Value engineering is a methodology that examines all the costs associated with a product and any functions that might increase the cost of the product. The aim of value engineering is to make sure that the product is made at the most cost-effective price yet have the highest value.
What it involves
In construction, it involves all the aspects of construction which include the accessibility of materials that are required, which method of construction will be used and the logistics of all these materials to get to the site. It will also take into consideration aspects like planning, how difficult it is to get the material to the site, the overall costs and profits.
The reason all these are undertaken is that it will reduce the life cycle costs, an overall improvement in the quality and environmental impacts. The value engineering should start right at the beginning of the project to be effective or achieve the greatest impact. Part of all this is the contractor and that any decisions that have been made which have resulted in any changes will not prolong the actual construction time.
To get to the required value there are certain factors that need to be considered:
- All the elements of the product need to be identified including the service that the project will provide.
- Assessing the functions of all the elements and considering alternative methods of delivery the same functions.
- When alternative solutions are considered then the costs also need to be taken into account. Alternative methods often cost more.
- After these have been considered then one needs to go into greater detail which method has the highest chance of success.
Value engineering is an exercise that involves almost the whole team involved with the project and it is developed as the project progresses. While the project is in progress the operations need to be assessed whether there are more cost-effective ways of procuring and transporting materials, more efficient ways of utilizing the plant and the equipment which in turn will cut the daily operational costs.
As a buyer, if a value engineering has been done you can be assured that:
- There have been no generalities and that all the available costs have been taken into consideration.
- The information has come from the best sources and that these have been refined to get the most cost-effective product.
- That the product has been made with expert advice from industry leaders and that standard product have been used.
Therefore, you can be assured that the process of value engineering will produce the product at the most cost-effective cost and at a standard that it will achieve the highest price.
Product value engineering was developed during in an error when it was necessary to consider different materials and methods to produce a product and in today’s age, you are assured that the product has been manufactured or constructed with the best materials and in the most cost effect and efficient way.