VALUE_ENGINEERING

VALUE ENGINEERING
The Origins of Value Engineering
Here is a quick history lesson:
In 1947 Lawrence D. Miles ( "Father of Value Analysis and Value Engineering" ) was responsible
for purchasing raw materials for General Electric during World War II when manufacturing was
at its peak. Sounds like a great gig, but the war caused extreme material shortages. This left
Miles searching for suitable alternatives that functioned similarly. He discovered that some
substitutes weren’t only cost-effective, they were actually better. This realization was the origin
of a new technique called “value analysis,” more commonly known today as value engineering.
Since its inception, this technique of analyzing value has been widely adopted by many
industries and evolved for uses Miles never imagined. Value engineering is used to solve
problems, identify and eliminate unwanted costs and improve function and quality. The set of
disciplined steps in the value engineering process is meant to optimize initial and long-term
investment, seeking the best possible value for the lowest cost.
What is value engineering?
Value engineering, or value analysis, is a concept that focuses on adopting a streamlined

approach to covering the necessary functions within a project at the lowest possible cost. This
concept focuses on substituting materials and opting for less expensive choices without
compromising performance or functionality. Instead of focusing on the physical attributes, the
primary focus lies in optimising the functions of materials and components. Businesses use
value analysis to enhance the value of a particular product or service. Two main elements define
value analysis: cost and function. Businesses can enhance the project's value by reducing the
cost without affecting its function, which improves its quality. Here's a look at what function and
cost mean for this concept:
What is function?
Function is simply a measure of the performance capabilities of a service or product. For

instance, a key function of business software may be to store data in a secure database.
Businesses can seek to optimise functionality by looking for a less expensive method to
maintain a database.
What is cost?
Cost refers to the resources a business consumes to execute a function. These resources can
include money, time, materials and human resources. A company can enhance the value of a
particular service or product if it reduces its costs without sacrificing functionality. For instance,
the business may save money by switching to a data pipeline solution instead of maintaining
the infrastructure to store data in a secure database.
The importance of value engineering
The organised effort that companies put into analysing the performance capabilities of specific
materials and machines and into looking for viable alternatives can help businesses in many
ways. It's hard to understate its importance to modern business, especially as more and more
companies seek to adopt a lean structure.
The 8 Stages of Value Engineering
The implementation of the value engineering process consists of eight different stages. Each
phase has several processes that help the project team to find ways to identify possible value
engineering changes.
1. Preparation Phase
In this phase, stakeholders will outline the project's scope, identify team members, and decide
on a budget and schedule. They'll decide who's responsible for the value engineering process
and when it will happen during project management.
2. Information Phase
This phase consists of gathering all the information available on:
 Possible materials
 Potential construction costs
 Schedule
 Specs
 Project scope
It is also important to identify the project's elements, use, and expectations during this stage.
Then share that info with the entire value engineering team.
3. Function Analysis Phase
In this phase, the VE team will identify the function of each component. Each element provides
a primary function, which is the vital function of the element, and then most have a secondary
function. A secondary function is not necessary but it’s beneficial. The team identifies how each
component contributes to the function of the project as a whole. Then they can proceed with
conducting a value analysis for each component. Based on these analyses, the VE team will
discover where making substitutes will lead to advancements in value. These substitutes will
provide better quality, cut costs, or increase the project's total worth.
4. Creative Phase
The creative phase is for brainstorming ways to improve the value of the problems identified in
the function analysis phase. Those involved will work as a team to generate lists of all the
possible solutions to increase the value of the project. No idea is dismissed at this stage, but
the largest and most expensive components will be the focus.
5. Evaluation Phase
More research is done on the lists generated by the creative phase to evaluate each solution
and find the best one. Typically, a table of pros and cons is drawn out for clear visual
representation. Followed by cost vs. benefit measurements to see whether the solution is, in
fact, cost-effective. It's crucial to compile construction cost data during this phase to determine
three possible solutions. The first is the original design. The second will require a larger
investment but save money throughout the project's life cycle, and the third will be a design with
the lowest cost. Next is an evaluation of each of the three at a large-scale level to see if they
would affect any other project areas.
6. Development Phase
With all the data accumulated in the first five phases, the team creates a plan of action using
the best solutions. Cost estimates, sketches, and all relevant data get compiled in a thorough
value management proposal.
7. Presentation Phase
This VM proposal is presented to the project owner or final decision-making individuals. Team
members/VE specialists explain how they came to their conclusions.Discussions or questions
proceed until the project owner understands all information presented and gives the go-ahead.
8. Implementation Phase
This VM proposal serves as a guide for all workers on the project to implement the solutions
discovered in the design process and other phases.

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VALUE ENGINEERING

The Origins of Value Engineering

Here is a quick history lesson:

What is value engineering?

Value engineering, or value analysis, is a concept that focuses on adopting a streamlined

Function is simply a measure of the performance capabilities of a service or product. For

The importance of value engineering

The 8 Stages of Value Engineering

This phase consists of gathering all the information available on:

 Potential construction costs

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