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A graphic of how value engineering can affect logistics, outsourcing, scheduling, and more
A graphic of how value engineering can affect logistics, outsourcing, scheduling, and more
Value Engineering in Construction: Enhancing Efficiency and Savings
5 minute read
Kevin Forestell headshot
Kevin Forestell
September 5, 2023

Value Engineering in Construction: Enhancing Efficiency and Savings

In construction and project management, finding ways to reduce costs without affecting quality is a constant challenge for engineers and design firms to manage. That's why value engineering (VE) has become an important strategy to use in the design stage to help increase efficiency while decreasing costs. In this blog, we will explore VE in construction, the importance of value engineering, its different methods, and its advantages for modern construction projects.

What is Value Engineering?

Value engineering is the strategic approach in construction that focuses on achieving cost savings while still ensuring quality and integrity. It involves a comprehensive analysis of the project's functions and requirements from design to construction. Using this approach allows for the identification of opportunities to optimize design, materials, and processes.

Value engineering seeks cost-effective solutions by exploring different materials, construction methods, and technologies to achieve equal or improved performance. Value engineering involves making intelligent choices, reducing waste, prioritizing important features, and improving the project.

Value engineering is commonly used by construction engineers and civil engineers who are responsible for supervising the planning and construction. Their role involves ensuring the safety of buildings, projects, and construction teams.

Value engineering has a rich history that can be traced back to the industrial and manufacturing industries during World War II. While it was initially developed to address the shortage of critical materials and skilled labor, it has evolved and expanded its application to industries including construction.

How Does Value Engineering Differ from Traditional Cost Cutting?

Value engineering is an integrated, proactive approach to quality and cost optimization, and should not be compared to traditional cost cutting. While cost-cutting focuses solely on reducing expenses, VE takes a holistic approach. It aims to identify unnecessary expenses, eliminate waste, and optimize processes to deliver more value without compromising quality.

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Value Engineering: What are The Steps in Value Engineering?

The VE process consists of several stages, each with its own set of objectives and activities. Let's explore these stages:

Planning Stage

The planning stage includes a few key steps from information gathering, functional analysis, and idea evaluation. Information gathering entails collecting all relevant information about the product, project, and process. This includes design specifications, requirements, drawings, cost data, and any other relevant documentation.

From there, functional analysis will encompass breaking down the product or project into its key functions and identifying what each component or element is intended to do. The goal is to focus on understanding the core functions that are essential for achieving the desired outcome.

The planning stage involves setting clear objectives, forming a team, and establishing a timeline for the project. It's also crucial to define the project's scope and identify the key stakeholders during this stage.

Design Stage

The design stage will include further development and analysis of multiple factors. This may involve creating sketches, calculations, or prototypes to assess the usefulness and effectiveness of the proposed solutions. There are typically several alternative designs that are brought forward during this stage, each with its own cost-saving strategies.

It's essential to estimate the costs associated with each proposed solution, considering both initial costs and potential long-term costs. This plan should outline the necessary steps, resources, timelines, and responsibilities required to execute the changes.

Methodology Stage

The methodology stage involves communicating the selected alternative and implementation plan to stakeholders, including project managers, clients, engineers, and other relevant parties. Ensure that everyone understands the rationale behind the decision and their impact on the project's cost and performance. Cost-benefit analyses should be conducted to determine the utility of each proposed value-enhancing idea.

Construction Stage

The construction stage will encompass implementing the approved idea. Putting the selected approach into action and monitoring the changes closely will help ensure they are being executed as intended and that the expected value improvements are being realized.

After building and using it, it's important to get feedback from stakeholders and assess the results of the value engineering process. This will help identify any challenges, lessons learned, and areas for improvement in future projects.

Why is Value Engineering Crucial in Modern Construction?

The role of value engineering in the modern construction landscape is hard to ignore because of all of its benefits. The benefits of value engineering range from increased sustainability to more cost-effective building practices innovation, and much more. With growing concerns about environmental impact, value engineering can promote sustainable practices.

It encourages the use of energy-efficient materials, renewable resources, and eco-friendly construction techniques, reducing the project's carbon footprint. Additionally, by proposing cost-effective solutions that maintain or enhance the project's quality, companies can stand out and win more contracts. These factors will help to ensure that you are able to maintain competitive bids.

Value engineering also encourages innovative thinking. By challenging engineers, architects, and designers to explore alternative materials VE construction methods and technologies could lead to better outcomes and enhanced performance.

Value Engineering Techniques and Tools: Making VE Effective

Value engineering uses various tools like WBS and Gantt charts to solve different problems efficiently. Some of the commonly used tools include cost-benefit analysis, value analysis, and value management software. These are a few of the online project management tools that will help with value construction.

Examples of Value Engineering in Construction

One example of value engineering is Denver International Airport's baggage system. DIA's automated baggage handling system faced numerous challenges during its construction and the project had initially exceeded budget constraints as a result of technical complexities.

Value engineering was used to redesign and simplify the system thus, reducing unnecessary complexity and addressing operational issues. This resulted in substantial cost savings, a more efficient baggage handling system, and a smoother airport operation overall.

Value engineering can lead to tangible benefits in various construction projects. Value engineering saves money by solving technical problems, improving materials and processes, and promoting collaboration. It also improves efficiency and helps achieve architectural goals.

How Value Engineering Saves Money Without Cutting Corners

Value engineering offers significant financial advantages to construction projects by identifying opportunities for cost savings while maintaining quality and functionality. Through a systematic approach, VE optimizes various aspects of a project, resulting in tangible benefits. Some of the ways include reduced material costs, process efficiency, and creative design solutions.

By evaluating alternative materials with comparable performance, construction projects can achieve cost savings without compromising durability. This approach is particularly relevant as it ensures that cost-effective materials are selected without sacrificing the project's visual appeal or structural integrity.

Additionally, by streamlining workflows, eliminating redundancies, and enhancing productivity, projects can achieve significant time savings. These time savings translate into reduced labor costs, minimized overhead expenses, and faster project completion, ultimately leading to improved project profitability. Value engineering vs. cost-cutting is about finding improvements that contribute to both short-term cost savings and long-term operational efficiencies.

Evolving Trends in Value Engineering

Value engineering has continued to focus on sustainability and adaptability to shape the future of the construction industry. This aligns with the global environmental need to promote energy-efficient materials, renewable resources, and eco-friendly construction practices, ultimately contributing to a more sustainable planet.

Sustainable construction methods and materials often require higher upfront investments, but they can lead to significant long-term cost savings. Energy-efficient systems save money by using less energy. They also require less maintenance. This makes sustainability a smart financial choice for the whole project.

Value engineering is a crucial approach in construction, helping balance costs and quality. Encouraging and incorporating sustainability into value engineering and construction is not just about following a trend; it's a strategic choice that aligns with societal, economic, and environmental imperatives.

As construction evolves, value engineering remains vital for delivering projects that are both cost-effective and high-quality. It's a way the industry shows its commitment to progress, efficiency, and responsible building practices.

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Mini Excavator image
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Kevin Forestell headshot
Kevin Forestell
Kevin Forestell is CEO of DOZR and one of the co-founders. Kevin first got started as an entrepreneur when he founded Forestell Landscaping right after graduating from University. His love and passion for the industry and desire to help solve an equipment problem that contractors faced every day is what brought the founding team to start DOZR. Kevin is proud of the level of efficiency brought to the industry through DOZR and hopes that DOZR will help change the standard way equipment is rented.
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