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What Is Value Engineering in Construction?

What Is Value Engineering in Construction?

February 19, 2023
Karolina
Quantity Surveying
What Is Value Engineering in Construction?

Value engineering is an essential construction concept that helps reduce costs and ensure a project is completed within budget. It involves using real-world data and technology to identify areas where cost savings can be made without compromising the quality of the overall project. It is also used to evaluate material choices, labor rates, technology and equipment, and other components that go into a project’s construction takeoff.

When making decisions during the estimation process, value engineering allows contractors to measure how different components will impact the total cost of a project. Through careful analysis of past projects and current market trends, construction professionals can make informed decisions about which components offer the best value for money.

Value engineering also helps inform decisions about when to hire personnel or purchase new materials or equipment for any given project. The ultimate goal of value engineering is to maximize efficiency while minimizing cost by considering additional factors such as project location, structural integrity, and safety measures when calculating estimates.

The Benefits of Value Engineering

Because the root of value engineering is to identify areas where cost savings can be made without compromising the quality of a project, it offers several benefits for construction projects:

Beyond this, value engineering can also provide a competitive advantage for contractors by helping them win more bids and receive more work. Likewise, it offers an incredible ROI, as detailed by the DOT.

Examples of Value Engineering

Value engineering can take on many forms, but two common examples that demonstrate what value engineering looks like in action are framing estimating software and concrete estimating software.

To give more context, consider this example: A contractor is working on a project that requires 200 yards of concrete. Using value engineering software, the contractor can quickly measure the dimensions of slabs, columns, footings, and walls for an accurate estimate without any manual calculations. Therefore, this technology is a critical tool for modern construction projects.

Steps for Value Engineering

While the process may seem complex, there are steps to successful value engineering:

  1. Define the scope of the project: Define what needs to be accomplished on a project. This includes defining the size, type, and expected timeline for the completion of the project.
  2. Request for information: RFIs clarify designs, plans, contracts, and specifications. It's a formal process through which important parties — like contractors or designers — can get clarification about any discrepancies in their documents. This ensures that all aspects of the project remain consistent throughout its completion.
  3. Gather data: Collecting data includes gathering accurate measurements, drawings, sketches, research reports, and other relevant information that will help inform your value engineering decisions. It’s also important to include data from similar projects to understand better what makes certain materials or components more cost-effective than others.
  4. Utilize a common data environment: Before making any decisions, it’s essential to keep all stakeholders informed and up-to-date on the project's current state. CDE helps provide transparency by allowing all construction team members to access data from a single source in real-time.
  5. Analyze data: Once you have gathered the necessary data, it’s time to analyze them. This involves running simulations on different scenarios for each component and material to determine which option results in the greatest financial savings without sacrificing quality standards.
  6. Make calculations: To make informed decisions about cost savings, you must use accurate measurement tools and make the necessary calculations. This can be done manually or with an online PDF measuring tool that uses AI.
  7. Identify potential solutions: After analyzing all the data, you can begin to identify potential solutions for reducing costs without sacrificing quality standards. For example, specific components may be substituted for cheaper ones without any significant difference in performance.
  8. Develop plans: Once you have identified potential solutions, it’s time to develop plans for implementing them on the project. This includes reviewing drawings, discussing alternatives with team members, and preparing a risk-mitigation strategy in case something goes wrong.
  9. Evaluate results: Finally, once you have implemented your value engineering plan, it’s important to evaluate the results. This includes assessing cost savings versus quality standards to determine if value engineering was successful.

Beyond these steps, accurate measurements, detailed documents, and proper data management are all key components of successful value engineering.

The Goals of Value Engineering

To achieve the overall goal of value engineering, there are five key objectives to consider:

These goals offer a comprehensive approach to helping project teams make informed decisions and achieve maximum value with minimal expenditure.

Who Conducts Value Engineering Efforts?

Various professionals often conduct value engineering:

For value engineering to be successful, contractors and other project stakeholders must form a collaborative partnership. Fortunately, construction takeoff software ensures that all professionals work from the same page.

Value Engineering vs. Value Analysis

Value engineering and value analysis are often used interchangeably, but there is a distinct difference between the two concepts. Value engineering focuses on finding value-adding solutions to reduce costs, while value analysis looks at how value can be improved.

In general, value engineering is more concerned with cost optimization and risk reduction, while value analysis focuses more on quality improvement. The two processes have many similarities — they involve analyzing data, identifying weaknesses and developing improvement plans — but they take different approaches to achieve their objectives.

Despite these differences, value engineering and value analysis do overlap in some areas, such as:

Ultimately, value engineering and value analysis can be used in tandem to help project teams make decisions that optimize value.

Overall, value engineering in construction offers an invaluable way for contractors to reduce costs and ensure their projects stay on budget.

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