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.
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.
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.
While the process may seem complex, there are steps to successful value engineering:
Beyond these steps, accurate measurements, detailed documents, and proper data management are all key components of successful 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.
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 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.