Value Engineering Example

This document originally appeared on the HEFCE HE Estates web site. In the construction industry, value engineering, value analysis and value management are all titles used to describe a structured process of examination of the function of a building to ensure that it is delivered in the most cost-effective way.

There are a number of definitions that are suggested: | |“A…technique for improving value for money…involves subjecting the design proposals to systematic review at each stage | | |of the design process (the concept stage, scheme design, and detailed design) to ensure that the final design meets | | |user requirements, without over-specification, at the lowest possible cost. ” The Management of Building Projects at | | |Higher Education Institutions (NAO) | | |“Value analysis is continuous, not static. It involves questioning the status quo, removing the redundant and | | |encouraging creative thinking.

” Better Value for Money from Purchasing (DTI) | | |“…an organised team study of functions to creatively generate alternatives which will satisfy the user’s needs at the | | |lowest life cycle cost. ” (Anon) | | |“Value Management is a proactive, creative problem-solving process which can be understood by all. ” Value from | | |Construction: Getting Started in Value Management (BRE) | | |“A structured approach to the identification and evaluation of project objectives and of the means by which these may | | |be achieved in order to obtain value for money, using a specialist facilitator and workshop techniques.

” Procurement | | |Guidelines for Higher Education: Building and Engineering Projects (CVCP now UUK) | There are as many different definitions as there are publications on the topic. The fundamental aspects are that: • it is based around the required function/purpose of the building • it is multidisciplinary • it follows a specific methodology. Over a number of years HEFCE have been encouraging HEIs to use the technique to improve value for money from their building projects.

This has been reinforced by the guidance issued to the sector by the CVCP (now Universities UK) which embeds the process in the development of the brief and execution plan. This web page is intended to provide a resource with details of publications and organisations that produce guidance on value engineering. It is important to understand the principles, how they can be applied and where various approaches to the use of value engineering are appropriate. A common misconception is that value engineering is just a cost cutting exercise.

If approached from this point of view, the wider benefits of the techniques may well be overlooked. These benefits include: • clarification of the brief separating needs from wants • improved performance through efficiency savings • identification of alternative designs, solutions or locations • identification of alternative construction methods • empowered staff through multi-disciplinary teamwork • enhanced service/product quality • identification of risk • identification of additional functions that improve the outcomes of the project • improved staff morale, commitment and relationships • rationalisation of the project programme.

It is always possible that the process confirms that the project is well designed and meets all the expectations of the client, end users, designers, project manager, contractor, etc. If this is the case then at least the stakeholders can be assured that this confirmation is based upon a thorough and structured analysis and that it has been tested against possible alternatives. There are potential risks that must be guarded against. They can be managed effectively if recognised, identified and dealt with.

These risks might include: • the exercise undertaken too late for changes to be effective • inadequate information causing incorrect assumptions • insufficient participation by stakeholders • insufficient time allocated for the process • inadequate support by senior management • unskilled facilitator using improper application of the methodology. In conclusion, the following quote is taken from the HM Treasury Central Unit on Procurement Guidance No 54: “All projects involve the allocation of scarce resources and when complete, need to satisfy a range of users’ requirements.

The philosophy and techniques of value management (VM) provide a structured approach to the examination and development of a project which will increase the likelihood of achieving these requirements at optimum value for money. ” Top of Page [pic] Publications Audit Commission (1996) Just capital: Local Authority Management of Capital Projects, HMSO ISBN 0118864351. See Audit Commission HTML Summary. Best, R. & de Valence, G. (eds. ) (1999) Building in Value: Pre-Design Issues Arnold Design Publishers, London. ISBN 0 340 74160 0. Bone, C. and Law, M.

Value Management – A Quick Guide Department of Trade and Industry. BRE (1997) Value from Construction: Getting Started in Value Management Building Research Establishment. BSRIA (1996) Value Engineering of Building Services AG 15/96 Building Services and Research and Information Association, Old Bracknell Lane West, Bracknell, Berkshire RG12 7AH. Tel: 01344 426 511. Fax: 01344 487 575. Connaughton, J. N. and Green, S. D. (1996) Value Management in Construction: A Client’s Guide, Special Publication 129, Construction Industry Research and Information Association, 6 Storey’s Gate, Westminster, London SW1P 3AU.

Tel: 020 7222 8891. Fax: 020 7222 1708. , 73 pgs. ISBN 0 86016 452 2. CVCP (now UUK) (1996) Procurement Guidelines for Higher Education: Building and Engineering Projects, Woburn House, 20 Tavistock Square, London WCIH 9HQ ISBN 0 948890 95 9. See Universities UK online bookshop. Gray, C. (1996) Value for Money Reading Construction Forum Available from Construction Management. Tel: 020 7665 2464. Fax: 020 7537 3631. Green, S. D. (1992) A SMART Methodology for Value Management, Occasional Paper No. 53 Chartered Institute of Building, Ascot, 46+vi pgs. ISBN 1-85380-0554. Green, S.

D. and Popper, P. A. (1990) Value Engineering: the Search for Unnecessary Cost, Occasional Paper No. 39, Chartered Institute of Building, Ascot, 53+x pgs. ISBN 1 85380. HM Treasury Central Unit on Procurement (1996) Value Management GN 54 HM Treasury Public Enquiries Unit. Tel: 020 7270 4558. IMI (1998) Practical Guide for Value Managers Innovative Manufacturing Initiative. Contact John Kelly. Tel: 0131 449 5111. JPPSG (1998) Whole Life Costing: A good practice guide for end users and all those involved in the procurement process Joint Procurement Policy and Strategy Group.

Male, S. , Kelly, J. , Grongvist, M. , Fernie, S. & Bowles,G. (Editors)(1998) The Value Management Benchmark , American Society of Civil Engineers (Thomas Telford, Ltd. ) ISBN:0-7277-2729-X. NAO (1998) The Management of Building Projects at English Higher Education Institutions HC 452 The Stationery Office Ltd, The Publications Centre, PO Box 276, London SW8 5DT. Watson, P. and Asher, H. (1999) Implementation of Value Management in Construction, Constrn. Inf. Quarterly,1999, vol. 1,issue 2, 1-9, 3 figs, 4 tabs, 6 refs.