Many of us in the construction industry refer to any exercise that reduces the costs of construction as “value engineering.” But, as Dave Metzger pointed out in a discussion forum today, actual value engineering begins in the early design phases of Schematic Design and Design Development. We are misusing the term “value engineering” when we use it to describe just any cost-cutting exercises, especially those that don’t begin until after bids have been received and construction documents are in for permit review!
Actual value engineering takes into account the life cycle costs, as well as the initial costs, of the building. The earlier in the schedule the value engineering exercises begin, the more value they provide to the project.
The Whole Building Design Guide, a program of the National Institute of Building Sciences, has a good piece about value engineering: http://www.wbdg.org/resources/value_engineering.php
Here’s an excerpt from the Whole Building Design Guide:
“Value Engineering (VE) is not a design/peer review or a cost-cutting exercise. VE is a creative, organized effort, which analyzes the requirements of a project for the purpose of achieving the essential functions at the lowest total costs (capital, staffing, energy, maintenance) over the life of the project.” – The Whole Building Design Guide, a program of the National Institute of Building Sciences
The more we call things what they truly are, the better our industry will be. We shouldn’t be using euphemisms in construction, especially when the substituted word actually has a related meaning! Beginning the process of trimming the construction budget after the bids are in isn’t value engineering, it’s plain old cost-cutting.
Thanks, Dave Metzger, for the reminder.
I like the example that was used when I was trained in VE – an incandescent lamp. The only piece of the lamp that is essential is the filament. Without that, no light. All other components are added for:
Convenience: Lamp base to make it easy to install.
Durability: Globe to protect the filament from physical damage.
Durability: Gas fill to extend life of filament.
Each component added cost rather than reducing cost, but also added value, both perceived and real. The end result? Consumers were willing to pay for the added convenience and durability to achieve a greater value.
Excellent! Thanks, Dave.
“Value” is a key word, isn’t it?
I applaud your comments. I am Vice President of Education for SAVE International, the Value Engineering professional Society (WWW.value-eng.org), and it is encouraging to see design- and construction-arena professionals getting accurate information about the true nature of the formal Value Engineering process. Should any of the readers of your blog seek additional information about Value Engineering, I would encourage them to visit the SAVE international website, or to contact me.
Thank you, Don!