Value Engineering: Enhancing Project Quality and Cost Savings
Introduction
Value Engineering (VE) is a methodology for optimising the design and construction of a project while achieving cost savings and enhanced quality. It is widely used in UK construction projects and is base
d on the principles of ‘value for money’ – getting the best possible outcome at the best possible price. As outlined in the RICS Value Management and Value Engineering 1st edition guidance, the VE process involves a systematic and structured approach to identify the most cost-effective solutions and optimal construction methods.
This article will provide a comprehensive overview of Value Engineering in UK construction and its role in enhancing project quality and achieving cost savings. It will explain the benefits, difficulties and step-by-step implementation of Value Engineering, in accordance with RICS guidance.
Steps for Implementing Value Engineering
Value Engineering (VE) is a systematic method for achieving project goals while maximising cost efficiency. The methodology, outlined in the RICS Value Management and Value Engineering guidance, involves five core steps:
Step No. 1: Understanding the project
The first step in Value Engineering (VE) is to gain a thorough understanding of the project. This entails having an understanding of the project goals, objectives, constraints, and risks. It also involves gathering input from key stakeholders to define the scenario and value criteria. A workshop approach, such as desk study or interviews, can be used to collect relevant information. The outcome of this step should be a description of the project success criteria. With a clear understanding of the project at hand, it is possible to move forward with the Value Engineering process.
Step No. 2: Identify possible solutions
The second step in the Value Engineering process is to identify possible solutions. At this stage, all ideas should be welcomed and encouraged. A variety of problem-solving techniques such as brainstorming can be used. The objective is to generate a large number of ideas and potential solutions without any critique or review. It is important to involve professional surveyors in this process, both to provide insights and to help estimate costs. The output of this step is a list of possible solutions to the value criteria defined in Step 1.
Step No. 3: Evaluate proposed solutions
In this stage, solutions need to be assessed against the previously established value criteria. Surveyors have a key role in this process, by providing reliable estimations of the costs of the various solutions. Solutions that are not feasible due to cost or other reasons should be eliminated from consideration. After the initial assessment, certain solutions may require further investigation and evaluation. The output from this step should be a shortlist of potential solutions, supported by documented evidence.
Step No. 4: Develop the shortlisted solutions in more detail
Once the potential solutions have been identified, the next step is to develop the shortlisted solutions in more detail. This process involves a detailed analysis of all aspects of the shortlisted solutions, including cost-benefit assessments, technical feasibility, environmental sustainability, budget constraints, and other project considerations. During this step, surveyors play a critical role in providing accurate estimates for costs as well as providing input on the feasibility of the proposed solutions. It is also important to iterate through the process of shortlisting and detailed analysis, in order to ensure a thorough evaluation of all options. The output of this step is a detailed examination of the shortlisted solutions, which can then be used to identify the best solution and make recommendations.
Step No. 5: Identify the best solution and make recommendations
Once the detailed analysis of the shortlisted solutions has been completed, the next step is to identify the best solution and make recommendations. Gradually shortlisting solutions through rounds of evaluation and assessment will help determine a clear favourite or a small number of equally good solutions. The surveyors will play an important role in estimating the costs of the solutions and providing the necessary evidence. Once the preferred solution(s) have been identified, they should be documented in a report for future reference. This report should provide a record of the whole Value Engineering (VE) or Value Management (VM) process and the decisions taken.
Implementing Value Engineering in Practice
Value Engineering can be successfully implemented through a five-step process as outlined above. In practice, the implementation of Value Engineering can be supported by a variety of professional services such as quantity surveying, engineering, architecture, legal, and technical. This collaborative approach helps ensure that the best solutions are identified and implemented, while also saving time and money.
When implementing Value Engineering, it is important to consider the balance of the potential savings and cost of implementation of a change in relation to the project phase. The earlier VE is implemented the easier it is to agree on and implement large cost savings, in contrast, late implementation of Value Engineering is likely to result in limited results and higher cost of the change.
Case Study
At Multiproject, we often come across projects with budget limits. Last year, we were appointed for a £12m residential development at RIBA Stage 2 with the objective to reduce the build cost by £2m. Following the initial review of the project, we applied the methodology outlined in the RICS Value Management and Value Engineering 1st edition guidance document. We prepared several Elemental Cost Plans for various methods of construction, and were able to provide an alternative approach to the project strategy and reduce shell and core cost by £1.5m.
Further savings were found in the careful selection of external and internal finish materials. For example, we identified that the use of reconstituted stone cladding was a more cost-effective option than a natural stone without affecting the o overall function of the building.
Finally, we employed a variety of methods to optimise the project delivery process by utilising value engineering workshops to ensure that key stakeholders were involved in the decision-making process.
Overall, our value engineering approach resulted in a successful project that achieved the desired cost savings. The project was delivered on time and within budget, and the finished development is an asset to the local community.
Sustainability integration
Value Engineering can be used to further enhance the sustainability credentials of construction projects. By incorporating sustainable elements into the Value Engineering process, surveyors can develop sustainable solutions that are both cost-effective and beneficial to the project’s future performance. For example, opting for sustainable materials that have a longer lifespan or are more energy-efficient can help to reduce operational costs over time and contribute to a reduction in carbon emissions. Additionally, surveyors can evaluate the lifecycle costs of a product to ensure that the most cost-effective and sustainable solution is chosen. The integration of sustainability considerations into the Value Engineering process is key to achieving a successful and sustainable construction project.
Digital technologies in Value Engineering
In today’s world, digital technologies are playing an increasingly important role in streamlining the process of Value Engineering. By using electronic design and cost formats, professional teams can assess design development’s impact on construction costs much more quickly and efficiently than ever before. By further integrating digital design and costing systems, value engineering can become a more streamlined part of the project development process. Such technologies can help teams quickly evaluate and identify the most cost-effective and value-adding solutions for a project, leading to improved quality and cost savings.
Conclusion
Value Engineering (VE) is a powerful tool for improving project quality while achieving cost savings in UK construction. By following the methodology outlined in the RICS and other professional bodies’ guidance documents, construction professionals can take a structured approach to VE, which involves understanding the project, identifying possible solutions, evaluating proposed solutions, developing the shortlisted solutions, and finally selecting the best solution. VE is a valuable asset to the construction industry as it allows professionals to enhance project quality and save costs. Additionally, by using digital technologies and integrating sustainability, the process of VE can be further streamlined. In conclusion, Value Engineering is an effective means of achieving project quality and cost savings in UK construction.
