Value Engineering - Explained
What is Value Engineering?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
Table of ContentsWhat is Value Engineering? Steps in Value Engineering ProcessInformation PhaseSpeculative PhaseAnalytical PhaseProposal Phase
What is Value Engineering?
The Value Engineering, also known as Value Analysis or Value Management, is a problem-solving method to improve performance or quality while reducing costs. It was proposed by proposed by Lawrence Miles and Erlicher and is used in a variety of industries.
It can also be described as a function-oriented, systematic team approach used to analyze and improve the value of a product (function in relation to cost), facility design, system or service.
Reducing costs refers to either total life cycle costs or the direct costs of production. This measure of cost is most applicable to expensive capital equipment, and includes manufacturing costs, installation costs, maintenance costs, and decommissioning costs.
Back to: STRATEGY & PLANNING
Steps in Value Engineering Process
Carrying out value engineering requires creation of a Job Plan (a systematic problem-solving process consisting of four major phases):
Define the problem to be solved. Evaluate the feasibility of implementing the VE study for the problem. Gather information about the problem. Allocate the required resources and team to execute the study.
Develop alternative approaches of providing the required functions at lower cost. This requires a functional analysis using the Function Analysis Systems Technique (FAST). This is a diagramming procedure that demonstrates the logical relations among the functions of building, system, or component.The FAST diagram allows the team to generate ideas to choose the best idea for optimizing value.
Apply cost comparisons and define the optimum alternative of the ideas generated. Life Cycle Costing (LLC) is applied to study the lowest cost of the final selected alternatives.
Present results of the study to the stakeholders for understanding and approval. Implementation will require concurrence on the part of all parties.