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Construction: Value Engineering

This document discusses value engineering and its application to construction projects. It defines value engineering as focusing on a project's functions rather than its costs. The value engineering process involves multiple phases: an information phase to understand the project, a functional phase to analyze its functions, a creativity phase to generate alternatives, and an evaluation phase to select the best alternatives. It emphasizes that value engineering aims to increase a project's value by improving its worth relative to its lifecycle costs, rather than simply cutting costs. It provides details on defining a project's functions, generating alternatives, and calculating a project's value, worth and lifecycle costs.

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Joseph Berlin Juanzon
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91 views30 pages

Construction: Value Engineering

This document discusses value engineering and its application to construction projects. It defines value engineering as focusing on a project's functions rather than its costs. The value engineering process involves multiple phases: an information phase to understand the project, a functional phase to analyze its functions, a creativity phase to generate alternatives, and an evaluation phase to select the best alternatives. It emphasizes that value engineering aims to increase a project's value by improving its worth relative to its lifecycle costs, rather than simply cutting costs. It provides details on defining a project's functions, generating alternatives, and calculating a project's value, worth and lifecycle costs.

Uploaded by

Joseph Berlin Juanzon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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LECTURE 14

Construction
Value Engineering

CE142
Dr. J. Berlin P. Juanzon CE, MBA
Introduction

2
Introduction
 What is Value Engineering

3
Introduction
Concept of Value

4
Concept of Value Desireable
When is VE used?
Potential Saving from VE
Value Study Diagram
Steps in VE Planning
Information Phase
Functional Phase
Functional Phase
Creativity
Creativity
Innovations
Innovations
Innovations
Innovations
METAL DECKING FORMS
Evaluating Ideas
Performance Evaluation
5. Operational Phase: Utilization of
Facility

4.4.Construction
ConstructionPhase
Phase::Bidding,
Bidding,Contract,
Contract,
Construction
Construction
Value
Engineering or 3.3.Design
DesignPhase
Phase::Design,
Design,Construction
Construction
Cost Reduction Materials,Space
Materials, SpaceUtilization,
Utilization,Site
Sitelayout,
layout,etc.
etc.

2. Planning Phase : Scope of the Project,


Site Location, Construction Budget

1. Conceptual Phase : Program


Needs, Project Feasibility

Life Cycle Phases of Facility


One of the techniques of Value Engineering is
asking a series of penetrating questions about
a system or process.
• What is it?
• What else might do the job?
• What does it do?
• What do the alternatives cost?
• What does it cost?
• What is it worth? • Which alternative is least
expensive?
• What is needed to • Will the alternative meet
Implement the alternative? the requirements?
Machine
Materials

Value Engineering

Manpower Methods

Value engineering is not cost cutting but defining


properly the function of work, activity and
resources
The main differences between value engineering and cost cutting are summarised as
follows:

  Value Engineering Cost Cutting

It is Function based Equipment/material based

Focus Poor value functions Big cost items

Results Increased value Scope reduction

Optimises Overall design Local design

Clarifies Client requirements Nothing


The Success of Value Engineering
• Systematic and
organized

The Value Engineering


process uses tested and
successful procedures that
are directed toward
achieving success in meeting
the purposes for the
"project" by all involved. A
standard "job plan" is used
to guide the entire process.
• Alternatives

The Value Engineering generates, examines,


and refines creative alternatives toward the
concept of producing an end product that
produces high customer acceptance. The
process endeavors to widen the number and
scope of the available alternatives. This is
done to increase the potential for enhanced
satisfaction, and take advantage of the added
expertise brought into the studied activity
through the value study process.
• Functions and FAST

One of the most unique and useful


qualities of the Value Method is its use of
functions to describe the activity or
product being studied. The value study
breaks the "project" into components so
as to avoid misunderstanding of the
planned intents for the project.
Value

The true value of a activity or product is its


relationship to its perceived worth as
opposed to its life-cycle costs. In Value
Engineering terms: Value = Worth / Cost.
When an item has a Value greater than 1.0,
the item is perceived to be a fair or good
value. When an item has a Value is less than
1.0, the item is perceived to be a poor value
or bad value. When the perceived worth far
exceeds the life-cycle cost, we usually
consider purchasing the item.
Worth

The worth of a product involves many features. The


most common cited are: benefits received, services
obtained, satisfaction of the product performance,
quality, safety, and convenience. The worth of the
product is a measure of what is in it for the customers
involved. It is a measure of how well the end product
meets the involved essential needs and the added
desires of those that have a voice in the product
selection or its use. An end product must always
supply the essential need, or its worth will be poor
Life-Cycle Costs
T

The true cost of an item is not just the amount


of money that you pay when you buy it. Much
more is involved. When you buy something, you
also buy its long-term effects. The initial costs
plus these long-term costs are called life-cycle
costs. This includes things like the time
involved to get the project done, the people
needed (number, expertise and so on), the
degree of difficulty involved, availability of
money or other resources, the amount of
maintenance needed, and the money that must
be expended and kept in reserve.

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