Value Engineering in Construction

Quantity surveyors performing value engineering

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What does value engineering mean in the construction industry? How can your construction project benefit from it? Read on to find out.

Value Engineering in Construction:
A Quantity Surveyor’s perspective

The concept of value engineering isn’t unique to the construction industry. Effective cost management and optimisation is vital to the optimal functioning of any business, and even more so as the cost of living, resources and materials rise. What’s unique about value engineering in construction is the word ‘value’: Quantity Surveyors are trained to see the detail and minutiae of a project in a way that an untrained eye might not. They have the unique insight and ability to extract maximum value from every process, product and resource. 

If you’re spending money on a construction project and want to make sure your budget is being maximised, employ the services of a Quantity Surveyor today. We are available for construction projects in the North of England, Midlands and Scotland, and have outlined examples below of where we’ve put value engineering practices into effect for many clients.

Value engineering in construction:
A detailed overview

Value engineering, (or ‘VE’) is the practice of thoroughly and systematically analysing and improving the value of a construction project through the optimisation of either practices, materials, applications or resources without compromising quality or extending the lifetime of the project. 

*Value engineering was conceived in 1947 by the General Electric (GE) Co. in America when a Vice President noticed that, due to wartime shortages in supply, his design engineers were having to use substitute products or designs, but that very often, these performed the same job at a lower cost! They then set their engineers about the task of intentionally developing substitute materials to perform the function of more costly materials. This engineer took the answers and questions raised by this process to the head of purchasing, and together they coined the phrase ‘Value analysis’ and thus the concept of value engineering was born! Since then, it has become integral to the construction industry.

How does value engineering work in practice?
The basics

The most important thing to understand is that value engineering is a multidisciplinary practice that Saunders founder and lead Quantity Surveyor Roger Saunders says “…is not just limited to materials or design.” and that analyses every aspect of a construction project, with the aim of identifying 3 things:

Potential cost reductions

Potential performance optimisations

Risk reduction

Collaboration throughout the construction project team is vital. Building functional, honest and successful relationships is something that we at Sanders Quantity Surveyors pride ourselves on. People don’t always like to have their work challenged, and doing this in a practical, yet sensitive way is important.

So where do we begin with this process? The Royal Institution of Chartered Surveyors outlines 5 key steps in a Value engineering study, which we will give an overview of below. For a detailed overview, please download and read the Royal Institution of Chartered Surveyors document.

1 Information gathering 

2 Creative thinking 

3 Analysis, evaluation and shortlisting 

4 Development 

5 Presentation

The first and most vital step to get right  in value engineering is information gathering. Our aim here is  to first define the project’s core functions and performance requirements. By understanding the project’s objectives, the team can identify alternative solutions that meet those requirements more efficiently. Here is where we also review cost estimates, plans and specs.

Creativity is key to problem-solving and solution ideation. Remember we mentioned the importance of interdisciplinary teams being involved? Well here it comes to life, via meetings and brainstorming sessions where all different kinds of construction project team members contribute to solution ideation for all types of elements of the project, from design to processes, to materials.

Analysis and evaluation come next, to look at  not only the initial construction costs but also long-term and operational ones. This is vital, as it ensures that decisions benefit the project over its entire lifecycle. An important part of the analysis stage is risk assessment and management – the process through which the project team, including the client, identifies and assesses the risks that the project poses. This enables them to be acknowledged, prioritised and then managed in a structured way to reduce their effect on the project as a whole and help avoid costly issues down the road. Each idea is evaluated based on criteria like cost, performance, safety, and sustainability, with the best alternatives selected for further development.

Development and Analysis: The chosen alternatives are then refined and further analysed; via cost estimating, risk assessment, and life cycle cost analysis.

Finally, the findings and recommendations are presented to the client and project team for their review..

Saunders Quantity Surveyors
Value Engineering in practice

Now you understand the theory of value engineering in construction, let’s look at how it works in the real world and hear from Saunders QS Founder and Director Roger Saunders:

“We were called in by a client in the early stages of the design of a large residential care home. The engineers were looking at alternative structural forms for the building; namely traditional load bearing, timber frame and Metsec SFS.. Saunders carried out a value engineering exercise, which determined that whilst Metsec (a fast-track metal galvanised steel stud panel framing system), was more expensive, overall savings could be achieved due to reduced time on site. Use of this product facilitated earlier starts by follow-on trades and reduced preliminary costs. Being both lightweight and efficiently bundled, SFS also helps to keep transportation emissions to a minimum. Sustainability is a concern which we always have an eye on too during the value engineering process and this is a good example”

 

 “Saunders were asked to review the cost of a very large photovoltaic installation proposed for a church roof. Designers had specified the type and output of the panels and costs were established from the supply chain to enable viability payback assessments. However, the detailed examination of the installation proposals revealed that the panel systems required extensive and specifically designed sub frames, to resist the considerable wind uplift. When this essential aspect was considered, we were able to report to the client on a more realistic and accurate cost, to enable a decision to proceed and a preferred supplier to be selected.”

 

“Value engineering is not just limited to materials or design. We recently advised a regular client who was proposing to build a range of similar facilities, that detailed design and competitive tendering was not the only option. By entering a framework with agreed margins with a preferred and suitable contractor, the client was able to bring in the contractor’s knowledge on buildability and that of his supply chain at an early stage, resulting in better design and material selection decisions These were reflected across future projects.”

 

“Be it in a private or commercial construction project, the high cost of external works can sometimes be insufficiently budgeted for. Saunders were recently involved with a very large area of reinforced concrete slab for turning and parking HGV vehicles at a prohibitive cost. Working with the engineers and the client resulted in an agreement to mitigate the area of the high specification slab and introduce alternative materials for less frequented areas and parking areas. The very high cost of this element of the project affected the viability of the total facility, but detailed examination and working together with the Client and designers, enabled a compliant and adequate solution to be achieved, at greatly reduced cost.”

Value engineering offers the potential for substantial cost savings and optimal project outcomes. By focusing on collaboration, creativity and function, value engineering facilitates high-quality results within budget.

If you’re looking for an experienced Value Engineering Quantity Surveyor in the North of England and Scotland, give us a call today for a free, no-obligation consultation.

*Source: An Introduction to Value Engineering, Don R. Taylor

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