Value Engineering: Forging New Pathways of Productivity in Construction

Outside the construction industry, value engineering has become one of those terms that everyone says but not everyone understands. Even within the construction world, many people struggle to understand what it really means and how it can actually make a difference in project management, construction, and even site development. There are many ways to think about value engineering. One way is to see it as a form of problem-solving or imaginative re-organization of resources in order to produce more value at less cost in any given project. 

Let’s face it. Ask anyone in the construction industry and the typical day-to-day preoccupations of most construction projects and project managers revolve around ideas of budget, timeline, and quality. Over decades of construction practice, standard modes of operation and problem solving have been developed and much stick to the familiar and what is known so as to avoid risk or mistakes. In a sense, value engineering is finding creative ways around what might be the standard way of doing things and looking at a problem from a different angle that might provide a better result. 

Historical Beginnings of Value Engineering 

During World War II, every industry suffered shortages of materials and resources. Both in the home front and in the frontlines, engineers had to work with what they had in order to get the job done—whatever job that was. So whether the task at hand was setting tracks or building bridges overnight so that tanks and supply vehicles could pass or whether back in the States, there was the need to improve on technology to help the war effort. 

Thus was born a methodology developed by Lawrence Miles who worked for General Electric Company during the war. Do to the war effort, there were shortages of materials, through manufacturing and production were in high demand. Miles was responsible for purchasing raw materials and was often confronted with the fact that that particular material was unavailable or unattainable. So he had to improvise and find a replacement material that produced the same function without a cost to quality or cost in some other form of production. 

Building Value — Producing More in New Creative Ways 

There are two main components of value engineering and these are directly connected to functionality and cost. The whole goal is to increase efficiency and decrease operating costs. The idea comes from General Electric Co in 1945 as a ratio of function to cost. Value engineering is a method or an approach that improves the value of what is being produced. Let’s more closely look at each of these components in a construction context. 

Function: a measure of the performance capabilities of any given product or service. 

Cost: The resources needed and/or required to achieve the function. This includes more than just cash dollars but also materials, tools, price, time, and more. 

Value: This means the most cost-effective, efficient, and productive way to reliably and competently accomplish a given function that will meet the client’s needs, desires, expectations. 

For example, your construction company is faced with the function of site preparation and construction for a school in raw terrain that is highly trafficked. Perhaps there is some wildlife habitats around the area that needs to be preserved. These are all considerations to be analyzed and functions to be achieved. 

The Working Parts — Breaking Down the Method

In construction, value engineering requires first and foremost someone with a specialty and/or profound knowledge of construction, materials, methods, safety, etc. This foundational knowledge helps informs the decisions made when it comes to reaching a certain goal.

Value engineering most often takes place after a design (functional or detailed). It can also begin before a design is finalized. There is a process of identifying, analyzing, developing alternative solutions, allocating costs, and developing the details. 

All of this is considered as part of the value analysis that happens and it typically occurs in 6 phases. 

1. Information. The initial part of the value analysis is gathering information and data and understanding the information, as well as understanding its primary goals. 

1. Functional analysis. Identifying the functions that the final product requires. And each product or construction project might have several functions. For example, “build rest stop” and “prepare the site.” As they are called these verb/noun pairs distill what a product needs to do. Some more examples might be: “accommodate 30 vehicles,” “preserve wildlife habitat,” or “provide picnic areas.”  

1. Creative. Generating and searching for creative solutions that might achieve the intended functions and add value. 

1. Evaluation. Evaluate the creative ideas, reassess their viability, and shorten the list to one that can be implemented. 

1. Development. Develop alternative ideas and/or solutions into viable, actionable plans. 

1. Presentation. Present and propose ideas to stakeholders and/or project managers. 

So whether we are working on a design for a new school, a bridge, site preparation for a larger installation or commercial site, value engineering is a methodology we often employ to maximize resources and always improve the quality of the final product. 

Construction that Thinks Outside the Box 

Here at Constructors, Inc we focus not only on quality, precision, timeliness, and professionalism, we also aspire to think outside the box. We are always looking for new pathways or productivity and functionality.  We’ve been doing construction for generations and we know first hand what a little creativity and analysis go a long way in producing good work and finding new ways to innovate the process. Construction projects often need new approaches and techniques in order to add functionality and performance. When it comes to construction, there is no shortage of issues or parts of a project that can be improved. Using value engineering as a way to constantly assess and reassess our resources and how we can better use them to improve functionality at less cost without compromising quality, safety, or beauty.

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