Value Engineering (VE) is in vogue; Value Engineering is the “in thing”, but there are many misconceptions about what value engineering actually is and how to get it.
Let us look at some of the common myths about Value Engineering in an attempt to understand what Value Engineering is all about, without actually defining the term!
Myth 1: Value Engineering is a part of cost planning: While one of the aims of Value Engineering is to reduce costs, it is incorrect to treat VE as a part of cost planning. Cost planning is about estimating costs at various stages of project implementation, it is not about reducing the costs. We are amused at the attempt of some clients to bundle VE as one of the deliverables in a cost planning assignment. Cost planning is the domain of Quantity surveyors and it involves Quantity take-off and rate analysis. VE is the domain of technical experts to find means of reducing costs through ‘Engineering’.
Myth 2: Value Engineering is about changing specifications: It is obvious that the cost of any item of work depends upon the technical specification of that item. Changing (often lowering) the specifications is an easy way to reduce costs. However, this is clearly not value Engineering since any reduction in the specification is tantamount to a reduction in Value of that item. One essential aspect of VE is that it should not result in value reduction!
Myth3: Value Engineering is about smart procurement: Project cost can definitely be reduced by smart procurement. Strategies of smart procurement include leveraging economy of scale, Just-in-time procurement, standardization, etc. However, none of these would qualify as Value Engineering. Value procurement would be a better term to describe these efforts, but not Value Engineering.
Myth 4: Value Engineering can be obtained as a free ‘add on’ service: Many, if not all clients wish to receive Value Engineering from consultants without having to pay any professional fees. This is, perhaps, one of the reasons why it is incorporated in the scope of service of the cost consultant, who is paid fees for cost planning on a per sqft basis. One must realize that VE is a serious business and requires sound and workable Engineering suggestions. Reluctance to specifically pay for VE efforts often results in no Value Engineering at all!
We at Gem Engserv have Value Engineering as one of the many services that we offer. Our proposals for Value Engineering are structured in a manner that aims to create a win-win outcome for us and our clients. However, it requires that the myths prevailing about Value Engineering are busted and the beneficiaries of VE, i.e. our clients not only understand what VE is all about but also have an effective mechanism to obtain VE services from consultants.