Value engineering Flashcards
Value Management vs Value Engineering?
Value management is the process of understanding what constitutes value for money to a client and a project. The process removes ambiguity and establishes a shared commitment to a set of key objectives that must be achieved.
Value engineering is the process of removing unnecessary costs from a project without affecting function or value. This is different from cost cutting -a product with a greater capital cost could be specified for example, which provides greater value across its life cycle.
What is value management?
Value Management focuses on an overall project strategy to provide true value; this includes reviewing whole life cost as well as initial capital expenditure
Proactive approach to delivering maximum value to the client first time
Output outline relationship between project objectives and business needs
Broader report for collection of stakeholders
What is value engineering?
Value engineering is focused on specific elements of the project to provide the best solution.
Is a reactive procedure when overspend has been identified. Part of VM
Output is summary of approaches to achieve required functionality & comparative costs
More technical report
What is value?
Ratio between the benefit (output) and the cost / effort (inputs) to achieve it
Will change between projects
What is EVM?
This is not something I have experience of directly but I understand it is a project management technique to measure progress of a project
Earned value management
What are the similarities in VM and VE?
Both focus on eliminating unnecessary cost to improve the ratio between costs and benefits . Not about reducing necessary costs by reducing scope, omitting work items or downgrading specification to a lesser performance
Focus on value rather than cost - optimum balance between quality, whole life cost and time
What are the benefits of VM/ VE ?
- Reduce project cost by focusing specifically on the functional requirements and considering alternative approaches
- Earlier consideration of design, buildability and maintainability can encourage more efficient and effective ways
What are the steps of VE / VM?
- Understand the problem - Information gathering
- Identify the different solutions - Creative thinking
- Evaluate the different solutions - Analysis, evaluation & shortlisting
- Develop shortlisted solutions in more detail
- Identify best solution & recommendations
What processes should you consider alongside VE?
- Lifecycle costing
- Risk management
- Lean construction - simplifying process of construction
What is needed to carry out VE?
- Time for thorough review
- Background details - an understanding of what constitutes value, what has already been considered
- Skill, knowledge & expertise - multi-disciplinary
What is included in a VE / VM report?
- Introduction & context
- Required outcomes and value - setting out functionality / performance outcomes
- Alternatives considered
- Value assessments of alternatives
- Conclusions and recommendations
What are some of the challenges faced with VE?
- Lack of time
- Lack of precisions - not an exact science, error margins should be considered
- Not starting early enough
- Not including appropriate stakeholders - occupiers e.g
- Revisiting previous decisions
How would you prioritise ideas if the project had a lot of VE opportunities?
Battelle method (progressive hurdles)
- Cull - simple yes no questions to determine which are eliminated
- Rate - more effort in to determining suitability
- Score - including reviews of costs, life cycle etc
Paired comparison
- Matrix comparing each option with each other (like the risk assessment calculation)
- Select preference between each pair
