What is Value Engineering? 

The Value Engineering, also known as Value Analysis or Value Management, is a problem-solving method to improve performance or quality while reducing costs. It was proposed by proposed by Lawrence Miles and Erlicher and is used in a variety of industries.

It can also be described as a function-oriented, systematic team approach used to analyze and improve the value of a product (function in relation to cost), facility design, system or service. 

Reducing costs refers to either total life cycle costs or the direct costs of production. This measure of cost is most applicable to expensive capital equipment, and includes manufacturing costs, installation costs, maintenance costs, and decommissioning costs. 

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Steps in Value Engineering Process

Carrying out value engineering requires creation of a Job Plan (a systematic problem-solving process consisting of four major phases):

Information Phase

Define the problem to be solved. Evaluate the feasibility of implementing the VE study for the problem. Gather information about the problem. Allocate the required resources and team to execute the study.

Speculative Phase

Develop alternative approaches of providing the required functions at lower cost. This requires a functional analysis using the Function Analysis Systems Technique (FAST). This is a diagramming procedure that demonstrates the logical relations among the functions of building, system, or component.The FAST diagram allows the team to generate ideas to choose the best idea for optimizing value. 

Analytical Phase

Apply cost comparisons and define the optimum alternative of the ideas generated. Life Cycle Costing (LLC) is applied to study the lowest cost of the final selected alternatives.

Proposal Phase

Present results of the study to the stakeholders for understanding and approval. Implementation will require concurrence on the part of all parties. 

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