Value Value

What is Value Engineering?

The goal of value engineering is to maximize value in both short-term and long-term investments. It was first used in the manufacturing sector during World War II and has since gained widespread use in the building industry.

Value Engineering (VE) must not be confused with design reviews or cost-cutting initiatives. It comprises a resourceful and systematic approach to project needs analysis with the objective of achieving key functionalities at the lowest total costs (including capital, staffing, energy, and maintenance) during the course of the project. By investigating different design concepts, materials, and processes without compromising client goals, VE promotes value and economy through collaborative research involving skilled, multi-disciplinary teams.

The professional group, now known as SAVE International, was founded in 1959 as the group of American Value Engineers (SAVE) and is committed to improving VE by fostering a greater understanding of its guiding principles, procedures, and concepts. With more than 350 active Certified Value Specialists (CVS) in the US, SAVE International currently has over 1,500 members. The U.S. General Services Administration asked SAVE to draught the requirements for CVS registration in the early 1970s.

VE may be used at any time, even while a project is being built. However, early VE implementation often results in the highest returns on time and effort invested. The three main project phases and the use of VE are described in the following sections.

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What is Value Engineering (VE)

VE is an approach used to cut out wasteful spending and guarantee value for money in a project. Its methods and procedures can be applied at any level of a project’s life cycle, from the early stages of strategic definition and design to project closeout.

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When implemented as a team effort including the entire project team, from the client to the supplier chain, VE is most successful in achieving maximum value.

For instance, instead of choosing an exact replacement when considering the installation of an additional CCTV system, a VE strategy would entail looking into different models that provide comparable or better functionality at a more affordable price. A more cost-effective solution can be attained by enhancing picture quality and lowering electricity usage.

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Value Engineering Steps

Value engineering measures the function-to-cost ratio, and the process of enhancing a product’s value entails either cost-cutting or functionality enhancement. Businesses typically prioritize cost reduction while maintaining product functionality. Information, creativity, assessment, development, and presentation are the five stages that make up this process.

1. Information Phase

Data collection and analysis are the first steps. This entails comprehending the current product and design as well as locating the project’s main functional problems. Any concerns or damaged parts are identified, and evaluation techniques are chosen to gauge project progress. Functional analysis is also carried out to find areas for improvement.


2. Creative Phase

As the team looks for ways to improve the specified functions, creativity is put to use. There are brainstorming sessions when all potential remedies for the problems that have been discovered as well as functional alternatives are considered. With the help of verb/noun pairings, the group comes up with a list of viable answers.

3. Evaluation Phase

The proposed solutions from the previous phase are assessed in this phase, taking into account both their benefits and disadvantages. The group gives their suggestions, stressing the benefits and drawbacks of each resolution. A recommendation is dropped if it has more drawbacks. The alternatives can be ranked using a weighted matrix analysis, and the most effective ones advance to the following stage.


4. Development Phase

The best options that have been chosen are thoroughly examined in this step. The team investigates the implementation procedure and related expenses. Common duties include sketching potential solutions, estimating costs, and performing technical evaluations. A strategy for implementing the final suggestions that have advanced in the process is created, outlining the procedures needed to do so.

5. Presentation Phase

The team delivers its successful solutions to management and stakeholders in the last stage. To persuade them of the benefits and potential cost savings of the suggested solutions, presentations are made using reports, flow charts, and other visual aids. The presentation is thorough, outlining related expenses, advantages, and potential drawbacks. It becomes an implementation plan that is carried out once it has been approved by management and any desired adjustments have been implemented.

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There are typically four metrics of project value


  1. High-cost, low-value projects are those that take a lot of time, money, or labor but offer little benefit to the business, the client, or both.
  2. High-cost, high-value: In this situation, a project includes large costs but has the potential to provide the client and the firm with substantial value while also lowering long-term costs.
  3. Low-cost, low value: In this case, a project has cheap expenses for both the client and the business, but the finished product provides only modest value to all parties.
  4. Low-cost, high value:  The ideal scenario for building projects is one where the expenditures in terms of time, money, and labor are minimal but the overall long-term value for the client and the business is high.

What does Value for Money really mean?

Value for Money (VfM) in the construction sector refers to striking the best possible balance between the advantages or quality of the project and its overall cost. The goal of VfM is to reduce costs, but it goes beyond this; it also involves effectively controlling expenses while maintaining quality.

Value management and value engineering are necessary to achieve value for money:

  • Value management seeks to continuously deliver value by locating and managing opportunities inside a project. Value engineering reduces costs by determining the relative worth of each project component.
  • By engaging early contractor involvement and collaboration between the design and professional teams to build a plan that is in line with the client’s needs, VfM reasoning implementation should begin from the outset of a project, maximizing the benefits.

Why Cost-cutting Puts Value for Money at Risk

While initial cost savings may make the project’s finances appear favorable, poor management might jeopardize the entire endeavor.

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In some circumstances, the adage “you get what you pay for” is valid; choosing less expensive materials could result in future costly issues or a shorter lifespan.

Although more expensive solutions may provide benefits at indirect costs, more cost does not always equate to higher quality. Even if local suppliers are more expensive, they could save you money on extra time or transit costs. Staff with higher levels of skill can produce results more rapidly and effectively. Additionally, durable materials frequently have advantages for sustainability, reduced maintenance costs, and lifespan.

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How Do Businesses Use Value Engineering?

Value Engineering (V.E.) is used by businesses in a variety of ways, often during the three project stages of planning, design, and final construction. To maximize value and make necessary adjustments, each phase depends on V.E. assistance from project managers.


Project planning phase

Businesses use V.E. to develop a more timely and cost-effective project during the planning stage. For instance, V.E. could be used to find economical solutions while preserving structural integrity when building a skyscraper. A new metal alloy for the internal support beams can be suggested by the project manager, or perhaps a construction method that emphasizes speed and structural integrity. The customer’s values, whether they value appearance, integrity, or a combination of elements, are also understood via V.E.

Design phase

The construction team works together to produce blueprints and other design documents during the design process. As the team implements the first planning phase, the first V.E. adjustments frequently occur during this phase. For instance, the team might change its mind about choosing steel as the ideal material in the design process after realizing that the structure’s shape necessitates a more flexible material. During this phase, the group also evaluates cost-effectiveness.


Construction phase

The design is turned into an actual environment during the construction phase. Here, the project’s life cycle is frequently established and V.E. metrics are extensively tested. For instance, when creating a new floor for an office building, the team can find that the amount of labor needed to work with a specific material surpasses the initial estimate, making it less practical and lowering the project’s overall value for the company.


Value engineering has the promise of increasing value and lowering costs for a range of goods and services. Let’s examine a few instances:



A complex piece of machinery was created by a manufacturing company, but it fell short of client expectations for performance and dependability. The relevant design, materials, and manufacturing processes were examined by a value engineering team. They noted areas that needed improvement, such as redesigning robust components and putting in place a more effective manufacturing process. These adjustments led to a more dependable product, more client pleasure, and lower expenses.


Due to the high cost of materials and labor, a construction business had cost overruns when constructing a sizable commercial structure. A team of value engineers looked closely at the design and building procedures. They discovered areas that may be improved, like using cheaper alternatives to materials and optimizing the design to reduce labor needs. Over 15% in costs were saved as a result of these modifications.



Because of a car model’s high price, an automotive manufacturer had trouble selling it. A team of value engineers looked into the designs, materials, and manufacturing procedures. The use of more economical materials and redesigned components to save manufacturing costs were two potential improvements they found. These adjustments increased sales and saved over 20% on costs.

Business procedures: Managing inventories and logistics was difficult for a large retail organization. To evaluate these procedures, a value engineering team was put together. They identified opportunities for development and put forward ways to boost productivity, cut costs, and simplify inventory control.

These businesses were able to optimize their goods, procedures, and costs by using value engineering ideas, which increased value for both the company and its clients.

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Immediate Benefits of Value Engineering


Enhancing Project Quality

The goal of value engineering is to maintain project quality, and in many circumstances, it succeeds. Two important methods are used to achieve this. In first, materials, systems, and procedures are simply compared to ascertain their respective qualities. The decision may become clear if the team finds that a less expensive option performs better.

The second way value engineering raises the quality of a project is a little more abstract. By using less expensive but similarly functional materials, money can be saved and then put towards other high-value components that enhance the finished product. The owner might decide to spend the money saved on interior finishes on a stronger HVAC system, for instance.

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Amplified Project Efficiency

The process of value engineering is centered on collaboration and information collecting. The project plan is made clearer by regular communication among the project team members regarding building supplies, schedules, drawings, specifications, and costs.

A clear course of action is developed as the team studies and discusses the documentation, analyses the design functions, creates and evaluates alternatives, and assesses associated costs. When everyone is on the same page from the start, the project can go forward with the least amount of delay and without the added expense and hassle of change orders. Thanks to the application of the value engineering process, this streamlined method makes construction work faster and more effective.


Cutting the waste

Wasteful practices are a common problem in construction projects. When on-site general contractors might have completed the work, extra supplies are ordered as a precaution, design components go beyond the scope of the project, and subcontractors are employed. These methods produce trash that is not essential.

The ability of value engineering to eliminate waste from a project is one of its key advantages. The full capability of on-site teams is utilized, unnecessary design components are examined and frequently deleted, and building materials are ordered in precise amounts without excess. Value engineering encourages the execution of lean projects.

It is important to keep in mind that cutting waste not only lowers costs but also speeds up project completion by getting rid of pointless tasks and hiring duplicates.

Frequently Asked Questions

What is value engineering’s main objective?

Value improvement is the main goal of a Value Engineering study. The scope definition, functional design, constructability, coordination (internal and external), or project development timetable may be the subjects of the value enhancements.

 Can value engineering be used in all sectors of the economy?

Yes, a variety of industries, including manufacturing, construction, healthcare, and services, can use value engineering. Its guiding ideas and procedures can be modified to meet the particular needs of each industry.

Why is value engineering different from cost-cutting, third question?

The largest distinction between cost reduction and value engineering, though, is that the former does not concentrate on how cuts can affect the long-term worth, intent, or functionality of the undertaking.

What part does teamwork play in value engineering?

In value engineering, cooperation is essential. Organizations can encourage creativity, innovation, and the production of ideal solutions by utilizing cross-functional teams and a variety of views.

What role does value engineering play in sustainability?

Value engineering takes into account both the up-front and ongoing costs. Development that is sustainable is one which satisfies present wants without compromising the ability of future generations to satiate their own needs.

Can value engineering be used on current goods or procedures?

Value engineering can be used to improve existing goods or procedures. Organizations can find possibilities for improvement and execute value-adding changes by thoroughly analyzing and re-evaluating the current situation.

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