We’ve all heard the term “Value Engineering” in construction - or more commonly referred to as simply “VE”. But what exactly does it mean and how is it being used?
Value Engineering in construction is the practice of looking at the design features - including systems, equipment, and materials - and determining if there are ways to optimize around cost and schedule while maintaining overall project performance, quality and safety. Although VE is becoming a common practice on many AEC projects, it is not always executed well. This is often due to short-sighted decisions and a lack of comprehensive understanding.
VE is not meant to be a part of design review, nor should it be solely a cost-cutting exercise. When it is applied this way, it is usually to the detriment of a project’s integrity. VE should be a conscious exploration of reasonable and practical alternatives, taking various design solutions into consideration when they optimize the cost/value ratio of elements within a project. Designers and contractors should use VE in a collaborative way to identify opportunities and propose changes that reduce costs without diminishing the quality of the project.
Progressive project owners are sensitive to the changing needs of the industry, and are looking for partners who can fulfill their visions and deliver a high-quality project on time, and wherever possible, under budget. Collaborative VE seeks to ensure that all stakeholders are working with the same goal in mind.
While there are many approaches to implementing VE on a given project, the one universal aspect that holds true is that Value Engineering is only as effective as the planning that goes into its execution. The more careful the planning, the greater the ROI on that planning and benefit to the project. As with all things, the fast moving tech sector is developing tools that help in this sector, making VE both easy and affordable for AEC professionals.
Value Engineering in construction is the practice of looking at design features and determining if there are ways to optimize around cost, schedule, performance, quality and safety
Value Engineering In Construction: Value isn’t solely a measure of cost
In the past, Value Engineering has been applied poorly and is therefore met with suspicion. Many contractors have come to view VE as a negative side effect of poor budget management during design that requires them to reduce scope or quality when they attempt to realign the project to the budget. VE also gets a bad rap because some contractors or subcontractors involved in the process do not restore value dollar-for-dollar — that is, one subcontractor might understate savings in one area while another overstates the trade-off cost, essentially taking money from the owner’s pocket.
These less-than-stellar results come from an unstructured, ill-informed approach that can’t be audited. Typically the VE process is also constrained by the demands of time. Either it begins too late in the process, or it entails a lot of brainstorming sessions that are not well documented. Compounding the time-crunch problem is that, as quickly as these changes are discussed and agreed upon, they now have to be transmitted into plans in the field, adding complexity and uncertainty, especially in a paper-based process. It’s hard to know if everything made its way onto the drawings until it’s too late and RFIs start coming back to the head office.
The typical approach usually involves a discussion based on 2D project plans where various project stakeholders suggest substitutions in material or changes in design, all solely in the interest of cost cutting. Numerous options and their iterations can be examined but if this discussion is not properly organized or documented, confusion can result around which options were agreed upon. Accepted cost delta and scope changes also may not be clearly translated to the drawings.
You all know where this leads: design discrepancies and confusion, RFIs and rework, late change orders, scheduling problems, and unforeseen expenses that the VE process was supposed to avoid, rather than compound. All this results in lower profits and diminished value as well as increased scepticism on the part of everyone involved.
A Better Way with Construction Software
Assemble Systems has developed a solution that presents a different approach to Value Engineering, one that is designed to avoid the common pitfalls and allow AEC professionals to get the most out of VE without disrupting their normal workflow, while greatly enhancing the speed, accuracy, and results of the process. Flexible VE tracking and collaboration increases visibility into accurate quantities, tracks proposed changes, and creates an audit trail for trustworthy accountability.
Assemble provides project teams with quick access to comprehensive model inventories that offer greater efficiencies to your work
Assemble’s cloud-based model data management gives all project stakeholders instant access the model information, ensuring they can visualize and understand the elements, quantities and costs being discussed -- from anywhere in the world. Assemble’s approach to Value Engineering is focussed on creating fluid team collaboration and transparency.
Assemble uses the 3D building information model (BIM) for accurate, up-to-date project data that supports an optimized VE process. Using Assemble, users can:
- Access saved views during the discovery phase of a VE process to quickly identify value-add opportunities.
- Associate model quantities with cost adjustments to get a razor-sharp picture of their impact to quickly make decisions.
- Tag each element, in the model, with a unique VE number and description, listing the type of change, costs adjustments, or other relevant parameters.
- Track the status of approval of individual changes and log them for later auditing.
- Quickly obtain quantities of items to be changed as well as quantities of the entire scope, so you can verify unit costs from the original bid in your effort to recoup the same unit costs for the changes.
- Create an audit trail defining what was in the original bid/contract compared to proposed changes, increasing accountability.
- Automatically push change information to the model, facilitating design update and verification and giving designers the ability to quickly find elements that need to be updated directly within the design file.
Putting Real 'Value' in Value Engineering
Oftentimes, Value Engineering is nothing more nuanced than a desperate scramble to reduce costs and thus the stakeholders miss the opportunity to deliver the true payoffs of properly executed VE to the owner. Assemble Systems seeks to help stakeholders capture that opportunity, enabling AEC professionals to move past the inefficient VE practices of yesterday and move toward a well thought-out, truly collaborative process, that delivers optimum returns on the best elements of Value Engineering..
Assemble Systems provides a SaaS solution that enables construction professionals to condition, query and connect BIM data to key workflows including design reviews, takeoffs, estimating, change management, value engineering and schedule management. By extracting an entire model inventory in minutes, Assemble provides project teams with quick access to comprehensive model inventories that offer greater efficiencies to your work.