What is Value Engineering?

Value Engineering is a design method to create solutions that perform well but don't cost too much

Value Engineering aims to optimize designs for best value. Once a design is realized, its real value emerges, shedding light on function performance and cost. Adjustments might be necessary to achieve optimal value, intertwining function, performance, design, and costs.

Value is subjective. A user's aesthetic choice might be impractical for a manager. Therefore, a diverse team is vital in Value Engineering.

Value Engineering has various aliases: value optimization, value management, value methodology, value analysis, or "Wertanalyse" in German. All trace back to Lawrence D. Miles' 1947 concept. Over time, its application has evolved, especially in today's digital age, emphasizing 'best value for money'. Value Engineering fosters swift innovation and superior performance.

Value Engineering prioritizes efficient solutions without high costs. Using a systematic approach that combines function analysis and creativity, its goal is to enhance product or process value, defined as the ratio of need to resources used.

These studies, often termed “pressure cookers” in a workshop setup, involve relevant stakeholders and the project team. They address function, creativity, and cost, requiring thorough planning. Often also driven by risks, key success factors, and prioritization of needs. The pressure cooker approach facilitates an itterative design process, from planning, model creation and testing to deriving lessons from each phase.

Value Engineering (VE) helps make things better without making them expensive. Think of it as getting the best without overspending. The main idea is to use what we have wisely and creatively. VE studies are like quick, focused teamwork sessions. These involve important team members and look closely at two things: what a product or process does (its purpose) and how it can be done differently or better, all while watching the budget. Before starting, everyone should know what the study will be about and what they hope to achieve. Sometimes, these studies are about coming up with new ideas. A well-known standard in Europe, EN 12973, guides many of these studies. When we talk about "need", we mean the basic job something does, like how a cable gives electricity. Resources can be money, time, or even energy. So, value can be seen as: Value = (What It Does x How Well It Does) / What's Used To make something more valuable, we can: Add new features. Make it work better. Spend less on it.

Step-by-step Guide to Value Engineering

Value Engineering is conducted by methodically proceeding through the stages listed below. From the Information phase to the Presentation phase, activities are collaboratively executed by a team. Employing this systematic itteratve approach ensures comprehensive coverage, thereby enhancing the reliability of the findings. A concise description of each phase is provided as follows:

Preparation Phase:
- Purpose: Define desired outcomes and assemble a team with the appropriate expertise for Value Engineering.
- Activities: This phase encompasses initial steps such as formulating cost models and collating pertinent data.
Information Phase:
- Purpose: Facilitate the exchange of project knowledge.
- Activities: The goal is to align everyone’s understanding. Moreover, the core tenets of the Value Engineering study are set during this period.
Function Analysis Phase:
- Purpose: Ascertain the rationale behind the functionalities of the system.
- Activities: Functions are pinpointed and categorized during this phase, costs associated with these functions are determined, and the value of any existing baseline design is assessed.
Creative Phase:
- Purpose: Elicit a range of alternative solutions.
- Activities: Ideas are generated based on functions that are perhaps costly, neglected, or underperforming. The ambition is to brainstorm a myriad of alternative concepts. This phase is a judgment-free zone, and any limitations are temporarily set aside.
Evaluation Phase:
- Purpose: Distinguish ideas worth pursuing from those best set aside for the time being.
- Activities: The array of conceived ideas is distilled down to the most viable options during this stage.
Development Phase:
- Purpose: Scrutinize the feasibility of concepts from the Creative phase, evaluate their merit, and contemplate their amalgamation into new potential alternatives.
- Activities: Here, the shortlisted ideas are delved into further to discern their value and feasibility.
Presentation Phase:
- Purpose: Enlighten stakeholders and management on the findings of the Value Engineering study thus far and garner their insights.
- Activities: The outcomes of the Development Phase are showcased to the decision-makers, culminating in a consensus on the value of the proposed ideas.
Reporting & Implementation Phase:
- Purpose: Chronicle the procedure, participants, and results of the optimization study to facilitate the implementation, verification, and adaptation of the findings in subsequent projects.
- Activities: Post-conclusion of the Value Engineering study, a comprehensive report documenting and detailing its insights is crafted. There’s also an emphasis on guiding the client through the process of actualizing the proposed ideas.

Value, Stakeholders and Different Viewpoints: important concepts in Value Engineering

When an idea is made real, we see its true Value. This means how well it works and how much it costs. To get the best value, we might need to change how it works, how well it works, or how much we spend on it. Value Engineering is about mixing these elements together.

Different people see Value differently. Some like things to look good, while others want them easy to fix. So, for Value Engineering, we need a mix of people with different ideas.

People from different places call Value Engineering different names, like “Wertanalyse” in Germany. But they all go back to the old idea about finding Value. As we use engineered technology, we all want good value for our money. Value Engineering strives to give the best results without spending too much.

Applying Value Management (VM) in Project Portfolio Management (PPM) leads to clear benefits. These include prioritizing projects based on value, optimizing resource use, and improving return on investment. VM helps organizations select, execute, and monitor projects that deliver the highest function for the lowest cost. The process includes defining objectives, assessing the value-to-cost ratio, and using methods like function analysis and cost-benefit reviews. Tools such as strategic function analysis, scoring models, and risk assessments support evaluation. Continuous feedback ensures the portfolio stays aligned with goals, maximizing value.

Starting a Value Engineering Study

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Call us to speak about your project. Let's see if we can offer you a no-cure-no-pay VE-study and why that might be.

Feeling more scientific? The 2 hours introduction training course is our 2 hours elearning training. Followed by live examples and Q&A online.

Construction projects

We facilitated VE-studies in numerous projects. We even have a no cure no pay offer to make. Project teams changed their course, came back on track, we able to re-establish good communiation channels with their stakeholders. Lessened the risks, compacted plannings, and save lots and lots of money.

Process industries

Food processing from dairy to sweets, Industrial chemical processing from iron to gold, from crude oil, to gas and solar. We helped organisations to introduce value engineering, trained, coached and moved on to the next.

Asset Owners and financers

Value for money: who is the most persistent in demanding best value? Right! Owners, financers, and the risk-takers. External teams to review, or a very good VM1 training to start thinking much more about value. How sounds that?

Sources that inspire us (in alphabetical order):

DACE Dutch Association of Cost and Value Engineers https://www.dace.nl/nl/value-management/value-management

EGB European Governing Board https://valueforeurope.com/

HKIVM Hong Kong Institute of Value Management https://hkivm.org/

IVM Institute of Value Management UK https://ivm.org.uk/

Krehl: https://krehl.com/

NEN Netherlands Standardisation Institute https://www.nen.nl/nen-en-12973-2020-en-267484

SAVE International https://www.value-eng.org/default.aspx

Value Engineering Academy https://value.fm/academy/home-academy/

VDI Verein Deutscher Ingenieure https://www.vdi.de/tg-fachgesellschaften/vdi-gesellschaft-produkt-und-prozessgestaltung/valuemanagement-und-wertanalyse

The outcome of any design must be Value

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Our teachers are international certified around the globe. With lots or experience in facilitiation, training, coaching and implementing in organisations.
Practitioners in Value Management PVM, Trainers in Value Management TVM, Certified Value Specialists CVS.