Value engineering is viewed in many industries as an excellent strategy for reducing costs, increasing reliability, and improving quality (OMB, 1993). It can be implemented in hardware and software; development, production, and manufacturing; specifications, standards, contract requirements, and other acquisition program documentation; facilities design and construction.
Value engineering is a technique directed toward analyzing the functions of a project or product to determine "best value," or the best relationship between reliability and cost. In other words, "best value" is represented by a project or process that consistently performs its required basic function and has the lowest cost.
In this context, the application of value engineering in a construction project can yield a better value when construction is approached in a manner that incorporates environmentally sound and energy-efficient practices and materials.
This paper discusses the important relationship between reliability and value engineering, in an effort to explain how the two work harmoniously to improve projects or products.
About Value Engineering
Value engineering is a professionally administered, function-based, systematic approach used to analyze and improve value in a product, facility design, system or service (Mudge, 1971). It is basically used as a means to solve problems and reduce costs. However, value engineering also works hand in hand with reliability, as it aims to improve performance and quality requirements. By enhancing value characteristics, value engineering improves reliability, ultimately increasing customer satisfaction.
In many ways, value engineering is similar to cost-cutting strategies. However, the close relationship between value engineering and reliability sets it apart from traditional cost-cutting measures. The following chart demonstrates the differences between value engineering and cost cutting:
Value Engineering Cost Cutting
It is Function based
Equipment and material based
Poor value functions
Big cost items
Basically, value engineering allows business managers to identify poor value functions and find ideas for lower cost and higher value alternatives. It directly addresses specific functionality problems, improving reliability. However, it does not reduce the scope of the process.
Elements of Value Engineering
Value engineering is based on functions, meaning that it uses function logic processes to identify needs and problems (Mudge, 1971). These processes serve to help people detach themselves from their preconceived biases. Thus, they can see past their own desires and look at the basic needs involved. Thus, people can see which aspects of value engineering can improve reliability.
Value engineering also focuses on obtaining results that increases a company's return on investment (ROI) or value for the customer. Basically, this means that value engineering concentrates on making products more reliable so that they generate more money for the company.
The Importance of Reliability in Value Engineering
Many people have different perceptions of value engineering; some are positive, while others are negative. Tim Smith, an engineer, said that, ideally, "value engineering is when a design is reviewed, and alternate means are suggested that result in the same system but at a lower cost. The value engineered system should perform the same as the original design while giving the owner the same value at a lower cost (Johnson, 2000)."
Paul Gonzalez, another engineer, also believes that the design objective must be kept at the forefront. "Value engineering is engineering systems to accomplish the same results while reducing the construction cost and maintaining the integrity (Johnson, 2000)."
However, the ideal is often not met. "As long as the objective of the system is retained, reducing the cost corresponds to increasing the value," Daniel Fagan, an engineer, said. "But, more often than not, the term 'value engineering' is used to refer to reducing the cost of a building by reducing the scope of the work (Johnson, 2000)." For example, a hot water system for a laundry could be designed with a water softener, resulting in a better quality finished laundry product that uses less soap. As a value engineering option, however, the water softener could be deleted. This would decrease the cost, but rather than providing the same results, the parameters would be changed.
Bob Boulware, and engineer, was not so positive about value engineer. offered a less idealized definition. "Value engineering means cheapening the job," he said. "There is no regard for 'value.'" For this reason, many engineers refer to value engineering as "no-value engineering (Johnson, 2000)."
Many engineers are resentful of value engineering because they believe it often does the opposite of what it is intended to do, which is cut costs while improving reliability and value. Some say that many companies introduce value engineering solely to cut costs, rather than implementing it professionally and mainly for engineering purposes.
Typically, value engineering on my projects ends up in reduction of equipment or equipment quantities," said John Smith, an engineer (Johnson, 2000). "We may design a hot water system with two boilers, each sized for 66% of the building's demand. A typical contractor's value engineering suggestion would be to provide one boiler sized for 100% capacity. There is a savings, but no value. If that one boilers fails, the owner has no hot water. The value of the original system design gives the owner 66% capacity from the second boiler, thus allowing him to have some hot water until the other one is repaired."
In this case, the contractor's value engineering solution is simply reducing equipment or purchasing less reliable equipment. However, this cannot really be classified as value engineering, as it reduces reliability and value. Therefore, it is really just cost cutting.
Unfortunately, value engineering is not implemented properly and the results are negative. For example, when value engineering focuses on costs rather than functions, reliability is sacrificed and the quality of the equipment diminishes, resulting in an overall system that is unreliable, ultimately resulting in higher operating costs and in need of more service and maintenance. The value in value engineering is lost.
One project in particular stands out in my mind," engineer John Serwatka said (Johnson, 2000). "It was a new school, and we designed a four-pipe heating/cooling system. There are a lot of outside air requirements for schools, and our design was the best system to control humidity. We had to delete it, however, because it cost too much money. As of this day, we are still trying to alleviate the problem of too much humidity in the space. The owner is upset because his construction manager failed to tell him that we did not want to take the system out because we knew this was going to happen. Now the owner has to spend thousands of dollars to fix the problem." In this case, cutting costs decreased reliability, defeating the purpose of value engineering.
Reliability is an important factor in value engineering. "A recent project that I worked on included a duplex system in the design for dewatering of the foundation," said engineer Daniel Fagan. "The value of a duplex system is that should one of the pumps fail, the other pump would still function. In an effort to reduce the cost of the project, the second pump was eliminated, which did save cost, but left the owner without any backup should the single sump pump fail."
For these reasons, it is important that reliability must play a stronger role in value engineering than cost. If cost is the only issue addressed, problems are bound to eventually surface.
RCM and Value Engineering
Reliability Centered Maintenance (RCM) emphasizes the roles that reliability theory and practice assume in properly focusing preventive maintenance practices on retaining a product's design reliability (Brown, 1992). RCM is best described as "doing the right thing" while value engineering is best described as "doing things right."
The implementation of value engineering results in decreased costs and increased reliability. Therefore, when used properly, value engineering is an excellent way to design…