How can you analyze and evaluate construction value engineering?
Construction value engineering (CVE) is a systematic method of improving the function, quality, and cost of a project. It involves identifying and eliminating unnecessary or excessive costs, while maintaining or enhancing the performance and reliability of the project. CVE can be applied at any stage of the project lifecycle, but it is most effective during the design and planning phases. In this article, you will learn how to analyze and evaluate CVE proposals and outcomes, using some practical tools and techniques.
Before you can assess the value of any CVE proposal, you need to have a clear understanding of the project scope and objectives. What are the main functions and requirements of the project? What are the expected benefits and outcomes? How do they align with the client's needs and expectations? Having a well-defined project scope and objectives will help you to establish the criteria and standards for evaluating CVE alternatives.
The next step is to identify and prioritize the cost drivers of the project. Cost drivers are the factors that influence the cost of the project, such as materials, labor, equipment, design, quality, schedule, and risk. You can use tools such as cost breakdown structures, Pareto charts, and value analysis matrices to analyze and categorize the cost drivers according to their impact and importance. By prioritizing the cost drivers, you can focus on the areas that offer the most potential for value improvement.
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When I was working in Qatar, we got an inquiry for the structural steel roof of a Sports Hall for the fabrication and installation of steel roof. There was a challenging roof truss installation work due to the weight and height of the main roof truss. The main contractor had proposed the installation methodology which would need two crawler cranes to install the main truss following its assembly on the ground out of the pitch. I proposed an alternative installation method which would decrease the cost of installation. Once we were awarded, we planned and executed this installation by using SLUs (Strand Lifting Units) where the segments of roof were assembled on the pitch and then lifted by using SLUs. It actually reduced the cost.
Once you have identified and prioritized the cost drivers, you can generate and analyze CVE alternatives. CVE alternatives are different ways of achieving the same or better function, quality, and performance of the project, at a lower cost. You can use tools such as brainstorming, function analysis, benchmarking, and life cycle costing to generate and analyze CVE alternatives. You should compare the alternatives with the original design or baseline, using criteria such as cost, function, quality, performance, reliability, feasibility, and risk.
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I believe the importance of team works. Meetings for discussions and brainstorming are very valuable. Sometimes the attendees of these meetings will be only PMO staff but other stakeholders like the designers, consultants, specialized sub-contractors will also join the CVE meeting to contribute with their ideas.
After you have generated and analyzed CVE alternatives, you need to select and implement the best one. The best CVE alternative is the one that maximizes the value of the project, while meeting or exceeding the project scope and objectives. You can use tools such as decision matrices, cost-benefit analysis, and value engineering change proposals to select and implement the best CVE alternative. You should also communicate and document the rationale and benefits of the selected alternative, and obtain the approval and support of the stakeholders.
The final step is to monitor and evaluate the CVE results. You need to measure and verify the actual cost savings, function improvements, quality enhancements, and performance gains of the implemented CVE alternative. You can use tools such as performance indicators, value engineering reports, and post-implementation reviews to monitor and evaluate the CVE results. You should also identify and document the lessons learned, best practices, and recommendations for future CVE applications.
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Measurable is controllable. Whichever CVE method is used, it must be followed in terms of numbers, values, quantities in order to analyze and compare it with the preset values without the applied CVE. This exercise should be made regularly throughout the project lifetime as well as at the completion of the project. Thus it will be monitored and evaluated. The applied CVE method must be reported separately at the end of the project and must be discussed during the meetings at the completion phase of the project. Outcomes of these discussions will also be added to "Lessons Learned" sessions.
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