Cohousing-L Mailing List: Value Engineering

[Bruce Hecht (brucehe]

David,

Value Engineering (VE) is a term that is often used incorrectly to mean
scope reduction. VE is not that. I have worked as a project manager on
industrial construction and many have this misconception. Below is a
definition from the Dept of Energy's Project Management website about VE. It
should clarify VE. VE can be a very effective tool, but I do not know if
anyone really uses this formal process on multifamily construction. VE is a
profession and I doubt if many production homebuilders are familiar with the
process.

Bottom line; just be clear what you are doing on your project. If you are
cutting scope, that is reducing features and functionality then say so and
make sure the whole team realizes this. You are changing the projects
Program, develop a process on how to do this.  If you are doing VE, you are
attempting to develop creative solutions that do not reduce the
functionality and features of your project but maintain that functionality
and reduce cost, improve schedule or quality. That is a different process.
Do a Google search on Value Engineering for more information.

Hope this helps.

Bruce Hecht

Bruce Hecht P.E.
Oregon Natural Step Network
Coordinator Corvallis Chapter
321 SW 9th St.
Corvallis, OR  97333
(541) 754-3028
mailto:brucehe [at] peak.org
http://www.ortns.org/

"Those who anticipate the future are empowered to create it"
John F. Kennedy




VALUE ENGINEERING DEFINITION

Value Engineering (VE) is the systematic application of recognized
techniques by a multi-disciplined team to identify the function of a product
or service, establish a worth for that function, generate alternatives
through the use of creative thinking, and provide the needed functions to
accomplish the original purpose of the project at the lowest life-cycle cost
without sacrificing safety, necessary quality, and or environmental
attributes of the project.
VE studies do all of the following:
*       Use an independent technically diverse team,
*       Follow a systematic Job Plan,
*       Identify and evaluate function, cost and worth,
*       Develop new and unusual alternatives for required functions,
*       Determine the best and lowest life-cycle cost alternatives,
*       Develop fully supported recommendations, and
*       Report to management within one week
VALUE ENGINEERING RESULTS
Projects that have already experienced cost, schedule, or scope problems
benefit from VE analysis. But the greatest potential for improvement is in
technically and organizationally complex or unusually constrained projects
in preliminary design (20-35% completion: before Critical Decision 2).  VE
at this point produces maximum benefit because recommendations can be
implemented without delaying progress or causing significant rework of
completed designs. While the average cost improvement from VE is 6%, cost
reduction is not always the most significant benefit. Schedule reductions,
environmental requirement modification, and operational procedures can all
be improved through the functional cost evaluation used in all VE studies.

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