Value Engineering – The Better Best Practice
From one industry to another, each one has a number of time and field-tested best practices that practitioners within each industry know, trust and follow. In the architecture industry, for example, best practices can include how to schedule a project, how to draft construction documents or how to staff a design studio.
Regardless of industry, the goal of a best practice is to increase the effectiveness and efficiency of an organization’s operations, costs, work flows, people and management, among other things.
When it comes to the practice of value engineering, however, some architects see this as less of a best practice to follow or deploy, and more of an infringement on their ability to design for a client. So, which is it, best practice or hindrance, and what can be done to mitigate any negative thoughts or feelings?
First referred to as functional and then value analysis, value engineering was developed by a team of executives at General Electric during the Second World War, when raw materials, component parts and skilled labor were in short supply. The Society of American Value Engineers International defines value engineering as a “function-oriented, systematic, team approach to provide value in a product, system, or service.” The definition further explains that while the process is often “focused on cost reduction, other improvements such as customer-perceived quality and performance are also paramount in the value equation.” While it’s good to have a working definition of value engineering, it’s critical to note that “quality” and “performance” are part of this definition. If these two items were not part of the value engineering practice or process then all one would have is an exercise in cost savings, which, in and of itself, is something completely different.
In the architecture industry, value engineering is often deployed in the latter stages of the project lifecycle, because this is when the design becomes more real and costs are better known. While exercising the value engineering process at this stage certainly serves a purpose (i.e., to reassess design elements and/or functions and to determine how costs can be reduced without sacrificing quality and performance), it’s not necessarily ideal for the following reasons. First, as stated above, the need for last-minute changes can be upsetting to the architects themselves, as well as the project designers and engineers, because some highly prized design elements may need to be altered or sacrificed altogether. Second, and more importantly, these last-minute changes in design or function may impact a client’s expectations or objectives of the project in a negative way. Think about it, for months a client may be expecting an agreed upon or desired design element or function and then, all of a sudden, the rug gets pulled out from underneath them. Their expectations are thrown off kilter. From a service delivery perspective, the last thing a service provider wants to do is under deliver, not meet or alter a client’s expectations. This becomes a recipe for a dissatisfied client, who will most likely turn into a one-time client. So, what can an architect do to prevent this?
A potential solution, or a better best practice, may be to conduct the value engineering exercise more towards the beginning of a project, as opposed to the end. If an architect were to make use of the commonly known steps of value engineering (see below) sooner than later then costs should never surpass the planned and agreed upon budget.
Value Engineering Steps
• Identifying the main elements of a product, service or project.
• Analyzing the functions of those elements.
• Developing alternative solutions for delivering those functions.
• Assessing the alternative solutions.
• Allocating costs to the alternative solutions.
• Developing in more detail the alternatives with the highest likelihood of success.
At Spacesmith, we follow this line of reasoning and engage a cost estimator early on in the project, as early as schematic design, and make cost estimates a required deliverable at every major milestone until the drawings are issued for final bid.
Of course, exercising the value engineering process during the early stages of a project may not make sense or work each and every time, but the idea is that it might be worth considering. While architects might be concerned about disappointing a client as it relates to design, it’s just as important to consider the service perspective as well. After all, architecture is a professional service and how that service is delivered matters.