Value engineering (VE) is a structured method of improving the value of a building, product or service by examining its function. Value is defined as the ratio of function to cost, so it can be increased either by improving function or by reducing cost without losing function.
On UK projects, value engineering is often used when a design or tender comes in over budget, but it is most effective early in design, when changes are cheaper to make. A genuine VE exercise questions what each element needs to do and looks for other ways of achieving it. The quantity surveyor prices the alternatives, including their effect on programme, maintenance and whole life cost. Points to note include:
- value engineering is not the same as cost cutting, which reduces cost at the expense of quality or function
- value management is a related, broader process that tests whether the project meets the client’s objectives
Related terms: value management, whole-life costing, cost plan.
