Value Engineering vs Value Analysis: Learn the Difference and Applications

The construction industry is evolving faster than ever in terms of the use of technology.

Today, one of the areas where recognized firms are emphasizing is the quality of construction.

Traditional Quality Assurance (QA) processes only checked deliverables for any discrepancies. But modern construction projects are massive and far more complex.

So, they need a new approach where the value is identified right in the design process. Today, the activities or tasks creating maximum value in a project are only effective when present across the design and engineering stages.

However, there are aspects around this realm of construction. Industry professionals point out two different processes: Value Engineering and Value Analysis.

This blog will help you understand the difference between these two. Also, if these two are not the same, their implementation is also at different construction stages. At the end of this blog, you will have the knowledge to use these processes at the correct project stage.

Both processes occur in a construction project with significant intervals. So, let’s start with:

Value Engineering: Significance and Application

The process occurs during the planning and design stage and is the basis of cost-effective construction.

Any cost savings in a construction project are achieved through value engineering. Different disciplines optimize their models during design and experiment with materials to find the best fit.

For example, to maximize the value of an office building construction, engineers might replace the plan to install a stone facade with precast concrete panels.

Here, the value is that the latter comes at a lower cost and supports easy installation. Here, engineers identified this possibility of value enhancement before construction began.

This is what value engineering involves, and the place where engineers apply it.

Typical Goals for Value Engineering in Construction

There is no specific point in a construction project to apply value engineering. The process is self-developing, and seasoned engineers easily identify when it is needed. It can be during MEP design, HVAC optimization, or structural and architectural designs. All these places have a scope of value engineering, but what matters most is the perspective of the professional. However, these are the typical goals that engineers aim for through the process.

Reduce Construction Costs

The most common purpose of value engineering is to reduce construction costs. Construction costs not only refer to the cost of on-site activities. If materials are heavy, then the cost of purchasing raw materials will increase.

Now, in our previous example of an office building with a stone facade. When it is replaced by high-quality precast concrete panels, two things happen. First, installation becomes easier with concrete panels, hence labor costs are reduced.

Secondly, there are also savings in procurement budget, as concrete panels are lighter than stone facades.

Improve constructability

In value engineering, engineers modify or remove certain materials or building components.

Hence, the process also affects the constructability of the buildings. The aim is to maximize function and perform cost-cutting by making designs safer and more efficient to build.

Seasoned engineers with global construction expertise can reduce on-site challenges and rework through value engineering. Their intent is simple: to identify areas where construction can become challenging or where reworks can occur.

Simplify Designs

Usually, engineers prepare architectural and structural designs to meet a client’s vision. Further, the inputs from other stakeholders also influence the design a lot.

Here, through value engineering, engineers find whether these adjustments are not making designs unnecessarily complex.

Optimize Material Selection

A part of value engineering deals with the materials applicable in a construction project. Engineers need to evaluate the impact of materials across cost, labor, and sustainability.

Thankfully, today’s digital construction tools help them virtually analyze material impacts. Hence, they can find alternatives with the same or better performance but at a lower cost.

Reduce Project Duration

Value engineering is also a great support for design and construction teams. Through it, engineers can identify time-saving opportunities during the design and construction process.

By optimizing designs and reconsidering construction decisions, value engineering shortens the project schedule.

And that leads to cost savings across material, labor, and construction equipment rents. It also provides greater client satisfaction.

So, these were the primary purposes of value engineering in a construction project.

Now, we will see where value analysis comes in the construction process.

Value Analysis: Significance and Application

Value analysis happens once construction is complete and the building is operational for life cycle cost analysis.

Owners usually do not incline towards hiring dedicated teams for this task. However, value engineering heavily determines the operational ROI of a building.

For example, in a building, some HVAC systems might consume higher energy. Value engineers identify such issues and resolve them to achieve significant improvements.

Engineers perform value engineering at a time when the building already exists and is in operation.

Now, let’s go through the primary goals of Value Analysis.

Typical Goals of Value Analysis

Value Analysis is more of an after-process and does not have to do anything with construction. However, value engineering performed during the design and execution can make value analysis more effective. Some organizations hire a dedicated team to monitor and perform value analysis. And what people fail to realize is that value analysis is not operations management. We will break this down in detail after we learn about the purposes.

Reduce Maintenance Costs

Value analysis affects maintenance activities and costs. If an organization updates fault or high-energy-consuming/heating systems, then maintenance tasks automatically decrease. When a system is optimized for value, the default benefit is that it requires less maintenance. However, that’s not true with advanced machinery used in the manufacturing and industrial sectors.

Lower Operating Expenses

Value analysis also involves evaluating the current operational state of a building. This exposes the potential gaps where a building is losing money. Value analysis can save money for the long-term operation of a facility. Professionals collaborate with facility teams to access the latest data on energy consumption, utilities, and labor.

Extend Asset Life

The ongoing value analysis leads to improvement activities on various assets for total cost. And these overall increase the durability and service life of assets. Engineers optimize building components and systems. Organizations get benefits in the form of delayed repairs, replacements, and major capital investments.

Now that we have explored the difference between Value Engineering and Value Analysis, it is time to clear a common misconception.

Why Value Analysis is Not Facility Management

The industry often misunderstands these two processes as interchangeable.

While both focus on improving building performance, cost-cutting, etc, they serve different purposes.

We can refer to Value analysis as the way to identify what can be improved in a building. It has nothing to do with maintenance schedules or equipment health. For example, in a medical facility, value analysis professionals can identify which HVAC systems are consuming extra power.

Their job is to optimize such energy-intensive systems across the facility to reduce initial costs.

On the contrary, facility management deals with the regular operations and maintenance of equipment. Dedicated professionals work for this part, with specialization in digital twins and cloud-based maintenance software.

They monitor and maintain equipment through maintenance scheduling, performing preventive maintenance tasks, and much more.

So, value analysis happens occasionally and in several cases is part of an organization’s asset maintenance activities. However, facility management is an ongoing job that observes and maintains the complete facility operations.

Now that we have a grip on value analysis, let’s understand how value engineering is performed.

How Value Engineering is Performed?

Value engineering in the construction industry is a multifaceted approach that occurs at various stages. Architectural and structural designs are the very first layer; engineers optimize through value engineering.

The goal is to analyze the existing design and find inefficiencies or unnecessary additions. People not familiar with the value engineering method can understand this as a team sport to refine the designs without sacrificing quality.

It is because the components used for these disciplines come with a high cost and consume labor resources. Here, value engineers optimize the design to aim for a greater project value with more efficient processes and fewer resources.

Many industry peers associate value engineering with removing unnecessary costs. While there are alternative solutions for various components, it is just a small piece of the puzzle.

Organizations with modern digital construction tools can perform a complete lifecycle cost analysis of a building.

Value engineering helps obtain greater value from a project through other factors as well. It does not focus solely on cost reduction.

Rather, the process involves other significant factors contributing to reevaluating design decisions, material selection, and construction methods.

Let’s explore the steps involved in a typical Value engineering process. These are:

Information Gathering

The first thing a value engineering team will do is to understand the project and the most significant factors for optimization. Without a basic understanding, it is not possible to work with modern construction projects. Even before hearing the client’s suggestions, they get familiar with:

• Project objectives
• Design intent
• Budget
• Technical requirements

Function Analysis

A building has numerous functioning systems that are interconnected in one way or another. Value engineering teams look at these systems from border perspective. In this initial stage, they establish a good understanding of the building systems and components. This helps them first identify the systems that can be optimized. Once they are clear on this, they can move forward to the remedial stage.

Creative Evaluation

This is the stage where most of the value engineering efforts are given. After analyzing a building and identifying the systems needing optimization, it is time to create alternative solutions. General electric systems might cause overheating because of improper insulation and not serve even the basic functions. The design team will design an alternative system that eliminates the heating issue. Several organizations backfoot on this because of the high upfront costs in installing new systems.

Technical and Cost Assessment

Now, with the new alternatives, engineers reconsider designs once again for other suitable alternatives. But before that, engineers perform an assessment of the new system. Engineers evaluate ideas through lifecycle cost estimates, constructability, quality, schedule, sustainability, and long-term performance. They compare this data with the data of the existing processes/systems performing essential functions.

Implementation

Through the above process, professionals select the best solution by creatively applying existing processes. The one that delivers the necessary functions in a much more efficient way. This can be a structural decision, or particular MEP components that were replaced with sustainable alternatives, etc. The new systems give better output without any unnecessary resource or energy consumption. Value engineering decisions also support the seamless expansion of buildings. And to a great extent, value engineering helps in reducing the carbon footprint for the project concept.

Uses cases of Value Engineering

As we know so far, value engineering is an evaluation assess across every stage of a construction project. It is the most advanced way to determine whether various building systems can serve the required functionality.

Engineers generally use it across these areas:

Material Optimization

A great part of value engineering involves detailed analysis of optimizing the materials. Across a building, walls, floors, conference rooms, etc, need different materials. Now, engineers do not just consider aesthetics, but they also compare the strength, durability, and environmental impact before selecting a material for similar projects.

Structural Design Optimization

A structural design goes through several revisions before engineers finalize it and save international. During the design phase, they try different structural systems, framing layouts, and foundation solutions. That is how they reduce material quantities and simplify construction.

MEP System Design

This is the part where value engineering is an inevitable thing. It is because MEP systems are the most complex ones to construct and hold the greatest potential for minimizing cost. Hence, to remove unnecessary costs and complexity, they analyze every mechanical, electrical, and plumbing system. The result is more effective equipment placement, efficient layouts, and routing strategies.

Sustainable Design

High sustainability standards for modern construction have become a mandate now. Value engineering practices let engineers make designs compliant with the sustainability standards. They evaluate and install environmentally responsible materials and use resource-efficient designs.

So, these are the critical areas where value engineering provides engineers a way to optimize construction projects.

Final Thoughts

Both processes are an integral part of every construction phase. Value engineering brings efficiency to every project element, whether it is the MEP design or the structural and architectural layouts.

Value analysis is what dedicated teams perform during lifecycle cost analysis and gain a competitive advantage. While thought of as a measure to reduce costs, they have a much bigger purpose in construction projects. With the use of artificial intelligence, value engineering has become more advanced.

Hence, engineering decisions become better when they are optimized to serve the required functionality in the most efficient way. Value analysis aims to maximize function without sacrificing the quality of occupant comfort. Professionals analyze various systems to find a cost-effective option and reduce long-term costs.

Must Read