VALUE ENGINEERING IN CONSTRUCTION PROJECTS

During the World War II, the Allied Nations passed an Ordinance reserving the use of materials such as Nickel, Chromium, Molybdenum etc., for the purposes defence manufacturing alone.

- A.N. Prakash 

As a result, there was a shortage of these essential materials for consumption by the private sector manufacturers.

As the saying goes 'necessity is the mother of invention'. This shortage of essential materials forced the industry to search of alternative materials. Lawrence D. Miles, Chief of Purchase at General Electric (USA), was constrained to look for alternative materials without compromising either the performance quality or the function of the original material.

After extensive research, Lawrence D. Miles developed a system for providing low-cost alternatives without having to compromise either on quality or the function. This systematic approach to cost reduction adopted by Lawrence D. Miles was named Value Engineering (VE).

Definition of 'Value'

Before we delve further into VE, let us understand what 'value" is. Value of all things is a very subjective concept like, says, beauty, where its assessment is largely in the eye of the beholder. Generally, the perception is that one pays more for a useful commodity than for the one that is less useful. However, this is not always true. One of the best examples to demonstrate the paradox of value is a comparison between water and diamonds. Water has low value but high utility, whereas ornamental diamond has a high value but low utility.

'Value' is often mistaken for 'cost'. Cost is merely a consideration paid in exchange for products or services rendered. The major attribute that differentiates cost saving or cutting and VE is that VE involves reducing the cost by improving the functionality.

The equation will then be:

Value = Function+Quality/Cost

Where:

Function is the specific work that a design/item must fulfil.

Quality is the owner's or user's needs, desires and specifications.