Value Engineering: A Key to Positive Client Relationships
Architects, engineers and other design professionals are interested in drawing, planning and designing functional and aesthetically-pleasing facilities and buildings. That’s what drives them. But they are also in the service business—design professionals have clients to keep happy. In the name of relationship-building, landing a project or financial constraints, design professionals are obliged to find ways to maximize budget. To make the most of a client’s every dollar, design professionals engage in value engineering. They often do so begrudgingly.
Make no mistake, value engineering is difficult. But for architects and design professionals, it’s more than that. These are creative people. They approach every project thinking big and aiming high. Architects dream of designing buildings that will please people, win a slew of awards and reset expectations for the local architectural community. With each step in the value engineering process, those dreams get reduced.
Value engineering goes beyond mere cost-cutting. The goal isn’t to trim the bottom line, but to maximize function at the lowest possible cost. Product quality is still the name of the game. Value engineering is a methodology that ensures the owner is not over-paying for a quality when an equally effective, less expensive option exists.
A quick history lesson: Lawrence Miles was responsible for purchasing raw materials for General Electric during World War II, when manufacturing was at its peak. Sounds like a great gig, but the war caused extreme material shortages, leaving Miles searching for suitable alternatives that functioned similarly. This was the birth of value engineering.
The practice has spread since Lawrence Miles’ time and today, value engineering is used in various industries to solve problems, identify and eliminate unwanted costs and improve function and quality. In other words, the value of products increases when they meet performance requirements at a lower cost. Whether a designer wants to substitute one material for another, consider alternative building methods or limit a project’s environmental impact, the process of value engineering remains generally consistent.
Step 1- Identify the material makeup of a project. Ask yourself: What is this?
Step 2- Analyze the functions of those elements. Ask yourself: What does this do?
Step 3- Develop alternative solutions for delivering those functions. Ask yourself: What else could do this?
Step 4- Assess the alternative solutions. Ask yourself: Can this still deliver the experience the owner demands?
Step 5- Allocate costs to the alternative solutions. Ask yourself: How much will this cost?
Step 6- Develop the alternatives with the highest likelihood of success. Ask yourself: What will do the best job for the longest time?
One area where design professionals can often find value is large systems—think HVAC, lighting and electrical systems. This is not to suggest one go looking for discount systems—quite the opposite. Often, spending more on a higher-performing system early will save in maintenance costs over the building’s lifespan. It would be wise to conduct a life cycle cost analysis and get input from the team responsible for maintaining the building to gather the long-term cost implications of major systems.
Overall, value engineering demands that architects and builders view a project with a wider lens and scrutinize materials, plans and processes to identify cost-effective alternatives to that meet the requirements of a project. But finding alternatives takes work. You have to know what you’re looking for and where to look.
Accurate Cost Data: A Crucial Tool for Finding Value
To effectively value engineer, design professionals need to know where costs lie. To help assess feasible solutions, many architects, owners, engineers and other construction professionals rely on accurate cost data from a reliable industry expert. RSMeans data from Gordian is a highly-trusted construction cost database with more than 85,000 labor, material and equipment costs. Such a robust resource is ideal for value engineering because it contains tens of thousands of viable alternatives that can be placed in assembly units. Those units can be swapped out in square foot models, making for more realistic Rough Order of Magnitude estimates.
There’s a reason value engineering has been popular since Lawrence Miles introduced it to the world in the 1940s. Value engineering maximizes client budgets, routing resources to other facets of the project or lowering final costs. All of those outcomes make clients happy.