Wikipedia defines value engineering as:
“Value engineering is sometimes taught within the project management, industrial engineering or architecture body of knowledge as a technique in which the value of a system’s outputs is optimized by crafting a mix of performance (function) and costs. It is based on an analysis investigating systems, equipment, facilities, services, and supplies for providing necessary functions at the lowest life cycle cost while meeting the required targets in performance, reliability, quality, and safety. In most cases this practice identifies and removes unnecessary expenditures, thereby increasing the value for the manufacturer and/or their customers.”
Simply put, value engineering is a method used to improve the value of a product or service during project planning.
Function
What is the purpose? How will this be implemented? Who are the stakeholders?
Performance
How long do I need it? What is my maintenance cycle? Will it be a safe and quality product?
Cost
What quality level do I need? What budget can be accepted? When do I need this?
The value of the project or service is increased when either the function is increased or the cost is decreased, or both. If both the function and cost increase or decrease, as long as the cost becomes correspondingly less to function, the value increases. How does this translate to planning and implementing your project?
As new ideas go through a process of development, the largest cost savings are realized in the beginning. As the project matures, the ability to reduce cost becomes more challenging. At some point you just want an efficient process that gets a quality job done which is delivered on time so you can stay on budget. In the construction phase it becomes important to mitigate your losses. A company with a proven planning process can ensure the project stays within the budget, quality and delivery expectations. Late or incorrect components cost you more through work stoppage at the construction site or the assembly line. You have to reschedule and you also may not meet your customers' delivery. You now have to use your resources to fix a problem instead of finding new work.
The process of value engineering has many avenues. As we get to the construction phase many of these items have been resolved. Shop drawings reflect a way to build the project based on the information in the construction documents. Depending on the level of detail, this is where some VE can be performed. Shop drawings provide the platform to the most efficient way to build something. The shop drawings need to go through an approval process. That takes time. Done at the beginning of the project, a good plan (shop drawings) makes the fabrication and installation go smoothly. You stay on budget and deliver on time with a quality project. You move on to the next project.
During the quoting and fabrication period the project goes through many avenues. You should look at the cost drivers of the project. Typical cost drivers include:
to name a few. Discussion on cost drivers can possibly find other methods to save time and cost. Also focus on the planning and engineering (3D model and shop drawings) to see the issues better when fabricating assemblies. Bill of Materials should be purchased so they are in stock at fabrication time. Work orders (instructions) that include quality planning that guide the fabrication to delivery.
You met the proper delivery date. The components fit at the jobsite of the assembly line. When this plan comes together there is no work stoppage and you move on to the next job. You look back at our initial budget and you realize you made a profit.
The Maloya team has helped many of our clients deliver successful projects and increase the value of their products or services. Our experienced team can lead your project from the initial concept phase all the way to assembly and delivery. Are you ready to start a new metal fabrication project? Contact us today to schedule a no-risk consultation.