Value engineering

GOOD ENGINEERING PRACTICE (cGEP)
1

I was at a conference last week where one of the presenters was discussing
value engineering. Part of the discussion was that the original design
included modular clean room panels for the walls and ceilings and during
value engineering it was suggested that these panels be replaced with
normal stick built construction and the only argument (that was stated at
the conference anyway) was that the user group was adamant that the panels
remain in the project.I have been involved in many “value engineering sessions” and the only go
al is to cut first cost. My understanding is that value engineering is a
process that looks at the full design and ALL the aspects of the design
components to determine if thet “add value” to the project.
Am I too unrealistic in this? Has anyone gone through a value engineering
session where life cycle costs and other drivers are considered, not just
first costs?

2

While I would generally agree that most value engineering exercises are
actually “project overrun prevention” (or worse still, overrun CPR)
exercises I have been involved in one Value Engineering exercise where
the cost went up - because the HVAC systems as proposed would not have
achieved the design requirements - meaning the labs wouldn’t have been
fit-for-purpose.

I have not yet been involved in any discussion where Life-Cycle-Costs
are a factor. Occasionally a maintenance manager can make a case for
"expensive to buy" product X rather “cheap to buy” product Y on a cost
to repair basis - but this has never been on a factual basis - the data
just isn’t available to most of us.

Good luck with the modular vs. stick built debate - it’s been going on
for my 10 years career and it was well established when I joined the
game.

3

Regrettably, most earnest “value engineering” is an exercise motivated to accomplish a reduction of a project cost estimate or identify cost reductions to prevent cost overrun. Hence the effort is often biased toward cutting upfront costs and not for considering Life-Cycle-Costs.

Up-front costs are real & immediate and life-cycle costs are based on assumptions. The challenge to defending a life-cycle cost position is in developing a plausible argument with substantiating data.

I did hope to go beyond providing a secondary opinion to support Ian Thorne’s feedback (see below). Ian alludes to the point that cases can be successfully made; the implication is that because the task is tainted towards reducing project costs the “decision makers” are not easily influenced by life-cycle costs that are lacking in data (data that is not often available).

Hence, if you are involved with a value engineering exercise argument, then consider the challenge of developing a more holistic solution/alternative that incorporates a life-cycle approach.

The example of modular versus stick-build clean room wall/ceiling panels is a historical classic. Being adamant one way or the other (for the exercise of my example) is in many ways a miss-carriage of proper evaluation and decision making. I am a proponent of the “modular” approach, yet I had a clean room project last year for an electronic materials industry that was largely stick-built.

Points of Issue:

  • Size, Scope & complexity of the specific space. Fit for function assessment
  • Are you able to decide on modular early in the design process to maximize the positive attributes, and plan from the beginning with this premise as a given. Choosing modular at the tail end of a design often creates integration, inter-connectivity issues.
    o Modular Design systems allow a greater % of proven design attributes to be applied to the application, resulting in more predictable results.
  • Housekeeping, cleanability and potent compound/active ingredient exposure levels may justify the engineered designs developed in modular systems.
  • TIME
    o Availability & lead time for materials
    o Can the project afford the generally longer time to install stick build?
    o Are there on-going operations that require minimization of disruption? And does that installation activity need to incorporate a “clean construction” approach
    o Are there expected life cycle events, (maintenance & repair) that could create a need to remove, repair and replace panels, where the modular designs could offer a minimized time, housekeeping challenge and effort to disrupt the operation.
  • Project managing
    o Access to skilled trades, and the coordination and stacking of those trade activities.

Decision makers and those assessing value-engineering opportunities should challenge themselves, when appropriate; to look beyond the easy attraction of reduced first cost benefits. It is frustrating to be engulfed in this pressure to cut, cut, cut first costs, and although companies are striving to prudently invest monies, tackle the task from the perspective to develop & present the case to support a position that focuses on fit for function and providing the best return on the investment.