How to apply value engineering to infrastructure developments

Andrew Loh
Associate Director, Infrastructure

Value engineering is an approach to system design and infrastructure development focused on continual enhancement.

This should be carried out using best practice ‘value for money’ initiatives and not just on cost savings alone. This implies that value engineering initiatives should be made by giving proper consideration to the owner’s own value for money definition.

For example, a simple definition might be: ‘Achieving best-practice outcomes economically, efficiently and effectively.’

In other words, when the cost of a value engineering initiative is relatively low, productivity is high and when best possible project outcomes have been considered, then value for money is the result. Adopting this principle in infrastructure development leads to powerful, valuable change that can greatly streamline the management structure of your project with no risk to quality.

Read on for our guide on how to apply value engineering to infrastructure developments!

Value engineering principles

Theoretically, value engineering is simply about identifying a project’s main elements in the context of value for money and then analysing each individual function in isolation. From there, you can develop alternative infrastructure development options and test to see if these better support your end objectives.

Value engineering typically covers five stages of planned activities:

• Research - assessing the primary factors involved in your project, such as methods of transporting building materials or managing paying contractors (economy and efficiency).
• Speculation - brainstorming different methods for achieving the same outcome, such as switching logistics partners or using a HR and scheduling app (effectiveness).
• Evaluation - determining criteria for success, such as reduced money spent on materials delivery and less time spent managing workers’ schedules (economy and efficiency).
• Development - firming up this alternative solution by considering the process involved in standardising your alternative idea, like changing your transport provider and securing membership for workforce management software (effectiveness).
• Presentation - delivering your final idea to key stakeholders with evidence of its success (value for money)!

Value engineering involves identifying a project’s main elements and testing alternatives to see which process best fits the owner’s value for money definition.

Applying value engineering in your project

The true insight offered through value engineering is during the functional design stage and prior to finalising the business case. Implementing this strategy later on in an infrastructure development project often reduces the impact of value engineering to a cost cutting exercise.

Value engineering is far from a matter of routine in the infrastructure sector. It takes time and input from impartial professionals specialising in different aspects of project development. Quality assessors, design software specialists, shareholders - the more diverse your working group, the more valuable input you gain before progressing with a detailed project design.

This methodology is particularly impactful when used to analyse the effectiveness of public-private partnerships. Using this approach, parties on both sides can put aside individual agendas and identify the most effective method of delivering the best infrastructure development possible, This has value beyond just streamlining communications and saving time. Research submitted to the International Journal of Applied Engineering says applying value engineering in large capital projects from the outset typically delivers cost savings of at least 10% value saving. But value engineering should not be about cost savings alone.

This way, operators can apply the core objective of choosing the most economical solution, with highest productivity and with maximum ‘ best for project’ outcomes, no matter the personnel involved in the project.

Maximising value in infrastructure development

Want to know more about the planning and research practices that can help you nail your infrastructure development project? Reach out to DCWC’s infrastructure team for specialist insight!