Introduction
Value engineering is the structured application of proven techniques at various design phases with the primary aim of cost avoidance, without sacrificing scope and quality. The principle involves evaluating the function of the process and/or equipment and focusing on poor value items/functions. This approach requires extensive team interaction and creativity.

What is VALUE?
Value is the ratio of functionality to cost. The function is the specific task required to satisfy a customer's needs and the cost is the resource consumed in achieving the function.

Applications

• Used on new plants/revamps:
  - clarifies scope
  - encourages focus on poor value
  - encourages alternatives
  - basis for cost reduction

• Used on existing plants:
  - highlights poor value operations
  - encourages alternative operations
  - compares costs of operation with benefits

Structured Steps for Value Engineering
The following steps are required to build and develop the value engineering exercise:

- Information gathering
- Function analysis
- Creative phase
- Evaluation
- Development
- Implementation

Summary
The main differences between value engineering and cost cutting are summarized as follows :

Value Engineering is a technique that is used to identify poor value functions and identify ideas for lower cost, higher value alternatives. It allows the creative generation of solutions to specific functionality problems, without reducing the scope of the process.