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.
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.
The following steps are required to build and develop the value engineering exercise:
The main differences between value engineering and cost cutting are summarized as follows :
| Value Engineering | Cost Cutting | |
| It is | Function based | Equipment/material based |
| Focus | Poor value functions | Big cost items |
| Results | Increased value | Scope reductions |
| Optimises | Overall design | Local design |
| Clarifies | Client requirements | Nothing |
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.
AVEC's commitment to supporting our client's business objectives means that we always try to respond appropriately to requests for our services or assistance. We are not encumbered by the mindset of 'doing what we have always done, because that seemed to work in the past'.
We are committed to quality. All our work is performed to the high standards of auditability and accountability required.
We offer a range of services from feasibility studies, through the various engineering phases, to construction and commissioning support. In addition, we can provide consulting services such as plant or project audits, troubleshooting, value engineering facilitation and participation.
We have many contract types from lump sum professional services through to cost-plus reimbursable projects.
We believe in risk and reward contracting with incentives and would be pleased to discuss bonus/penalty scenarios
on any potential contracts.