Value engineering is commonly used during business case development to optimise CAPEX. It needs to involve a multi-discipline group of people to ensure all vested interest are represented. It is very important from the beginning that the customer’s key requirements are understood. The process has to be well facilitated to ensure people do not automatically jump to “the” technical solution, as challenging delivery of the key requirements may have a number of alternatives of which a more cost effective solution may be one. The facilitator may also need to deal with conflict as the “designer” will not necessarily take too kindly to their concept being challenged. This challenge is perfectly healthy and should be encouraged during the VE process to ensure the most cost effective solution is found. It is also essential that the cost be broken up so it is clearly understood what each particular function of the process is going to cost. When the group understands the cost of each process, in many cases what was essential becomes “nice to have”.
Within CUB we have used value engineering on several major Projects and cost savings in a range of 10-30% have been achieved without affecting functionality. Value Engineering is a mandatory exercise on high value projects. Some of our key project people within CUB have undertaken training on value engineering so they are well versed in the concepts and able to lead teams through the exercise.
This paper presents the opportunities in cost savings during the CAPEX and business case development phases using Value Engineering.