Value Engineering

Project and Program Management October 25, 2025
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Introduction

**Value Engineering (VE)** is a systematic, creative process focused on achieving the required project function at the lowest life-cycle cost consistent with quality, reliability, and performance. This methodology moves beyond simple cost-cutting to analyze **function** and identify alternative solutions that optimize the value equation (Value = Function / Cost). Participants will master the formal VE job plan, including functional analysis, creative idea generation, and rigorous evaluation techniques. The training is essential for project stakeholders seeking to drive significant project savings and enhance performance without sacrificing the necessary purpose of the deliverables.

Objectives

Upon completion of this course, participants will be able to:

  • Master the principles of **Value Engineering (VE)** and its systematic, job-plan approach.
  • Apply **Functional Analysis** techniques (e.g., FAST Diagramming) to define the fundamental purpose of a project element.
  • Differentiate between cost-cutting and true **Value Optimization** (Value = Function / Cost).
  • Apply creative techniques for generating alternative solutions that achieve the required function at lower cost.
  • Conduct a rigorous **Evaluation and Life-Cycle Cost Analysis** of proposed VE alternatives.
  • Develop and present a persuasive **VE Proposal** to stakeholders for approval and implementation.
  • Understand when and where to apply VE within the project lifecycle (typically design phase).
  • Implement the VE process to solve complex project problems without compromising quality or performance.

Target Audience

  • Engineers, Architects, and Design Managers
  • Project Managers and Program Managers
  • Cost Estimators and Quantity Surveyors
  • Procurement and Supply Chain Managers
  • Professionals involved in capital expenditure and construction projects

Methodology

  • Group Workshop: Conducting a FAST Diagramming exercise and generating alternative solutions for a project component
  • Individual Exercises: Performing a basic Life-Cycle Cost (LCC) analysis for competing design options
  • Case Studies: Analyzing successful Value Engineering initiatives that delivered significant savings and performance gains
  • Role-Playing: Presenting a VE Proposal to a skeptical stakeholder group and defending the recommendation
  • Discussions: Strategies for differentiating between beneficial VE and detrimental cost-cutting

Personal Impact

  • Mastery of a powerful, systematic methodology for achieving value optimization.
  • Enhanced ability to analyze function and challenge conventional project design assumptions.
  • Increased confidence in contributing to significant cost savings without sacrificing quality.
  • Acquisition of highly valued analytical and creative problem-solving skills (functional analysis).
  • Improved professional credibility through the delivery of high-value project solutions.

Organizational Impact

  • Significant, verifiable reduction in project capital and life-cycle costs (high ROI).
  • Delivery of projects that have optimized function, quality, and performance for the investment.
  • Reduced organizational waste by identifying and eliminating unnecessary costs in design and process.
  • A culture of continuous improvement focused on maximizing value rather than simply reducing cost.
  • Competitive advantage in procurement and contracting through cost-effective, high-value proposals.

Course Outline

Unit 1: Fundamentals of Value Engineering

Concepts and Definitions
  • Defining **Value** and the **Value Equation** (Value = Function / Cost).
  • Differentiating between Value Engineering (pre-design/construction) and Value Analysis (existing products).
  • Understanding the relationship between function, worth, and cost in the VE methodology.
  • The optimal timing for applying VE within the project lifecycle.

    • Unit 2: The Value Engineering Job Plan (Information and Function)

    Analysis and Purpose
    • The **Information Phase**: gathering data, understanding scope, and determining project objectives.
    • Mastering the **Function Analysis Phase** and defining functions using verb-noun pairs (e.g., "Support Weight").
    • Applying **FAST (Function Analysis System Technique) Diagramming** to map project functions hierarchically.
    • Identifying high-cost, low-value components for targeted analysis.

      • Unit 3: The Creative and Evaluation Phases

      Innovation and Selection
      • Mastering **Creative Techniques** (e.g., Brainstorming, Morphological Analysis) for idea generation.
      • Developing a wide range of alternative solutions that perform the required function.
      • The **Evaluation Phase**: conducting a rigorous **Pros/Cons and Scoring Matrix** analysis.
      • Techniques for conducting a **Life-Cycle Cost (LCC)** analysis for each alternative solution.

        • Unit 4: The Development and Presentation Phases

        Justification and Proposal
        • Conducting a detailed technical and economic analysis of the most promising VE alternatives.
        • Refining the alternatives to ensure they meet all required performance and quality criteria.
        • Developing a clear, persuasive **VE Proposal** that quantifies savings and impacts.
        • Strategies for presenting and securing approval for the VE recommendations from the client/sponsor.

          • Unit 5: VE Implementation and Organizational Impact

          Control and Culture
          • The process of implementing approved VE changes into the project design and contract documents.
          • Techniques for managing the potential resistance to change from design or operational teams.
          • Measuring the actual savings and performance improvements achieved by the VE process.
          • Strategies for integrating the **Value Engineering Culture** into the organization's project delivery framework.

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