Design
Value engineering: where the money is actually saved
Saving during construction is late and usually means saving on quality. The real potential to reduce cost sits in design decisions — and it disappears as working drawings are issued.
When an investor sets out to reduce project cost, the work almost always starts on site: rates are renegotiated, cheaper contractors are sought, items are cut. The difficulty is that by that stage most of the cost is already fixed by design decisions, and further reduction comes out of quality or time.
Value engineering means working on design decisions to reduce delivery cost while preserving the required functional and operational performance. "While preserving" is the operative phrase: it is what separates value engineering from simply cutting scope.
Why the potential decays
The cost of making a change and the saving available move in opposite directions. At concept stage, layout, structural scheme and process can be changed almost free. After working drawings are issued, changing the structural scheme means redesign. After installation begins, it means demolition.
The practical conclusion: value engineering is worth doing once, but at the right moment — at design documentation stage, before the move to working drawings.
Three worked examples
First: a thermal calculation on one project showed that insulation thickness could be reduced against the adopted design. At the same time the façade sub-structure and ventilation gap details proved undeveloped — which threatened cost growth at installation, where decisions get made on site. The corrections simultaneously reduced material cost and removed the risk of improvised works.
Second: on the Komatsu service centre project, detailed setting-out and a change of crane type produced material savings for the client. The sequence matters here: the saving did not come from choosing a cheaper crane but from revisiting the layout, which made a different type viable.
Third: optimising process solutions on an industrial facility reduced capital cost by USD 300,000. That kind of effect is only available while the process scheme can still be changed.
Where to look: five typical areas
- Structural scheme and column grid. It drives concrete and steel quantities across the whole asset — the largest single saving.
- Façade solutions and details. Developing sub-structures and junctions removes installation cost growth that the estimate never shows.
- Engineering systems and redundancy. Redundancy specified "just in case" is a frequent and expensive item.
- Process layout. Changing the scheme can remove the need for expensive equipment entirely.
- Materials with difficult logistics. An item unavailable locally costs not only its price but its lead time.
Three common mistakes
- Value engineering as cutting. Substituting a cheaper material without checking operational performance is not value engineering — it defers cost into the future.
- Value engineering by the designer. The author of a solution rarely assesses it critically. It requires an independent view — the management company or a separate team.
- Value engineering after working drawings. By then the saving from a change is comparable to the cost of redesign.
Value engineering is not a hunt for cheaper materials. It is a test of whether every design decision is genuinely necessary in the form in which it was taken.
How to organise it
A workable structure: a value engineering session at completion of design documentation, involving the management team, the designer, a representative of future operations and a cost specialist. The output is a schedule of proposals with quantified cost effect, schedule impact and operational consequences. The client decides on each proposal.
Related service
Design Management
Managing design: release schedule, interdisciplinary coordination, expert review, value engineering.