VALUE MANAGEMENT & VALUE ENGINEERING
Value Management (VM) and Value Engineering (VE) are systematic approaches used in
construction and other industries to optimize value in projects, ensuring the best possible
outcomes in terms of cost, functionality, and quality. Both methods focus on improving
efficiency, but they operate at different stages of the project life cycle and focus on slightly
different aspects of value optimization.
1. Value Management (VM)
Value Management is a broader, strategic approach that focuses on ensuring that the project
delivers maximum value throughout its entire life cycle, from inception to completion. It
involves evaluating the objectives, functions, and needs of a project or product and making
decisions that align with its intended value.
Key Features of Value Management:
• Strategic Focus: VM is often applied during the early stages of the project, such as
during feasibility studies or concept development. It helps define the project’s
purpose, scope, and key objectives.
• Holistic Approach: It considers not only the cost but also the functionality, quality,
aesthetics, and sustainability of a project.
• Stakeholder Involvement: VM typically involves the participation of all key
stakeholders (owners, designers, contractors, etc.) to ensure that all needs and
expectations are clearly understood and addressed.
• Functional Analysis: A systematic review of the functions of each project component
to ensure that they contribute effectively to the overall project objectives.
• Decision-Making Tool: It helps in making informed decisions to balance costs,
quality, and performance without compromising the project's value.
Purpose of Value Management:
• Ensures alignment between the project objectives and stakeholder expectations.
• Helps in identifying and eliminating unnecessary costs without affecting the project’s
performance or quality.
• Improves communication among stakeholders by establishing clear objectives and
priorities.
Example in Construction:
A city planning a public park may use Value Management early on to decide the key features
of the park (playground, walking paths, green spaces), ensuring that it meets community
needs while staying within budget.
2. Value Engineering (VE)
Value Engineering is a more technical and design-focused approach that typically occurs
after the conceptual stage, during the design and construction phases. It is aimed at
optimizing the project’s function by finding cost-effective alternatives without reducing the
quality or performance of the final product.
DR. EMMANUEL THYAKA, PhD.
VALUE MANAGEMENT & VALUE ENGINEERING
Key Features of Value Engineering:
• Design Optimization: VE focuses on improving design efficiency, material selection,
construction methods, and other technical aspects to reduce costs while maintaining
performance.
• Cost Reduction: The primary objective is to reduce unnecessary expenditures by
identifying lower-cost alternatives for materials, methods, or systems that still fulfill
the required functions.
• Function-Oriented: VE breaks down the project into individual components and
functions, ensuring each component performs efficiently and cost-effectively.
• Multi-Disciplinary Team: Like VM, VE involves a team of professionals, but these
are often technical experts, including engineers, architects, and cost analysts.
• Systematic Process: VE follows a specific methodology, typically including function
analysis, creativity (brainstorming ideas for improvement), and evaluation (assessing
alternatives based on performance and cost).
Purpose of Value Engineering:
• Reduces project costs without sacrificing quality, performance, or safety.
• Helps find innovative solutions to design or construction challenges.
• Maximizes efficiency by identifying and eliminating unnecessary expenditures.
Example in Construction:
In the construction of a commercial building, Value Engineering might be used to find a more
cost-effective HVAC system that provides the same level of efficiency and comfort but at a
lower installation and maintenance cost.
Differences Between Value Management and Value Engineering:
Aspect Value Management (VM) Value Engineering (VE)
Strategic, big-picture focus on overall Technical focus on optimizing
Focus
value design and cost
Stage Early stages (feasibility, concept) Design and construction phases
Aligning project objectives with Reducing cost while maintaining
Objective
stakeholder needs performance
Technical experts (engineers,
Involvement All stakeholders (owners, designers, users)
architects)
Broad, considering all aspects of value Narrow, focusing mainly on cost-
Scope
(cost, quality, functionality) effective solutions
Function analysis, creativity, and
Methods Functional analysis, stakeholder workshops
evaluation
Important to note is that:
DR. EMMANUEL THYAKA, PhD.
VALUE MANAGEMENT & VALUE ENGINEERING
• Value Management is a high-level, strategic tool to ensure the project meets its
objectives and delivers maximum value.
• Value Engineering is a more focused on technical method for reducing costs and
optimizing design without compromising the project's functionality or quality.
Both VM and VE are crucial for enhancing the overall value of construction projects,
working together to ensure that projects are both economically efficient and aligned with
stakeholder needs.
DR. EMMANUEL THYAKA, PhD.
