International Journal on Recent and Innovation Trends in Computing and Communication ISSN: 2321-8169

Volume: 4 Issue: 12 168 172

_____________________________________________________________________________________________
Study on Value Engineering in Construction Projects
Abraham Lintu Varghese Prof. Abhijit. N. Bhirud
Civil Engineering Department, Civil Engineering Department,
Imperial college of Engineering and research, Imperial college of Engineering and research,
Wagholi, Pune-412205, India. Wagholi, Pune-412205, India.
[email protected] [email protected]

Abstract: - Value engineering is a technique by which we get to know how the cost of the project can be optimized without affecting the quality,
requirements, function of the particular project. This paper tells us about the various factors which affect value engineering technique, the
problem areas in the construction of buildings and also about the importance of application of value engineering to construction projects. Value
engineering is a proven technique and the need of the current era.

Keywords-Value Engineering,construction,quality,function.
__________________________________________________*****_________________________________________________

1. INTRODUCTION suit with the existing conditions. The alternatives should be

able to resist all the influences.
Value engineering is mostly applied to most of the
construction projects for having better recognition of scope of Value engineering can be applied for various aspects. Few
project and also necessary for eliminating the cost which is uses are: (1) it can be used for reduction of unnecessary cost on
unnecessary and also without affecting its functional existing project. (2) It can help in determining the possible
requirement of the each item concerned with the projects. alternatives which is best for the project. (3) The schedule of
Construction projects are nowadays getting bigger in size day the project which was delayed due to uncertain situations can
by day and it is becoming necessary to complete the project in be improved. (4) Whenever there is threat for risk in project
planned cost and time. But due to various uncertainties in the Value engineering can help in reducing risk. (5) It is imparted
projects there is much delay in projects and simultaneously for better quality, reliability and satisfaction of all the needs of
increases the cost of project. Through Organized and creative customer. (6) The performance of organization can also be
approach and thinking it is possible to impart value to the improved to a better extent.
system. It is very necessary to meet all the needs of the
2. LITERATURE REVIEW
customer and value engineering helps to determine the best
scheme for it. In 1978, this theory was introduced in China and 2.1 Review of Technical papers
it has been since adopted by all companies for greater
1 .V.Bazjanac, J.T.ODonnell, S.Tarantino, N.Mrazovic and
economic benefits.
J.Compostella (2014)
There are many aspects which can impart poor value to the
project. (1) Proper information is not considered as there is i. The objective was to do a performance based value
time shortage. (2) Whenever there is a problem some engineering so that the later impacts will not hamper
adjustments are done and the problems are tried to be solved quality.
which lacks the quality. (3) Sometimes the requirements and ii. This was possible through employment of semi-
needs of the customer are not taken into consideration and after automatic generation of all inputs.
the completion of the projects it lacks its functions for which it iii. The PBVE model enables better delivery of energy
was meant to be. (4) No proper communication is been done performance predictions. It enables to maintain the
and few aspects are misunderstood. original building energy efficiency aspects.
iv. This paper concludes telling us about the importance
Value engineering is always applied on a service or product of having performance based value engineering.
for its analysis and design. In value engineering the people who
are experts take into consideration of all the parameters based 2 . Chong ZHOU, Bing WANG, Yong GUO (2014)
on their experience and knowledge with construction. During
the review, the external factors are also taken into consideration i. The objective was to integrate the theory of value
so that to identify its impact on the projects and also the extent engineering and analytic hierarchy process and also on
of the impact. Also it is necessary to keep in mind to check is project management research optimization.
these parameters are able to tackle all the challenges. Then the ii. This was possible through a model which evaluate
experts check for all the alternate possibilities and which can function, cost etc. With establishment of evaluation

168
IJRITCC | December 2016, Available @ http://www.ijritcc.org
_______________________________________________________________________________________
International Journal on Recent and Innovation Trends in Computing and Communication ISSN: 2321-8169
Volume: 4 Issue: 12 168 172
_____________________________________________________________________________________________
index for high rise building they identify first level 3. THEORY OF VALUE ENGINEERING
and second level indicators.
3.1 Concept of Value Engineering
iii. They calculate the weight of each index through
integration of VE and AHP. The Value engineering is a scientific method through which
iv. This method was implemented in various projects and we strive to improve the value of the product/service from the
found to be helpful in maximizing the value of project point of view of the customer to have the desired function from
management. the elements of the product cost at the reasonable cost of the
deployed resources. VE always takes into consideration of the
3 . Wan-hua Qiu, Han-peng Zhang, Ze-Shui Xu, De-Sheng existing product and services. The objective of maximizing
Wu (2015) profit by proper examination of all the areas which is having
high cost and finding ways to eliminate those unnecessary cost
i. The objective was to propose a new theoretical model
and do benefit for the company. The main focal point in VE is
which was based on the introduction of VE/VM into
reduction of material cost. The value is increased by reducing
space system.
cost and retaining the value of the product/service. Also
ii. This was possible through taking function analysis,
sometimes the increase in cost is necessary but also it should be
functional optimization and functional realization of
considered to increase the value much more than cost.
object development as base to get final optimization.
iii. The application of Design structure matrix will also The Value engineering team comprises of a cross-
further help in optimization of project. functional team and it is necessary for all the key expertise to
iv. This model provides an idea which is new for be in the team for the best outcome of the VE study. The
structured optimization of space system and improves method of selecting critical areas will result in the success of
function value and cost management. VE. It is necessary to select the critical high cost area so that
we can have better outcomes. Also before selecting the areas it
4 . A. Afshar Ghotli (2013) is necessary to categorize into prominent categories so that it
will give us better idea to select from the most appropriate
i. The objective of the study was to find the gap between
categories. The VE team has to initially study all aspects of the
how Value management is being practically used with
project including the performance function of each aspect.
the Value management published knowledge.
Then with help of proper tool select the most appropriate areas.
ii. This was done by investigating the current works of
Value engineering has always proved to be one of the best
VM and also about the level of practice of VM.
solutions for all the major cost runs in a project which can be
iii. The usage of literature survey, questionnaire among
controlled.
experts, interviews were carried out. Further analysis
of this information and critical issues were identified 3.2 Factors influencing Value Engineering
iv. New strategies which include new organization charts,
specification binding, involvement of government, There are various factors which has a great influence on the
using technical articles etc were suggested by author. Value engineering study.

3.2.1 Customer requirements

5 . G.B. Lin and Q.P. Shen (2010)
The basic function of any product is to provide
i. The objective of this paper was developing a
satisfactory performance to the customer as they are the prime
framework for proper measurement for Value
importance of any business.
management studies in construction.
ii. This was done by study of the existing frameworks While doing Value engineering it is necessary to keep the basic
and factors which had major impacts are identified function of the product/service same and also the functionality
and foundation based on theory is established. of the product should not change. There is always a must and
iii. The preliminary framework was developed and Key want type of needs. It is necessary to keep the must needs of
performance indicators by a survey based on the product and the want needs can be taken into consideration
questionnaire was presented. depending on the cost and utility.
iv. It was found by analyzing of the various data
providers, weight ages of the KPIs and case study, 3.2.2 Brand value
focus group meeting proper framework for When a service is in a market it is always having a
measurement was made. brand name associated with the product/service. This is also
considered to be one of the important aspects as Value
engineering shouldnt hamper the quality of the product and
169
IJRITCC | December 2016, Available @ http://www.ijritcc.org
_______________________________________________________________________________________
International Journal on Recent and Innovation Trends in Computing and Communication ISSN: 2321-8169
Volume: 4 Issue: 12 168 172
_____________________________________________________________________________________________
thus affecting the brand value. It is always used to study in (1) The improper planning is considered to be one of the
detail the benefit and problems associated with the alternative major problems to affect the cash budget. When there
material. Selecting the most appropriate material along with is an unexpected uncertainty which comes up and due
keeping up the quality of the product/service is important. to which the finance of the project is certainly affected
and also there can be other problems which comes up
3.2.3 Cost of material and labor
due to improper planning.
The cost of material is the major 50% cost of total cost (2) Lack of skilled workers in the execution of the
of the product. Hence it is very important to consider reducing projects. As major construction is having a need for
the cost of material by way of reducing wastages, substitution skilled workers as there is precision required in the
with alternatives without affecting quality and even adding activities. Lack of proper workers available affects the
some changes to the existing material. Even a very small schedule cost and quality of construction projects.
reduction can bring about much reduction in the overall cost. (3) An environmental regulation hinders the conformance
The labor productivity is a major issue and we need to seek for of the project as per the requirement. It is necessary to
ways by means for improving the productivity and improving design considering the requirement and environmental
overall efficiency. restrictions. The cost of considering these
environmental aspects will increase in the cost of
3.2.4 Systematic process approach construction and indirectly affecting the budget.
(4) Increase in cost due to safety issues is also one of the
The major problem for effective functioning of value
major concerns. Due to some thefts or some problems
engineering ideas needs a systematic process approach in the
due to internal staff also affect the functioning of the
organization. If the methods in which the activities are done are
activities in the project.
not controlled and not systematic then the value engineering is
(5) Cost overruns are a common problem in the
of no use. It requires all to involve together and understand the
construction industry. It is necessary to identify those
objectives of the company and cooperate together so that
areas where these cost overruns occur. It can be due to
success is achieved. It needs to be taken care that all the
various reasons such as improper handling of
processes need to be crucially studied and identify the problems
materials, no proper methodology and functioning
so that better function ability is achieved.
efficiency.
3.2.5 Continuous Improvement (6) There is huge scope of work which is involved in the
construction projects and many times there is a dispute
The systematic methodology should be followed so that arises in the course of work so to resolve the
that the value engineering changes made to the organization has disputes there needs a DRB or arbitration and that is a
an impending effect for future. Also continuous monitoring on time consuming process and can be a major reason for
periodic basis is required so that it can be analyzed where there delay in completion of projects.
are problems mitigation of the same can be done at earliest. (7) Due to constraints in the schedule of works it becomes
The continuous improvement will ensure the stability of the necessary for completing the works in restricted time
organization and also much cost savings in the unnecessary which impacts on the quality of works and ultimately
cost.
puts black mark on the organization.
3.3 Problems faced in Construction of Buildings (8) Most of the works is been undertaken without proper
supervision and it ends into work completing with lots
The Industrial construction is one of the prominent sectors of defects and it becomes a different task for
where India is having much greater growth in the recent years. rectification of defects which includes much time and
There has been much cost incurred when it comes to cost.
construction of Industrial buildings. There is also much
unnecessary cost which comes throughout the life cycle of 4. APPLICATION OF VALUE ENGINEERING TO
construction. More precise ways have to be taken to have such CONSTRUCTION PROJECTS
buildings to be constructed. During the planning stage itself
many aspects which affect the cost of construction have to be There has been much competition in the construction
considered. The necessity of a value based design is an ultimate sector from last decade and it requires them to have a better
necessity of industrial construction. The industrial buildings are reliability towards the customer which intends them to give
always designed heavily as heavy loads are expected to be better services at reasonable cost. There are many factors which
imposed on the structure. need to be considered for keeping a low cost. It is necessary to
know that having low cost is not only the binding factor but
The major problems faced in construction projects are also it is necessary for them to have a better value to their
170
IJRITCC | December 2016, Available @ http://www.ijritcc.org
_______________________________________________________________________________________
International Journal on Recent and Innovation Trends in Computing and Communication ISSN: 2321-8169
Volume: 4 Issue: 12 168 172
_____________________________________________________________________________________________
project. The value in this case can be different for all concerned possible combination. Also it is necessary to compare the
parties. Each party tries to have a better value and the main selected results with the quality of the project. The quality is to
motive behind a business is to have a good profit. When it be maintained so that future sustainability is maintained.
comes to the contractor side he would always try to complete 5. CONCLUSION
his work in the lowest possible cost similarly for the client he
The success of the project depends on various factors
should be getting maximum gains as possible. The customer
which are involved in a project such as the methods applied
has to only consider his comfort level and the design team
for the projects, the internal and external factors associated
would consider its functions and aspects to be taken into
with the projects. The initial estimates which are prepared
consideration.
should be maximum in accordance to the project and it is
As construction involves a larger amount of task
necessary as it can directly affect the fund requirements in the
starting from the planning to the execution stage, there is a risk
execution of project. It is necessary to identify the necessity of
of completing the tasks in the given time and cost. Also it
VE in any project. The VE can only be applied on projects
should be considered that the durability, reliability of the work
which can have considerable cost benefit. Hence it is useful if
should also increase. It is necessary to take precautionary
we apply value engineering to a big project where the VE can
measure in the planning or initial stage but we take fewer
bring considerable benefit to the organization. Also there
measures for considering value. Also after the work completed
should be a proper balance between all the things which are
it is less seen the tendency of comparing the construction with
being applied to a project and also the needs of the customer
the value but generally it is seen that the profit basis is been
should also be taken into consideration.
considered and compared. In value engineering we consider
The VE savings can be brought about in favor of all
for designs which are integrating both value and cost and for
parties concerned to the project. It is necessary that all parties
that it finds the critical elements and eliminate the unnecessary
should understand the importance of value engineering and
cost associated with the project.
impart it as an important part of their function. Successful VE
The production cost is always a major concern and it
implementation is possible only through the coordination of all
has to be reduced for achieving a better reduction in the
concerned participants. VE is mostly properly defined and
overall cost of project. It can be either the material cost,
understood by all levels in the organization. It can be an
equipment cost etc. Its always necessary to check whether the
effective technique for having better performance with cost
equipments and materials being used are according to the
reduction. The quality of the concerned people undertaking
conformance of the current needs and if not then it is
VE is very important. It gives us better quality, cost and
necessary to replace them with materials which is equivalent
performance for the concerned product/service.
to existing material and also its necessary to consider the cost
The need of the era is for a better analyzing and
reduction aspect also.
evaluating technique which can be used for better value
The minimization of the defects and lack of
engineering results which assuring better performance for the
clarification during the execution of projects leads to future
future. Many mathematical models are been applied but the
unnecessary cost indulged and this can be reduced by proper
functional relationship with the elements is important to be
details to be given to the execution team so that a better
considered as it will affect the post performance of the project.
quality project could be done and the future unnecessary cost
For choosing of the correct alternative is the most important
can be controlled. Value engineering can impart a good
key feature of value engineering. Value engineering was found
integration between the cost and value of the project. It is very
to be the important aspect which imparts value to a project.
necessary to always check the aspects of the project on a
periodic basis. That basically helps to achieve more
REFRENCES
understanding of what functions need more clarity and
changes to be done so that good quality can be achieved.
[1] Amit Sharma and Dr. R.M.Belokar, Implementation of value
When we plan to do value engineering to particular
engineering-A Case study, International Journal of Marketing,
project it is necessary to properly follow all steps related to VE Financial, Services & Management research, Vol 1 No 3, March
in a proper manner so that we get better results. Firstly it is 2012.
necessary to identify the critical elements which are imparting [2] Pingbo Tang and Robert B Bittner, Use of Value Engineering
unnecessary cost in a project. There can be various such to Develop Creative Design Solutions for Marine Construction
critical elements but it is not possible to carry VE on all the Projects, Practise periodical on structural design and
critical elements as it can affect the overall quality of the construction, ASCE, Feb 2014.
project. The combination of the elements should be taken [3] V.Bazjanac, T.Maile, J.T.ODonnell, S. Tarantino, N. Mrazovic
and J. Compostella, Streamlining the Value engineering
which can have maximum cost reduction in a project. The
process and its impact on Building Energy performance,
possible combination of the elements can be selected by
proper mathematical models which help us to analyze the best
171
IJRITCC | December 2016, Available @ http://www.ijritcc.org
_______________________________________________________________________________________
International Journal on Recent and Innovation Trends in Computing and Communication ISSN: 2321-8169
Volume: 4 Issue: 12 168 172
_____________________________________________________________________________________________
Computing in Civil and building engineering, pg 235-242,
ASCE, 2014.
[4] Chong Zhou, Bing Wang and Yong Guo, An Innovative
Application of AHP and Value Engineering Techniques in
Project Mangement of High rise buildings, ICCREM, Pg 619-
626, ASCE 2014.
[5] G.B.Lin and Q.P.Shen, Development of Performance
Mesurement Framework for Value Management Studies in
Construction, Construction Research Congress,2010.
[6] Chougule Mahadeo Annappa and Dr. Kallurkar Shrikant
Panditrao, Application of Value Engineering for Cost
Reduction of Household Furniture Product, IJIRSET, Vol 3,
Issue 10, October 2014.
[7] A.Afshar Ghotli, Asst. Prof. Alireza Rezaei, Value Mangement
in Building Construction Industry of Northern Cyprus:
Addressing a Theory and Practise Gap, AEI, Pg no 83-92,
2013.

172
IJRITCC | December 2016, Available @ http://www.ijritcc.org
_______________________________________________________________________________________