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News & Press: 2019 News items

Value management: when QS and designer are in sync

Monday, 18 February 2019   (2 Comments)
Posted by: Bert vd Heever
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Value management during a project’s design phase can help manage costs, provide value for money and avoid budget overruns later.

A very interesting article recently appeared on the website of the NZ Ministry of Business, Innovation and Employment. It stated that although many see design and quantity surveying as being stand-alone practices, huge benefits can be derived when combining these disciplines at an early stage in a process of value engineering..

They say: "A quantity surveyor (QS) can provide valuable input at the start of a project by providing advice about value engineering and cost management."

So what is value engineering?

"Value engineering is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be manipulated by either improving the function or reducing the cost." Wikipedia

The concept originated at the General Electric Company during the 2nd World War when Lawrence Miles, who was in charge of purchasing raw materials realised that when he was unable to obtain a particular material it was necessary to replace that material with another that performed the same function.

Many see the involvement of the QS in the process of value engineering as necessary to realise cost-saving benefits for a project. But genuine value management is far more than just a cost-cutting exercise.

The Designing Buildings Wiki says:

"Value engineering is used to solve problems and identify and eliminate unwanted costs, while improving function and quality. The aim is to increase the value of products, satisfying the product’s performance requirements at the lowest possible cost.

In construction, this involves considering the availability of materials, construction methods, transportation issues, site limitations or restrictions, planning and organisation, costs, profits, and so on. Benefits that can be delivered include a reduction in life cycle costs, improvement in quality, reduction of environmental impacts, and so on."

With cost overruns measured in billions of rand, spent on projects that are hardly fit for purpose government will start to rely more heavily on the value management knowledge that Quantity Surveyors can bring to the table.

If called on to lead a value management exercise, will you be able to do so?

To find out more about value management click here.


Written by Bert van den Heever

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Association of South African Quantity Surveyors


Comments...

Jan Hendrik Hofmeyer Cruywagen Prof says...
Posted Thursday, 07 March 2019
One must be careful not to confuse the terms "Value management" and "Value engineering" to be the same. In South Africa we usually use value engineering as a cost-cutting exercise after tenders have closed to bring the project within budget, whereas value management is done at the design stage to get the best value for money. This may mean that, say, finishes with a higher cost are used, especially if the life cycle cost of the product is also taken into account, to get the best value
Bennett Fendt (Umhlanga Rocks) says...
Posted Sunday, 03 March 2019
As a PQS I have been doing this for eons, however, have often encountered blowback from architects who WANT what they want and have little respect for the skills we posses. Just recently the phrase " value engineering" has become a buzz word while in fact what is happening is simply a cost reduction exercise and not value management.