COST VALUE ENGINEERING (QSB 4214)

Module Teaching Objectives

1.    To create an understanding in general the value process, function analysis and team dynamics in the client’s value system.

2.      To identify solutions to undertake value studies at different stage of a project. 

3.     To recommend a more collaborative effort towards the promotion and awareness of value management in Malaysian construction industry in an effort to achieve value for money invested.

Learning Outcomes

In this module, I basically learned how identify the appropriate time to carry out Value Engineering throughout different construction phases.

I also learned how to recognize and recall the contribution of the value engineering /value management in the development process. Besides, I also know how to apply the value management to a value outcome in the decision making process.

Lastly, I learned how to analyse the cost and value implications of project scope and generate a Job-Plan for the implementation of Value Management workshop.

DEFINITION

Kelly and Male (1991) characterized VM by being :

• System oriented-uses a formal job plan to identify and remove unnecessary costs.
• A multi-discipline team approach –team of experienced designers, estimators and value Management Consultants.(Facilitator)
• Life-cycle orientated-examines the total costs of owning and operating a facility .
• A proven management technique.
• Function orientated – relates function required to the value received

Dell’Isola (1982) 

“ the creative organized approach whose objectives are to optimize the cost and/or performance of a facility or system"

Che Mat, M.M (2004) defines VM as a rigorous, systematic and innovative methodology with multi disciplinary approach to achieve better value and cost optimization for projects, products, facilities, systems and services without sacrificing the required performance.

Evolution of the term of VM from the period of its introduction to its present form.

Role of Quantity Surveyor in VM

The following tasks are undertaken by Quantity Surveyors, and are involved in value engineering practice:

• Preparing and administering maintenance programs.
• Forecasting expenditure flows.
• Advising on cost limits and preparing budgets.
• Advising on Cash Flow Forecasting.
• Advising on Life Cycle Costing.
• Cost Analysis.
• Cost benefit Analysis.
• Estimating 
• Evaluating alternative designs.
• Undertaking feasibility Studies.
• Investment Appraisal 
• Measuring and describing construction work but only in terms of cost planning.

Value is a measure expressed in currency, effort or exchange or on a comparative scale which reflects the desire to obtain or retain an item, service or ideal. The relationship of value to function and cost is represented by the expression

               

   Value = (Function + Quantity) ÷ Cost

Where,

Function = The specific worth that a design/item must perform

Quality  = The owners or users needs, desires and expectations

Cost         = The life cycle cost of the product/project

Thus, value can be well defined as the most cost effective or worthwhile; where product and/or project can perform at the least cost without sacrificing the required performance.