Gus Alexander recently made a bitter complaint about value engineers spoiling his design. Well, fair enough, but that’s not what value engineering is for
In a recent article, Gus Alexander outlined his feelings towards the often practised but seldom perfected art of value engineering – feelings that have been informed by personal experience but ones that I, in part, contest (The wrecking crew, 17 July, page 28).
It is unfortunate that Gus’ impressions seem to be informed by a long line of overzealous QSs masquerading as value engineers, so it’s only fair to allow a value improvement professional to redress the balance. Don’t get me wrong. I understand Gus’ frustrations. As a value improvement specialist I’ve witnessed many a botched value engineering exercise. I’ve lost count of the number of times that I’ve witnessed a cost-cutting exercise parading beneath the banner of value engineering. It is such exercises that have led to the widespread misuse of the title and the gradual erosion of a concept that is simple and effective when approached properly. Gus has outlined a number of examples that illustrate this, but he only scuffs the surface of the real issue.
Value as a concept has had an accurate definition since the first Oxford English Dictionary was published back in 1884. And when Lawrence Miles of General Electric framed the concept of value engineering in 1947 he gave us a number of techniques that focus on the use of innovation to balance the relationship between function and cost. It is this concept that seems to have been lost in translation and the construction industry has all too often ended up with a half-cut process.
Why have we ended up in such a situation? It could have something to do with the tendency of the industry to recycle paradigms that have been used by other industries – Motorola’s “Six Sigma” quality management techniques and lean production, to name just two. Another plausible suggestion is that many professionals have just enough learning to be dangerous, but too little to understand the concepts that Miles developed. The more plausible reason is a combination of these.
Value engineering is the use of innovation to balance the relationship between function and cost. It is this concept that seems to have been lost in translation
My experience is that what starts with good intention falls down because of poor execution. Value engineering is all too often carried out at the wrong time (too late) with little or no structure (picking off the easy targets) by the wrong people (the same team that created the design being challenged). As Einstein told us: “We can’t solve problems using the same kind of thinking we used when we created them.”
Having framed the problem, what, might you ask, is the solution? A client recently cited some innovative thinking that enabled him to deliver a better result with a 20% cost saving thrown in, but he found it difficult to explain how it had been achieved. Over a few beers the story was told and retold. Eventually we agreed that the reason the project team had been able to come up with its gem of an idea was its ability to get the right people together at the right time and ask the right questions. Such innovation cannot be bottled and used elsewhere but the driving forces can.
More practical examples of value engineering can be found in everyday life – take the Easy Group, for example. Its key principle when identifying new markets is to ask whether it can provide a service that is of better quality and lower price while still making a profit.
There is a little-known British and European Standard that provides a useful framework (BS EN 12973). But if, like me, the idea of reading such a document might send you to sleep quicker than an overdose of Nytol, understanding that such a framework gives you a practical outline of when to challenge, what to challenge and how to challenge, is more important than memorising it. The point is to make sure you focus on challenging what you really want and then challenging how you might go about getting it. By doing that in a structured way – challenging the product, the process and the people involved, for example – you can identify those all-important innovations that will deliver a better end result for a lower price.
Danny Granger is an associate director of Turner & Townsend. He also sits on the board of the Institute for Value Management