Value is defined by the ratio of Function to Cost (Value=Function÷Cost). People make choices every day based on perceived value. We think about value all the time, whether it is a major purchase such as a car or house, our next vacation destination or even choices as mundane as picking a restaurant or movie. Everyone wants to get the most “bang for their buck.” The same holds true in business.
In the business realm, managers make value-based choices for everything from office supplies to construction projects. Different purchasing decisions have different definitions of value. For office supplies, value might be driven by the vendor’s ability to provide same day or next day delivery, their selection of products, and of course, cost.
In contrast, construction projects tend to have a much more complex and multi-faceted definition of value. Not to mention the potential for significant financial consequences if the building, road, bridge or utility system doesn’t perform as intended.
With the ultimate goal of obtaining maximum value, all phases of a construction project have critical decision points where outcomes can be contrary to that goal. Without a repeatable method to evaluate design and construction options, unnecessary risk may be incurred during the project lifecycle. To help minimize the risk associated with the decision making process, firms are implementing Value Engineering.
Value Engineering (VE) is the commonly used name for the systematic and structured approach used to improve projects, products and processes. Traditional VE efforts have historically been focused at either the project kickoff phase or the construction bid process phase of construction projects. These traditional approaches, while value-added, have some intrinsic failure modes. The one-time approach doesn’t provide the most opportunity for providing value solutions because many times recommendations from the programing phase of the project are not followed through the life of the project. Likewise, recommendations given during the construction phase has little ability to make a significant impact and cheapens the design.
If VE is integrated throughout the life of the project, it is assured that recommendations are implemented throughout the life of the project and opportunities to make meaningful changes present themselves. Management Solutions, LLC, in partnership with Greene and Associates, has developed the Ci2 Integrated Value Engineering approach for facility design and construction utilizing this concept. The Ci2 process integrates VE concepts across the entire project lifespan, from initial design through project close-out.
This approach consists of five sessions at key gateways of the project lifecycle. A visual map of the sessions is shown below.
The Ci2 process supports decision making that aligns with both the project goals and overall business goals for everyone involved with the project. This ongoing evaluation process promotes the generation of value creating ideas at all phases of the project and ensures the ideas are evaluated and carried through the project.