Value management is concerned with the creation of sustainable value, either at project, product, process, organizational or social level.
Value management focuses on improving and sustaining a desirable balance between the needs and wants of stakeholders and the resources needed to satisfy them.
Value engineering, on the other hand, is a systematic, organized approach to providing necessary functions in a project at the lowest cost. Value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality.
Value engineering (sometimes called value analysis) is focused solely on the functions of various components and materials, rather than their physical attributes.
Together, you can think of value management and value engineering as techniques concerned with defining, maximizing and achieving value for money (VfM).
These are systematic team-based collaborative approaches, initially pioneered in the United States during the Second World War to secure maximum output from limited resources. At the initial stages of a project, value management provides an exceptionally powerful tool to explore a project’s objectives and aspirations from the client’s perspective.
Value management and value engineering techniques originated in the manufacturing industry, but today they are equally applicable to a wide range of disciplines, including construction. In fact, the DoD incorporated VfM into the delivery of its very extensive construction program.
Experts in this area believe that for organizations to achieve maximum benefit, value management should be carried out from the very early stages of a project, not simply introduced when problems occur.
Value management exercises can also be used to recover cost divergence (costs diverging from the budget) that may become apparent when design reports are prepared. Under these circumstances, the client may have to choose priorities, or decide to increase the budget.
Want to learn more? Tonex offers Value Management and Value Engineering Training, a 3-day course that provides participants with techniques for reexamining projects with a view to reducing total project costs.
Value Management and Value Engineering training course introduces the concepts of Value Management and Value Engineering in relation to system and capability acquisition projects.
The course includes an overview of Value Engineering/Value Management (VE/VM) concepts, principles, and definitions, and focuses on the use of tools and techniques to improve project and program cost and schedule results, especially Return on Investment (ROI).
For more information, questions, comments, contact us.