You’ve worked with your design and construction team to create the perfect development on paper, but do you know whether you’re getting the best result for your efforts? Developers rely on value engineering to get project costs down while maintaining high quality standards. Take a closer look at value engineering and discover why developers should work with a value engineering partner to maximize the value of their assets.
What is value engineering?
In the development industry, “value engineering” refers to a method used to improve the value of a project by examining the function of each element or item and its associated cost. Teams weigh the function-to-cost ratio of each element and make suggestions for alternative designs, construction methods, materials and more, all with the goal of improving the overall value.
It’s important to remember that value engineering isn’t solely about cutting costs. It involves optimizing critical elements of a project by analyzing every related factor—cost, upkeep, wear and tear. aesthetic value and more. Development, construction and design teams must work together and understand the overarching goals and vision of the project to provide truly advantageous value engineering.
Defining value for a project
What does value really mean? In general, anything that has a favorable ratio of costs to benefits can be considered a “good value.” While developers may think it’s easy to define cost—how much an element costs upfront—they need to dig a little deeper to truly understand the value. Considerations like how long materials last or what type of maintenance an item needs play a big role in determining value.
Once developers identify the most important components of a project—and what the project aims to achieve—they should share them with an experienced value engineering team. After review, the team will return with a list of suggestions that enhance the project to provide the best possible value, all while respecting your goals.
This approach refers to “value enhancement.” Rather than implementing sweeping cost-cutting measures that may not be the best fit for a client’s budget, goals or needs, value enhancement goes deeper. A good value engineering team like the experienced professionals at Sandbox Development will take all facets of a project into consideration and find each client the best-quality options at the lowest possible cost.
As developers weigh these suggestions, they should keep three primary criteria in mind.
Most value engineering processes are driven by the goal of cost reduction. Your value engineering team will propose ideas of less-costly materials or systems, such as finding lower-priced but similar fixtures or eliminating unnecessary features. Even simple suggestions or alternatives can improve the value of a project. But without the next consideration—quality—value engineering would just be a practice of cost-cutting.
Before developers make any big decisions about value engineering, considering quality is paramount. Quality encompasses many things, including the quality of environment you’re creating, the quality of materials in that environment and even the quality of the team you’re choosing to build that environment. While some design elements, materials or equipment might come at a higher cost, they might be justified by the enhanced quality they bring.
For example, higher-cost elements or items allow stakeholders to charge more for their services. In some cases, they can have a beneficial impact on the productivity or happiness of those who use and enjoy the space. Overall, a high-quality product is generally going to have more value than a low-cost, low-quality one.
Finally, developers must consider the long-term implication of any value engineering decisions they make. While low-cost flooring or fixtures may seem practical initially, the faster you need to replace these elements, the more they’ll actually end up costing in the long run. However, if saving extra money upfront is the difference between getting a project off the ground or having it stall, making sacrifices may be the best option.
Value engineering is critical during project planning
Value engineering is a critical process at every stage of a development, but in most cases, the planning stage is the best time to engineer value. Starting early minimizes the cost of implementing changes and has the least impact on the project’s overall schedule.
In the project planning stage, your value engineering partner should look closely at your plans and vision for the project. They’ll offer alternative solutions that fit within your parameters and seamlessly work them into the plans. While this takes time and effort upfront, it can save developers from costly change orders that can push back a project’s timeline.
It pays to partner with a value engineering team
No matter what type of development you’re planning, working with an experienced value engineering team like Sandbox Development can enhance the value of your project. We’re committed to doing the right thing and making the best use of your resources, and we’ll never stop looking for ways to add value. Contact us to get started.