Value Engineering: the New Reality

In the interest of sustainable practice, we’re all compelled to do more with less. Value engineering can help, if all the stakeholders are on the same page.

As EGD designers and fabricators, most of us run headlong into the practice of value engineering on a regular basis. Our clients are increasingly driven to demand the most bang for every dollar they spend. Designers are challenged to devise more multi-functional, engaging, and effective programs under tighter budget constraints, while fabricators are challenged to deliver higher-quality products for less cost.

The movement toward life cycle assessment and other sustainable approaches to design, fabrication, and construction adds a new dimension to the equation. Just as value engineering can be used to create an acceptable balance between performance and cost, it can also be used to advance the sustainability goals of our projects.

As EGD professionals, our job is to understand what drives the design and production process so that we can navigate effectively and profitably within this ever-more prevalent reality. Our role as designers and fabricators is to help our clients make informed decisions about the value-engineering process.

Value engineering 101
Value engineering is a systematic method to improve the “value" of goods, products, or services by examining function. “Value” is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost of something. A primary tenet of value engineering is that basic functions of the item in question be preserved, and not be reduced, as a consequence of pursuing value improvements. While we can all argue the subtle nuances and semantics of this definition, we can agree that this process is tied to the intrinsic relationship between “value/function” and cost.

This relationship, as it manifests itself in the minds of all the parties involved in a project, determines ultimately how the “value“ is defined. It also informs the perceived acceptable and real costs that our clients are willing to pay for that value. To understand the dynamics of this relationship, we need to understand the factors that influence it.

The design and construction process is in the midst of fundamental change. The arrival of building information modeling (BIM), the shift of more liability to—or being assumed by—the general contractor, the expanding role of the owners representative, and delegated decision-making have all contributed to this change. Additionally, the general acceleration of the design and construction process to manage costs and limit exposure has contributed to an environment that is less and less conducive to thoughtful, reasoned, and informed decisions about the relationship between value/function and cost. This environment often leaves some of the best ideas on the chopping block, due solely to lack of understanding about their inherent value and function to the project.

The sustainability factor
The realities of sustainability add another yet dimension to the value engineering process. Buildings account for an estimated 48% of all greenhouse gas emissions and construction is responsible for upwards of 60% of the annual consumption of the world’s resources. Obviously, the need for change is real.

The global focus on efficient and responsible use of resources and efforts to reduce energy, water, and resource consumption are driving us all to be more informed and responsible in our designs. Fabricators are now focused on material efficiency, modularity, recyclability, and reducing the power consumption (both in production and in the use) of the products they make.

Designers are being asked to provide multi–functional, ever more flexible and durable solutions that work to enhance, support, and transform our clients’ businesses. Increasingly, we’re asked to help tell the story of sustainability, whether through an interpretative program that quantifies and communicates the sustainable aspects of any given effort, or by communicating energy and material savings as they relate to return on investment. Through its SEGD Green Paper, the new Green Resources Guide (add URL), and other initiatives, the SEGD Sustainability Forum has outlined many ways that EGD practitioners can engage in more sustainable practices. Common to most approaches is that we are all simply compelled to do more with less.

Perspective check
Every client asks how long a project will take and how much it will cost. As EGD practitioners we do ourselves a disservice if we can’t answer those questions. Since most EGD work takes place within the framework of a larger design and construction process, it is important to see this process through the point of view of all of the stakeholders. This perspective check helps us understand each stakeholder’s motivations and illuminates opportunities for improving the process.

It goes something like this:

• Owner/client— Wants the best-quality solution for the least amount of money possible. Sees sustainability as a marketing advantage, societal mandate, and potential benefit to the bottom line. Is frustrated by inability to understand every aspect of a project.
• Designer— Wants to design the “right/best” solution that is sustainable and both functionally and aesthetically transformative to the client. Is frustrated by tight schedules, reduced budgets, and reduced access to the client.   
• Fabricator— Wants to build high-quality products both efficiently and profitably. Is frustrated by the requirement to bid, build, and install signage from “pretty pictures.” Believes sustainability should be weighed against longevity and performance. Sees material efficiency as an increased potential for profitability. 
• Contractor— Wants to deliver the project on time with the least exposure and risk possible. Believes that time, unresolved issues, and inefficiency cost him money.
• Owners Rep— Wants to demonstrate that he is actively looking out for his client’s interests. This is most easily proven by his ability to save them money by encouraging value engineering at every opportunity. Questions the “real value” of sustainability.

While these perspectives are oversimplified, it’s easy to see how they collide during value engineering efforts. This makes the topic of function—rightly or wrongly—somewhat subjective, unless the purpose and benefits of the object in question are communicated early and often. 

A call to action
So how can we as EGD practitioners make the value engineering process work to our clients (and ultimately our) benefit? What if we engaged in more design/build partnerships? What if we embraced value engineering as part of the design process instead of the construction process? These two steps would go a long way toward providing our clients with answers about cost/function much earlier in the design and construction process.

If we design in ways that are not material dependent—or that are at least scalable—we can provide our clients with effective solutions that can be accomplished at multiple price points. If designers and fabricators work together to evaluate the form of the objects we design early in the process, more value can be created through optimal use of materials, consideration of longevity, simplification of forms, and engineered reduction of maintenance issues. These steps can make every project more sustainable.

As designers, we should focus our efforts on designing for impact, always with the user experience in mind. We must take a deeper interest in the how’s and why’s involved in building our designs—if only to gain a higher level of understanding about their cost and production. This investment in knowledge will inform the solutions we provide and may lead us to more sustainable solutions.
We also must take a more sophisticated role in communicating the function and intrinsic value of what we design for our clients. We should engage clients in a process that aligns the work we do with their strategic goals and objectives, be they cost, brand, coolness factor, function, or all of the above. To do this, we must find a champion within the client organization, show them the “big picture,” and find ways to provide them everyday context for the value of the work.

As fabricators, we should streamline and evolve our processes to be as efficient as possible. We should intensify our efforts to bring new and innovative technologies and solutions into our dialogue with designers. We should strive to gain a richer understanding of the design aspects most critical to the client and the designer, recommending options for savings and efficiency early on. We should work to be an informational resource and a sounding board in the design process, with the goal of informing that process to mutual benefit.

And finally, EGD practitioners on both the design and fabrication side should engage in honest, direct, mutually supportive professional relationships. We need to take individual responsibility for our own professional development while also making the effort to inform and learn from each other at every opportunity. These things only happen if we commit to doing them. The dialogue is mutually beneficial.

--By Harry Spetnagel, segdDESIGN No. 28, 2010

Editor's note: Harry Spetnagel, an associate design director in Gensler’s Denver office, joined the firm in 2006 with more than 15 years’ experience in sign design and fabrication. He is a member of the SEGD Sustainability Forum.