Value engineering as the name suggests, is a systematic approach to reduce the construction cost while ensuring superior quality of the product for the end user. It primarily focuses on promising low cost construction without compromising on the quality. In this kind of development the costs related to the construction, designs, maintenance and replacements are considered. The rationale behind value engineering is to avoid utilising higher-grade components in order to cut down the unnecessary cost of the construction process. However, this process does not involve compromising on the value and quality of the end product.
Value engineering will enable the players to develop new methods and techniques along with increasing productivity, cost reduction, better performance, high quality, simple design (civil, structural, mechanical, etc.) and optimum project duration without affecting the function of project or service. It is a creative approach which has been proved effective in the construction scenario, and should be implemented at all levels of the project management worldwide.
Scope of Construction Industry
India's construction sector is assessed at Rs.4000 billion or $100 billion. India is ranked number one among the top ten spending nations on the construction sector in the world. Production of cement is more than about 250 million tons in India. A report on "Global Construction 2025", estimates that China, India and US (United States) will account for almost 60% of global growth of the construction sector. Government of India is spending 9% of the GDP on various infrastructure projects. According to the Future Market Insights in the report titled, “Construction Chemical Market: India Industry Analysis and Opportunity Assessment 2014 - 2020”, the Indian construction chemical market will exhibit a CAGR of 17.2%. The market is projected to reach US$ 1,890 million by 2020.
Decoding Value Engineering
Value engineering is an effective way of cutting down the cost and adopts different techniques in order to achieve far greater results. The starting point for value engineering is to isolate the cause behind high cost which helps in devising effective strategies and analysing the ways for cost management. It is commonly seen that around 15% to 25% of the budget could be saved by adopting this initial step. In the construction industry, value engineering is a systematic way which is implemented during the stages of planning, design and construction.
Value engineering has the potential to be used in various projects and has proved beneficial, especially in more complex and higher value projects. Experts have observed that the cost can be significantly reduced in the initial stage of design. If the Value concepts are implemented in the concept stage, the savings will be higher. Strategy and planning are emphasised in the early stage because the scope of cutting down cost will keep decreasing as the project progresses.
It will be beneficial to analyse various value engineering techniques, like:
1. Various types of formworks that provide us benefit over the conventional formwork, where we save on time, cost (in the long run) and ensure high quality.
2. Different kinds of industrialized housing construction technologies, which have huge benefits over conventional construction techniques.
Investment in the construction sector and ongoing infrastructural developments in India have made this a crucial industry segment. Apart from the huge investment associated, construction sector also has variety of construction projects involving stakeholders, materials, construction management techniques, etc. All of these sectors widen the scope of application of value engineering. Considering the attributes and scope of the Indian construction industry, it will be beneficial to have more value engineering studies. This will allow players in the sector and other industry players to identify and overcome various loopholes faced during the construction process and overcome the same through adopting creative alternatives. Value engineering will enable the players to develop new methods and techniques along with increasing productivity, cost reduction, better performance, high quality, simple design (civil, structural, mechanical, etc.) and optimum project duration without affecting the function of project or service.
Spokesperson: Mr. Arvind Gowda, CEO, Expat Engineering India Ltd (EEIL)