S-060 - Value Engineering Review
Value Engineering is an industry proven technique to improve a project. Many initiatives are aimed at cutting project cost, and the result is often lower specification, poorer performance, and higher maintenance. Value Engineering looks at ‘function’ (What does this do?), rather than ‘equipment’ (What is this made of?)
Instead of searching for a way to make the same equipment more cheaply, it looks for a better way to deliver the same result or function. Value is measured by the formula Function/Cost.
The functional analysis performed as part of Value Engineering defines ‘What is the function of this equipment?’ This also forms a foundation for Reliability Centre Maintenance analysis, which considers ‘How do we maintain this function?’
The results of a Value Engineering exercise improves the value of a project – either better performance for the same cost, or lower cost for the same performance.
Value Engineering is best performed in the early part of the Select phase of a project, when the overall concept is becoming clear. At this point, it helps to narrow down alternatives, and improve the chosen concept before front end engineering begins.
The Value Engineering review should be done with all disciplines present, though the main emphasis is on surface engineering:
- From the project asset list, make a functional analysis, using a process flow diagram to tabulate the result.
- Define each function as:
a verb: pump, mix, transfer, cool
plus a noun:
pump fluid, mix gas, transfer waste
- For each function, explore alternative ways to deliver the function: Delete/Do another way/Combine.
- Measure the baseline value of the project against the project value drivers.
- Define the scale range for each value driver, and measure the delta of each improvement suggestion.
- A Functional Analysis of the existing design concept
- A list of value improving suggestions
- An assessment of the value improvement to the project.