Introduction
Value Engineering assessment is a review that is required to be undertaken towards the end of FEED, when the design and associated estimates are complete, prior to moving into the EXECUTE Phase of the project. Value Engineering Assessment is generally carried out to ensure that the project is ‘at the lowest total life-cycle cost’. The life-cycle cost covers design, installation, operation, maintenance, decommissioning, etc.
Value Engineering assessment is a formalised assessment of a FEED study to ensure;
(a) The engineering work is technically valid and
(b) That the lowest life-cycle cost has been achieved.
Value Engineering is a technique that employs an organized multi-disciplinary team, a planned approach, to achieve objective of lowest overall cost without compromising quality. It can be accomplished by organized review of project design, for the purpose of creating design alternatives and design improvements that can save life-cycle costs. This is normally achieved through Value Engineering workshop sessions.
Generally, the Value Engineering is performed by a third-party, in a workshop format. The, scope of Value Engineering is prepared by engineering consultant for COMPANY’S review and approval and shall be the basis for appointing the third-party Value Engineering Facilitator.
Value Engineering study can be based on PFDs or P&IDs.
Value Engineering Workshopwill normally progress through the following phases:
- Information Phase
- Creative Phase
- Judgment (Analytical) Phase
- Development Phase
- Review and Implementation Phase
Information Phase
Value Engineering team should absorb all the available information during this initial phase such as design criteria, design concept, alternatives evaluated, etc. Cost saving ideas should be written down as soon as they are generated during the Information Phase.
Creative Phase
During this phase, the project is separated into components that seem to offer the most potential for cost savings and alternative approaches to achieve the target functions are then developed. The Value Engineering coordinator should encourage the team to brainstorm and submit ideas without any prejudgment.
Judgment (Analytical) Phase
When the creative phase resulting in generation of alternative ideas is completed, the Value Engineering team reviews the alternatives to identify those which are attractive for further development. Some alternatives may be discarded in the preliminary review. Others are rated based upon a previously designed rating procedure to identify those alternatives that promise the greatest cost saving or value to the project. The chosen alternatives should be presented to design team with supporting documentation (such as sketches, studies and similar procedures used elsewhere) for detailed review and evaluation.
Development Phase
During this phase, the engineering consultant researches the recommendations, collects data, develops the proposed cost decrease and describes their advantages or disadvantages. The cost breakdown should clearly indicate the cost difference between the original concept and the proposed change. Items such as reduction in maintenance or life-cycle cost should also be calculated.
On completion, the engineering consultant submits a preliminary report on the findings and accepted recommendations. The report should provide the reader with a clear understanding of the implications to the Project should any recommendation become a reality.
Review and Implementation Phase
Value Engineering coordinator will present preliminary report to a review panel, which will consist of members from the CONSULTANT and COMPANY. The review panel will discuss ideas and decide upon each based on its merits. An implementation schedule will be decided for accepted ideas.
CONSULTANT will issue a comprehensive final report incorporating comments, discussions and decisions of the review panel.