Value engineering

Value engineering (VE) is a systematic analysis of the functions of various components and materials to lower the cost of goods, products and services with a tolerable loss of performance or functionality. Value, as defined, is the ratio of function to cost. Value can therefore be manipulated by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.^[3] The term "value management" is sometimes used as a synonym of "value engineering", and both promote the planning and delivery of projects with improved performance.^[4]

The reasoning behind value engineering is as follows: if marketers expect a product to become practically or stylistically obsolete within a specific length of time, they can design it to only last for that specific lifetime. The products could be built with higher-grade components, but with value engineering they are not because this would impose an unnecessary cost on the manufacturer, and to a limited extent also an increased cost on the purchaser. Value engineering will reduce these costs. A company will typically use the least expensive components that satisfy the product's lifetime projections at a risk of product and company reputation.

Due to the very short life spans, however, which is often a result of this "value engineering technique", planned obsolescence has become associated with product deterioration and inferior quality. Vance Packard once claimed this practice gave engineering as a whole a bad name, as it directed creative engineering energies toward short-term market ends. Philosophers such as Herbert Marcuse and Jacque Fresco have also criticized the economic and societal implications of this model.

^ "How they built Grenfell". The inquiry heard that aluminium composite is often used instead of fire-proof materials, as part of "value engineering" exercises to save money. This was the case in the refurbishment of Grenfell Tower, when non-combustible zinc panels were swapped out for aluminium composite to save nearly £300,000. {{cite magazine}}: Cite magazine requires |magazine= (help)
^ "Grenfell: council made more on two house sales than it spent on cladding". They confirm that almost £300,000 was cut from the cost of the cladding system used on Grenfell Tower by changing from zinc to aluminium as part of what was described internally as a "value engineering process". Zinc panels with a fire retardant core were replaced by cheaper aluminium panels with a core that has since proved combustible in government tests.
^ "Value Methodology Standard" (PDF). Archived from the original (PDF) on 2009-03-19. Retrieved 2008-12-01.
^ Invernizzi, Diletta Colette; Locatelli, Giorgio; Grönqvist, Marcus; Brookes, Naomi J. (2019-01-28). "Applying value management when it seems that there is no value to be managed: the case of nuclear decommissioning". International Journal of Project Management. 37 (5): 668–683. doi:10.1016/j.ijproman.2019.01.004. ISSN 0263-7863. S2CID 115941020. Archived from the original on 1 Feb 2019 – via https://doi.org/10.1016/j.ijproman.2019.01.004. {{cite journal}}: External link in |via= (help)

[1] "How they built Grenfell". The inquiry heard that aluminium composite is often used instead of fire-proof materials, as part of "value engineering" exercises to save money. This was the case in the refurbishment of Grenfell Tower, when non-combustible zinc panels were swapped out for aluminium composite to save nearly £300,000. {{cite magazine}}: Cite magazine requires |magazine= (help)

[2] "Grenfell: council made more on two house sales than it spent on cladding". They confirm that almost £300,000 was cut from the cost of the cladding system used on Grenfell Tower by changing from zinc to aluminium as part of what was described internally as a "value engineering process". Zinc panels with a fire retardant core were replaced by cheaper aluminium panels with a core that has since proved combustible in government tests.

[3] "Value Methodology Standard" (PDF). Archived from the original (PDF) on 2009-03-19. Retrieved 2008-12-01.

[4] Invernizzi, Diletta Colette; Locatelli, Giorgio; Grönqvist, Marcus; Brookes, Naomi J. (2019-01-28). "Applying value management when it seems that there is no value to be managed: the case of nuclear decommissioning". International Journal of Project Management. 37 (5): 668–683. doi:10.1016/j.ijproman.2019.01.004. ISSN 0263-7863. S2CID 115941020. Archived from the original on 1 Feb 2019 – via https://doi.org/10.1016/j.ijproman.2019.01.004. {{cite journal}}: External link in |via= (help)

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