Construction costs have risen significantly in recent years. With increased material prices, labour shortages, and stricter building regulations, staying on budget while maintaining quality can feel like a daunting challenge. That’s where value engineering comes in.
Value engineering (VE) is often misunderstood. For some, it’s synonymous with cutting costs at the expense of quality. For others, it’s a strategic approach to enhancing a project’s efficiency and effectiveness. At its core, VE is about maximising value, not just reducing expenses. However, when improperly executed, it can lead to stripped-down designs, dissatisfaction, and long-term issues.
What is Value Engineering?
Value engineering is about maximising value by finding creative ways to reduce costs without compromising the functionality, durability, or aesthetic appeal of your project. It’s not about cutting corners, it’s about working smarter.
For example, if you have a $2 million budget for a project initially estimated at $2.5 million, our team will step in to identify areas where costs can be optimised. This might involve re-specifying materials, considering alternative construction methods, or collaborating with more cost-effective subcontractors and suppliers.
Our approach often includes sourcing locally, swapping premium materials for high-quality alternatives, or re-evaluating the design to ensure every dollar is well-spent.
How We Help From Start to Finish
- Early Collaboration
We begin by working closely with you during the planning and design phases. Engaging early allows us to flag potential cost issues before they arise and propose solutions that align with your vision and budget. For instance, we’ve partnered with designers to suggest material substitutions or structural adjustments that save costs while preserving design integrity. - Expert Recommendations
Our experienced team is well-versed in construction trends, pricing, and innovative materials. Whether it’s swapping out expensive cladding for a durable alternative or using modular construction techniques to speed up timelines, we prioritize solutions that add value to your project. - Open Communication
Throughout the project, we maintain clear communication with all stakeholders—clients, designers, and subcontractors. Balancing expectations is key, especially when each party has different priorities. We mediate these conversations to ensure the final outcome aligns with your goals. - Managing Challenges
Stakeholders often have varying levels of understanding when it comes to budgets and costs. Leasing agents, for example, might underestimate current market prices, leading to unexpected budget constraints. Similarly, designers may propose high-end features that exceed what’s feasible for your budget.That’s why we work collaboratively to bridge these gaps. By providing budget feedback during the design phase, we help stakeholders align their expectations with reality early on, avoiding costly revisions later. - Adapting and Delivering
At Keola, we understand the need for flexibility. Value engineering is often an iterative process, and we’re ready to adapt as needed. For one recent project, we revised the budget six times before construction began, achieving a 20% cost reduction without sacrificing quality.
This kind of adaptability requires teamwork and expertise. From our project managers to our subcontractors, everyone contributes ideas for smarter, more cost-efficient construction.
Misconceptions Around Value Engineering
There are several common misconceptions about value engineering that can lead to missed opportunities or undesirable results. Here’s a breakdown of these misunderstandings:
- "VE strips away design intent."When value engineering is poorly implemented, it can result in oversimplified solutions that sacrifice both functionality and aesthetics. Unfortunately, the term "value" can sometimes be used as a euphemism for "cheap," leading to design compromises that undermine the original vision.
- "Infrastructure should last decades, but VE focuses on short-term gains."
A key pitfall of value engineering is failing to account for the entire lifecycle of a building. Cutting upfront costs while ignoring long-term maintenance and operational savings can lead to expensive repairs and inefficiencies down the road, undermining the project's long-term value. - "VE favours contractors over clients."
If value engineering becomes too focused on construction convenience, it can inadvertently prioritise the contractor’s bottom line over the client’s needs. This imbalance can prevent clients from fully realising the long-term benefits of their investment. - "I hate VE because it cuts corners."
We redefine VE by focusing on creative problem-solving. It’s not about cutting corners but finding smarter ways to achieve the same or better results.
The High Stakes of Engaging Designers/Architect First
One of the biggest risks occurs when clients engage designers without having a clear understanding of their budgets, priorities, and long-term goals. Architects (and their clients) often aim to incorporate as many "cool" features as possible into the project, designing more than what fits the budget. Without this foundational clarity, projects can quickly spiral into expensive territory, and the design may evolve in ways that exceed expectations and budgets, creating unnecessary financial strain.
A Better Approach - Start with VE from the beginning of your projects.
When done correctly, value engineering begins before the design stage. This means collaborating with clients to align on project goals, budgets, and priorities while exploring innovative ways to deliver value. Here’s how we help:
We work with architects, engineers, and clients early to establish realistic budgets and identify potential high-cost elements. For example:
Can materials be sourced locally to reduce costs and lead times?
Are there new design options that provide flexibility and savings?
Proper VE evaluates not just the upfront costs but the entire lifecycle of a project. This includes maintenance, energy efficiency, and operational costs. A higher initial investment can lead to significant savings over time.
VE should enhance the user experience without cutting essential features. For instance, we ensure that sustainability measures, like energy-efficient systems are integrated without adding unnecessary luxury or compromising affordability.
Our team helps structure designs so that optional features can be added or removed easily. This "Lego block" approach prevents costly redesigns and ensures smoother transitions when budget constraints arise.
Real-World Examples of VE Success:
Social Housing Done Right
Instead of bespoke, high-cost designs, we advocate for modular, scalable solutions that prioritise durability and cost-efficiency, ensuring more units can be built within the same budget.
Commercial and Residential Projects
By leveraging tools like lifecycle cost analysis and fixed asset advisory, we’ve helped clients achieve both immediate savings and long-term value.
School Projects with Tight Budgets
Why Choose Keola?
Our dedication to value engineering means you’ll have a partner who prioritises your needs, finds creative solutions, and ensures your project is completed to the highest standards.
If you’re starting a construction project and want a team that can take you from concept to completion while staying within your budget, contact us today. Let us show you how value engineering can make your vision a reality.
Award winning
Our unique engineering approach to construction management is built on strong analytical minds that say there’s ‘never a problem, always a solution’.
We have an ethos of building things that work. Added to this an exceptional back office team who offer a streamlined, process driven approach to project delivery. On time with industry leading quality.
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Award winning
Excellent track record
We take care of the details, expertly navigating the intricacies of working with Council for RMA issues, noise, fire rating, inter-tenancies, unit titles, parking, infrastructure etc.
Can-do approach
Sometimes it takes a little Kiwi ingenuity to figure out a cost-effective way of bringing an architect’s vision to life. So if you’re looking for a builder that’ll add value and finesse to your project, call us.
Exceptional experience
Director Sanjesh Lal is a Chartered Civil Engineer and Registered Master Builder. He’s backed by the exceptional and experienced Keola team to expertly manage your construction project.
Difficult site? No problem
Constructing a building with difficult site constraints? Rest easy. We take pride in our engineering approach to construction management on challenging sites.
Low Variations
Our approach and deep understanding of the process means we price very accurately and pride ourselves on low variations. That means you can trust the figures we put forward.
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