Value Engineering – The Key to Getting More of What You Want Most
Value engineering is not a commonly understood term. According to Wikipedia:
“Value engineering (VE) is a systematic method to improve the “value” of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased 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.”
In the context of home remodeling, it is the method used to design and plan your project, so you get the most of what you want from your project within a given budget.
One way to understand one type of value engineering when remodeling is with this example of how it would work:
You have three bathrooms you want to remodel. A master bath, a bathroom for your kids and a guest powder room. You want to invest no more than $80,000. Your home is upscale, and you entertain regularly.
If you used the $80,000 to create three upscale bathrooms of equally quality, you could not get the luxury master bath you want within your budget. Without value engineering, your budget will split $35,000 each for the two full baths and $10,000 for your powder room. Both full baths will get the same budget.
However, YOUR priorities are getting the high-end master bath you want and an upscale powder room. By telling us this, we might reallocate your budget to put only $15,000 into the kid’s bathroom, $8,000 into the powder room and use the rest, $57,000, for the master bathroom.
Your kids will have a bathroom fine for their needs. The powder room will still look great, and you can get much more of what you want in your master bathroom.
However, value engineering can also come into play in different ways. For example:
You want to get all new windows in your home. Because of advertising you have seen, you want to windows from a name brand company like Andersen or Pella. However, your project budget can only afford low-end model windows from these companies and the low-end windows are not the models, nor have the features you want.
So, using value engineering, we might recommend these approaches:
- If your priority was to have brand name windows, we could suggest you get the model of brand name windows, with the features you want but only for the rooms where the window model and features are most important to you. Then, for the rest of the rooms, you can buy lower cost windows from this brand name company. These windows may not have all the features you want, but they meet your basic needs. Bottom line, you get all new windows, and from the name brand company, you want.
- If your priority is how the windows look, their quality and how well they work, we could recommend a quality window that has everything you like about the brand-name They have the same or better quality, and they work as well or better. They have similar or even more options and features. But, they are not a well-known brand of windows. Typically they cost less because they do not advertise to the public, just to the trade. So because the windows are not a nationally known name brand, they cost much less. This allows you get the look and type of window you want in every room of your home. You do not get the brand name, but you get a much better value based on what your priorities are.
In both cases, we have helped you get what you really want by using our experience, knowledge and some creative and outside the box problem-solving.
Word of Caution
A mistake some contractors and homeowners make when “value engineering” is they lose sight of the life-cycle cost of the lower cost materials and products they may use for the lower priority aspects of your project
Using substandard products and materials that will cost you more to maintain or prematurely replace over the time, you will need to use them for the less important parts of your project is rarely a good idea. Using lower cost materials and products that won’t cost more to maintain or prematurely replace is a better way to go.