Design to Cost · Generate
Value Engineering Workshop
Cross-functional session: state the function, brainstorm alternative ways to deliver it, cost the best candidates.
- Time2 h
- FormatTeam
- StageGenerate
Value Engineering Workshop: what it is and why it works
A value engineering workshop brings design, purchasing, manufacturing, quality and, on capital projects, construction and operations into one room to generate better ways of delivering the functions that cost the most. The session opens with the cost breakdown and the functions identified as high cost and low value. The team then runs structured creativity rounds on those functions, generating alternatives without judging them, before evaluating the ideas on value impact and implementation effort. The best ideas leave the room with an owner and a date.
Cost reduction often fails because it is treated as an accounting exercise: each department trims its own budget, and nobody questions the design itself. Value engineering changes the question from how to make the same thing cheaper to how to deliver the same function differently. The discipline follows the job plan formalized by L. D. Miles and developed by SAVE International: gather information, analyze functions, create alternatives, evaluate them, develop the best into proposals and present them for decision. A two-hour session covers the creative and evaluation core; larger studies on capital projects often run for several days. Functional analysis and FAST diagrams prepare the ground, while DFM/DFA reviews and process redesign turn selected ideas into detailed changes.
What you need
- A cost breakdown for the product or project
- A function list or FAST diagram, with high-cost, low-value functions highlighted
- A cross-functional team, including people who build, buy, operate and maintain
- Relevant constraints: performance requirements, safety, codes, schedule
- A facilitator who keeps the session to time and separates idea generation from judgment
What you get
- A list of alternative ways to deliver the targeted functions
- An evaluation of each idea on value impact and implementation effort
- The top ideas assigned to owners with dates and next steps
- A record of rejected ideas and the reasons, for future reference
When to use it
When cost reduction is an accounting exercise instead of a design one.
How to do it, step by step
- Assemble a cross-functional team: design, purchasing, manufacturing, quality.
- Present the cost breakdown and the high-cost, low-value functions.
- Run structured creativity rounds on the worst offenders.
- Evaluate ideas on value impact and implementation effort.
- Commit the top ideas to owners and dates before closing the workshop.
Worked example: Process water pumping station at a mine
Illustrative scenario — figures are realistic but not from a real company.
A mining company's project team was designing a pumping station to transfer process water from a storage pond to a concentrator. The estimate had reached $6.4 million, about $1 million over budget. The team scheduled a two-hour value engineering session before completing detailed design.
- The team brought together process and civil engineers, a buyer, a construction manager and two maintenance supervisors from an operating site.
- The cost breakdown showed a concrete wet well and intake at $1.9 million, the pump building at $1.1 million, pumps and motors at $1.3 million, piping at $0.9 million, electrical at $0.8 million and other items at $0.4 million. The team focused on the functions transfer water, protect pumps and house equipment.
- Creativity rounds generated 27 ideas, including barge-mounted pumps, vertical turbine pumps in caissons, outdoor-rated motors with sunshades instead of a building, and a prefabricated electrical house.
- Ideas were scored on value impact and implementation effort. Three were selected: barge-mounted pumps, eliminating the building in favor of outdoor-rated equipment with access platforms, and a prefabricated electrical house.
- Each selected idea was assigned to an owner with a date for a technical feasibility check, including hydraulic, operability and safety reviews.
Result. After feasibility checks and a hazard review, the barge concept and prefabricated electrical house were adopted, and the building was reduced to a small maintenance shelter. The revised estimate was about $5.3 million. Maintenance supervisors had proposed two of the three winning ideas, which the team took as a lesson about whom to invite.
Common pitfalls and how to avoid them
- Inviting only designers, so ideas stay within familiar solutions.Include people who buy, build, operate and maintain the product or facility.
- Judging ideas while they are being generated.Separate creativity rounds from evaluation, and enforce the separation with a facilitator.
- Adopting ideas without checking performance, safety or code requirements.Route selected ideas through technical feasibility and safety reviews before approval.
- Ending the workshop with a list of ideas but no owners.Assign each selected idea to a named owner with a date before closing the session.
Frequently asked questions
What is the difference between value engineering and cost cutting?
Cost cutting usually reduces spending on existing elements, for example by negotiating prices or removing scope. Value engineering analyzes the functions a product or project must deliver and looks for other ways to deliver them at lower cost without reducing required performance, safety or quality. It can also add cost where that increases value, for example in maintainability.
What are the phases of the value engineering job plan?
The job plan used in value engineering typically includes information gathering, function analysis, creative idea generation, evaluation, development of the selected ideas into proposals, and presentation for decision. Many organizations add preparation before the workshop and implementation follow-up afterward. The sequence ensures functions are understood before solutions are generated and judged.
Who should attend a value engineering workshop?
A cross-functional team that knows the product or project from different angles: design, purchasing, manufacturing or construction, quality, and people who operate and maintain the result. A facilitator experienced in value engineering helps keep the process disciplined. A decision-maker should be available to approve owners and next steps at the end.
Origin
Value engineering — SAVE International; job plan formalized by L. D. Miles and successors.
Used in these playbooks
Cost redesign sprint 1 week
One week to redesign the expensive parts: analyze functions, run the workshop, apply DFM rules and cost the prototype honestly.
- Functional Analysis
- Value Engineering Workshop
- DFM / DFA Review
- Prototype Costing
Related methods
- Functional AnalysisExpress the product as functions — verb plus object — free of solutions: what must it do, not how.
- DFM / DFA ReviewDesign for manufacture and assembly: fewer parts, simpler joins, standard processes — cost falls with…
- Process RethinkQuestion the process itself: a different technology or supplier process can delete cost the design cannot.
More in “Generate”
Produce reduction ideas from functions, design rules and process rethink.