Where & Why Value Engineering Goes Wrong with Capital Projects
Abstract: Value engineering (VE) as a technique was first developed in the U.S. during World War II to cope with the problems inherent with wartime shortages of key components. Since these shortages existed, innovative methods were required as a workaround to solve these problems. Larry Miles with General Electric is widely credited as the developer of the technique. While the origins of VE were in U.S. manufacturing, the technique has spread to numerous other areas including retail, construction, and services sectors in the U.S. and throughout the world. VE has acquired other names including value analysis, value management, and value improving practices. Whatever the name, VE has been widely successful in improving value in a variety of areas. However there have been many other instances where VE has not been successful, or those invoking the VE name have incorrectly implemented the technique or do not really practice genuine VE (but still call their work by that name). This has resulted in professionals, across a variety of sectors, viewing VE as only a simple cost reduction technique. Correctly applied, it is far more! This paper arose from the writer’s extensive VE experience on teams related to capital projects and reflects years of discussions with practitioners in the construction industry. The material presented herein is the information thus obtained, which has been distilled into various categories related to capital construction projects.
Speaker: Dr. Neil Opfer, CCP CEP PSP FAACE
Dr. Opfer has extensive experience in the construction industry in various construction positions and as a construction faculty member and construction consultant. He has been employed in the construction divisions of such firms as Inland Steel (Arcelor-Mittal), Morrison-Knudsen (URS), CE Lummus, and Standard Oil of California (Chevron). He has been on the faculty of the Construction Management Program – College of Engineering at the University of Nevada, Las Vegas (UNLV) since 1989. He has been a licensed general contractor in the State of Nevada since 1999. Neil has written over 80 articles, papers, and book chapters on various aspects of the construction industry. He has had extensive experience in construction consulting for a number of ENR Top 400 Contractors and Fortune Top 500 Firms. He received a P.D. Engineering from University of Wisconsin - Madison, an M.S. Management (MBA) from Purdue University along with a B.S. Building Theory, B.A. Economics, and B.A. Business, all from Washington State University. He is a member of numerous professional associations (AACE, AIC, AWS, CFMA, CMAA, IESNA, PMI) and he maintains CCP, CEP, CPC, CSHM, PMP, and PSP certifications.
Neil has been a member of AACE International since 1979 and has made numerous presentations at local and regional meetings as well AACE International meetings/conferences. He became a Certified Cost Professional (CCP) in 1984, a Certified Estimating Professional (CEP) in 2008, and a Planning & Scheduling Professional (PSP) in 2008. He is a frequent speaker at construction industry seminars, trade, and professional association meetings having conducted over 100 seminars and made over 125 presentations. He is a founding officer in AACE’s Nevada Section. Neil served on AACE’s Board as Director-Region 6 (1995-1997) and has been a member of the Education Board since 2014. Neil has been honored by the AACE as a recipient of the Brian D. Dunfield Educational Service Award (2004), the Charles V. Keane Distinguished Service Award (2009), as a Fellow (2013), and the Lifetime Achievement Award (2017).
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