Unit 1: Introduction to Value Engineering
Expert-defined terms from the Professional Certificate in Value Engineering course at London School of Business and Administration. Free to read, free to share, paired with a professional course.
AACE International #
AACE International is a professional association that provides guidance and resources for the field of cost engineering, including value engineering. Related terms: cost engineering, value engineering. AACE International provides a framework for the application of value engineering principles and techniques in various industries.
Acceptable Risk #
Acceptable risk refers to the level of risk that is considered tolerable by an organization or individual. Related terms: risk analysis, risk management. In value engineering, acceptable risk is an important consideration when evaluating alternative solutions and making decisions.
Activity #
Based Costing: Activity-based costing is a method of assigning costs to activities and products based on the resources they consume. Related terms: cost accounting, cost management. Activity-based costing is a useful tool in value engineering for identifying areas where costs can be reduced or optimized.
Affordability #
Affordability refers to the ability of an organization or individual to pay for a product or service. Related terms: cost-effectiveness, value for money. In value engineering, affordability is an important consideration when evaluating alternative solutions and making decisions.
Alternatives Analysis #
Alternatives analysis is a method of evaluating different options or solutions to a problem. Related terms: decision analysis, options analysis. Alternatives analysis is a key component of value engineering, where different solutions are evaluated and compared to determine the most effective and efficient option.
American Society of Civil Engineers #
The American Society of Civil Engineers is a professional association that provides guidance and resources for the field of civil engineering, including value engineering. Related terms: civil engineering, value engineering. The American Society of Civil Engineers provides a framework for the application of value engineering principles and techniques in the construction industry.
Analytical Hierarchy Process #
The analytical hierarchy process is a decision-making method that involves breaking down a problem into smaller components and evaluating them based on their relative importance. Related terms: decision analysis, multi-criteria decision analysis. The analytical hierarchy process is a useful tool in value engineering for evaluating and comparing different solutions.
As Low As Reasonably Achievable #
As low as reasonably achievable refers to the principle of minimizing risks and costs to the lowest level that is reasonably achievable. Related terms: risk analysis, risk management. In value engineering, as low as reasonably achievable is an important consideration when evaluating alternative solutions and making decisions.
Benchmarking #
Benchmarking is the process of comparing an organization's performance or products with those of other organizations. Related terms: best practices, performance measurement. Benchmarking is a useful tool in value engineering for identifying areas where improvements can be made and for evaluating the effectiveness of different solutions.
Brainstorming #
Brainstorming is a creative thinking technique used to generate a wide range of ideas or solutions to a problem. Related terms: creative thinking, idea generation. Brainstorming is a key component of value engineering, where a team of individuals work together to generate and evaluate different solutions.
Break #
Even Analysis: Break-even analysis is a method of evaluating the financial viability of a project or investment by calculating the point at which the costs equal the benefits. Related terms: cost-benefit analysis, financial analysis. Break-even analysis is a useful tool in value engineering for evaluating the financial viability of different solutions.
Business Case #
A business case is a document that outlines the justification for a project or investment, including the costs, benefits, and risks. Related terms: feasibility study, project proposal. In value engineering, a business case is an important document that outlines the justification for a project or investment and provides a framework for evaluating alternative solutions.
Capital Expenditure #
Capital expenditure refers to the investment of funds in assets that are expected to generate benefits over a long period of time. Related terms: operating expenditure, investment appraisal. In value engineering, capital expenditure is an important consideration when evaluating alternative solutions and making decisions.
Cash Flow #
Cash flow refers to the movement of money into or out of an organization or project. Related terms: financial management, investment appraisal. Cash flow is an important consideration in value engineering, where the financial viability of different solutions is evaluated.
Certified Value Specialist #
A certified value specialist is a professional who has been certified by the Society of American Value Engineers to practice value engineering. Related terms: value engineering, certification. A certified value specialist has demonstrated expertise and knowledge in the principles and techniques of value engineering.
Change Management #
Change management refers to the process of planning, implementing, and evaluating changes to an organization or project. Related terms: organizational development, project management. Change management is an important consideration in value engineering, where changes to a project or organization can have significant impacts on costs and benefits.
Civil Engineering #
Civil engineering is the discipline that deals with the design, construction, and maintenance of infrastructure, including buildings, roads, and bridges. Related terms: construction engineering, value engineering. Civil engineering is a key area where value engineering is applied to optimize the design and construction of infrastructure.
Commissioning #
Commissioning refers to the process of testing and validating the performance of a system or facility to ensure that it meets the required standards. Related terms: testing, validation. Commissioning is an important step in value engineering, where the performance of a system or facility is evaluated to ensure that it meets the required standards.
Concept Design #
Concept design refers to the initial stage of design, where ideas and concepts are generated and evaluated. Related terms: preliminary design, detailed design. Concept design is a key stage in value engineering, where different solutions are evaluated and compared to determine the most effective and efficient option.
Concurrent Engineering #
Concurrent engineering refers to the simultaneous design and development of a product or system, involving multiple disciplines and stakeholders. Related terms: collaborative design, integrated design. Concurrent engineering is a useful approach in value engineering, where different stakeholders and disciplines work together to design and develop a product or system.
Construction Engineering #
Construction engineering is the discipline that deals with the application of engineering principles to the construction of buildings, roads, and other infrastructure. Related terms: civil engineering, value engineering. Construction engineering is a key area where value engineering is applied to optimize the construction process.
Cost Accounting #
Cost accounting is the process of assigning costs to products, services, or activities. Related terms: financial accounting, management accounting. Cost accounting is a useful tool in value engineering for identifying areas where costs can be reduced or optimized.
Cost #
Benefit Analysis: Cost-benefit analysis is a method of evaluating the costs and benefits of a project or investment. Related terms: feasibility study, project proposal. Cost-benefit analysis is a key component of value engineering, where the costs and benefits of different solutions are evaluated and compared.
Cost #
Effectiveness: Cost-effectiveness refers to the ratio of benefits to costs, where the benefits are maximized for a given level of costs. Related terms: efficiency, effectiveness. Cost-effectiveness is an important consideration in value engineering, where the goal is to maximize the benefits for a given level of costs.
Cost Estimating #
Cost estimating is the process of predicting the costs of a project or investment. Related terms: cost accounting, cost management. Cost estimating is a useful tool in value engineering for evaluating the financial viability of different solutions.
Cost Management #
Cost management refers to the process of planning, controlling, and monitoring costs. Related terms: cost accounting, cost estimating. Cost management is an important consideration in value engineering, where the goal is to minimize costs and maximize benefits.
Critical Path Method #
The critical path method is a project management technique used to identify the critical tasks and activities that determine the duration of a project. Related terms: project management, scheduling. The critical path method is a useful tool in value engineering for evaluating the schedule and timeline of a project.
Decision Analysis #
Decision analysis is a method of evaluating and comparing different options or solutions to a problem. Related terms: alternatives analysis, options analysis. Decision analysis is a key component of value engineering, where different solutions are evaluated and compared to determine the most effective and efficient option.
Decision Tree #
A decision tree is a graphical representation of a decision-making process, showing the different options and outcomes. Related terms: decision analysis, tree diagram. A decision tree is a useful tool in value engineering for evaluating and comparing different solutions.
Design for Manufacturability #
Design for manufacturability refers to the design of a product or system to facilitate its manufacture and assembly. Related terms: design for assembly, design for production. Design for manufacturability is an important consideration in value engineering, where the goal is to minimize costs and maximize efficiency.
Design for Six Sigma #
Design for six sigma is a methodology for designing products or systems to achieve high levels of quality and reliability. Related terms: six sigma, quality management. Design for six sigma is a useful approach in value engineering for optimizing the design and development of products or systems.
Design of Experiments #
The design of experiments is a statistical methodology for designing and analyzing experiments to evaluate the effects of different variables. Related terms: experimental design, statistical analysis. The design of experiments is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Detailed Design #
Detailed design refers to the stage of design where the details of a product or system are developed and finalized. Related terms: preliminary design, concept design. Detailed design is a key stage in value engineering, where the details of a product or system are developed and finalized.
Earned Value Management #
Earned value management is a project management technique used to measure and evaluate the performance of a project. Related terms: project management, performance measurement. Earned value management is a useful tool in value engineering for evaluating the performance of a project and identifying areas for improvement.
Economic Analysis #
Economic analysis refers to the evaluation of the economic viability of a project or investment. Related terms: cost-benefit analysis, financial analysis. Economic analysis is a key component of value engineering, where the economic viability of different solutions is evaluated and compared.
Efficiency #
Efficiency refers to the ratio of output to input, where the output is maximized for a given level of input. Related terms: effectiveness, productivity. Efficiency is an important consideration in value engineering, where the goal is to maximize the output for a given level of input.
Effectiveness #
Effectiveness refers to the degree to which a product or system achieves its intended purpose or objective. Related terms: efficiency, productivity. Effectiveness is an important consideration in value engineering, where the goal is to maximize the benefits for a given level of costs.
Engineering Change Proposal #
An engineering change proposal is a document that outlines a proposed change to a product or system, including the costs, benefits, and risks. Related terms: change management, project management. An engineering change proposal is an important document in value engineering, where changes to a product or system are evaluated and compared.
Feasibility Study #
A feasibility study is a document that outlines the viability of a project or investment, including the costs, benefits, and risks. Related terms: business case, project proposal. A feasibility study is an important document in value engineering, where the viability of a project or investment is evaluated and compared.
Functional Analysis #
Functional analysis is a method of evaluating the functions and requirements of a product or system. Related terms: functional decomposition, requirements analysis. Functional analysis is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Functional Decomposition #
Functional decomposition is a method of breaking down a product or system into its component functions and sub-functions. Related terms: functional analysis, requirements analysis. Functional decomposition is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Gap Analysis #
Gap analysis is a method of identifying the gaps or deficiencies in a product or system, including the costs, benefits, and risks. Related terms: needs analysis, requirements analysis. Gap analysis is a useful tool in value engineering for identifying areas for improvement and evaluating the viability of different solutions.
Green Building #
Green building refers to the design and construction of buildings that are environmentally sustainable and energy-efficient. Related terms: sustainable development, energy efficiency. Green building is an important consideration in value engineering, where the goal is to minimize the environmental impact and maximize the energy efficiency of buildings.
Illumination #
Illumination refers to the use of light to enhance the appearance and functionality of a product or system. Related terms: lighting design, visual design. Illumination is an important consideration in value engineering, where the goal is to optimize the appearance and functionality of products or systems.
Innovation #
Innovation refers to the introduction of new or improved products, services, or processes. Related terms: creativity, entrepreneurship. Innovation is an important consideration in value engineering, where the goal is to introduce new or improved products, services, or processes that maximize benefits and minimize costs.
Integrated Design #
Integrated design refers to the simultaneous design and development of multiple components or systems, involving multiple disciplines and stakeholders. Related terms: concurrent engineering, collaborative design. Integrated design is a useful approach in value engineering, where different stakeholders and disciplines work together to design and develop products or systems.
Interface Management #
Interface management refers to the management of the interactions and interfaces between different components or systems. Related terms: systems engineering, integration management. Interface management is an important consideration in value engineering, where the goal is to minimize the risks and maximize the benefits of interactions and interfaces between different components or systems.
Investment Appraisal #
Investment appraisal refers to the evaluation of the viability of an investment, including the costs, benefits, and risks. Related terms: cost-benefit analysis, financial analysis. Investment appraisal is a key component of value engineering, where the viability of different investments is evaluated and compared.
Life Cycle Cost #
Life cycle cost refers to the total cost of ownership of a product or system over its entire life cycle, including the costs of acquisition, operation, and disposal. Related terms: life cycle analysis, whole-life costing. Life cycle cost is an important consideration in value engineering, where the goal is to minimize the total cost of ownership and maximize the benefits.
Life Cycle Analysis #
Life cycle analysis refers to the evaluation of the environmental and economic impacts of a product or system over its entire life cycle. Related terms: life cycle cost, whole-life costing. Life cycle analysis is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Maintenance #
Maintenance refers to the activities and tasks necessary to maintain the performance and functionality of a product or system. Related terms: operations, support. Maintenance is an important consideration in value engineering, where the goal is to minimize the costs and maximize the benefits of maintenance activities.
Make or Buy #
Make or buy refers to the decision of whether to manufacture a product or component in-house or to purchase it from an external supplier. Related terms: outsourcing, procurement. Make or buy is an important consideration in value engineering, where the goal is to minimize costs and maximize benefits.
Manufacturability #
Manufacturability refers to the ease and efficiency of manufacturing a product or component. Related terms: design for manufacturability, production engineering. Manufacturability is an important consideration in value engineering, where the goal is to minimize costs and maximize efficiency.
Material Selection #
Material selection refers to the process of selecting the most suitable materials for a product or component, based on factors such as cost, performance, and sustainability. Related terms: material science, materials engineering. Material selection is an important consideration in value engineering, where the goal is to minimize costs and maximize performance.
Mitigation #
Mitigation refers to the reduction or elimination of risks or negative impacts. Related terms: risk management, contingency planning. Mitigation is an important consideration in value engineering, where the goal is to minimize risks and maximize benefits.
Modular Design #
Modular design refers to the design of a product or system as a series of interconnected modules or components. Related terms: modular construction, modular manufacturing. Modular design is a useful approach in value engineering, where the goal is to minimize costs and maximize flexibility.
Multi #
Criteria Decision Analysis: Multi-criteria decision analysis is a method of evaluating and comparing different options or solutions based on multiple criteria. Related terms: decision analysis, options analysis. Multi-criteria decision analysis is a useful tool in value engineering for evaluating and comparing different solutions.
Net Present Value #
Net present value refers to the present value of the expected future cash flows from an investment, minus the initial investment. Related terms: discounted cash flow, investment appraisal. Net present value is a useful tool in value engineering for evaluating the financial viability of different investments.
Operating Expenditure #
Operating expenditure refers to the costs of operating and maintaining a product or system, including the costs of energy, labor, and materials. Related terms: capital expenditure, maintenance. Operating expenditure is an important consideration in value engineering, where the goal is to minimize costs and maximize benefits.
Operations Research #
Operations research is the application of advanced analytical methods to help make better decisions. Related terms: management science, decision science. Operations research is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Optimization #
Optimization refers to the process of finding the best or most effective solution to a problem, given a set of constraints and objectives. Related terms: decision analysis, problem-solving. Optimization is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Outsourcing #
Outsourcing refers to the practice of contracting with an external supplier or vendor to provide goods or services. Related terms: procurement, make or buy. Outsourcing is an important consideration in value engineering, where the goal is to minimize costs and maximize benefits.
Parametric Estimating #
Parametric estimating is a method of estimating the costs of a project or investment based on historical data and statistical relationships. Related terms: cost estimating, cost management. Parametric estimating is a useful tool in value engineering for evaluating the financial viability of different solutions.
Performance Measurement #
Performance measurement refers to the process of evaluating and measuring the performance of a product or system. Related terms: benchmarking, metrics. Performance measurement is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Preliminary Design #
Preliminary design refers to the initial stage of design, where the overall concept and feasibility of a product or system are evaluated. Related terms: concept design, detailed design. Preliminary design is a key stage in value engineering, where different solutions are evaluated and compared to determine the most effective and efficient option.
Probabilistic Risk Assessment #
Probabilistic risk assessment is a method of evaluating the risks and uncertainties associated with a project or investment. Related terms: risk analysis, risk management. Probabilistic risk assessment is a useful tool in value engineering for evaluating and mitigating risks.
Procurement #
Procurement refers to the process of acquiring goods or services from external suppliers or vendors. Related terms: outsourcing, make or buy. Procurement is an important consideration in value engineering, where the goal is to minimize costs and maximize benefits.
Product Design #
Product design refers to the process of designing and developing a product, including the creation of prototypes and testing. Related terms: product development, engineering design. Product design is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Product Development #
Product development refers to the process of designing, testing, and launching a new product or service. Related terms: product design, engineering design. Product development is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Production Engineering #
Production engineering refers to the discipline that deals with the application of engineering principles to the production of goods and services. Related terms: manufacturing engineering, industrial engineering. Production engineering is an important consideration in value engineering, where the goal is to minimize costs and maximize efficiency.
Project Management #
Project management refers to the discipline that deals with the planning, execution, and control of projects. Related terms: project planning, project control. Project management is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Project Planning #
Project planning refers to the process of defining, organizing, and scheduling the tasks and activities necessary to complete a project. Related terms: project management, project control. Project planning is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Quality Function Deployment #
Quality function deployment is a method of translating customer requirements into design specifications and quality characteristics. Related terms: quality management, design for quality. Quality function deployment is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Quality Management #
Quality management refers to the discipline that deals with the planning, assurance, and control of quality in products or services. Related terms: quality control, quality assurance. Quality management is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Reliability #
Reliability refers to the ability of a product or system to perform its intended function over a specified period of time. Related terms: maintainability, availability. Reliability is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Reliability #
Centered Maintenance: Reliability-centered maintenance is a method of maintaining a product or system, based on its reliability and maintainability characteristics. Related terms: maintenance, reliability. Reliability-centered maintenance is a useful approach in value engineering, where the goal is to minimize costs and maximize benefits.
Return on Investment #
Return on investment refers to the ratio of the benefits or returns from an investment to the initial investment. Related terms: cost-benefit analysis, investment appraisal. Return on investment is a useful tool in value engineering for evaluating the financial viability of different investments.
Risk Analysis #
Risk analysis is the process of identifying, assessing, and prioritizing risks or uncertainties associated with a project or investment. Related terms: risk management, probabilistic risk assessment. Risk analysis is an important consideration in value engineering, where the goal is to minimize risks and maximize benefits.
Risk Management #
Risk management refers to the process of identifying, assessing, and mitigating risks or uncertainties associated with a project or investment. Related terms: risk analysis, probabilistic risk assessment. Risk management is an important consideration in value engineering, where the goal is to minimize risks and maximize benefits.
Robust Design #
Robust design refers to the design of a product or system to minimize the effects of variation or uncertainty. Related terms: design for robustness, reliability engineering. Robust design is a useful approach in value engineering, where the goal is to minimize costs and maximize benefits.
Root Cause Analysis #
Root cause analysis is a method of identifying the underlying causes of a problem or failure. Related terms: failure analysis, problem-solving. Root cause analysis is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Scheduling #
Scheduling refers to the process of planning and controlling the timing and sequence of tasks and activities necessary to complete a project. Related terms: project management, project planning. Scheduling is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Six Sigma #
Six sigma is a methodology for improving the quality and efficiency of products or services, by reducing defects and variations. Related terms: quality management, design for six sigma. Six sigma is a useful approach in value engineering, where the goal is to maximize benefits and minimize costs.
Society of American Value Engineers #
The Society of American Value Engineers is a professional association that provides guidance and resources for the field of value engineering. Related terms: value engineering, certification. The Society of American Value Engineers provides a framework for the application of value engineering principles and techniques in various industries.
Stakeholder Analysis #
Stakeholder analysis is a method of identifying and evaluating the interests and needs of different stakeholders, including customers, employees, and suppliers. Related terms: stakeholder management, communication planning. Stakeholder analysis is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Statistical Process Control #
Statistical process control is a method of monitoring and controlling the performance of a process, using statistical techniques and tools. Related terms: quality control, process control. Statistical process control is a useful approach in value engineering, where the goal is to minimize costs and maximize benefits.
Sustainability #
Sustainability refers to the ability of a product or system to meet the needs of the present without compromising the ability of future generations to meet their own needs. Related terms: sustainable development, environmental sustainability. Sustainability is an important consideration in value engineering, where the goal is to minimize the environmental impact and maximize the social and economic benefits.
System Engineering #
System engineering is the discipline that deals with the design, development, and operation of complex systems, including the integration of multiple components and subsystems. Related terms: systems design, systems analysis. System engineering is an important consideration in value engineering, where the goal is to maximize benefits and minimize costs.
Systems Thinking #
Systems thinking refers to the approach of considering the overall system and its components, rather than just the individual parts. Related terms: system engineering, holistic thinking. Systems thinking is a useful approach in value engineering, where the goal is to maximize benefits and minimize costs.
Teardown Analysis #
Teardown analysis is a method of disassembling and analyzing a product or system, to identify its components, materials, and design features. Related terms: reverse engineering, design analysis. Teardown analysis is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Total Cost of Ownership #
Total cost of ownership refers to the total cost of acquiring, operating, and maintaining a product or system over its entire life cycle. Related terms: life cycle cost, whole-life costing. Total cost of ownership is an important consideration in value engineering, where the goal is to minimize costs and maximize benefits.
Total Quality Management #
Total quality management is a methodology for improving the quality and efficiency of products or services, by involving all stakeholders and employees in the quality improvement process. Related terms: quality management, continuous improvement. Total quality management is a useful approach in value engineering, where the goal is to maximize benefits and minimize costs.
Value Analysis #
Value analysis is a method of evaluating the value of a product or system, by identifying its functions, costs, and benefits. Related terms: value engineering, cost-benefit analysis. Value analysis is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.
Value Engineering #
Value engineering is a methodology for improving the value of a product or system, by analyzing its functions, costs, and benefits, and identifying opportunities for improvement. Related terms: value analysis, cost-benefit analysis. Value engineering is a key component of value engineering, where the goal is to maximize benefits and minimize costs.
Value Management #
Value management is a methodology for managing the value of a product or system, by identifying and prioritizing the key value drivers and stakeholders. Related terms: value engineering, stakeholder analysis. Value management is a useful approach in value engineering, where the goal is to maximize benefits and minimize costs.
Whole #
Life Costing: Whole-life costing is a method of evaluating the total cost of ownership of a product or system over its entire life cycle, including the costs of acquisition, operation, and disposal. Related terms: life cycle cost, total cost of ownership. Whole-life costing is a useful tool in value engineering for evaluating and optimizing the performance of products or systems.