value engineering assignment

Value Engineering: When and How to Apply It

Introduction.

In the competitive world of project management, achieving maximum value while minimising costs and ensuring project efficiency is crucial. This is where Value Engineering (VE) comes into play. Understanding the core principles of VE and its benefits will enable you to make more informed decisions and drive successful outcomes. Value Engineering is a systematic approach that identifies and analyses the functions of a project to maximise its value while reducing costs. It is a valuable tool in project management that helps achieve the desired results while staying within budget constraints.

Our aim is to provide you with a comprehensive guide on applying VE effectively. We will explore when to apply VE, the necessary preparations and steps involved in its implementation, common challenges and solutions, measuring its success, and future trends in VE. By the end of this article, you will have a better understanding of VE and be equipped with the knowledge to utilise it in your projects for better outcomes.

What is Value Engineering?

Value Engineering (VE) is a systematic and structured approach to project management that focuses on maximising value while minimising costs. It is a methodology that involves analysing and improving the value of a project by identifying and eliminating unnecessary expenses and maximising functionality. In simpler terms, it aims to achieve the same or better results at a lower cost.

The core principles of Value Engineering can be summarised as maximising functionality, minimising costs, and enhancing project efficiency. By focusing on these principles, project teams can identify opportunities to optimise resource use and improve a project’s overall value.

Maximising functionality involves identifying and understanding the project’s goals and objectives in detail. This helps project teams develop alternative solutions that meet the project’s objectives while minimising costs. Minimising costs involves scrutinising every aspect of the project to identify areas where costs can be reduced without compromising the project’s functionality. Enhancing project efficiency involves streamlining processes and utilising resources effectively to improve the project’s overall performance.

One of the key aspects of understanding Value Engineering is differentiating between value and cost in construction. While value refers to the benefits and outcomes of a project, cost refers to the monetary expenses incurred. Often, project teams tend to focus solely on minimising costs, which can lead to a compromise in the project’s overall value. Therefore, it is crucial to strike a balance between value and cost when implementing Value Engineering.

In conclusion, understanding Value Engineering and its core principles is crucial for project management success. By incorporating VE into project planning and execution, project teams can achieve better outcomes, reduce costs, and improve project efficiency. It is an essential tool that should be embraced and utilized in the construction industry for better project outcomes.

The Need for Value Engineering

Value Engineering (VE) is a critical process in project management that aims to maximise the value of a project while minimising its costs. As the construction industry becomes increasingly competitive, the need for efficient and cost-effective processes is more pressing than ever. In this section, we will explore the economic and environmental factors that drive the need for Value Engineering in construction projects.

A. Economic Factors Impacting Construction Projects:

The construction industry is heavily influenced by economic factors that can significantly impact project costs and timelines. The two most significant factors are fluctuating material costs and labour market dynamics.

• Fluctuating Material Costs:

The construction industry is highly reliant on raw materials such as steel, wood, and concrete, which are subject to frequent price fluctuations. These fluctuations can have a significant impact on the overall project cost, making it challenging to accurately estimate and budget for a project. This is where Value Engineering comes in, helping project managers find alternative materials or methods that can reduce costs without compromising quality.

• Labour Market Dynamics:

Another significant factor in the construction industry is labour market dynamics. With fluctuating supply and demand for skilled workers, labour costs can vary significantly from project to project. Value Engineering can help identify areas where labour costs can be reduced, such as implementing more efficient processes or utilising technology.

B. Environmental Considerations and Sustainability:

In recent years, there has been a growing emphasis on sustainable and environmentally friendly construction practices. As a result, projects must adhere to strict regulations and standards, which can add to the overall project cost. Value Engineering can help identify ways to meet these standards while also minimising environmental impact, such as using eco-friendly materials or implementing energy-efficient systems.

• Meeting Regulatory Standards:

Regulatory standards and compliance requirements are constantly evolving, making it challenging for construction projects to keep up. Failure to meet these standards can result in costly delays or even fines. Value Engineering can help identify ways to meet these standards while also reducing costs.

• Reducing Environmental Impact through VE:

With the increasing focus on sustainable and resilient construction practices, Value Engineering can play a crucial role in reducing the environmental impact of projects. By identifying alternative materials or methods, VE can help minimise waste, energy consumption, and carbon footprint, ultimately leading to a more sustainable project.

When to Apply Value Engineering at Different Project Stages

Value Engineering (VE) is a powerful tool that can be used at any stage of a project’s life cycle to optimise costs, enhance functionality, and improve efficiency. However, applying VE early on tends to produce the best results.

• Early Project Stages:

One of the best times to apply VE is during the early stages of a project, including the concept and design phases and feasibility studies. During these stages, decisions about the project’s scope, design, and budget are being made, making it easier to identify potential value engineering opportunities. By involving a VE team at this stage, project teams can avoid costly changes and delays later on.

• Mid-Project Stages:

While VE is most commonly associated with the early stages of a project, it can also be effectively applied during the mid-project stages. This includes the pre-construction phase and procurement and contracting. At this point, the project’s scope and design are more defined, making it easier to identify areas for cost reduction and functionality improvement.

In general, applying VE early on in a project allows for more flexibility and creativity in identifying alternative solutions. However, mid-project VE can still yield significant benefits, especially if there are changes in the project’s environment or new cost-saving opportunities arise.

In conclusion, there is no one “right” time to apply VE in a project. It can be effectively used in both early and mid-project stages. However, it is crucial to make the necessary preparations and involve a dedicated VE team to ensure the best results. By incorporating VE into project management practices, teams can achieve cost savings, enhanced functionality, and improved efficiency, leading to better project outcomes.

Factors to consider for implementing Value Engineering

Before implementing Value Engineering (VE) in a construction project, it is crucial to make the necessary preparations to ensure its success.

• Dedicated VE Team: Having a dedicated VE team is essential for a successful implementation. This team should consist of professionals with diverse backgrounds, such as architects, engineers, and other stakeholders. Each team member should have a clear understanding of their roles and responsibilities.
• Defined Scope: It is crucial to have a clear and defined scope for the VE study. This includes identifying the objectives and goals of the VE process, as well as determining the areas of the project that will be evaluated. A well-defined scope will help the team stay focused and ensure that the VE process is effective.

Before moving on to the implementation stage, it is important to ensure that the team is well-prepared and has a clear understanding of their roles and responsibilities. This will help in avoiding any delays or confusion during the VE process.

How to Implement Value Engineering

Implementing Value Engineering (VE) in project management requires a systematic approach and the involvement of a cross-functional team. In this section, we will discuss the step-by-step process of implementing VE, from establishing a dedicated team to measuring its success.

• Establishing a cross-functional VE team: The first step in implementing VE is to assemble a team with diverse expertise and perspectives. This team should include architects, engineers, project managers, cost estimators, and other stakeholders. Each team member brings a unique set of skills and knowledge, which is crucial in the VE process. The team should also include a facilitator or a VE specialist who can lead the process and guide the team towards finding cost-saving and value-adding solutions. Involving a facilitator ensures that the VE process is conducted efficiently and effectively.
• Identifying value engineering opportunities: The team’s next step is to analyse the project’s goals and objectives and identify areas where VE can be applied. This can be done by conducting a thorough cost-benefit analysis of the project. The team should consider all aspects of the project, such as design, materials, and construction methods, to identify potential areas for improvement.
• Developing alternative solutions: Once the value engineering opportunities have been identified, the team can start brainstorming and coming up with creative solutions. The team should encourage open communication and collaboration to generate feasible and innovative ideas. The team should also evaluate the feasibility and potential impact of each proposed alternative.
• Implementing approved changes: After evaluating the proposed alternatives, the team can select the most feasible and beneficial solutions to be implemented. The team should communicate these changes to all relevant parties, such as contractors and subcontractors, to ensure a smooth transition. It is essential to manage the implementation process carefully to minimise any disruptions to the project. The team should also document all changes made through VE for future reference. To ensure the successful implementation of VE, it is crucial to involve all stakeholders from the beginning of the project. This promotes transparency and reduces the risk of resistance to change.

In conclusion, implementing VE in project management involves creating a dedicated team, identifying opportunities, developing alternative solutions, and implementing approved changes. Overcoming challenges and continuously measuring its success is crucial in ensuring the effectiveness of VE. As future trends in construction continue to evolve, incorporating VE into project management practices will become even more critical for achieving cost savings, efficiency, and sustainability. We encourage all project managers to start implementing VE in their projects for better outcomes.

Challenges and Solutions in Applying Value Engineering

Implementing value engineering in a project can come with its own set of challenges. However, with proper strategies and solutions, these challenges can be overcome for successful implementation and results.

Common challenges in implementing Value Engineering:

• Resistance to change: Some team members or stakeholders may resist implementing changes suggested by the value engineering team, leading to delays or difficulties in the process.
• Balancing cost reduction with quality: It can be a challenge to find a balance between reducing costs and maintaining the quality of the project.

Strategies for overcoming challenges:

To overcome these challenges, it is important to have open communication and involve all stakeholders in the value engineering process. Address any concerns or resistance by explaining the benefits and providing data to support the suggested changes. It is also crucial to have a strong project manager who can effectively manage and balance the priorities of cost, quality, and schedule. Regular monitoring and evaluation of the VE process can also help identify and address any challenges or issues that may arise.

Measuring the Success of Value Engineering

The success of any project can only be truly measured once it has been completed and its results have been assessed. The same applies to value engineering (VE) – its effectiveness can only be determined after it has been implemented and its impact has been evaluated.

Cost savings

One of the most obvious ways to measure the success of VE is through cost savings. The core principle of VE is to maximise functionality while minimising costs, so it is crucial to track the cost savings achieved through VE. This can be done by comparing the estimated costs before implementing VE to the actual costs after VE has been applied. This will give a clear indication of the cost savings achieved through value engineering. In addition, it is important to track the cost savings over a period of time to evaluate the long-term impact of VE on the project’s budget.

Increased Efficiency

Another important factor to consider when measuring the success of VE is the increased efficiency of the project. By identifying and eliminating unnecessary costs and improving processes, VE can lead to a more efficient project, resulting in reduced time and resources. This can be measured by comparing the project’s timeline and resource allocation before and after VE. A decrease in time and resources used can indicate the success of value engineering in streamlining the project.

Increased Quality of Project Delivery

Apart from cost savings and efficiency, the quality of the project can also be used as a measure of success for VE. Some critics argue that VE may compromise the quality of the project in pursuit of cost savings. However, this is not the case if VE is implemented correctly. By focusing on maximising functionality, VE can actually improve the quality of the project. To measure this, it is essential to establish quality benchmarks at the beginning of the project and compare them to the final results after VE has been applied.

Customer Feedback

In addition to these direct measures, the success of VE can also be evaluated through indirect measures such as customer satisfaction and stakeholder feedback. By involving stakeholders in the VE process and considering their input, the end result is more likely to meet their expectations and needs. This can be measured through surveys or feedback forms, gauging customer satisfaction and stakeholder opinions.

It is important to note that the success of VE is not limited to the final results of the project. The process itself can also provide valuable insights for future projects. It is crucial to track and monitor the VE process, including the methods and techniques used, the challenges faced, and the solutions implemented. This information can be used to continuously improve VE processes, leading to better outcomes for future projects.

In conclusion, measuring the success of VE requires a holistic approach, considering factors such as cost savings, efficiency, quality, and stakeholder satisfaction. By tracking and monitoring these measures, project managers can evaluate the effectiveness of VE and make improvements for future projects. The success of VE not only benefits the current project but also sets a strong foundation for future projects by incorporating best practices and continuous improvement.

Future Trends in Value Engineering

As technology continues to advance and sustainability becomes a top priority in the construction industry, the future of value engineering (VE) is also evolving.

• The integration of technology in VE processes is becoming more prevalent. Tools such as 3D modelling and Building Information Modeling (BIM) are being used to identify value engineering opportunities and streamline the decision-making process.
• There is a growing focus on sustainable and resilient construction practices. This includes using VE to not only reduce costs but also minimise environmental impact and ensure the long-term durability of projects.

These future trends highlight the need for project managers to stay updated on the latest technology and industry practices in order to effectively apply value engineering in their projects. By embracing these trends, companies can not only save costs but also stay competitive in a constantly changing industry.

Key Takeaway: Incorporating technology and sustainability into value engineering processes will be crucial for success in the future of the construction industry.

Conclusion:

In conclusion, Value Engineering (VE) is a crucial tool in project management that helps maximise functionality, minimise costs, and enhance efficiency. This article has provided step-by-step best practices for applying VE, highlighting its benefits and practical tips for implementation. By understanding the core principles of VE and differentiating between value and cost in construction, project managers can identify the need for VE in their projects.

Early application of VE in project stages, together with a dedicated VE team and a well-defined scope, is essential for successful implementation. The article also discussed how to implement VE, including involving cross-functional teams, identifying opportunities, developing alternative solutions, and implementing approved changes. It also addressed common challenges and provided strategies for overcoming them.

To measure the success of VE, cost savings and increased efficiency are key indicators to track. As future trends continue to integrate technology and emphasise sustainable practices, incorporating VE into project management is becoming increasingly important. Incorporating VE into project management practices can lead to better outcomes and continuous improvements. So, don’t hesitate to start implementing VE in your projects today for a more cost-effective and efficient approach.

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Balancing Cost and Quality: A Comprehensive Guide to Value Engineering in Project Management

• Ossian Muscad
• June 23, 2023
• No Comments

Last Updated on June 23, 2023 by Ossian Muscad

Value engineering is an essential process in project management that helps to reduce costs while improving the quality of products. It involves a systematic approach to identifying and eliminating non-essential features while maintaining or even enhancing the utility of the product. This method can be used in any industry, from construction to manufacturing, and it can provide significant cost savings when done correctly.

This guide will discuss value engineering, how it works, and how you can optimize projects and maximize profits. We will also cover best practices for implementing value engineering into your business operations so that you can get the most out of every project without sacrificing quality or performance. By understanding how value engineering works and applying its principles effectively, you’ll be able to create high-quality products at lower costs with greater efficiency than ever before.

What is Value Engineering?

Value Engineering (VE) is a systematic approach to improving the value of products, services, or projects by optimizing their function and cost. In simple terms, it’s a process that involves finding ways to make things work better while spending less money.

Value engineers collaborate with stakeholders to determine a product or service’s crucial functions, enhance it, and potentially lower costs. Through a series of evaluation steps, value engineers can identify areas of improvement and eliminate non-essential features to optimize the product and create cost savings.

How Value Engineering Works

Value engineering is conducted through an organized process that includes six distinct steps.

• Identify the Main Functions: First, you need to understand the primary purpose of the product, service, or project. What does it need to do? What are its key features?
• Analyze the Costs: Next, determine the costs associated with each function. This includes materials, labor, production, and any other relevant expenses.
• Generate Alternatives: Brainstorm different ways to achieve the same function at a lower cost. Consider alternative materials, designs, or processes.
• Evaluate Alternatives: Assess the pros and cons of each alternative and compare them to the original design. Consider factors like performance, reliability, and overall value.
• Develop the Best Solution: Choose the best alternative and refine the design. This often involves working closely with stakeholders to ensure the new solution meets their needs and expectations.
• Implement the Changes: Put the new design into practice and monitor the results to ensure the desired improvements are achieved.

Benefits of Value Engineering

As you can see, value engineering offers numerous advantages. It can help to reduce costs without sacrificing quality or performance, and it can also be used to improve the overall functionality of a product or service. Additionally, value engineering encourages creativity and innovation by forcing teams to think outside the box when developing solutions. Here are other notable advantages of value engineering:

• Encourages Innovation: Value Engineering pushes teams to explore new ideas, materials, and methods, fostering a culture of innovation within the organization.
• Competitive Advantage: By adopting VE, businesses can stay ahead of their competitors by offering products or services with better value, performance, and quality.
• Sustainability: Through optimizing resource usage and reducing waste, VE can contribute to more sustainable business practices and reduced environmental impact.
• Better Decision-making: The systematic analysis involved in VE helps organizations make more informed decisions about design, materials, and processes, leading to better outcomes.
• Risk Reduction: By identifying potential issues early in the development process, VE can help reduce risks associated with project delays, cost overruns, and performance failures.
• Enhanced Collaboration: VE often requires input from various departments and stakeholders, promoting cross-functional collaboration and teamwork within the organization.
• Scalability: The principles of VE can be applied across different projects, industries, and scales, making it a versatile and valuable approach for businesses of all sizes.

Examples of Successful Value Engineering

To give you a better understanding of how value engineering works, let’s look at some examples of value engineering in various industries:

• Construction Projects: VE has been used extensively in the construction industry to reduce costs and improve efficiency. For example, a building project may use alternative materials or construction methods to save money without compromising quality or safety.
• Manufacturing: A company manufacturing electronic devices might use VE to optimize the design of their products, reducing the number of components and simplifying assembly processes, resulting in lower production costs and a more reliable product.
• Transportation: In the automotive industry, VE has been used to redesign vehicle components to make them lighter and more fuel-efficient without sacrificing performance or safety.
• Event planning: Event planners may use Value Engineering to reduce the costs of organizing a large event by eliminating unnecessary expenses and optimizing existing resources.

Potential Challenges and How To Overcome Them

Value engineering also has its fair share of challenges that can hinder its effectiveness. To help you overcome any potential issues, here are some of the most common challenges associated with VE and how to address them:

• Resistance To Change: Stakeholders may be hesitant to embrace new ideas or processes. To overcome this, it’s essential to communicate the benefits of VE clearly and involve stakeholders in the decision-making process.
• Limited Resources: VE can require additional time, effort, and expertise. Businesses can address this by investing in training and development or partnering with external consultants.
• Balancing Cost and Quality: It’s crucial to ensure that cost reductions do not compromise the quality or functionality of the product, service, or project. This can be achieved through careful analysis, testing, and stakeholder input.
• Unrealistic Expectations: Some stakeholders may expect immediate or overly ambitious results from VE efforts. To manage expectations, it’s essential to set realistic goals and timelines and communicate these clearly to all involved parties. Regular progress updates can also help to keep everyone on the same page.
• Loss of Original Intent or Purpose: In redesigning or optimizing a product, service, or project, there is a risk of losing sight of the original goals or objectives. To mitigate this, always consider the core functions and purpose when evaluating alternatives. Maintain open lines of communication with stakeholders to ensure that their needs and expectations are understood and met throughout the VE process.

Streamline Value Engineering Using a Low-code Platform

A low-code platform can be an invaluable resource if you want to streamline the value engineering process. Low-code platforms make it easy to create custom applications quickly and without coding. With a low-code platform, business owners can easily collect data from different departments and stakeholders to help inform decision-making and achieve the desired outcomes.

DATAMYTE is a quality management platform with low-code capabilities. The DataMyte Digital Clipboard is a low-code workflow automation software with a checklist and smart form builder. This tool lets you create a comprehensive Value Engineering checklist and custom forms to gather detailed feedback from stakeholders.

To create a checklist or form template using DATAMYTE, follow these steps:

• Log in to the DATAMYTE software platform and navigate to the ‘Checklist’ module.
• Click “Create Checklist” to create a new checklist.
• Define the title of the checklist and the category in which it belongs.
• Use DATAMYTE’s low-code capabilities by adding items to the checklist; click “Add Item.” You can define the description of the item, the type of answer required, and any other specifications, such as reference documents, acceptance criteria, or limits.
• Assign appropriate personnel responsible for completing the checklist and any required approvals, such as supervisors or quality assurance personnel.
• Save the checklist, and it will be available for use.

DATAMYTE also lets you conduct layered process audits, a holistic assessment of critical process steps, focusing on the areas with the highest risk of failure or non-compliance. By conducting LPA with DATAMYTE, you can effectively identify and correct defects before they become major quality issues.

DATAMYTE is the complete package for creating and implementing effective value engineering processes. Book a demo with our team today to learn how DATAMYTE can help your business reduce costs and improve quality.

Value engineering is a powerful tool that can help businesses reduce costs and improve product quality. By leveraging the principles of VE, organizations can optimize processes, products, services, and projects to increase efficiency and maximize value. With the help of low-code platforms like DATAMYTE, businesses can streamline their VE process and ensure they achieve their desired outcomes.

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A Quick Guide to Value Engineering for Projects

Let’s face it, you want to execute your project well but you don’t want to spend a lot of money doing it. That, in a nutshell, is value engineering. It’s a way to look at your project, whether it’s project management, construction or manufacturing , and figure out how to execute it for the best value.

As you can imagine, value engineering is a popular business pursuit. But what is value engineering, how do you implement it and is it different across industries? We’ll answer those questions and more as we explore its process and applications.

What Is Value Engineering?

Value engineering is when a business looks at how it functions and develops a systemic and organized approach to deliver its project at the lowest cost possible. It does this through the substitution of less expensive alternatives such as materials and methods. However, this must be done without sacrificing quality or functionality.

The focus of value engineering is only on the functions of the various components and materials of the project, not their physical attributes. Also called value analysis, it reviews new or existing products during the design phase of a project and determines how certain substitutions can reduce costs while increasing product value.

The way a business determines the value of an item as it works on value engineering is by finding the most cost-effective way of producing it without neglecting or diminishing its purpose. As a concept, value engineering was first developed during World War II in the 1940s at General Electric. The shortages demanded a more creative approach, which was found to reduce costs while providing equal or better performance.

There are many tools used in value engineering such as work breakdown structure (WBS), network diagram and Gantt charts. ProjectManager is online project management software with dynamic Gantt charts to plan your value analysis. The Gantt chart is a great tool to solve problems such as cost or schedule overrun. You can filter for the critical path and set a baseline to track your planned effort against your actual effort to make sure you’re meeting your goals. Get started with ProjectManager today for free.

Value Engineering Steps

Value engineering is calculated as a ratio of function to cost. The way to add value to a product is either by reducing cost or improving functionality. It’s more likely a business will seek cost-cutting and preserve the function of its product. This process can be broken down into five phases: information, creative, evaluation, development and presentation.

1. Information Phase

The first stage involves gathering data and analyzing it. This includes understanding the product and design as it currently is and looking at the key functional issues of the project. Define any objections or broken components. Then identify methods that the team can use to evaluate the progress of the project . There’s also a functional analysis to determine if there are improvements that can be made.

2. Creative Phase

Now it’s time to get creative as you explore the ways to improve the functions that you discovered in the first phase. This is done by brainstorming with the team and looking at all possible solutions to the problems you’ve identified and alternatives to the function. The team should create a list of potential solutions to the function with a verb/noun combination.

3. Evaluation Phase

At this time, you’ll look over the suggested solutions from the previous phase and determine the merits and demerits of each. The team should present their ideas and describe the advantages and disadvantages of each. If there are more disadvantages, the suggestion is stricken. The team can perform a weighted matrix analysis to rank the alternatives. The best ideas will make it to the next phase.

4. Development Phase

This phase involves an in-depth analysis of the best alternatives that have made the cut. You’ll need to understand how to implement each and what the cost will be. It’s likely that you’ll need to sketch out these possibilities, create cost estimates and use other technical analyses. The implementation plan is then developed, outlining the processes involved for the final recommendations that have gotten this far in the process.

5. Presentation Phase

The team now presents its winning solutions to management and stakeholders . This is done with reports, flow charts and other presentation materials. They will need to convince management and stakeholders of the viability of their solutions to add value and cut costs. The presentation is detail-oriented, with associated costs, benefits and potential challenges all outlined. Once approved by management and any requested changes are applied, it becomes an implementation plan that’s executed.

Value Engineering in Project Management

As we mentioned, value engineering is used in many industries. We’ll look at a few, starting with project management , which is commonly used to optimize the overall value of the project. The project manager and project team will consider all costs associated with the project and explore any cost-saving alternatives. This is done throughout the life cycle of the project.

Value engineering in project management includes an in-depth look at the functions of things like equipment, facilities, services, systems and materials that are used in the project. As these are analyzed, project managers look for ways to improve cost-effectiveness without negatively impacting quality, reliability, performance or the reputation of the product or service.

Methods used in value engineering a project can include reduced production time, reduced expenses, increased earnings, expansion of the market share, using existing resources more efficiently and improving quality. For a more detailed look at value engineering as it relates to project management, check out the Project Management Book of Knowledge (PMBOK) published by the Project Management Institute (PMI).

Value Engineering in Construction

Value engineering in construction is employed by the project team to improve value by examining function, just as it does in general. The construction and design team needs to understand the project fully as every project is different and every client’s idea of what is valuable differs, too.

Construction projects include evaluating the project with three main criteria: cost reduction, added quality and the life cycle/maintenance. The value engineering in construction takes place at a high level and can occur during the project planning, design and construction of the project. There are pros and cons to making changes in each of these project phases.

The planning phase is the best time to address value engineering as the cost to implement any change is lower than in other phases and the impact on the schedule is less. However, most value engineering takes place during the design phase. The owner works with an architect to create plans that constructors use to estimate costs and schedules. If the costs are too high, the process starts over. Value engineering occurs during construction when contractors feel there’s a good option. These changes can be expensive and will likely alter the schedule.

Value Engineering in Manufacturing

The basic structure of value engineering is the same in manufacturing . You start by breaking down your costs and assigning a dollar value to each item. This helps you determine the cost of goods sold. Now, what are the cost drivers? Whatever these are, such as metal parts, that’s where you need to focus on value engineering. But don’t forget to speak to your customers and see where they see value in your product.

Just as with other industries, the process of brainstorming with your team is how to come up with ideas that can help cut costs and maintain the quality of your product. However, your brainstorming topics could be different. In manufacturing, it’s about analyzing the materials and seeking alternatives, looking at features that might no longer serve a function or others that need to be added, as well as exploring your supply chain and seeing if changes to that strategy are appropriate. Then, as discussed above, you evaluate, implement and review the solutions.

ProjectManager Helps With Value Engineering

Now that you understand what value engineering is and how important it can be, you’ll also understand the need for software that can help you plan and implement these changes to your construction project, manufacturing or any project management work. ProjectManager is online project management software that can help you plan, implement and review your value analysis while working more efficiently and saving you money.

Use Multiple Project Views

Different industries work in different ways, which is why we have different tools to manage your work that all share the same real-time data. Having one source of truth means everyone is working on the same page as they implement the value engineering across departments. Whether you use a traditional Gantt chart to plan or prefer the more agile kanban board or even a sheet, list or calendar view, we have them all. That adds value and efficiency just as you’re adding value and efficiency with value analysis.

Get Real-Time Reporting

In order to make sure you’re getting the value you expect from the plans you’ve implemented, you need to monitor progress and performance. Reporting is crucial for keeping stakeholders updated but also to gather data to help you make adjustments when necessary to achieve your value engineering goals. With one click you can turn complex data into helpful reports on status, portfolio, plan, tasks, variance and more. All reports can be customized to zero in on what you want to track and download. You can also print the dashboard or send it electronically to stakeholders.

Our collaborative platform makes it easier to brainstorm and collect ideas and documentation with unlimited file storage. Files can be shared and teams can comment at the task level, which connects everyone from remote workers to other departments. ProjectManager is the one tool you’ll need to oversee value engineering from start to finish.

ProjectManager is award-winning project management software that helps you work more efficiently. Our real-time data allows for more insightful decision-making and allows teams to work better together. It’s already serving teams at NASA, Siemens and Nestles to deliver success. Why not join them? Get started with ProjectManager today for free.

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• Mechanical Engineering
• NOC:Product Design Using Value Engineering (Video) 
• Co-ordinated by : IIT Roorkee
• Available from : 2019-07-25
• Introduction to Product Design and Development
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What Is Value Engineering?

Understanding value engineering, ratio of function to cost, steps in value engineering, types of value.

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Value Engineering: Definition, Meaning, and How It Works

Investopedia / Dennis Madamba

Value engineering is a systematic, organized approach to providing necessary functions in a project at the lowest cost. Value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality. It is focused solely on the functions of various components and materials, rather than their physical attributes. Value engineering is also called value analysis.

Key Takeaways

• Value engineering is a systematic and organized approach to providing the necessary functions in a project at the lowest cost.
• Value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality.
• Value engineering is often broken into six steps or phases starting with generating ideas and ending with change implementation.
• Value engineering is primarily focused on the use, cost, esteem, and exchange values.
• The ultimate formula for value is often defined as function divided by cost, with value engineering striving to maximize function while minimizing cost.

Value engineering is the review of new or existing products during the design phase to reduce costs and increase functionality to increase the value of the product. The value of an item is defined as the most cost-effective way of producing an item without taking away from its purpose. Therefore, reducing costs at the expense of quality is simply a cost-cutting strategy.

The concept of value engineering evolved in the 1940s at General Electric, in the midst of World War II. Due to the war, purchase engineer Lawrence Miles and others sought substitutes for materials and components since there was a chronic shortage of them. These substitutes were often found to reduce costs and provided equal or better performance.

With value engineering, cost reduction should not affect the quality of the product being developed or analyzed.

Miles defined product value as the ratio of two elements: function to cost. The function of an item is the specific work it was designed to perform, and the cost refers to the cost of the item during its life cycle . The ratio of function to cost implies that the value of a product can be increased by either improving its function or decreasing its cost. In value engineering, the cost related to production, design, maintenance, and replacement are included in the analysis.

Product Value = Function Cost \begin{aligned}&\text{Product Value} = \frac { \text{Function} }{ \text{Cost} } \\\end{aligned} ​ Product Value = Cost Function ​ ​

For example, consider a new tech product is being designed and is slated to have a life cycle of only two years. The product will thus be designed with the least expensive materials and resources that will serve up to the end of the product’s life cycle, saving the manufacturer and the end-consumer money. This is an example of improving value by reducing costs.

Another manufacturing company might decide to create added value by maximizing the function of a product with minimal cost. In this case, the function of every component of the item will be assessed to develop a detailed analysis of the purpose of the product. Part of the value analysis will require evaluating the multiple alternate ways that the project or product can accomplish its function.

Value engineering often entails the following six steps, starting from the information-gathering stage and ending with change implementation.

Step 1: Gather Information

Value engineering begins by analyzing what a product lifecycle will look like. This includes a forecast of all the spending and processes related to manufacturing , selling, and distributing a product.

Value engineers will often break these considerations down into more manageable data sets. In addition to assigned financial values, value engineers may prioritize processes or elements along a product's manufacturing plan. Value engineering may also call for expectations regarding time, labor, or other resources for different manufacturing stages.

Step 2: Think Creatively

With the core baseline expectations for the product having been documented, it's now time for the value engineering team to consider new, different ways for the product to be developed. This includes trying new approaches, taking risks on things never been done before, or creatively applying existing processes in a new way.

Levering these creative ideas, value engineers will re-imagine how the product will be created and distributed from state to finish. This phase is the "idea-generation" stage where members of the team should be encouraged to brainstorm freely without fear of criticism.

Examples of thinking creatively may include changing the materials used, changing the product's design, removing redundant features, trading off reliability for flexibility, or changing the steps/order of the manufacturing process.

Step 3: Evaluate Ideas

With a bunch of ideas now on the table, it's time to decide which are reasonable and which aren't Each idea is often assessed for its advantages and disadvantages. Instead of focusing on the quantity of each tally, the value engineering team must consider which pros and cons outweigh their counterpart.

For example, a single change may result in five new benefits. However, doing so would outlaw distribution to a country that the company exports the most goods to. In this case, the five benefits may not outweigh the one disadvantage.

Step 4: Develop and Analyze

Once the ideas are ranked, the best ideas are taken and further analyzed. This includes drafting model plans, detailing changes and their impacts, producing revised financial projections , redesigning physical renderings, and assessing the overall viability of the change.

Be mindful of timeline constraints and considerations when analyzing changes, especially if other departments will be negatively impacted by pushed out schedules or deadline changes. Also, consider how the break-even point of a product may change as a result of the adjustment to ensure the strategy aligns with the philosophy and financial capability of the organization.

Step 5: Present Discoveries

With plans devised and presentations pulled together, it's time to deliver the best ideas to upper management or the board for their consideration. Often, more than one idea will be presented at a time so the deciding group can consider and compare alternatives. Each alternative should be consistently presented with fair representation across each choice.

Value engineering calls for enhancing the value of each product; therefore, presentations should begin and end with how the change will benefit the company. Presentations should also include revised timelines, financial projections, drawings, and risks. Often, management may seek specific answers on changes or desire to see different analysis performed than what is presented.

Step 6: Implement Changes

As management gives confirmation to move forward with changes, value management shifts from a theoretical practice to an change management implementation process. When proposed changes are accepted, new teams are formed and assigned areas of oversight. Value engineer team leads often remain engaged with the changes to monitor what is being adjusted and how expectations are being aligned with new realities.

If a company lacks the required expertise to brainstorm changes, it may rely on external third parties to manage the first five steps (with the company taking over once it has decided what changes to make).

When performing value engineering, analysts must often consider how to define 'value'. After all, one customer's perception of a product may be very compared to another customer based on their assigned value of the good. In general, there are four primary types of value recognized by value engineering:

Use value is the primary type of value and it is determined by the attributes of the good. These attributes define what the product is able to do, how it is used, and what its purpose is. This heavily ties to product differentiation where consumers can only derive value from a specific good without competitors.

The use value of a product is the primary purpose of value engineering. Without a use value, consumers would not initially purchase the good. For instance, if a type of shoe did not adequately protect someone's feet or make it so they could walk down the street, the shoe has little to no use value. Without use value, products will ultimately fail because they serve no purpose.

Assuming we have a good generating use value, it's now time to consider how it takes to make that good. Let's assume the shoes from above are tremendous for hiking, rugged wear, and waterproof protection. This means the shoes may require experienced labor to craft, specifically-treated raw materials for its production, and premium quality control for consumer safety.

In this example, all of the variables mentioned above represent different cost variables with different values. A consumer may value the shoes at $50/pair; if the company determines its cost value is $75/pair, the company must assess how to rebalance the equation. Alternatively, charging a customer prices too high will likely yield negative cost value.

Esteem Value

While the use value describes the physical benefit of a product, consumers may also experience intrinsic value that often extends beyond what the product is. For example, should the shoe above come from Nike, consumers may be willing to pay higher premium for the shoe because of the added esteem benefit of the brand recognition.

Though esteem value is often positive and associated with brand recognition, it can also be negative and correlated to brand dissonance. This is often related to the target consumer of the product. For example, low-cost , budget-conscious consumers may have negative esteem value when considering Apple's innovative, higher-cost product line.

Exchange Value

The last and smallest component of value relates to a product's ability to be exchanged. With the introduction of international shipping and supply chain analytics, it is now becoming easier for almost any consumer to receive any product in a reasonable amount of time.

Still, a value engineer must how to facilitate the distribution of a product, the physical characteristics of a product, and other attributions that make it so the good can easily be bought or traded. Should consumers find it very difficult to buy or receive the good, value may be lost or destroyed.

There are countless ways to define or categorize customer value. In reality, value engineering encompasses every value perceived or received by a customer whether it conforms to the four primary types above.

Value Engineering vs. Value Analysis

While value engineering is the technique often used before a product has been fabricated, value analysis is the technique used to analyze an existing product. The goal of value analysis is often to review an existing set of costs and benefits with the intention of enhancing its value.

While value engineering occurs earlier to prevent value loss, value analysis occurs after-the-fact and may be used to remediate product deficiencies. Value engineering is generally used to aid manufacturing, while value analysis may sometimes be used more heavily in the business or sales department.

Though the two terms may often be used interchangeably, value engineering is the practice of preventing unnecessary costs or deficient value while value analysis is the practice of eliminating costs or negative value components. Changes made in response to value analysis may be brought about during different stages of a product's life span, while value engineering only occurs at the initial product stage.

What Is the Role of Value Engineering?

Value engineering is the process of designing a product to ensure the value a customer receives is maximized. This is a careful activity of balancing the functions of the product along with the financial consideration of a product. In general, value engineering strives to maximize the benefit a consumer receives while minimizing costs.

What Are the Phases of Value Engineering?

Value engineering is often broken into six stages: information gathering, brainstorming, evaluating, developing plans, presentation, and implementation. The phases range from collecting relevant data to designing alternatives to see what management thinks of the potential changes.

Why Is Value Engineering Important?

Value engineering is the process to ensuring your customer's satisfaction and utility of a product is maximized. Without considering a product's use, cost, or functionality, a good may lose its place in the marketplace because it doesn't solve a problem or reflect accurate financial prices. Value engineering is important because it forces a company to evaluate its future plans to maximize profitability.

What Are the Types of Value in Value Engineering?

Value engineering often breaks values into the use, cost, exchange, and esteem value. Though other departments may use different categories to define consumer benefit, the end goal is to ensure all benefits of a consumer are captured for analysis.

Value engineering is the process of ensuring a product doesn't waste away its potential. Products that lack purpose or drive value will get lost in the marketplace, becoming cost centers for a company that yields little to no profit. By implementing value engineering, a company evaluates how a product can better serve its customers, how value can be created, and costs can be minimized.

Washington State Department of Transportation. " The Methodology for Maximizing Project Value ," Page 3.

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Value Analysis (VA) and Value Engineering (VE): Definitions and Benefits Essential Product Development for Engineers

Value engineering.

Value Engineering (VE) is concerned with  new  products . It is applied during product development. The focus is on reducing costs, improving function or both, by way of teamwork-based product evaluation and analysis. This takes place before any capital is invested in tooling, plant or equipment.

This is very significant, because according to many reports, up to 80% of a product’s costs (throughout the rest of its life-cycle), are locked in at the design development stage. This is understandable when you consider the design of any product determines many factors, such as tooling, plant and equipment, labour and skills, training costs, materials, shipping, installation, maintenance, as well as decommissioning and recycle costs. Therefore value engineering should be considered a crucial activity late on in the product development process and is certainly a wise commercial investment, with regard to the time it takes. It is strongly recommended you build value engineering into your new product development process, to make it more robust and for sound commercial reasons.

What is Value Engineering - Dr Mike Clayton (Courtesy of Online PM Courses)

Value Analysis

Value Analysis (VA) is concerned with existing products . It involves a current product being analysed and evaluated by a team, to reduce costs, improve product function or both. Value Analysis exercises use a plan which step-by-step, methodically evaluates the product in a range of areas. These include costs, function, alternative components and design aspects such as ease of manufacture and assembly.

A significant part of VA is a technique called Functional Analysis , where the product is broken down and reviewed as a number of assemblies. Here, the function is identified and defined for each product assembly. Costs are also assigned to each one. This is assisted by designing and viewing products as assemblies (or modules). As with VE, VA is a group activity that involves brainstorming improvements and alternatives to improve the value of the product, particular to the customer.  

Note: Many refer to Value Management as an umbrella term, which encompasses value engineering and value analysis.

Value Analysis in a Nutshell - Clearly Explained for Manufacturers (Courtesy of Alpine Engineering & Design Inc)

Reducing Costs by Using Value Engineering in Conjunction with other World  Class Manufacturing Techniques

Before we move on and examine the specifics of value analysis, it is worth pointing out some of the best performers in industry often use value analysis, in conjunction with other world class manufacturing techniques, such as Lean Manufacturing. They do this in order to reduce their costs not only in product development, but in all areas of the business, particularly production. Please see the  Lean Manufacturing Essentials   section for specific details about production-based cost reduction.

Functional Analysis Explained: A Key Part of VA

Reasons for Value Analysing Existing Products

The majority of the information here is geared towards New Product Development and New Product Introduction. In contrast to this, as stated above, VA is based upon products you already sell. On the face of it, the reasons for value analysing existing products may seem obvious. However you may find yourself in a situation where you need to convince others and make the case for undertaking a VA exercise. Senior managers may require justification as to why it’s worth the investment of time and effort. Below are some points that may help. Consider applying them to your specific situation.

• VA reduces costs (in all areas such as materials, parts and production), as well as improving product function. Therefore, the value of the product is increased to the customer.
• Reducing the cost of products increases revenue and profit per product. Therefore, giving your company the option of reducing price to sell more or investing in R&D.
• VA enables improvements to be made to the product in a variety of areas, such as design and engineering, material selection, testing, manufacturing, assembly, shipping, installation, use by the customer, service, maintenance and recycling.
• For many manufacturing businesses their product range has evolved over time, as a collection of solutions to meet new customer needs, rather than being the result of strategic planning. Often products have been developed under tight time constraints and as a result, a wide variety of parts and materials have been sourced and used. This leaves lots of scope for component rationalisation across the range.  In-turn this opens the door to cost reduction negotiations based on ordering greater quantities and economies of scale . A value analysis exercise can deliver this.
• A VA project enables your business to take commercial advantage of the constantly falling price of some technologies, as well as source alternative components and materials.
• The above factors all increase perceived value of the product by all those who interact with it, throughout its product life (including of course, the customer).
• The prestige value of the product increases, therefore making ownership more desirable, which should help product sales (and indeed the process of marketing and selling it).
• A customer who perceives the value of the product as being more prestigious is more willing to pay a premium for it or choose it over rival products if it is priced the same.
• An all-round better quality product is easier and less costly to produce, assemble, ship, install, use, service and recycle. The result is to reduce all associated costs throughout the product lifecycle (importantly, including ownership costs for the customer).
• VA, in conjunction with other world class manufacturing techniques, can help realise substantial company-wide improvements, thereby delivering significant competitive advantage.

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Product Design Using Value Engineering

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Value Engineering is a methodology used to maximize the performance and minimize the cost of particular construction options. Value engineering examines and defines the project’s function and then evaluates the different elements of the design solution, their costs and their effectiveness in meeting the functional requirements of the project. Cost analysis and value engineering are particularly effective in identifying unnecessary project features or spotting costs that can be eliminated without affecting the integrity, functionality, or aesthetic appearance of the final project.

UBSE incorporates value engineering into the design and project management process, developing cost-saving alternatives when appropriate, without compromising quality. UBSE will:

• Apply value engineering principles in the review of proposals and construction cost estimates
• Evaluate the method and the source of line-item costs
• Determine if the process or approach to a particular portion of work is not only practical, but also cost effective
• Determine how closely each portion of work meets the specific design objectives

For large or more complex projects, the application of careful cost analysis and value engineering techniques can often result in very significant savings.

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Advantages of Value Engineering

In the engineering stages of a project, value engineering is a creative, team-based approach to seeking and selecting the best alternative for achieving a function that will ultimately save the client money. It is a methodical, organized approach to performing necessary functions in a project at the lowest possible cost.

Value engineering encourages the substitution of less expensive materials and methods without sacrificing functionality. It is solely concerned with the functions of various components and materials, rather than their physical characteristics. Value engineering is also referred to as value analysis.

The following are the advantages of value engineering:

(1) Value engineering helps achieve an improved product design and quality. It is a systematic part of the design process where equipment specifications, light fixtures, and other budget priorities are detailed into the construction schedule.

(2) Value engineering suggests eliminating the unnecessary functions in the organization that increase costs and have complex ties. It helps to cut costs, but it takes it one step further to enable the design team to prioritize what’s more important.

(3) Value engineering enhances the customers’ satisfaction and sales by determining the exact need and expectations of customers.

(4) Value engineering emphasizes seeking the alternatives for achieving the function and on applying the best alternative among the various courses of action available. It can be an active part of a creative design process while at the same, ensuring that available funds meet the client’s goal.

(5) Value engineering provides competitive advantages to the firm in the areas of product quality, costs, and customer satisfaction. Reducing labor effort allows lead time reduction. Getting the product to the customer as quickly as possible will help a company win jobs and beat out the competition.

(6) Value engineering focuses on standardization of the parts and components by identifying the possibility of using the same component or function in different products of the company. This brings the economy in the cost of manufacturing the parts and components.

Value Engineering (VE) is a method, not a program. It is a methodical process used by a multidisciplinary team to increase the value of a project by analyzing its functions. A fair return or equivalent in goods, services, or money for something exchanged is defined as value.

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• Value Management/ Value Engineering

Value Management/ Value Engineering - Assignment Example

• Subject: Engineering and Construction
• Type: Assignment
• Level: High School
• Pages: 8 (2000 words)
• Downloads: 6
• Author: crunte

Extract of sample "Value Management/ Value Engineering"

The aspect of VM operates under a well structured schedule of process. This allows the functional needs and alternative resolutions, linked with their costs to be recognized and incorporated to strict timetable (Pinto 2008, p. 128). 2. Defining the Concepts Value management is different from value engineering in that value engineering entails attaining specific functions at reduced cost or holistic life cost while value management entails the process of defining the actual meaning of value within a confined context in the building industry.

The concept of value management ensures that there is definitive agreement of objectives and making sure that the solutions are aligned with these objectives. The value engineering answers on how while value management answers the questions on WHY. Value management concept is a sequence of process with proven techniques that are systematically brought together to recognize better project, services, and the industry projects. Both the VE and VM have the same process thus using the same methodology (Kendrick 2006, p.243). The process of VM works in a top-down approach, which starts from the requirements and the objectives and aims on the root causes and not the signs.

In this process there is an earlier agreement that is developed between the stakeholders concerning the need for the project, the scope, potential outcomes, main functions and risks, in relation the wider business environment (Sham 2008, p.89). There is exploration for potential opportunities for exploration and the most cost-effective approach of implementation is structured, which is reliable with the estimated time and quality of the work to be undertaken. This method in building industry is concerned with the whole project as opposed to the components of the building techniques and in most instances, VM is a process that is based on consensus (Kendrick 2006, p.244). In this process, selection for the workshop is crucial to its effectiveness to ensure that the wide range of impacts are specifically addressed to the individuals with the right skills and knowledge, experiences and judgment skills.

Specific members are chosen to undertake a particular task if the stakeholders are not able to undertake the task. 3.0. Characteristics A well structured value management system has the following characteristics in the building industry: 1. Well defined aims and objectives and the capacity at the outset of the project that focus on the client needs 2. A systematic and well staged strategies to the whole project other than the individual components of the project 3. There is the availability of multi-faceted team efforts that is influenced by positive human flexibility 4.

The process adequately considers of the organizational structure and environment ,which takes consideration of both external and internal environments 5. The element of function analysis 6. Effective use of techniques and tools to promote independent facilitation. 7. A workshop structure that has well defined job plan that distinguishes innovation from assessment and development 4.0. Stakeholders The stakeholders in this project are individuals who have real interest in the project results that might include promoter, supervisor, engineer, and constructor, user of the project, operator and financier.

The project focuses to reflect the holistic key needs and

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Applied principles of value management and engineering, combining risk assessment and value engineering (this is project risk management class), effectiveness and efficiency of value management, value management and value engineering, value and risk management, value management strategy for fitness centre.

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STAR interview: civil engineering solutions that add value to society

In this STAR interview, we speak to Joanne Vinke-de Kruijf of the Faculty of Engineering Technology (ET). STAR is an acronym for (S)ituation, (T)asks, (A)ctions, (R)esults. We also have many “star” colleagues at UT with an interesting story to tell.  Joanne Vinke-de Kruijf  contributes to the creation of integrated civil engineering solutions that add value to society.

What is/was the situation (S) of your research/initiative?

Infrastructure is essential to a safe and well-functioning society. Climate change has put a considerable amount of pressure on infrastructure, especially water-related infrastructure. Physical and organisational adjustments are needed to be well-prepared for longer periods of drought, more extreme rainstorms and heatwaves.

What tasks (T) were or are you currently working on?

My team and I conduct research into the implementation of participatory and integrated approaches to climate issues. We have conducted comparative research into how municipalities in Overijssel cooperate in the adjustment to climate change, both within their organisations and beyond, and where improvements can still be made. We also researched why it is often difficult in Overijssel to coherently implement solutions in sustainable heating, adapting to climate change, and other challenges. In two other projects we are focusing on integrated approaches to water safety, in which we review possible implementations of natural solutions to dike reinforcement in protected nature reserves and of water safety landscapes: an innovative and future-focused spatial approach. In a European project we are conducting research into innovative policy instruments for involving various sectors and citizens in a transition to more sustainable and more just water management. In September we will be launching a new European project into the development and implementation of sponge measures, to improve water retention in landscapes.

What actions (A) are you working on and who are involved?

We conduct our research in projects funded by the Dutch Research Council, the European Commission and local and regional partners. In research projects but also in education and final projects, we work closely with municipalities, water boards, provinces, network organisations, companies and interest groups. In cooperation with the Zwolle water board, we have set up two multi-year partnerships to promote the development and sharing of knowledge. At UT, we work with scientists in other groups, both within the Faculty of Engineering Technology and beyond. This cooperation takes place in projects but also via UT and 4TU programmes in the field of resilience. In the field of climate resilience, we have also recently started working with the University of Auburn in the US.

What results (R) do you hope to achieve, and how will society (or UT organization) perceive them?

Our research shows that, particularly in a densely-populated country such as the Netherlands, cross-sector and participatory approaches have a lot of potential and can help solve multiple issues at the same time. Landscape-based and more nature-based solutions, but also closer cooperation with residents and other parties, are promising. They can help boost the resilience of infrastructure, ecosystems and societies in a broad sense. Our research shows that parties recognise this potential. And yet it is not always possible for them to coherently solve issues. A climate-resistant infrastructure and living environment requires new cooperations and changes in the ways we think and work. We research and develop a wide range of approaches that can help in this.

Photo: An integral climate project of the municipality of Enschede: restoration of the Stadsbeek including the realization of the Pinkeltjesplein, a square that provides space for water, play and nature and was designed with residents.

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Green Chemistry

Full use of lignocellulosic biomass in efficient synthesis of l-tyrosine and its analogues by engineering microbial consortia.

Lignocellulose biorefining has great potential to replace the use of petrochemical resources in production of fuels and chemicals. However, the full use of lignocellulose, which is depolymerized to yield mainly glucose, xylose, and lignin-derived phenolics, remains challenging. Here, we developed the Glucose-Xylose-Phenolics (GXP) system to fully use lignocellulose for production of L-tyrosine and its analogues in the minimal medium. First, we engineered an Escherichia coli–Escherichia coli consortium carrying a CRISPR/dCas9 interference system to simultaneously use glucose and xylose to support cell growth and produce pyruvate, obtaining 34.3 g L-1 pyruvate with a yield of 0.68 g g-1 sugar. Then, we introduced tyrosine phenol lyase and other biocatalytic enzymes into this consortium to generate the GXP system, which could convert pyruvate and lignin-derived phenolics to L-tyrosine and its analogues. Using this GXP system, 20.8 g L-1 L-tyrosine was produced from 12.5 g L-1 phenol with a yield of 86.4%. Using hydrolysate of the raw material sorghum pith, 0.94 g L-1 L-tyrosine was produced from 0.96 g L-1 p-coumaric acid with a yield of 88.7%, and 8.1 g L-1 pyruvate retained, corresponding to an overall yield of 0.163 g product g-1 sorghum pith. Development of this GXP system illustrates a strategy for full use of lignocellulosic biomass for synthesis of value-added chemicals.

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