Cost Control Application Research of Value Engineering in the Design Phase of Construction Project

Abstract

At abroad, the construction industry is the main area applying value engineering. In China, apart from industry business, the construction industry is the most important area involving the application of value engineering. But a study made by Guangdong construction industry shows that many enterprise managers don't have a clue about the value engineering. At present, the value engineering in construction industry is still at quite a low level. The popularization and application of value engineering in construction industry will make it easier for the construction industry eradicate the problems of long construction period, large waste, poor quality and high cost. Value engineering can make up for the shortcomings of these methods, for it studies allocation of product’s properties and its cost based on its functions, and it emphasizes the organic combination of the improvements of products’ function and the reduction of the cost. As long as the value engineering is practically popularized, the appearance of construction industry is bound to change. Introduction Value engineering, a subject about technology and economy dedicated to improve the function of product or system, and reduce the cost of product or system, therefore with the lowest life cycle cost to meet customers’ requirements about function. The application of value engineering focuses on the design phase of the research of development of the product, which is an important characteristic of value engineering. Compared with other countries, there is certain disparity in both the theoretical research and practical application of value engineering in the construction industry in our country. Therefore we have to catch up. So using value engineering methods to control cost in the most productive phase of value engineering—design phase bears great practical significance. Characteristics of Value Engineering Application in the Design Phase of Construction Project As a kind of productive and creative activity, value engineering is not only used in machinery manufacturing industry to guide the design, but also is needed in basic construction and the construction industry to guide the design. Although there are many similarities of the application of value engineering used respectively in construction design and the industrial products’ design, due to the fact that the production activities and product of basic construction and the construction industry bear their own characteristics, so on the one hand, it increases the difficulty of the engineering application of value engineering, on the other hand, it forms the characteristics of engineering application of value engineering which are different from industrial product design. (1)Application of value engineering in engineering design is different that of product design. In general, the research object of value engineering in the product design is the product, the function refers to the product’s function that the user requires, the cost refers to the production cost and use-cost, and its aim is to reliably meet the user's request with the lowest life cycle cost. And in engineering design, the research object is a portion of the project or structure, such as factories, buildings or a certain component etc. Function refers to the operating function of the country or the users about the project. In general, in addition to the function, quality of the project, there are time requirements about project delivery. Cost refers to the construction cost and maintenance cost after use in the entire project or some part of the project. The purpose of value engineering application is International Conference on Economics, Social Science, Arts, Education and Management Engineering (ESSAEME 2015) © 2015. The authors Published by Atlantis Press 390 to develop a low cost, high function scheme with the lowest cost to realize of nation or users’ requirements of the project. (2)When value engineering application used in engineering design, its designed cost goal is different from the value engineering application used in product design. The prices of industrial products are generally stipulated by the state. Based on the given price to deduct tax, profits and some circulation cost, we can calculate out the social cost of a certain kind of product. Application of value engineering in product design can based on the above information and the enterprise's specific circumstances to apply the appropriate methods to set cost targets, so as to guide and control product program. Yet, due to the fact that the construction products bears oneness characteristic, the production is not fixed in a certain place and there is long production process and numerous links, which make the building products must pass a special design program, namely, determine the price by using the separate programming budget in basic construction. Specifically speaking, it is based on the construction drawings and budget quota to calculate the quantity of divisions and departments; Select a set of budget unit price, then calculate direct fee; then based on the direct fee or artificial cost to calculate the indirect fee; and then according to the feeing standard to calculate independent cost and planned profit; finally, calculate the unit project budget cost in general. Clearly, this method of defining price is different from general industrial product pricing method. The determination of the cost target while applying value engineering in the engineering design can be only based on the engineering budget and according to the specific circumstances with appropriate method to achieve a reasonable result. The General Procedure of Value Engineering Work The process of value engineering is a process of discovering analyzing and solving problems. Value engineering work procedures are shown in table 1. Table 1 the general procedure of value engineering work General process Basic steps Detailed steps Problems to be tackled analysis The process of define and sort out the function 1. choose an object (1)what the research object of value engineering? 2.gather and sort out materials 3.define the function (2)The function? 4.sort out the function Evaluation of the function 5.analyze the cost of function (3)The cost? 6.evaluation of the function (4)The value? 7.determine the scope of object generalize 8.create a scheme (5)Are there any other methods to achieve the same function? evaluation Stipulate improvement solution 9.examine and approve (6)The cost of new plan? (7)Does the new plan meet the requirements? 10.implement and inspect 11.identify the results 12.make proposals From table 1 we can know that: the working process of the value engineering is in essence aims at the research object of value engineering to carry out seven basic issues, and the seven issues determines the basic steps and working process of value engineering. 4. Cost Control of Construction Project The cost control of construction project mainly lies in the investment decision-making stage, design stage and the implementation stage during construction. It aims to control the project investment within the approved cost quota and correct the deviation at any time, thus to ensure the implementation of project investment management objectives can be achieved, finally, to achieve maximum investment benefit by rational use of manpower, material resources and financial resources. Investment control mainly includes the following five aspects: first, in the feasibility study stage, the cost control can accurately estimate investment, thus guarantee the control of total investment