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Value Engineering For Hotels

Introduction to Value Engineering

Products are bought for what they can do—either through the work they do or the pleasing aesthetic qualities they provide for.

Using this as a foundational pillar, the emphasis was laid on understanding the function of the component being made.

Thus was born, value engineering.

In mathematical terms, value is defined as the ratio of function to cost. Ideal value engineering can be defined as maximizing functionalities at minimum costs.

According to Wikipedia,

“Value engineering (VE) is a systematic method to improve the “value” of goods or products and services by using an examination of function.”

It is a primary tenet of value engineering that basic functions be preserved and not be reduced because of pursuing value improvements.

According to the principles of construction,

Value engineering is the science of obtaining balance among cost, reliability and performance of a product or a project.

Commonly used in building projects when the project’s cost begins to exceed its budget, value engineering relates to the substitution for a product or assembly that is part of the original design with an alternative that provides acceptable performance, reliability, and aesthetics at a lower cost.

Value Engineering - History

The term value engineering was coined in the United States of America in the 1940s. GENERAL ELECTRIC CO. employees – Lawrence Miles, Jerry Leftow, and Harry Erlicher began looking for alternates due to the shortage and scarcity of strategic materials needed to produce their products and goods during the Second World War. This process ultimately gave rise to what we now know as value engineering or value analysis.

Initially, value engineering was known as value analysis. Since engineering positions were available, individuals applying this new technique were employed as “Value Engineers.”

As the application of value engineering as a process expanded, there was also a change in the thought process — from the review of existing parts to improving conceptual designs. This was one of the factors that marked the emergence of value engineering.


Soon, the value-engineering concept was used to improve the value of projects in almost every sector – the private sector, the government, the manufacturing, and the construction industries and that is how – value concepts spread worldwide.

The present scenario has organizations in almost every industry have adopted ethical value engineering practices to either improve functionality or reduce costs because that is how the value of a product increases.

Moreover, with competition rising, consumers and buyers are increasingly looking for high-value goods and services at optimum costs.

The industries where value engineering has influenced are the construction industries and the hospitality industry. An integration of both is hotels.

Construction projects like hotels could benefit by identifying improvements for various phases of the hotel project: concept development, preliminary design, final design, procurement and construction, quality programs, new product development activities, manufacturing processes, and architectural and engineering design to name a few.

Value Engineering for Hotels

Value – addition is an evergreen concept. The world has only evolved more when intellectuals have combined in redesigning and redefining the concepts of everyday things.

Similarly, in hotels too, value engineering as a process, as a method, and as a part of the design and development process is crucial to the overall development and evolution of the hotel industry and the hotel, itself.

By studying the different aspects of fixtures, goods, and raw materials in every stage of the hotel development or renovation – there is room to grow and break away from the things of the past.

This is done by value engineering and analysis.


How? This is how:

  • Finding the functionality associated with each product, fixture, and raw material used.
  • Finding gaps in design and applications.
  • Is the product design intended for its optimum use?
  • Is the fixture/accessory made exactly for the application that it was manufactured for?
  • Does the location require such a product/ fixture?
  • What functionalities can be substituted or added?
  • How can the value (function/cost) be improved?
  • What is the duration, or, the shelf life of the product?
  • Can the same functionality and, ultimately- value, be derived from a lower cost?
  • Can the product or fixture be made more durable?
  • Can raw materials other than the ones purchased normally be used?

Questions like these mentioned above make the value engineering process absolutely invaluable and integral to every hotel.

Value engineering in hotels is beneficial to the organization as they promote:

  • Total clarity and control
  • Functional knowhow
  • Promote conceptual overhauls and redesigns
  • Optimize functionalities, structures, and stereotypes
  • Make room for new technologies and solutions.
  • Potential for industry-wide innovations by substituting materials
  • Smart savings on unnecessary things
  • Facilitating alternate substitutes at optimized costs
  • Increasing the ROI of the organization

And the list goes on and on.

An organization, which takes improvement seriously, will not shy away from adopting a similar value engineering process. The world is a witness to that.

Whenever any organization has invested in adding value to the existing scenarios and optimizing it for the better use of the consumer and the producer, it has benefitted majorly.

Moreover, the hotel will surely benefit from that.

Well, now we know – what are value engineering, what is the history associated with, the people involved with value engineering, and the need and importance of value engineering in hotels.

It is now time to understand the value engineering process.

What is The Value Engineering Process?


The value engineering process is a systematic step-by-step process, which involves activities from start to scratch. It is comprised of six phases:

  • Information Phase
  • Function Analysis Phase
  • Creative Phase
  • Evaluation Phase
  • Development Phase
  • Presentation Phase

Let us look at all the phases in detail:

1. Information Phase

The information phase understands the current project environment and the issues that affect project decisions. The team reviews and describes current project conditions and identifies research objectives. This phase includes market research to test knowledge on existing technologies, innovations, and methods. The information phase, in value engineering brings all team members to the same level, which is the foundation of project understanding, including performance, and clarity of the story. Performance understanding establishes a basic case for identifying and balancing alternatives and differences and sets the agenda for innovation.

2. Function Analysis Phase

The functional analysis phase understands the project from a functional perspective; what the project should do, rather than how the project is currently being done. The team defines project functions and activities using context. The team reviews and analyzes these functions to determine what needs to be improved, completed, or created to achieve project objectives. This section focuses on the team ensuring that the project meets the needs and objectives of the client. It provides a complete understanding of the project by focusing on what the project does or needs to do rather than what it is. The team identifies non-targeted activities (activities) to focus on in order to improve the project.

3. Creative Phase

As the name implies, the creative phase generates many ideas related to other ways of performing tasks. The value engineering team uses creative techniques to identify alternative ways to do the project(s). The team also develops a wide range of ideas that provide a variety of ways to do the task(s) to improve the value of the project.

4. Evaluation Phase

The evaluation phase looks after reducing the number of ideas that have been identified as a shortlist with the greatest potential to improve the project. The team follows a systematic value evaluation process to select ideas that offer the potential for value improvement while maintaining the project’s function(s) and considering performance requirements and limits. The team produces a targeted list of concepts that demand quality time to nurture into value-based solutions that can be implemented into a project or as a project feature.

5. Development Phase

The development phase of the value engineering process further analyzes and develops a shortlist of ideas and develop those into value alternatives. This stage encompasses developing selected ideas into substitutes or alternatives with a sufficient level of documentation to allow the decision-making authorities to determine if the alternative is viable and whether it should be implemented. The Value Study team creates alternatives and low-, medium-, and high-risk scenarios and offers these alternatives to higher authorities and management as options that address the strategic objectives of value engineering.

6. Presentation Phase

The presentation phase is the last phase of the value engineering process. As the name says, this phase presents value alternatives to the management team, decision-makers, and project stakeholders. The value engineering team leader develops a presentation or report that conveys the adequacy of the alternative(s) developed by the team and the associated value improvement opportunity. This phase ensures that all the stakeholders involved understand the value alternative process. Also, the presentation phase generates interest to sanction implementation.


Value-engineered products are not only economically beneficial, but they are essential too. These products save a tremendous amount of cost and deliver functionality at both, the initial phase and through all the life-cycle phases.

A value-engineered product is meticulously procured or “cherry-picked” after doing thorough research of all the available options and trends in the market. For a construction project, “Value-Engineering” can be termed as “Best Quality at Best Price!”


We certainly know what we do!

At AORBIS, we are a team of consultants and product specialists with broad work experience and expertise in the A/E/C industry which allows us to take a value-driven approach to every project. Established in the year 2018, we provide building products, materials, and services to our clients based in the United States.