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Evaluation of influential value engineering factors on the function of interchanges: case studies in Iran

Abstract

In Iran, recently in large-scale projects, the science of value engineering has become very important and in order to show the significant impact of value engineering results in increasing efficiency and reducing the cost of projects, the reason for choosing this research. The experience of value engineering in the developed countries shows the significant effect of this method in the value optimization of plans and projects. This research, too, aims to evaluate the effects of value engineering on the performance of interchanges in Iran, so that with comparing their results, the most important qualitative parameters can be determined, and also to present a suitable model for cost reduction per each IRR of the value engineering study’s expenses. The first part of this research will give a short introduction on value engineering and its job plan, and then, 8 value engineering studies of interchanges in the cities of Tehran, Karaj, Shiraz, and Mashhad will be qualitatively and quantitatively analyzed, and their results as a qualitative and quantitative evaluation (including construction cost, total value index, and relative value index) will be compared with the base plan of the projects and also with each other. Finally, the outcome of the research will show that among the evaluation parameters, the acquisition parameter plays a significant role in choosing the best design in value engineering, some part of which depends on the employer’s view in this regard. In the next step, the best improvements were in reducing travel time and in increasing safety, and also the most neglected parameter in the value engineering analyzed here is environmental improvements, which demands especial attention. From this research, it can be concluded that per every one IRR of expenditure on performing value engineering studies, the total cost of interchange projects in Iran is reduced by 334 IRR.

Introduction

Value engineering is a systematic attempt which aims to study and analyze all of the operations of a project from its conception up to the design stage and then initiation and utilization and is considered as one of the most effective and important economical methods in the engineering field [24]. In the framework of project management, value engineering is paying attention to all of the components of the design and at the same time not taking for granted any part of the project [1]. The goal in VE is reducing the time needed to reach initiation stage without increasing the cost or lessening the quality of the work [9]. Project management is planning and directing the project in a framework of specific time, cost, and quality constraints toward its specific results [6]. Standing (2001) considers VE as a project with minimum cost which includes due assessment and elimination of unnecessary costs without having detrimental effects on safety, quality, reliability, implementation method, and delivery [32]. In this paper, 8 VE case studies on Iranian interchanges are used, enabling this research to identify and analyze the benefits of the successful application of value engineering in enhancing the quality of interchange projects. The goal of this paper is the qualitative and quantitative measurement and evaluation of the effective factors of VE projects on interchanges and extracting the shared effects in order to increase quality, performance, and value index of such projects. This research will determine the amount saved for the cost of value engineering projects in Iranian interchanges. To conduct this research, extensive studies in this field have been conducted from various sources, and their impact and results have been used (Elhegazy H (2021) [13], Elzarka et al., (2016) [11], Chakraborty et al., (2020) [10], Chakraborty et al., (2016) [11], Dell'isola (2017) [12], Elmousalami [18], Kumar and Gururaj [22], Swei et al. [33], Elhegazy et al., (2020, 2021, 2022) [14,15,16,17], Wang et al., (2017) [36], Zhong et al., (2022) [37]).

Value engineering basics

Value engineering is a powerful methodology when it comes to problem-solving, cost reduction, and at the same time improving performance and quality, which by identifying and enhancing value indices, and applying creativity, increases client satisfaction and the value of investment.

Value engineering job plan

A value engineering job plan is comprised of three stages (Iyer, 2009) [20]:

  1. 1.

    Pre-study

  2. 2.

    Value engineering or value analysis workshop

  3. 3.

    After study

Each stage having a job plan as is shown in Table 1 [8].

Table 1 The order of value engineering steps

Value analysis plan includes operational implementation steps of value methodology [23]. In fact, that which Miles and the people coming before him were doing was the application of this key stage. The second stage has 6 steps which are applied in order as depicted below. The International Society of American Value Engineers (SAVE) has proposed the job plan depicted in Table 2 for the value engineering workshop (SAVE international, 2017 [31]; Kolano & Eta, 2015 [21];) (second stage).

Table 2 Value engineering methodologies

The International Society of American Value Engineers (SAVE) has proposed the following procedure (Fig. 1) for the steps mentioned in Table 2 [21, 31].

Fig. 1
figure 1

The schematic of the value analysis process in VE workshop

International experiences regarding value engineering interchanges

The experience of value engineering in the developed and developing countries demonstrates the significant effect that this method has on improving the value of designs and projects. International experience shows that, in a period of 8 years, 2700 value engineering studies have been carried out in the transportation sector of the USA, for which the ratio of cost reduction (with preserving or improving quality and function) to the study costs has been 113 dollars to 1 [9]. In the US road sector alone in 2008, 382 value studies were carried out. Twelve billion dollars were spent conducting these studies. The approximate total cost of these projects was roughly 30,000 billion dollars. The amount of cost reduction produced as proposals in value engineering workshops was 6500 billion dollars from which 2530 billion was approved. This reported and approved saving shows that for every 1 dollar spent on value engineering, 205 dollars have been saved [32]. The statistics given here are from the value-engineered projects funded through federal government’s budget, and if we were to include the projects value engineered by private sector contractors, the figures would have been higher. The results produced in the USA illustrate a number of pivotal points:

  1. 1.

    The strength and accuracy of the base plan (the initial design by the consultant) not only do not preclude value engineering, but it paves the way for presenting new ideas and increasing the value of the project.

  2. 2.

    Not every value engineering proposal is necessarily approved. In most cases, only 50% of them gets approval.

  3. 3.

    The reported savings only include construction costs, and if the costs accumulating in the life span of the project were included, the figures would have been significantly higher [2, 32].

A well-designed methodological research presents the administrators and engineers of road projects, including interchanges, with the most effective approaches for solving many of the problems they encounter. Although, the growth rate of highway transportation brings more complex problems with itself, which demands special attention on the part of decision makers. All selected projects are among the major and very important projects in Iran, which have been designed and implemented by the most prominent and well-known consultants and contractors, and these projects are among the highest projects in terms of price and cost of work.

Methods

For all selected projects, the value engineering discussion has been done extensively and separately by the country’s leading expert consulting engineers, and it has not been possible to provide all the details for each project separately. Therefore, the statistics and results obtained from value engineering, which is completely accurate and specialized, have been used to conduct research, and the results obtained from the value engineering of projects have been transferred and used without any change in the analysis of relevant research data.

At first, in this research, all civil, traffic, construction, economic, value, base plan, and value engineering design studies, were gathered from their respective consulting firms for analysis. The general specifications of the projects and the consulting firms of the base plans and value are presented in Table 3. The total cost of the base plan is comprise of the construction costs, repair and maintenance, utilization, and land acquisition [3,4,5, 7, 19, 25,26,27,28,29,30, 34, 35]. In the next stage, all of the parameters will be qualitatively and quantitatively analyzed.

Table 3 General specifications of the projects analyzed

Results

All selected research projects are among the large and very important and well-known projects in Iran in which value engineering is very important, and in general, it can be said that value engineering reduces costs. A total of 10 to 40% in these projects and due to the budget deficit of many construction projects in Iran, cost reduction is the most important factor in value engineering in this country.

Qualitative analysis

Considering the forms sent to all beneficiary parties of the interchange projects, the parameters deemed important by the beneficiaries and team experts were gathered, integrated, and extracted as is presented here [7, 19, 27,28,29,30, 34, 35].

-Reducing problems in construction and traffic detour -Pedestrian passage facilitation
-Increased safety -Securing pedestrian and cyclist access
-Enhancing urban landscape -Project’s flexibility
-Improving local access -Increasing the level of service of the highway
-Reducing construction time -Improving traffic performance
-Accelerating construction and utilization -Maintenance and utilization facility
-Travel time reduction -Reducing social problems
-Acquisition facility -Improving public and quasi-public transportation
-Reducing environmental degradation  

Based on the project value studies of the projects under analysis done by the consulting firms (named in Table 3), the evaluated qualitative parameters of the projects are presented in Table 4.

Table 4 Qualitative parameters analyzed in each project

The value engineering team in each project, noting the location, type, and the particular conditions of that project, compares the qualitative parameters using binary AHP method. Then, for each parameter, a numerical score is calculated, and finally, the parameters having the highest score are chosen for analysis and proceeding with the value engineering process. The scoring is done by binary comparison of the parameters and giving each one a score ranging from 0 to 10, where the sum of score for both of the parameters is 10. The priority and importance of the parameter determine the score it receives, that is, the higher its priority and importance, the higher the score it receives. In such manner, using the binary method, all of the parameters are separately compared, their individual score is calculated, and finally those having a score higher than 5 are chosen. After comparing the parameters using AHP, based on the score they received by the value engineering team of each project being studied, the chosen qualitative parameters were analyzed. Then, all the qualitative parameters of each project were analyzed (according to the Table 4), and those parameters which were shared by at least 50% (i.e., 4) of these projects and were among the important qualitative factors were extracted. In the following Table 5, points (rates) of qualitative parameters in each project can be seen.

Table 5 The scores of the qualitative parameters analyzed in each project

In the next stage, we calculated the average score of each parameter for these projects. Table 6 shows the average for the influential parameters determined in the previous stage.

Table 6 The average score for the qualitative parameters

Keeping in mind that the base plan score is evaluated as 5, therefore, by calculating the ratio of the base plan score to that of the calculated average scores from Table 6, the optimization rates of the qualitative parameters, as shown in Table 7, are obtained.

Table 7 Optimization rate for qualitative parameters

Therefore, it can be concluded that the priority of qualitative parameters of interchanges in Iran (according to the conducted case study) and their optimization rate is as shown in Table 8.

Table 8 Priority of qualitative parameters rates

Based on the conducted research, it can be concluded that in Iran, when constructing interchanges, among the qualitative parameters, the acquisition facility has an especial importance for the employer (in most cases the government), as it has the highest optimization rate among the qualitative parameters leaving them behind with a significant margin. It is worth mentioning that in analyzing each project separately, acquisition facility had the highest optimization rate compared to other parameters. This goes to demonstrate that in many of the value-engineered projects, considering the high cost of land and buildings in Iran, the employers in choosing the best option among the value-engineered options, put forward by the value consulting firm, go for the one with no or the fewest number of acquisitions or ultimately the one having the highest acquisition facility.

The other point worthy of attention in this research is that reducing environmental degradation occupies the last place (i.e., it has the least priority) among the important and influential qualitative parameters with an optimization rate of zero. Unlike other countries which place a significant importance on preserving and improving the environment, unfortunately, in Iran, this issue is neglected especially by the governmental employers, which requires reconsideration and more attention.

Quantitative analysis

All of the information and documentations related to the base plan and value engineering studies of the aforementioned projects were analyzed and studied, and the data including the construction cost of the base plan, the construction cost of the top value engineering plan, the total cost of the base plan (comprising of the construction costs, repair and maintenance, utilization, and land acquisition), and the total cost of the value plan of the projects were extracted and are represented here in Table 9.

Table 9 Construction and total costs of the projects

For each project, the construction cost reduction is calculated by finding the difference between value plan’s construction cost and construction cost from base plan. Also, the total cost reduction is the result of subtracting the total cost of value plan from the total cost of the base plan (in Table 10).

Table 10 The amount of the construction cost reduction of the projects (IRR)

Afterwards, using the value engineering contracts of each project, the cost of value engineering was extracted, and the total sum of the cost of value engineering studies was obtained, and next, the total sum of cost reduction was calculated. To calculate the profit gained for every IRR spent on value engineering (saved amount), the sum of total cost reduction must be divided by the sum of value engineering costs. The resulting figure represents the amount saved for every IRR of value engineering cost (in Table 11).

Table 11 The amount of total cost reduction and value study costs of the projects (IRR)

As it can be observed in the table above (Table 9), in value engineering interchanges in Iran for every IRR of the cost of value engineering studies, 586 IRR is saved from the total cost. But in order to improve the accuracy of the research, taking into consideration that the initial construction cost of these interchange projects are not identical, and also the size of the projects, a range must be chosen so that the figures obtained can be realistic and credible. To do so, a variance and a standard deviation were calculated using formula 1, so that the intended range could be calculated using formula 2. Then eliminating the data outside of that range, the figure given above was fine-tuned.

$$\sigma\ Standard\ Deviation=\sqrt{\left(\sum {\left({x}_m-{x}_i\right)}^2\div n\right)}$$
(1)

X m: Total average of saving for every IRR of the cost of value engineering studies of the projects

X i: The amount saved for every IRR of the cost of value engineering study of each project

n: the number of projects

$${\displaystyle \begin{array}{c}\to \sigma\ Standard\ Deviation=\sqrt{\left(472308\div 8\ \right)}=6\ 8\ 7\\ {}\mathrm{Average}-\mathrm{standard}\ \mathrm{deviation}\le \mathrm{the}\ \mathrm{range}\ \mathrm{being}\ \mathrm{studied}\le \mathrm{average}-\mathrm{standard}\ \mathrm{deviation}\\ {}\to 102\le \mathrm{the}\ \mathrm{range}\ \mathrm{being}\ \mathrm{studied}\le 1273\end{array}}$$
(2)

Obtaining the range of the research, it is determined that one of the projects is located outside of the domain, therefore, leaving the numbers for the said project out of the calculations, the amount saved is recalculated as follows (formula 3).

$${\displaystyle \begin{array}{c}{\mathrm{X}}_m=\left({\sum}_i^n{x}_m\right)/n\\ {}\to \mathrm{Saving}=2340\div 7=334\end{array}}$$
(3)

The total saving of the projects located inside the obtained range is 2340 IRR, which if it is divided by the number of projects located inside the range, on average, the saving would be 334 IRR for each project. Consequently, it is revealed that for every IRR cost of the value engineering studies conducted for these interchange projects, 334 IRR is saved from the total cost of interchange project in Iran. Accordingly, it can be deduced that for the interchange project in Iran, on average, for every IRR spent on value engineering, 334 is saved from the total cost of these kind of projects, which testifies as to the necessity of value engineering and its tangible effects on interchange projects in Iran. The international experience shows that in federal highway projects, the amount saved for every dollar of the cost of value studies in the year 2009 has been 99 dollars; 2010, 146 dollars; 2011, 80 dollars; 2012, 96 dollars; and in the year 2013, 118 [32]. In the US road sector alone in 2008, 382 value studies were carried out. Twelve billion dollars was spent conducting these studies. The approximate total cost of these projects was roughly 30,000 billion dollars. The amount of cost reduction produced as proposals in value engineering workshops was 6500 billion dollars, from which 2530 billion was approved. This reported and approved saving shows that for every 1 dollar spent on value engineering, 205 dollars have been saved [32].

Conclusions

The outcome of this research demonstrates that among the evaluation parameters, the acquisition parameter in interchange projects plays a significant role in choosing the top value engineering plan. As it was mentioned, this partially depends on the views that the employers hold. The highest improvements accomplished were in reducing travel time and increasing safety. The most neglected parameter in the value engineering plans evaluated was improving the environment which demands especial attention. Also, from this research, it can be concluded that for every IRR spent on conducting value engineering studies, 334 IRRs are saved from the total cost of interchange projects in Iran.

The value engineering study should be started in the design stage of interchange projects.

Availability of data and materials

The datasets used and/or analyzed during the current paper are available from the corresponding author on reasonable request.

Abbreviations

AHP:

The analytic hierarchy process

USD:

United States dollar

$:

Dollar

VE:

Value engineering

IRR:

Iranian rial

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MJ carried out the research methodology, developed the computational technique and performed the investigation and validation of the analytical work, and wrote the manuscript draft. NA performed the conceptualization of the research idea, participated in the interpretation of the results, reviewed the edited manuscript, and supervised the whole project. Also, he contributed to the discussion of the results and visualization of the final manuscript. The author(s) read and approved the final manuscript.

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Correspondence to Nima Amani.

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Nigjeh, M.J., Amani, N. Evaluation of influential value engineering factors on the function of interchanges: case studies in Iran. J. Eng. Appl. Sci. 69, 48 (2022). https://doi.org/10.1186/s44147-022-00100-9

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Keywords

  • Value engineering
  • Interchanges
  • Case study
  • Cost reduction
  • Improving qualitative parameters