Value engineering
To ensure implementation of full-cycle projects under the EPC model R&D Institute "PEGAZ" applies a complex of the best practices which are a part of Value engineering. These methods were developed by the highly qualified personnel of PEGAZ Holding and adapted to regional specifics.
VALUE ENGINEERING – is a complex of methods and tools to manage the value of an investment project at all stages of its life cycle which determines the economic relations among its participants.
VALUE ENGINEERING includes:
- Formation of the project budget (project budget planning, Value Management of capital investments, investment estimation);
- Estimated price formation,
- Expert review (check of reliability of definition) of cost estimate of construction,
- Formation of construction costs,
- Value control of the project implementation process,
- Analysis of the actual expenses (construction costs).
Value engineering as a complex solution of the customer s tasks is indeed an actual product which will be increasingly in demand by the market. Especially in the current conditions, when the key task of any company is to reduce costs, both at the construction stage and during the operation of the facility.
Value engineering of investment and construction projects correlates closely with the concept of integrated project cost management (TCM – total cost management).
THE TOTAL COST MANAGEMENT INCLUDES FOUR ASPECTS:
- Resource planning;
- Cost estimation;
- Preparation of the project budget;
- Cost control.
Value engineering allows us to complete the project before deadline and under the budget and satisfy all the defined earlier expectations of the customer, i.e. full achievement of all the results defined earlier. Thanks to the considerable experience and high qualification in EPC project execution specialists of "PEGAZ" can achieve reducing of investment and operational expenses by 10-15%.
R&D Institute “PEGAZ” employs leading specialists with unique experience in the field of Value engineering, who constantly confirm their qualifications. Employees of the company continuously improve their skills, taking specialist courses and trainings, participating in international conferences and seminars. PEGAZ Holding supports development of Value engineering in Russia as an organizer and sponsor of major events in this field.
Earned Value Management – is a project management technique for measuring project performance and progress in an objective manner.
A very important stage in project implementation is the stage of preliminary technological engineering, since the degree of influence on the project during implementation significantly decreases. Possibility of making changes in the project depends heavily on the timeliness of the solutions, choice of the best solution and use of flexible approaches in design. Ill optimized design solutions can negatively affect investment attractiveness of the project and lead to suspension of implementation at many stages.
This methodology makes it possible to control the efficiency of implementation of the project at any stage and to predict all deviations from the implementation schedule and budget.
The following tools are created to control the efficiency of project implementation:
- An activity progress chart;
- An integrated target plan;
- A baseline budget.
The analysis of Earned Value deviation allows:
According to schedule
- To see the leads and lags of the target plan (deviation from the schedule);
- To synchronize data with reports at the end of works;
- To analyse deviation tendencies from the schedule
According to expenses
- to define the status of the work performed to fulfill a plan (by a deviation on expenses);
- to define deviations (to eliminate an evaluation error of the project implementation which has arisen at direct comparison of the actual expenses with the budget);
According readiness
- To place priorities and to focus on the works aimed at implementation of the project;
- To assess the remaining requirements and to create the most probable estimate of the time and costs required to achieve the objectives;
- The deviation on degree of readiness allows to estimate divergence degree with the plan.