INTERNATIONAL JOURNAL OF

PROJECT MANAGEMENT
International Journal of Project Management 23 (2005) 151158 www.elsevier.com/locate/ijproman

Appraisal of value engineering in construction in Southeast Asia

Charles Y.J. Cheah
a b

a,*

, Seng Kiong Ting

b,1

School of Civil and Environmental Engineering, Nanyang Technological University, Block N1, #01b-35, 50 Nanyang Avenue, 639798, Singapore School of Civil and Environmental Engineering, Nanyang Technological University, Block N1, CACS-B1b-07, 50 Nanyang Avenue, 639798, Singapore Received 31 July 2003; received in revised form 9 January 2004; accepted 27 July 2004

Abstract The concept of value engineering has existed for more than half a century. Its application in construction is credited with some success notably in public contracts in the United States. Nevertheless, value engineering is rarely applied in the Southeast Asian construction industry. A survey among industrial practitioners has been conducted to identify possible causes for the dire status. Generally, there is a lack of understanding in value engineering concepts among industrial practitioners and it is important for the government to take the lead in promoting value engineering practices in domestic projects. Moreover, the scope of value engineering can be broadened to address corporate-level systems and initiatives. 2004 Elsevier Ltd and IPMA. All rights reserved.
Keywords: Construction value system; Corporate-level initiatives, Target costing; Value engineering

1. Introduction The origin of value engineering (VE) can be traced back to the days of World War II when there was a material shortage problem in the manufacturing sector due to an increased consumption for war purposes. Lawrence D. Miles, an electrical engineer who was then assigned to the purchasing department of General Electric (GE), started nding ways to alleviate the material shortage problem in GEs production. To accommodate the constraint, he focused on functions that a product was meant to perform and experimented with alternatives to achieve the same functions without compromises in quality. Although the main emphasis was not cost reduction, this came as a by-product. Initially named as value analysis by Miles himself, the program was designed to improve value without sacricing intended
Corresponding author. Tel.: +65 6790 5267/4916; fax: +65 6791 0676. E-mail addresses: cyjcheah@ntu.edu.sg (C.Y.J. Cheah), cskting@ ntu.edu.sg (S.K. Ting). 1 Tel.: +65 6790 4916; fax: +65 6791 0676 0263-7863/$30.00 2004 Elsevier Ltd and IPMA. All rights reserved. doi:10.1016/j.ijproman.2004.07.008
*

functions on purpose [1]. This basic premise still underpins todays concepts of value analysis, value engineering and value management. The value analysis technique was subsequently introduced into construction by the US Navy and the Army Corps of Engineers circa 1963 through the adoption of incentive provisions and sharing clauses in construction contracts [2]. Over a short period, other public agencies in the US, such as the Department of Transportation and the General Services Administration, followed suit. Outside the US, value engineering practices and applications were introduced in Japan, Italy, Australia and Canada all during the 1970s. Construction-oriented value engineers were also found in India, South Africa, England, France, Sweden and Germany [3]. Successful applications had been reported in many cases of construction projects [4]. Over time, the subject of VE embraced other tools such as the job plan, the Functional Analysis Systems Technique (FAST), and even methods to nurture creative thinking (e.g., the Delphi Method). The legacy of Miles lives on when he is now widely regarded as the inventor of VE. One might also observe that VE has been developed and applied in various

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forms to cater for dierent industrial contexts. The generic nature of VE makes it applicable to many types of projects ranging from buildings to water treatment works. Moreover, it is also suggested (at a later part of this paper) that the prospects of implementing VE in the corporate and systemic contexts are bright. In many ways, the inquiry of key functions furnished by a product or service system and the search for alternative solutions beyond mere cost cutting remain central to these dierent forms of implementation. The list of advantages often extends beyond functional improvements, cost reduction and creative solutions, since implementation of VE potentially leads to more eective teamwork and improved communication among stakeholders.

VE application and such distinctions are less critical. For the sake of simplicity, only VE is referred throughout the paper.

3. Data collection and research methodology A questionnaire survey was conducted among 54 industrial practitioners who were attending a module in value engineering at the Nanyang Technological University, Singapore. The module was only one component of a part-time Masters degree program in international construction management catered for working professionals. It is important to note that since this was a compulsory module, participation in the survey did not necessarily imply a bias of interest or knowledge in the VE topic. In addition, these participants came from a diverse background (see Table 1), with their industrial experience ranging from 1 year to over 20 years. Based on these facts, it is believed that the sample is reasonably random. Eectively, a 100% response rate is gathered. The survey is very similar in nature to the one conducted by Fong and Shen [7] to study the outlook of VE in Hong Kong. With the module spanning ve sessions, the timing of the survey had to be carefully planned in consideration of two factors: 1. From the authors experience, it is expected that some participants have either limited knowledge or some preliminary misconceptions about VE. Such misconceptions need to be claried before seeking the respondents views about the future prospects of VE. 2. To preserve the participants independent judgment and exclude potential inuence by either their peers or the course instructor, the survey had to be conducted prior to the nal discussion session. In view of these two factors, the survey was conducted right after the basic concepts and the methodology of VE were introduced. Subsequently, the survey results were collated and presented in the nal session of the module so that further clarications can be sought to explore possible explanations for the ndings.

2. The outlook of VE in Southeast Asia While the picture is generally more positive elsewhere, concepts and applications of value engineering do not seem to be well embraced by the Southeast Asian (SEA) construction industry. In Japan, the birth of VE programs was marked by the visit of a Japanese delegate to the Society of American Value Engineers (SAVE) in 1965 [1]. The active presence of large Japanese contractors in SEA since the 1970s did not subsequently lead to a smooth introduction of VE to the region. One possible reason was a lack of knowledge transfer when local SEA subcontractors might have been excluded from the VE programs. Similarly, despite VEs presence in proximate countries such as Hong Kong and Australia, the SEA region remains devoid of VE knowledge and practices. This is also indicated by the worldwide locations of the local chapters of SAVE International (formerly SAVE), whereby SEA local chapters are nowhere to be found. While Hong Kong has set up the Hong Kong Institute of Value Management (HKIVM) since 1995 to promote awareness and establish standards of value management in the city, similar eorts cannot be seen in Singapore, for example. The objective of the study outlined in this paper is to identify causes leading to limited VE application in SEA and highlight the real concerns among industrial practitioners. Findings from the study would help to structure future directions and also provide additional insights for other countries which are facing similar problems in promoting VE practices in their local construction sectors. It is realized that distinctions do exist between value engineering, value analysis and value management as dened by the British Standards [5,6]. Rightfully, value management is a style of management applied at the corporate level while value analysis/engineering concerns application of tools and methods at the operational level (project-oriented activities). Still, the context of this paper focuses on more general issues of

Table 1 Respondents background/nature of their employing rms Respondents background/nature of employing rms Contractors Designers/consultants Owners/developers/government agencies Facility operators/managers Suppliers and others Total Number 29 11 5 3 6 54

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One additional noteworthy fact is that many of these participants came from other Southeast Asian countries such as Malaysia and Myanmar. The employing organizations of some of them have projects and businesses not just in Singapore but also in other neighboring countries. Furthermore, it is not unreasonable to consider the nature of the construction industry in this region to be largely homogeneous. In view of all these factors, ndings gathered from the survey can be considered as indicative of the general situation in Southeast Asia. The following section discusses the primary results of the survey following the outline of the original questionnaire.

Table 3 Feedback on prospects and applicability of VE in construction Respondents opinion (voting for positive outlook) Strongly agree Agree Neutral Somewhat disagree Disagree Number of responses (Percentage in brackets) 11 (20) 26 (48) 17 (32) 0 0

4.2. Respondents opinion on the prospects of VE in construction This section focuses on both the prospects and limitations of applying VE in construction. First, the respondents were asked to comment on whether they believed there is sucient ground to apply VE in construction. The picture portrayed by the respondents was an encouraging one. As shown in Table 3, more than two-thirds of them felt positive about VEs prospects in the construction industry. The others had chosen to remain neutral, but none had expressed a pessimistic view on this issue. Despite a positive belief in VEs prospects, it is also important to identify the major impediments that might hinder successful VE applications. Six options were listed as follows and the respondents were asked to select those that they considered as major impediments:  Divided authority and decision-making process among project stakeholders including owners, designers, contractors, suppliers and others.  Conict of interests among the various parties (VE may not create a winwin situation for all parties concerned).  Lack of communication among the dierent stakeholders.  Lack of time to implement especially when VE is applied to a specic project rather than a more permanent production or management system.  Lack of knowledge/awareness about VE in the industry.  Plain inapplicability of most VE principles in the context of construction. Respondents were also requested to specify any other factors which they perceived as major but not listed in the above. The ndings for this issue are summarized in Table 4. In Table 4, the lack of time for VE implementation factor is ranked as the most serious impediment, garnering 65% of the respondents votes. This is closely followed by the consensus that the lack of knowledge about VE is indeed a main concern. Under the option of Other Factors, one respondent commented that some contractors are fearful of getting a lower prot

4. Details of survey ndings 4.1. Respondents prior knowledge about VE To gather a better understanding about the background of the respondents, they were asked to comment on how knowledgeable they are in VE prior to the course. Table 2 eectively shows that 74% of them were either lacking in knowledge or completely ignorant about VE. Moreover, having now learnt about the various aspects of VE, 17% of them came to realize that they had previously misconceived VE as just another usual cost cutting exercise. Obviously, cost cutting is not the entire story of VE, as the basic principle itself calls for the provision of functionality in a reliable and cost-eective manner [8]. In fact, as the terminology itself implies, the starting point of VE should be value, rather than cost. The results did not come as a surprise since they were consistent with two previous studies in 1994 and 1997 [9,10]. In those two studies, a total of ve architects and 17 engineers were interviewed and 75% of them claimed that they had little experience or knowledge about VE. Obviously, the outlook has not improved over the years. The implications of these ndings are more than trivial considering the fact that most respondents are experienced, practicing professionals in the construction industry with at least a baccalaureate degree. Apparently, the lack of knowledge and awareness about VE is a major cause for its limited application in this region.
Table 2 Respondents prior knowledge about VE Respondents prior knowledge about VE Quite knowledgeable Thought that VE is just another normal cost cutting exercise Heard of, but not sure what it is Never heard of Number (Percentage in brackets) 5 (9) 9 (17) 28 (52) 12 (22)

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C.Y.J. Cheah, S.K. Ting / International Journal of Project Management 23 (2005) 151158 Table 5 Possible causes for limited application of VE in Southeast Asia Factors limiting application of VE in Southeast Asia Lack of support from parties with authority Lack of exibility in contractual provisions Lack of awareness or knowledge about VE Cultural and operating factors dier from other regions Percentage of respondents selecting each option 61 61 59 37

Table 4 Major impediments to application of VE in construction Impediments to apply VE successfully in construction Lack of time to implement VE in a project environment Lack of knowledge about VE in the construction industry Conict of interests among project stakeholders Lack of communication among project stakeholders Divided authority/segmented decision making process Plain inapplicability of VE principles in construction Percentage of respondents selecting each option 65 56 48 43 39 9

Table 6 Choices of procurement system to allow implementation of VE Contract procurement system Percentage of respondents selecting each choice 9 14 57 20

margin in the event of ineective VE implementation. This risk has discouraged greater commitment to adopt VE in their operations. More importantly, most respondents (91%) do not subscribe to the belief that VE principles are simply inapplicable to the context of construction if the responses were to indicate otherwise, it would signal a structural concern that is hard to overcome. This nding is thus consistent with the earlier consensus in Table 3 which portrayed an encouraging prospect of VE application in construction. Generally, construction-oriented VE practices are more prevalent in the US essentially due to its mandatory inclusions in larger federal projects under the federal procurement law. For Environmental Protection Agency (EPA) projects, for example, the once voluntary VE program was made mandatory in 1976. Similarly, VE has established a strong foothold in other countries such as Japan, Canada, Australia and England throughout the years. Compared to these countries, it is worthwhile to examine factors that may have prevented VE practices from ourishing in the Southeast Asian region. For this, the respondents are asked to select the most dominant dierentiating factors from the four options listed below:  Cultural and operating factors in SEA are simply too dierent from countries such as the US and Japan.  Lack of exibility in contractual provisions to incorporate VE during the procurement process.  Lack of awareness or knowledge about VE in the local/regional construction industry.  Lack of support from parties who have more authority and clout, such as the government and the project owners. Again, respondents were requested to specify any other dierentiating factors which are not listed in the above. The ndings for this issue are summarized in Table 5. In Table 5, one of the two most dominant factors is the lack of support from parties with more authority

Traditional (Design-Bid-Build) Construction management Design & Build Build-Operate-Transfer Source. Yuen [11].

to call for VEs implementation. The signicance of exibility in contractual provisions is also evident in Table 5. This factor should not be overlooked during the initial selection of project delivery methods. In a past survey conducted by Yuen [11], respondents were asked to select their choice of procurement systems, as shown in Table 6. Obviously, integrated project delivery methods such as Design&Build and Build-Operate-Transfer (BOT) provide more exibility to VE studies designers and contractors eectively belong to the same team under these procurement methods. Consequently, frequent communication and close ties exist between the two parties. For the case of Hong Kong, Fong and Shen [7] also arrived at a similar conclusion that strict distinctions between design and construction phases in traditional contracting methods have caused confrontational attitudes between design and construction teams, which are in fact major obstacles to apply VE successfully. Not surprisingly, the lack of awareness/knowledge about VE continues to be a key problem. Table 5 was also designed to hypothesize whether construction professionals in SEA are hindered by local cultural and operating factors in adapting to the unfamiliar VE methodology imported from abroad. This factor does not turn out to be a very major concern. 4.3. Respondents opinion on usefulness of various VE concepts The VE methodology is underpinned by various key concepts and techniques, such as the job plan and the Functional Analysis System Technique (FAST) diagram. Over the years, new concepts have enriched the

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knowledge eld of VE. As previously mentioned, this survey was timed so that the respondents had just been exposed to these various concepts and techniques when the survey was conducted. It would be interesting to examine their fresh opinions on the usefulness of these topics, especially for academician and course instructors who are providing educational training services in this area. The respondents opinions are collated under Table 7. The ndings are generally clear, although a couple of issues require further elaboration. First, in many industries, the scope of VE is broader than those applications found within construction which focus primarily at project level implementation. For example, VE may be applied to management and service systems other than product and project systems [12]. Cooper and Slagmulder [13] related VE to target costing and also proposed the combination of the two as a bridging technique to increase collaboration with suppliers. All these can be classied under VE issues in a corporate context. Unfortunately, strong appreciation of this topic was not reected in this survey. Incidentally, the few respondents who had selected this option belonged to senior management level they obviously had a better perspective of corporate level issues. Second, it is thought that VE could function as an indirect tool to pursue other objectives, such as promoting interdisciplinary teamwork, nurturing an innovative culture within a rm, or even serving as a marketing tool. This is in fact a grounded presumption a direct analogy can be drawn from past research eorts in the
Table 7 Feedback on the usefulness of various VE concepts Selected VE concepts Functional analysis Creative thinking techniques Concept of Value Job plan as a systematic approach Concept of cost VE in the corporate context (e.g., target costing) FAST diagram VE as an indirect tool to serve other purposes (e.g., marketing) Enhancing scope of VE with other disciplines (e.g., IT, economics) Percentage of respondents selecting each option 63 59 54 52 50 24 22 19 11

area of strategic planning. For example, Langley [14] found that the process of strategic planning can be as important as the outcome itself, whereby other goals are achieved along the way when its execution is taking place. However, a similar idea for VE was not well received by the respondents in this survey. 4.4. Respondents opinion on future prospects of VE The nal group of questions focuses on the perceived eectiveness of VE in elevating the status of construction in terms of four related aspects: (1) quality of works; (2) new innovations; (3) prot margin of rms; and (4) long-term competitiveness of rms. Respondents were asked to judge with a prior assumption that the VE methodology has been properly planned, structured and implemented in each case. The ndings are summarized in Table 8. In Table 8, a larger diversity of opinion is observed for the rst aspect (quality of works) as compared to the others. In the post-survey session, when discussions were open to the oor, some respondents expressed their view that quality, although intrinsically linked to value, is not the only concern in VE studies. In fact, other techniques that specically address quality issues such as Total Quality Management (TQM), would be more eective. Some have also commented that the lack of time to implement VE in many cases (see Table 4) would inevitably lead to a certain level of quality compromise. A more uniform agreement was found for the second and third aspects in Table 8. Consistent with Table 7, which ranks creative thinking techniques as one of the most useful VE concepts, 80% of the respondents thought that VE would help to promote new innovations in the industry. For the third aspect, 72% sided with the belief that VE is eective in improving the prot margin of rms. Overall, the general consensus seems to convey that VE is a valuable concept that would help to elevate the status of the industry. Responses gathered for the last aspect were in line with this conclusion, with 85% stating that VE helps to promote a rms competitiveness in the long-run.

5. Other insights furnished by non-parametric statistics Armed with the survey results, selective non-parametric statistical tests can be used to verify or refute

Table 8 Eectiveness of VE in improving status of selected aspects Selected aspects Number of responses (voting for strong eectiveness of VE) Strongly agree Quality of works New innovation Prot margin of rms Long-term competitiveness 11 18 16 24 Agree 20 25 23 22 Neutral 20 10 14 6 Somewhat disagree 2 1 0 1 Disagree 1 0 1 1

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hypothesized relationships among a few factors. The technique makes minimal assumptions about the underlying distribution of the sample data, unlike the case of parametric studies. Furthermore, non-parametric measures of correlation are available for both categorical (nominal scale) and ranked data (ordinal scale) [15], which suit the characteristics of the data collected in this survey. Hypothesis 1. Type of rms and frequency of applying VE. In Table 1, most respondents came from a contracting background. One might suspect whether the survey results would be distorted by the dominance of this group of respondents. One way this could be reected is through the association between two parameters: type of rms and frequency of VE application. If contractors truly take a dierent stance as a group, this could be manifested by their frequency in applying VE. Table 9 shows the construction of a 2 2 contingency table used to test this hypothesis. The classications along each axis are self-explanatory. Using the data in r coecient C, which is a measure Table 9, the Crame of degree of association between two sets of attributes, was computed as 0.255. This coecient is not statistically dierent from zero at a = 0.05 signicance level, thus one cannot reject the null hypothesis that there is indeed no relationship between the two sets of attributes. It follows that organization types within the construction value system do not seem to inuence the likelihood of VE application. Hypothesis 2. Firm size and frequency of applying VE. A similar test can be done to examine the relationship between rm size and frequency of VE application. It is logical to assume that larger rms would have more resources, project opportunities and larger economies of scale to implement VE. The measure of rm size can be represented by the number of employees in the organization as reported by the respondents. To ensure consistency of results for the range of number of employees reported, two separate tables were constructed for dierr ent cuto points (100 and 150 employees). The Crame coecients were computed as 0.316 and 0.324, respectively, and they are both statistically dierent from zero at a = 0.05 signicance level. The results reject the null hypothesis and conrm that larger rms seem to be
Table 9 Contingency table: type of rms versus frequency of VE application Frequency of VE application Type of rms Contractors Never/rare Sometimes/frequent Total 19 10 29 Non-contractors 10 15 25 29 25 54 Total

more frequently engaged in VE studies. This nding concurs with the viewpoint of some respondents that smaller jobs undertaken may not benet from VE possibly due to a lack of scope. This issue is especially significant in the regional context as the market consists of many small private rms.

6. Summary and discussion of survey results In summary, the survey ndings conrm the belief that VE principles are sound and possess strong application prospects in the SEA construction industry. On the other hand, many hurdles still stand in the way for VE practices to ourish. First, there is a lack of knowledge about VE in this region. Specically, there is a huge necessity to educate: 1. Parties who have the authority and clout to impose VE provisions in contracts, such as owners, developers and government agencies. 2. Industrial practitioners in general, especially in promoting its usefulness and clarifying misconceptions about the VE principles. It is important to realize that concerns and conict of interests can be largely resolved if all parties have a better understanding of the VE principles and appreciate the potential benets derived from VE studies. For example, some owners perceive VE proposals submitted by contractors as an excuse to lower quality and functionality (which they assume as forming the basis of the cost reduction proposed). Ironically, contractors, who might well have a genuine intention to improve on an existing design, would eschew the risk of unsuccessful VE studies that potentially lead to losses. If only the two parties understand each others concern, a winwin situation can be structured through proper design of contractual provisions in equitable savings and risks sharing. This, obviously, can only be realized when the basis and principles of VE are clear to them in the rst place. Second, governments and building/construction authorities should play a lead role in promoting VE. Past experience of the US clearly demonstrates the importance of this factor [2]. Specically, incentives to apply VE should be built within the provisions of public contracts. Over time, this also helps to build up case precedence and form a database showing success and failure rates of VE applications. By referring to these evidence and precedence, private sector owners would feel more comfortable in adopting VE for their projects. Key lessons can also be learned from past failures so that practices are improved over time or customized to suit unique circumstances. It should be mentioned that the current situation is partly a repercussion of the survey conducted by Yuen

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[11] when respondents in his case also expressed positive views on VE but nonetheless commented on various factors that have neutralized its popularity growth. Incidentally, some of these factors coincide with the currently identied ones. This implies that nothing much has been achieved during the past few years in promoting VEs adoption in this region. Finally, project delivery methods, design of contractual provisions and organizational structure (for both projects and companies) are all highly relevant issues of concern. Segmented delivery methods such as the traditional approach of Design-Bid-Build may not have room and time to cater for VE implementations. Moreover, since the VE process serves to draw inputs from a multidisciplinary team, engagement of VE consultants should be helpful in coordinating VEs implementation and minimize the conict of interests among dierent stakeholders provided that the consultants are backed by the owner [2]. For government agencies that have a more constant stream of ongoing projects, it may even be justied to form a VE program committee to oversee the implementation for various projects and build up case precedence to facilitate learning and future improvements.

7. Broadening the scope of VE in construction In many cases, implementation of VE within construction is largely conned to the project level. Researchers such as Akiyama [12] and Cooper and Slagmulder [13] have commented on the role of VE in a larger corporate context. To utilize VE in shaping long-term competitiveness of construction rms, its scope has to be broadened. Some may refer this to value management. Essentially, the key issue lies on the adoption of a broader mindset in expanding the basic VE methodology. 7.1. Value engineering and target costing Cooper and Slagmulder [13] linked VE to a concept known as target costing, which they dened as a structured approach to determine the life-cycle cost at which a proposed product with specied functionality and quality must be produced to generate the desired level of protability over its life cycle when sold at its anticipated selling price. Although this denition is more related to the manufacturing sector or the sale of a product, much can be learned from the concept and applied to the construction business. In long-term planning, a rm typically determines the type of market segments to compete, the type of clients to serve, and any revenue or prot targets to achieve all these based on a chosen form of corporate strategy. In all cases, the external market conditions always serve as the backdrop. The process of target costing starts with the presumption that market

conditions and competitive pressure will dictate a certain level of targeted prot margin for each type of projects (or market segments at large). Given this targeted prot margin, the allowable cost can usually be derived. When the current cost of a working system judging from past projects of similar nature or attributes, is higher than the allowable cost, a cost reduction objective should be set, coupled with a reasonable time frame to achieve such objective. In this way, the initial market-driven eect is transmitted down to the project and component levels. Value engineering then comes in at this point. The VE principles and methodology provide a systematic approach in searching for alternative solutions that preserve the functionality and reliability of constructed facilities a oor value, so to speak. The cost is obviously capped by the allowable cost described previously. Taken together, the two measures provide guidelines for redesigning the working system so as to achieve the minimum oor value while being subjected to the maximum cost cap. Note that this process is conceptually dierent from the usual practice of lowering a mark-up or tender price when the market outlook is gloomy. The target costing-plus-VE process presets a prot margin and work from thereon, whereas lowering of mark-up implies a reduction in prot margin in and of itself. The former eectively calls for more intensive eort to be devoted by an organization to improve on their operational systems rather than simply yielding to market conditions and competitive pressure by adopting a lower mark-up. For the cost reduction objective to be realized then, it is obvious that a rm would have to work closely with other parties within the value system who play an inuential role in project- and component-level costing. In construction, these parties are likely to include designers, contractors, subcontractors and suppliers. Given the segmented nature of most contractual systems and delivery methods, large rms that possess in-house design and construction teams would be in a much better position to carry out the above mentioned strategy. Furthermore, large rms have more bargaining power in drawing their regular suppliers to work with them towards a new project or product system a phenomenon that is exemplied by the automobile industry (which incidentally has a value system that is quite analogous to construction). For smaller rms, this strategy can still be explored within a network of quasi-rms [16]. In this network, stable working relationships typically exist within a group of contractors, subcontractors and suppliers. 7.2. Enhancing value engineering with development in allied disciplines Since its inception, the knowledge eld of VE has enjoyed valuable contributions from related areas such as

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creative thinking. Today, the trend continues in various aspects. Not too long ago, new developments in prefabrication and precast concrete technology have expanded the domain of technical solutions. Likewise, large construction rms, notably the Japanese, have achieved admirable advancement in building automation and robotics [17]. All these developments have helped to expand the frontier in searching for alternative solutions for a project, a product or a system. For example, Tabatabai-Gargari and Elzarka [18] illustrated how the integration of knowledge-based systems and computer-aided design systems could generate design alternatives and improve the accuracy of cost estimates two major steps in a typical VE study. The VE methodology also has many softer aspects that should not be overlooked. For example, forming a VE team and coordinating VE activities require prudent observation of group dynamics such as leadership, trust building and conict resolution. Commonly perceived as a functional analysis technique, the FAST diagram is also an eective communication tool since it is essentially a roadmap that facilitates discussions among the VE team members. Not too long ago, Green [19] reported on a research project that sought to propagate a few soft methodologies within UK value management practice. In many ways, these concurrent developments help to elevate the application of VE techniques to the macro level. Indisputably, the VE process is generic and a broader range of available solutions can only enhance its usefulness in solving component-, project-, system- and corporate-level issues. Even new developments in nance and economics can indirectly aect VE through the aspects of life-cycle costing alternative solutions need to be evaluated in the light of marginal operating and maintenance costs, replacement values, decommissioning costs and salvage value of the facility. Proper evaluation techniques are thus required to arrive at a reasonable estimate in present value terms, so that all alternatives can be compared on par.

In addition, there is substantial ground to broaden the scope of VE by: (a) introducing its use at the macro level; (b) enhancing its eectiveness by adopting new developments in allied disciplines. All these factors imply that since its inception, VE has somewhat changed its outlook towards a new and promising direction. Construction professionals need to keep themselves abreast of these issues in order to elevate the status of their rms and the industry as a whole. Back in Southeast Asia, however, there are obviously more concerns of catching up with these ongoing developments. References
[1] Younker DL. Value engineering: analysis and methodology. New York: Marcel Dekker; 2003. [2] Zimmerman LW, Hart GD. Value engineering: a practical approach for owners, designers and contractors. New York: Van Nostrand Reinhold; 1982. [3] DellIsola AJ. Value engineering in the construction industry. New York: Van Nostrand Reinhold; 1982. [4] US Environmental Protection Agency. Value engineering: case studies and formats for proposals and reports; 1977. [5] British Standards Institution. BS EN 13251: Value management, value analysis, functional analysis vocabulary Part 1 Value analysis and functional analysis. London; 1997. [6] British Standards Institution. BS EN 12973: Value management. London; 2000. [7] Fong PSW, Shen Q. Is the Hong Kong construction industry ready for value management?. Int J Project Manage 2000;18(5):31726. [8] Mudge AE. Value engineering: a systematic approach. Pittsburgh, PA: J. Pohl Associates; 1990. [9] Ong SC, Teo CM. Application of value engineering to building projects. Unpublished nal year project report, Nanyang Technological University, Singapore; 1994. [10] Chong TW. Application of value engineering techniques for cost reduction in construction project. Unpublished nal year project report, Nanyang Technological University, Singapore; 1997. [11] Yuen CC. Applications and limitations of value engineering concepts in Singapore construction industry. Unpublished Master of Science dissertation, Nanyang Technological University, Singapore; 2000. [12] Akiyama K. Function analysis: systematic improvement of quality and performance. Cambridge, MA: Productivity Press; 1991. [13] Cooper R, Slagmulder R. Target costing and value engineering. Portland, OR: Productivity Press; 1997. [14] Langley A. Formal analysis and strategic decision-making. OMEGA 1991;19(213):7999. [15] Siegel S, Castellan Jr NJ. Nonparametric statistics for the behavioral sciences. New York: McGraw-Hill; 1988. [16] Eccles RG. The quasirm in the construction industry. J Econ Behav Organ 1981;2(4):33557. [17] Cousineau L, Miura N. Construction robots: the search for new building technology in Japan. Reston, VA: ASCE Press; 1998. [18] Tabatabai-Gargari M, Elzarka HM. Integrated CAD/KBS approach for automating preconstruction activities. J Construct Eng Manage 1998;124(4):25762. [19] Green SD. A participative research strategy for propagating soft methodologies in value management practice. Construct Manage Econ 1999;17(3):32940

8. Conclusions This paper presents a survey that is indicative of the extent to which value engineering principles and practices are being applied in Southeast Asia. Although generally there is a strong belief that future prospects of VE in the Southeast Asian construction industry are positive, a number of impediments still stand in the way. In particular, more eorts are required to educate industrial practitioners and owners on various aspects of VE. Governments also have to play a lead role in promoting such initiatives.