A good Value Engineering (VE) team ensures that products and processes are optimized, costs are reduced, and value is added for the customer. But what happens when this same team also oversees procurement? 🤔 Unfortunately, this often shifts the focus – away from the core VE methodology and towards cost-cutting through buying cheaper components. The result: a compromise in quality and, in the long run, massive costs for the company.

💡 A real-life example from the field:

A client in the Oil & Gas industry aimed to reduce costs by purchasing cheaper valves for their equipment. The Value Engineering team, which was also in charge of procurement, chose a lower-cost supplier. Initially, everything seemed fine: direct procurement costs dropped, and the company was pleased. However, what followed was a disaster. 😨

The cheaper valves led to leaks in the piping systems. These leaks caused production stoppages, repairs, and downtime, leading to millions in additional costs. What started as a cost-saving measure turned into a quality nightmare and major financial burden. 🚫💸

The lesson here?  

When the VE team also manages procurement, the original goal – to create more value for the customer – can be lost. Instead, the focus shifts towards the cheapest suppliers, which often leads to reduced quality. The aim of Value Engineering should always be to find the optimal balance between cost, quality, and functionality, not just to pick the cheapest option. 🎯

🏗️ Conclusion:  

Value Engineering and procurement should operate independently. This ensures that the VE methodology is maintained, and the long-term value for the customer is preserved.

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