Value Engineering is a purposeful and well-defined set of disciplined practices aimed at maximizing the value of both initial and long-term investment. Know the nitty-gritty of value engineering for the hospitality sector.
How value engineering helps your restaurant business
Value Engineering is a deliberate and clear set of disciplined practises meant to maximise the value of both original and long-term investment. It was first employed in the manufacturing business during WWII and has since been widely used in the building industry for many years. Restaurant Value Engineering is a novel idea in the restaurant industry. We look into Restaurant Value Engineering and how it may help you make more money each week.
Value and value engineering
The definition of value is “the consideration that something is believed to earn; the importance, worth, or utility of anything.” It is a statement for your restaurant or bar that educates not only your clients but also your team, about the business’s aims and basic beliefs. There will always be the value that you want to consider, so narrow down on the many customers that may potentially come into your business.
Value Engineering (VE) is neither a design nor a peer review process, nor is it a cost-cutting effort. VE is a creative, coordinated effort that assesses a project’s needs with the goal of accomplishing the required functions at the lowest total cost (capital, manpower, energy, and maintenance) during the project’s life. Value and economy are increased by the exploration of other design concepts, materials, and processes without compromising the client’s functional and value objectives through a group inquiry utilising skilled, multi-disciplinary teams.
So what it means for restaurants
A restaurant is a just-in-time manufacturing firm that relies on a diverse set of skills from a sometimes transitory workforce, as well as time and temperature-sensitive inputs, to supply goods that satisfy dynamic and changing client demand. In a nutshell, it outlines many of the issues that arise while attempting to manage a restaurant, while also highlighting the opportunity for creating value for your customers. The area we want to experiment with is the disparity between the price you paid to make the item and the value that your buyers place on it.
Value engineering can be implemented for restaurants of any level. From fine dining to street joints different levels of VE can be seen. Fine dining is one of those businesses where a significant degree of Value Engineering goes into making something of exceptional value. There are many things you can take from a fine dining restaurant and apply to your business to raise the perceived value of the experience. There are many instances in fine dining when an expensive product is put in and you have to dispute what the value is that it is putting in. Labour expenditures are also important, with a far higher cost per table or per seat component than in a typical run-of-the-mill restaurant.
VE can be used at any stage of a project, including building. However, the earlier it is implemented, the greater the return on the time and effort involved. The three major stages of a project and the implementation of VE are as follows.
This is the best time to put VE strategies into action. You’ve just conceptualized your dream restaurant, and any modifications to the design at this point will have little, if any, influence on the schedule, A/E time, and redesign expenses. An independent team can also provide a fresh outside perspective on alternative ideas from other similar restaurant projects.
Most VE are used to being involved at this point, when the design has at least reached the schematic level. On projects worth more than a particular amount of money, most government agencies mandate at least one VE session during the design stage.
Value engineering is still viable during this period by using Value Engineering Change Proposals (VECP). Contractors can be paid to propose solutions that deliver greater value to the owner, and they can share in the financial gains obtained. Clearly, the owner must carefully assess contractor-generated ideas, both from a life-cycle and liability standpoint.
Setting the limits
Determine what are the essential must-haves first. Make a list of what you wish to keep from the project. This assures that if you have a deep connection to anything, it will remain outside of the value engineering process. It’s crucial to remember in this phase that it’s not usually the high ticket things that help you save money.
Rope everyone in
Ensure that the subcontractor, architect, and owner are all present during the value engineering process. This promotes open communication with the team and ensures that everyone is on the same page.
List down the changes
Prepare a comparison sheet showing the modifications made so that everyone participating in the project understands what is going on. This helps track the project’s cost-cutting and authenticity, as well as seek for any wiggle space. Architects utilise this list to adapt the project and suggest concessions to the owner on a regular basis, which might be alternative ideas for restaurant value engineering.
There are several factors to consider in order to make your restaurant a success. Auriga Hospitality Consultants can now make your value engineering journey easier.