Value Engineering in Crude Palm Oil Industry Design to Minimize Cost

This paper provides an overview to find an alternative design by value engineering application to minimize the building cost in palm oil Industry. The company initial design used a 10 Tons FFB vertical sterilizer cap 4 units which cost IDR 8.857.183.300. Therefore, a brainstorming process is carried out to generate alternative designs are able to minimize the cost of building factories and space requirements while still meeting the company capacity of 40 tons per day. The study found 2 alternatives obtained from the results of brainstorming. The first alternative is to use a 15 Tons FFB vertical sterilizer cap of 3 units and the cost is reduced by 7,85% and the space requirements are reduced by 16,67%. Alternative 2 is to use a 20 Tons FFB vertical sterilizer cap of 2 units and costs are reduced by 19,02% and space requirements are reduced by 11,11%. The results obtained by conducting value engineering shows that the percentage of cost reduction by replacing the type of vertical sterilizer and the number of units capable of costs minimization and space requirements. The second alternative was chosen because it was able to costs minimization greater than the alternative 1.