Value management in building design and construction - Revision history

ConSIG CWG at 09:56, 8 April 2021

2021-04-08T09:56:14Z

← Older revision		Revision as of 09:56, 8 April 2021
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	* Cost plans.		* Cost plans.
	* Existing use value.		* Existing use value.
		+	* Lean construction.
		+	* Lean construction - a quality perspective.
	* Market value.		* Market value.
	* Pareto analysis.		* Pareto analysis.

Designing Buildings at 06:46, 30 August 2020

2020-08-30T06:46:49Z

← Older revision		Revision as of 06:46, 30 August 2020
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	* Kelly, J; Male, S and D Graham (2004) Value Management of Construction Projects, Blackwell Science		* Kelly, J; Male, S and D Graham (2004) Value Management of Construction Projects, Blackwell Science

−	[[Category:Cost_/_business_planning]] [[Category:Design]] [[Category:Property_development]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Cost_/_business_planning]] [[Category:Design]] [[Category:Property_development]]

Designing Buildings at 09:00, 8 March 2020

2020-03-08T09:00:17Z

← Older revision		Revision as of 09:00, 8 March 2020
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	* Constraints.		* Constraints.
	* Construction industry reports.		* Construction industry reports.
		+	* Cost exercises.
	* Cost plans.		* Cost plans.
	* Existing use value.		* Existing use value.

Designing Buildings: Reverted edits by 194.82.45.1 (talk) to last revision by Editor

2019-10-23T07:11:53Z

Reverted edits by 194.82.45.1 (talk) to last revision by Editor

← Older revision		Revision as of 07:11, 23 October 2019
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−	hi[[File:Valueengineering.jpg\|link=File:Valueengineering.jpg]]	+	[[File:Valueengineering.jpg\|link=File:Valueengineering.jpg]]

	= History of development =		= History of development =

194.82.45.1 at 21:25, 22 October 2019

2019-10-22T21:25:06Z

← Older revision		Revision as of 21:25, 22 October 2019
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−	[[File:Valueengineering.jpg\|link=File:Valueengineering.jpg]]	+	hi[[File:Valueengineering.jpg\|link=File:Valueengineering.jpg]]

	= History of development =		= History of development =

Editor at 18:22, 14 March 2019

2019-03-14T18:22:38Z

← Older revision		Revision as of 18:22, 14 March 2019
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	--[[User:CIOB\|CIOB]]		--[[User:CIOB\|CIOB]]

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Best value.		* Best value.
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	* Cost plans.		* Cost plans.
	* Existing use value.		* Existing use value.
		+	* Market value.
	* Pareto analysis.		* Pareto analysis.
	* Overcoming difficulties in value management.		* Overcoming difficulties in value management.

Editor at 14:55, 4 May 2018

2018-05-04T14:55:34Z

← Older revision		Revision as of 14:55, 4 May 2018
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	* Function performance specification (FPS).		* Function performance specification (FPS).

−	For more information see Value management techniques.	+	For more information, see Value management techniques.

	See also Overcoming difficulties in value management.		See also Overcoming difficulties in value management.
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	* Construction industry reports.		* Construction industry reports.
	* Cost plans.		* Cost plans.
		+	* Existing use value.
	* Pareto analysis.		* Pareto analysis.
	* Overcoming difficulties in value management.		* Overcoming difficulties in value management.

Editor at 15:05, 19 April 2018

2018-04-19T15:05:44Z

← Older revision		Revision as of 15:05, 19 April 2018
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	* Value planning.		* Value planning.
	* Whole life costs.		* Whole life costs.
		+	* Whole-life value.

	=== External references ===		=== External references ===

Editor at 13:36, 10 November 2017

2017-11-10T13:36:04Z

← Older revision		Revision as of 13:36, 10 November 2017
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	However, with the growing spread of the quality movement in the 1980’s and the shift of the initial focus from materials to cost and quality, the concept was eventually accepted in the UK and Europe, where the design team became a key part of the team undertaking the value audit.		However, with the growing spread of the quality movement in the 1980’s and the shift of the initial focus from materials to cost and quality, the concept was eventually accepted in the UK and Europe, where the design team became a key part of the team undertaking the value audit.

−	With time, there was a realisation that materials, cost and quality, as governed by the specification, were not enough. Products had to respond to the needs of the customer. Emphasis therefore shifted to a more rounded appreciation of value, encapsulating cost, time, performance, knowledge and technical competency. At the same time, the scope of the studies also grew, to capture processes as well as products, with a focus on expressing and measuring value in such a way that the project team can respond with the most effective solutions.	+	With time, there was a realisation that materials, cost and quality, as governed by the specification, were not enough. Products had to respond to the needs of the customer. Emphasis therefore shifted to a more rounded appreciation of value, encapsulating cost, time, performance, knowledge and technical competency.
		+
		+	At the same time, the scope of the studies also grew, to capture processes as well as products, with a focus on expressing and measuring value in such a way that the project team can respond with the most effective solutions.

	[[File:Evolution_of_value_management.jpg\|link=File:Evolution_of_value_management.jpg]]		[[File:Evolution_of_value_management.jpg\|link=File:Evolution_of_value_management.jpg]]
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	* Value engineering.		* Value engineering.
	* Value management techniques.		* Value management techniques.
		+	* Value planning.
	* Whole life costs.		* Whole life costs.

Designing Buildings at 06:15, 3 March 2017

2017-03-03T06:15:56Z

← Older revision		Revision as of 06:15, 3 March 2017
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	= History of development =		= History of development =

−	Value Management (VM) and Value Engineering (VE) are techniques concerned with defining, maximising and achieving 'value for money' (VfM). These are systematic team-based collaborative approaches, initially pioneered by United States ~~practitioners~~ during the Second World War, to secure maximum output from limited resources.	+	Value Management (VM) and Value Engineering (VE) are techniques concerned with defining, maximising and achieving 'value for money' (VfM). These are systematic team-based collaborative approaches, initially pioneered in the United States during the Second World War to secure maximum output from limited resources.

	At the initial stages of a project, value management provides an exceptionally powerful tool to explore a project’s objectives and aspirations from the client’s perspective.		At the initial stages of a project, value management provides an exceptionally powerful tool to explore a project’s objectives and aspirations from the client’s perspective.

−	Whilst the process originated in the manufacturing industry, the key initiating question (“what function does a component perform and how else can this function be performed”) is equally applicable to a wide range of disciplines, including construction, and within 10 years of the concept emerging, the US Department of Defence incorporated VfM in the delivery of its very extensive construction programme.	+	Whilst the process originated in the manufacturing industry, the key initiating question (“what function does a component perform and how else can this function be performed”) is equally applicable to a wide range of disciplines, including construction, and within 10 years of the concept emerging, the US Department of Defence incorporated VfM into the delivery of its very extensive construction programme.

−	Although its use was widespread in the US from the 1950’s, it took another three decades for the concept to be applied in Europe, with ~~its~~ first ~~ever~~ application in the UK in 1983 by the American company Xerox. One of the reasons for this slow uptake was ~~probably~~ due to the fact that the US approach to VfM required a separate team to audit the incumbent design team’s proposals. The design team was then expected to implement the audit team’s proposals. This predictably opened up ~~numerous~~ problems relating to design responsibility, legal complications and even professional rivalry.	+	Although its use was widespread in the US from the 1950’s, it took another three decades for the concept to be applied in Europe, with the first application in the UK in 1983 by the American company Xerox. One of the reasons for this slow uptake was due to the fact that the US approach to VfM required a separate team to audit the incumbent design team’s proposals. The design team was then expected to implement the audit team’s proposals. This predictably opened up problems relating to design responsibility, legal complications and even professional rivalry.

−	However, with the growing spread of the quality movement in the 1980’s and shift of the initial focus from materials to cost and quality, the concept was eventually accepted in the UK and Europe, where the ~~incumbent~~ design team became a key part of the team undertaking the value audit.	+	However, with the growing spread of the quality movement in the 1980’s and the shift of the initial focus from materials to cost and quality, the concept was eventually accepted in the UK and Europe, where the design team became a key part of the team undertaking the value audit.

−	With time, there was a realisation that materials, cost and quality, as governed by the specification, ~~are~~ not enough. Products had to respond to the needs of the customer. Emphasis therefore shifted to a more rounded appreciation of value, encapsulating cost, time, performance, knowledge and technical competency. At the same time, the scope of the studies ~~has~~ also ~~grown~~, to capture processes as well as products, with ~~the~~ focus ~~being~~ on expressing and measuring value in such a way that the project team can respond with the most effective solutions.	+	With time, there was a realisation that materials, cost and quality, as governed by the specification, were not enough. Products had to respond to the needs of the customer. Emphasis therefore shifted to a more rounded appreciation of value, encapsulating cost, time, performance, knowledge and technical competency. At the same time, the scope of the studies also grew, to capture processes as well as products, with a focus on expressing and measuring value in such a way that the project team can respond with the most effective solutions.

	[[File:Evolution_of_value_management.jpg\|link=File:Evolution_of_value_management.jpg]]		[[File:Evolution_of_value_management.jpg\|link=File:Evolution_of_value_management.jpg]]

−	A key differentiator between the value management concept and many other processes is that value management focuses on the expected outcome ~~from~~ a project. Only once the outcome is clearly established, understood, agreed and defined, does the process address the question of how it will be delivered.	+	A key differentiator between the value management concept and many other processes is that value management focuses on the expected outcome of a project. Only once the outcome is clearly established, understood, agreed and defined, does the process address the question of how it will be delivered.

−	The ~~aspired~~ outcomes ~~from a project~~ are represented in a statement of ~~the~~ project objectives, expressed in terms of the expected benefits to the business. These are linked through 'value drivers' (defined as a functional attribute that is necessary to fully deliver the expected benefits from a project – equivalent to a primary function) to the design intent. Later, as the project evolves, these relate directly to the design solutions and what is built.	+	The outcomes are represented in a statement of project objectives, expressed in terms of the expected benefits to the business. These are linked through 'value drivers' (defined as a functional attribute that is necessary to fully deliver the expected benefits from a project – equivalent to a primary function) to the design intent. Later, as the project evolves, these relate directly to the design solutions and what is built.

	[[File:The_value_cascade.png\|link=File:The_value_cascade.png]]		[[File:The_value_cascade.png\|link=File:The_value_cascade.png]]
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	Construction projects have been the subject of frequent reviews and reports. A significant number of these, including the Emerson report (1962), the Banwell report (1963), the Wood report (1975), Latham reports (1993, 1994) and the Egan report (1998) identified recurring themes:		Construction projects have been the subject of frequent reviews and reports. A significant number of these, including the Emerson report (1962), the Banwell report (1963), the Wood report (1975), Latham reports (1993, 1994) and the Egan report (1998) identified recurring themes:

−	* The adversarial nature of operation and contractual relationships;	+	* The adversarial nature of operation and contractual relationships.
−	* A need for integration of the supply chain;	+	* A need for integration of the supply chain.
−	* A need for simplicity in contractual language and arrangements~~; and,~~	+	* A need for simplicity in contractual language and arrangements.
	* A need to move away from the cheapest option towards the ‘best value’ option.		* A need to move away from the cheapest option towards the ‘best value’ option.

	From this it is evident that the principles and methodology of value management are not only necessary in construction projects to achieve better value from the resources, but also to deliver ancillary benefits such as better communication, improved team-working, better alignment of the supply chain and a better understanding of project objectives.		From this it is evident that the principles and methodology of value management are not only necessary in construction projects to achieve better value from the resources, but also to deliver ancillary benefits such as better communication, improved team-working, better alignment of the supply chain and a better understanding of project objectives.

−	The application of value management in construction projects will largely depend on the value of a particular project and the level of the risks involved. The figure below indicates a typical risk ~~&~~ value matrix which can be used to identify the need and necessity of value management.	+	The application of value management in construction projects will largely depend on the value of a particular project and the level of the risks involved. The figure below indicates a typical risk and value matrix which can be used to identify the need and necessity of value management.

	[[File:Risk_and_value_matrix.jpg\|link=File:Risk_and_value_matrix.jpg]]		[[File:Risk_and_value_matrix.jpg\|link=File:Risk_and_value_matrix.jpg]]

−	Image: Risk & Value Matrix (Based on the Kraljic matrix for supplier positioning).	+	[Image: Risk & Value Matrix (Based on the Kraljic matrix for supplier positioning).]

	For strategic – critical projects (high risk, high value), a full value management process is almost always justified. For strategic – security projects (high risk, low value) and tactical – profit (low risk, high value) projects, the necessity of value management will depend upon the merits of each project. For tactical – acquisition projects (low risk, low value) a value management exercise may not be necessary.		For strategic – critical projects (high risk, high value), a full value management process is almost always justified. For strategic – security projects (high risk, low value) and tactical – profit (low risk, high value) projects, the necessity of value management will depend upon the merits of each project. For tactical – acquisition projects (low risk, low value) a value management exercise may not be necessary.
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	* A tool for optimising the balance between differing stakeholder needs and expectations.		* A tool for optimising the balance between differing stakeholder needs and expectations.
	* A basis for creating a clear project brief that reflects the project sponsor’s priorities and expectations, expressed on the basis of value and function. This improves communication between all the stakeholders so that each can understand and respect the other’s constraints, expectations and requirements.		* A basis for creating a clear project brief that reflects the project sponsor’s priorities and expectations, expressed on the basis of value and function. This improves communication between all the stakeholders so that each can understand and respect the other’s constraints, expectations and requirements.
−	* A basis for ensuring ~~that~~ the project is the most effective way of delivering business benefits and satisfying business needs.	+	* A basis for ensuring the project is the most effective way of delivering business benefits and satisfying business needs.
	* A functional basis for embellishing and refining the business case for the project, by addressing both the monetary and non-monetary benefits.		* A functional basis for embellishing and refining the business case for the project, by addressing both the monetary and non-monetary benefits.
	* A functional basis for design development and management, through improved communications, mutual learning and enhanced collaborative working, leading to better technical solutions with enhanced performance and quality, often through innovative solutions.		* A functional basis for design development and management, through improved communications, mutual learning and enhanced collaborative working, leading to better technical solutions with enhanced performance and quality, often through innovative solutions.
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	Value management can be a very low-cost, high-benefit exercise. When integrated into the project management methodology early in the project life cycle, the cost may become almost negligible because of the reduced need for subsequent reviews and opportunities for substituting value management for some of the routine appraisals and quality audits that are always necessary.		Value management can be a very low-cost, high-benefit exercise. When integrated into the project management methodology early in the project life cycle, the cost may become almost negligible because of the reduced need for subsequent reviews and opportunities for substituting value management for some of the routine appraisals and quality audits that are always necessary.

−	The benefits of a value management review are often perceived in terms of improved quality and reduced cost. However the ~~“invisible”~~ benefits can be just as, or more valuable. Consensus and mutual understanding between stakeholders, clear objectives, reduced risk of changes in scope and improved communications will help to ensure that the project meets the objectives of the client and is delivered within the relevant parameters.	+	The benefits of a value management review are often perceived in terms of improved quality and reduced cost. However the 'invisible' benefits can be just as, or more valuable. Consensus and mutual understanding between stakeholders, clear objectives, reduced risk of changes in scope and improved communications will help ensure that the project meets the objectives of the client and is delivered within the relevant parameters.

	= Process =		= Process =

−	Value management is a team-based approach used to define the client's objectives and ensure ~~that~~ best value, whole-life solutions are selected to satisfy those objectives. It is not necessarily about cost cutting.	+	Value management is a team-based approach used to define the client's objectives and ensure best value, whole-life solutions are selected to satisfy those objectives. It is not necessarily about cost cutting.

−	To achieve maximum benefit, value management should be carried out from the very early stages of a project, not simply introduced when problems occur. The process of value management includes value engineering, which is a more systematic approach to ensuring ~~that~~ specific functions are satisfied to the required standard for the least cost. It assess a range of possible solutions against the values required by the client.	+	To achieve maximum benefit, value management should be carried out from the very early stages of a project, not simply introduced when problems occur. The process of value management includes value engineering, which is a more systematic approach to ensuring specific functions are satisfied to the required standard for the least cost. It assess a range of possible solutions against the values required by the client.

	Value management exercises can also be used to recover cost divergence (costs diverging from the budget) that may become apparent when design reports are prepared. Under these circumstances, the client may have to choose priorities, or decide to increase the budget.		Value management exercises can also be used to recover cost divergence (costs diverging from the budget) that may become apparent when design reports are prepared. Under these circumstances, the client may have to choose priorities, or decide to increase the budget.