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- 1. • L I M J A C K J U N I 1 3 0 0 4 1 4 2 • C H O N G Y O O N W H U I I 1 4 0 0 5 0 7 4 • YA P K A H Y O O N G I 1 3 0 0 4 3 5 5 • L E C T U R E R : M D M H I D AYA H GROUP MEMBER:
- 2. PRESENT OUTLINE • Definition & Aim • Terminology used in Value Management • Risk of value management in construction • Cost involve in value management
- 3. DEFINITION Introduction Value Management is the name given to a process in which the functional benefits of a project are made explicit and appraised consistent with a value system determined by the client Value Management is a style of Management, particularly dedicated to motivate people, develop skills and promote synergies and innovation, with the aim of maximising the overall performance of an organization
- 4. AIM The aim of Value Management is to provide the best function at the lowest possible overall cost. Including: • Management process • Systematic approach • Teamwork and multi- disciplinary principle • Analysis of function technique • Stages of project or product • Whole-life cost concept
- 5. Management process • Process that involves control, monitoring and managing of project team member, redesigning of spaces and components, appropriate of materials in order to meet the stated project goals. • It is a holistic process managing all forms of resources and this differentiates the practice from other cost-cutting or cost-saving exercises.
- 6. Systematic approach • Logical, methodological and organized so that member can easily participate and approach can be adapted from subsequent exercise • In regardless of the approach, the principle must be followed in planning, organization, conducting the actual workshop and reporting the findings or recommendations to client or stakeholders through an appropriate feedback mechanism.
- 7. Teamwork and multi-disciplinary principle • Where people and individuals from various backgrounds and of diverse dispositions are selected and assembled in a team to brainstorm and agree on the optimization of function and cost • Although there are various suggestions regarding the set of people that should form a value management team, it is worth noting that a successful value management exercise involves both professionals and non-professionals in construction and other concerned fields
- 8. Analysis of function technique • This stems from the fact that the function of a product or element may differ, depending on the point of view of the individuals concerned and the purpose of the project under consideration • To guide against misconceptions and individual views, it is fundamental for a value management team to highlight all the elements or components of a project or process and their functions.
- 9. Stages of project or product • One of the principles of value management is the consideration of different stages of a project and how the alternatives materials will fit • The stages of a construction project are from conception to inception, planning, actual construction, completion, usage, conversion, and demolition • The duration or stages of the main project should be a major deciding factor
- 10. Whole-life cost concept • Related to all associated costs of a product or element, including initial, running, and demolition or re-use costs • It will be unfair to judge products or elements only by their initial or running cost but the total costs that will be required for the entire life of the project should be considered
- 11. TERMINALOGIES USED IN VM • Value Methodology • It is the process, principles and techniques adopted in the conduct and practice of value management • It includes those practised at value planning, engineering, and analysis phases. • Value Planning • Achieving project value during the planning stages of a project • A sub-set of value control and they are both derived from the principle of cost planning and cost control • For instance, in construction this is associated with value at the early stage, namely, conception, inception, feasibility, viability, and other planning-related activities of the project
- 12. • Value Control • Concerned with managing value throughout all stages of a project where cost control is practiced • This indicates a direct link to cost control which is not the same as value management • Value Analysis • Associated with the post-construction or completion phase, indicating that the practice is related to the value of completed project • Inclusive of the use and re-use stages of a project
- 13. • Value Engineering • Closest term to ‘value management’ which is described as study of value at the design, construction, and engineering stage of a project • Value management explains all the concepts, principles, processes, and participants required for each stage of the discipline in a project. • This is necessary for the successful implementation of the discipline and also underscores the reason for its adoption in this research book.
- 14. RISK OF VALUE MANAGEMENT IN CONSTRUCTION • There are risks inherent in every activity, including the ones that are conceived for the purpose of managing or controlling people, activities or processes. • As beneficial as value management has proven to be, there are some risks that need to be monitored, evaluated, and responded to for the process to be smooth, worthwhile and successfully applied in the construction industry.
- 15. RISK OF VALUE MANAGEMENT IN CONSTRUCTION (CONT’D) 1) Sufficient Time for the Study • One of the major risks to the adoption and acceptance of value management in the initial period is the concern over the period of time it takes to complete an exercise. 2) Completeness of Cost Information • lack of full and necessary information of all the costs associated with an element or component
- 16. RISK OF VALUE MANAGEMENT IN CONSTRUCTION (CONT’D) 3) Related Functions of Components or Elements • Items or elements with related function are usually difficult to quantify 4) Uniqueness of Construction Projects • No two construction projects are the same • Team should be able to identify the functions of various elements bearing in mind the uniqueness of the project in consideratio
- 17. RISK OF VALUE MANAGEMENT IN CONSTRUCTION (CONT’D) 5) Quality of End Product • End-product quality of an element or component t must be given the necessary attention in determining a product that will perform the best function at the least possible cost • The availability of historical data and the required information on the product • Second is the analysis of the difference in exposure to weather and other conditions between the present or past and the current situation • Third is the issue relates to examining the conditions of the use of the products.
- 18. RISK OF VALUE MANAGEMENT IN CONSTRUCTION (CONT’D) 6) Selection of Team Members • Multi-disciplinary in that members of the team are varied and unlikely to be drawn from the same area of practice or sector of the economy • Risk associated with this attribute is the selection of the wrong people who may contribute nothing or negatively to the success of the practice
- 19. RISK OF VALUE MANAGEMENT IN CONSTRUCTION (CONT’D) 7) Representation of Original Design Team • It will be better if some of the existing design team members of the project under consideration are included as members of the team. • It becomes a risk if the existing team members are unwilling to agree and accept changes to the project that arise from the exercise.
- 20. RISK OF VALUE MANAGEMENT IN CONSTRUCTION (CONT’D) 8) Choice of Facilitator • One of the key characteristics expected of a facilitator is the knowledge, understanding, and experience of a value management workshop 9) Support for the Practice • Risk in the adoption of value management is the level of support from clients, statutory or regulatory bodies as well as from top management staff of an organization.
- 21. COST INVOLVE IN VALUE MANAGEMENT • There are various costs associated with value management exercise. • These costs are incurred before, during and after the exercise.
- 22. COST INVOLVE IN VALUE MANAGEMENT (CON’T) 1) Cost of facilitator • Facilitator is an experienced value manager tasked responsibilities of planning, controlling and managing value management exercise and reporting the outcome to client. • Professional who devotes him/her time to the success exercise must be paid accordingly. • Cost include professional fee, transport cost • Payment may depend on several factors including experience of the facilitator, type and nature of project and size and cost of project
- 23. COST INVOLVE IN VALUE MANAGEMENT (CON’T) 2) Cost of other participants • Participants are members value management apart from facilitator • These people may or may not be experienced in value management , professional and experienced in construction • Their payment may depend on the same factors as for the facilitator
- 24. COST INVOLVE IN VALUE MANAGEMENT (CON’T) 3) Cost of venue • A conducive environment with basic facilities and amenities is fundamental to conducting productive meetings • the cost of the venue does not only include the cost of securing or renting the venue but also that of siting the venue in the right environment • This will reduce the stress of team members travelling from one area to the other will also ensure that members can have informal discussions after the official session is over. • However, this comes with the many disadvantages associated with the use of modern day information and telecommunication technologies (ICT) if not properly managed.
- 25. COST INVOLVE IN VALUE MANAGEMENT (CON’T) 4) Administrative cost • Apart from the provision of basic social amenities, it is also necessary to allocate cost for administration purposes. • These may include insurance, office supplies, wages and benefits of accounting staff, wages and benefits of secretary(s), wages and benefits of legal personnel, among others where applicable 5) Information Gathering Cost • A key principle of value management is the comparative analysis of alternatives. • One of the costs associated with value management is that of collecting information regarding function, cost (initial, annual, running, maintenance), lifespan, and the physical characteristics of elements or components to facilitate deliberation by team members.
- 26. COST INVOLVE IN VALUE MANAGEMENT (CON’T) 6) Indirect and Other Costs • These are costs that are not directly associated with the actual value management exercise but are necessary in achieving the overall goal of the practice • Indirect cost may include the cost of buying equipment to actualise recommendations emanating from the value management exercise