Value Management<br />A collaborative approach to customer satisfaction<br />
Collaborative approach to <br />Define and meet the business needs<br />Focus on value rather than cost<br />Consider opti...
Traditional Approaches<br />Concept<br />“Traditional behaviour is mostly about supplier margin not a common purpose”<br /...
A traditional procurement approach significantly exceeded budget of £20m<br />Value management workshops “brought the team...
Aim to improve capital productivity<br />19,500 sites worldwide<br />Spend $400m – $700m per annum<br />Resulted in cost s...
Establish Integrated teams to focus on value not cost by:<br />Understanding the challenge and the focus areas<br />Identi...
Standardisation through modular design, common practices and processes<br />Transparency though IT real time access to inf...
Culture of transparency means<br />Joint leadership and  commitment from the top<br />Rewards for organisations and indivi...
Bridging the Gap<br />Concept<br />VM 1<br />Design<br />VM 2<br />Procurement<br />VM 3<br />VM 4<br />VM 5<br />Implemen...
Diagnosis of the issues with the client and suppliers<br />Workshop with the integrated team using VM techniques to genera...
Are You Ready for Value Improvement?<br />Value Management<br />Cost Management<br />Supplier  is involved<br /> in the co...
Parallel Project Training<br />on-line APM <br />e-learning<br />Public & in-house<br />training<br />Project Management T...
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Presentation to the PCMG (Pharmaceutical Contract Management Group) on Value Management

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Presentation to the PCMG (Pharmaceutical Contract Management Group) on Value Management

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Presentation to the PCMG (Pharmaceutical Contract Management Group) on Value Management

  1. 1. Value Management<br />A collaborative approach to customer satisfaction<br />
  2. 2. Collaborative approach to <br />Define and meet the business needs<br />Focus on value rather than cost<br />Consider options using a structured approach<br />Prevent unnecessary expenditure and waste<br />Aims of Value Management<br />Client<br />Supplier<br />1<br />Supplier<br />2<br />
  3. 3. Traditional Approaches<br />Concept<br />“Traditional behaviour is mostly about supplier margin not a common purpose”<br />Design<br />Procurement<br />“Often the design is done in complete isolation to the implementation”<br />Implementation<br />“Risk management is often concerned with responsibility for the additional cost not fixing the root cause”<br />
  4. 4. A traditional procurement approach significantly exceeded budget of £20m<br />Value management workshops “brought the team together”<br />They agreed clear mission and values<br />The result was an improved understanding of client requirements <br />A truly integrated team was built<br />And the final cost was £19.5m<br />Case Study OneWithington Community Hospital<br />Source: OCG Value Management in Construction<br />
  5. 5. Aim to improve capital productivity<br />19,500 sites worldwide<br />Spend $400m – $700m per annum<br />Resulted in cost saving of 40%<br />Two weeks saving in implementation time<br />Long term partnership started in 1996<br />Case Study TwoGlobal Alliance BP / Lend Lease<br />
  6. 6. Establish Integrated teams to focus on value not cost by:<br />Understanding the challenge and the focus areas<br />Identifing alternative courses of action<br />Analysis and evaluation of proposals against defined criteria<br />Value ImprovementPractical Steps <br />
  7. 7. Standardisation through modular design, common practices and processes<br />Transparency though IT real time access to information about status<br />Strategic procurement by using global buying power<br />Online bidding for suppliers, but with focus on overall cost saving not just the lowest price<br />What leads to the improvements?<br />
  8. 8. Culture of transparency means<br />Joint leadership and commitment from the top<br />Rewards for organisations and individuals against balanced scorecard, not just cost<br />An integrated knowledge management database<br />A flexible work force with strong team working (secondments etc)<br />Multi disciplinary team working<br />Open book finance<br />Value Improvement Culture Not Just Process<br />
  9. 9. Bridging the Gap<br />Concept<br />VM 1<br />Design<br />VM 2<br />Procurement<br />VM 3<br />VM 4<br />VM 5<br />Implementation<br />
  10. 10. Diagnosis of the issues with the client and suppliers<br />Workshop with the integrated team using VM techniques to generate solutions<br />Follow up to ensure agreement of actions<br />VM 1: stakeholder needs, objectives and priorities<br />VM2: project definitions and options<br />VM3: value engineering to reduce cost<br />VM4: handover review<br />VM5: lessons learned <br />Workshop Format<br />Different workshops at different stages<br />Value Improvement Process Workshops<br />
  11. 11. Are You Ready for Value Improvement?<br />Value Management<br />Cost Management<br />Supplier is involved<br /> in the concept / design<br />Client specifies <br />design alone<br />    <br />Focus is on the root cause of the risk<br />Focus is on who pays for the impact of the risk <br />    <br />Payment is based on balanced scorecard<br />Payment is based on fixed price <br />    <br />Transactional relationship with suppliers <br />Long term partnership with key suppliers <br />    <br />Culture of cross <br />fertilisation of ideas <br />Islands of functional<br /> knowledge <br />    <br />
  12. 12. Parallel Project Training<br />on-line APM <br />e-learning<br />Public & in-house<br />training<br />Project Management Training for Clinical Trials<br />
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