2. Lecture Objectives
Introduce Concept of Value
Define value management
Identify value management interventions
Discuss key techniques and their
application
3. Introduction To Value
What is Value?
Value and COST
Value and FUNCTION
Value and BENEFIT
Value and TIME
“Adding Value”
Value – a compromise?
4. Concept of Value
Value =
Satisfaction of Needs
Use of Resources
EN12973
The concept of value relies on the relationship between the
satisfaction of many differing needs and the resources used in
satisfying them.
A relationship not an equation
Source: Sweett Group
5. Obtaining Value
COST
VALUE = WORTH
(worth = the lowest cost that enables
the required functions to be provided)
• Maximum benefit at minimal cost
6. Value Management
• Determining Client requirements – this
is not always as simple as it seems!
• Delivering those requirements without
unnecessary cost
7. Value Management History & Definitions
• History
Lawrence Miles, purchasing engineer
with GEC in WW2
Value analysis: an organised approach
to providing the necessary functions at
the lowest cost
This is NOT cost cutting - quality is not
reduced.
8. Value Management History &
Definitions(2)
• Value analysis - an organised
approach to the identification and
elimination of unecessary cost.
• Unecessary cost - cost which provides
neither USE, nor LIFE, nor QUALITY,
nor APPEARANCE nor CUSTOMER
BENEFIT(S)
9. Development of V(M!)
• US Dept of Defense
• UK – 1960s use in manufacturing
• Formation of VE Assoc. in 1966 (IVM in 1972)
• Common use throughout Europe
• Growth in UK Construction (BAA, Whitbread,London
Underground)
• Guidance Notes (e.g. BRE 1997; CIB 1997; HM Treasury)
• British Standard BS EN 12973 2000 Value Management
• Egan
• Best Value
15. Value Management
OPTIONS APPRAISAL
BUSINESS CASE
OUTLINE DESIGN
FINAL SKETCH PLAN
DETAIL DESIGN
1st REVIEW
2nd REVIEW
3rd REVIEW
CONCURRENT STUDIES
CONSTRUCTION
HANDOVER
CONTRACTORS CHANGE
PROPOSALS
POST PROJECT
EVALUATION
17. Issues dealt with(1)
• Value Planning (Value Management)
• VM1 – pre-brief/briefing
– Is a built solution required
– Stakeholder requirements
– Priorities
• VM2 – Outline proposals
– Reviewing criteria
– Selection of best value alternative
18. Issues dealt with(2)
Value Engineering
Engineering the developing design to eliminate unecessary cost
Workshop(s)
Contractor’s Change Proposals
Value incentive clauses
Value Analysis
Analysing value in finished product to inform
future
decisions
19. Structure of VM Team
Independent VM team
Early American Approach
Advantages and dis-advantages
Using Project Team Members
Depends on nature of project and timing of
intervention
Importance of Client top management support and
appropriate representation on VM team
20. Source: Cyril Sweett & Ptnrs
No Time
Waste
of Time
Too
Expensive
Too
Difficult
Too
Complex
I Do It
Anyway
Not
Interested
Don’t Want
Outsiders
The
Barriers
The
Barriers
23. Study(Wokshop) Phase
• Alternative approaches
– Degree of structure may depend on
project, participants (and their experience),
time available
The Job Plan – Based on Lawrence
Miles original approach
29. What is VM
• Value Management
– A structured approach to defining what value
means to a client in meeting a perceived need by
establishing a clear concensus about the project
objectives and how they can be achieved
• Value Engineering
– A systematic approach to delivering the required
functions at lowest cost without detriment to
quality, performance and reliability
30. Lecture Objectives
Introduce Concept of Value
Define value management
Identify value management interventions
Discuss key techniques and their
application
Editor's Notes
Pre- workshop
The research indicates two aspects of pre-planning- the value manager briefing and the briefing of workshop participants.
The former is necessary to ensure that the value manager understands the clients key “functionality aspects[i]” Such clarity will enable the facilitator to more effectively manage the workshop participants.
The latter is felt necessary to ensure that participants, who are influenced by their own professional traditions and background and who are often “solution driven”, understand both the need for a broader, functional, analytical approach to value management and the essential multi-disciplinary nature of the activity.
The approach to, and outcomes of, such pre-planning vary though the objectives are common.
Approaches involve, discussions with the client representative and workshop participants, either in a pre-workshop meeting, individual meetings or, at the very least a series of telephone calls, the latter more likely for later workshops in a series of interventions.
Discussion with the client helps identify priorities and formulate objectives for the workshops. In some instances this will involve functional analysis, particularly where workshop time is limited.
If you’re going to maximise the use of the people in the room, then you’ll need to do preparation on functional analysis with the client. If you go into the workshop with the functional analysis clearly understood, and tell the team what it is, then they can do their ideas generation and evaluation quite well.[ii]
Pre- meetings with participants enable them to come to the workshop, reassured and effectively prepared.
We sit down with designers to re-assure them that it’s not just going to be a hatchet job.[iii]
The outcome of such preparatory activity varies, though normally includes some form of information pack or briefing document. The detail will depend on circumstance but will generally include organisational details of the workshop together with an agenda, objectives of both the workshop and the project as a whole, and any available data on cost or design (where appropriate). For workshops later in the project life cycle, the outcomes of previous workshops would be circulated.
As well as providing practical details, the briefing pack, which may be no more than two or three sheet of paper[iv], seeks to guide participants to issues that they should be considering prior to the workshop though such pre –preparation can cause a tension between guiding and directing which may narrow down thought processes and limit “lateral thinking” in the workshop itself.
[i] VM Capita page 1
[ii] F&G Page 5
[iii] Capita page 2
[iv] DLE page 4
Pre- workshop
The research indicates two aspects of pre-planning- the value manager briefing and the briefing of workshop participants.
The former is necessary to ensure that the value manager understands the clients key “functionality aspects[i]” Such clarity will enable the facilitator to more effectively manage the workshop participants.
The latter is felt necessary to ensure that participants, who are influenced by their own professional traditions and background and who are often “solution driven”, understand both the need for a broader, functional, analytical approach to value management and the essential multi-disciplinary nature of the activity.
The approach to, and outcomes of, such pre-planning vary though the objectives are common.
Approaches involve, discussions with the client representative and workshop participants, either in a pre-workshop meeting, individual meetings or, at the very least a series of telephone calls, the latter more likely for later workshops in a series of interventions.
Discussion with the client helps identify priorities and formulate objectives for the workshops. In some instances this will involve functional analysis, particularly where workshop time is limited.
If you’re going to maximise the use of the people in the room, then you’ll need to do preparation on functional analysis with the client. If you go into the workshop with the functional analysis clearly understood, and tell the team what it is, then they can do their ideas generation and evaluation quite well.[ii]
Pre- meetings with participants enable them to come to the workshop, reassured and effectively prepared.
We sit down with designers to re-assure them that it’s not just going to be a hatchet job.[iii]
The outcome of such preparatory activity varies, though normally includes some form of information pack or briefing document. The detail will depend on circumstance but will generally include organisational details of the workshop together with an agenda, objectives of both the workshop and the project as a whole, and any available data on cost or design (where appropriate). For workshops later in the project life cycle, the outcomes of previous workshops would be circulated.
As well as providing practical details, the briefing pack, which may be no more than two or three sheet of paper[iv], seeks to guide participants to issues that they should be considering prior to the workshop though such pre –preparation can cause a tension between guiding and directing which may narrow down thought processes and limit “lateral thinking” in the workshop itself.
[i] VM Capita page 1
[ii] F&G Page 5
[iii] Capita page 2
[iv] DLE page 4
Report
It is common practice to produce a report or summary of decisions and actions following the workshop. Whilst this is seldom a presentation for decision, as the decision makers would normally be present at the workshop, it is important that both the decisions and the reasons for them are recorded.
The rationale for decisions is felt to be particularly important.
It is absolutely essential because, you can imagine, a year down the line, a party saying, “why didn’t you do that…”[i]
If you don’t record them (decisions) and something goes wrong….how did we get to this[ii]
One respondent reported on a project in which appeals from a planning enquiry went to the Secretary of State.
The first thing they went for was the VM journal. Where was the decision made to go to this site?”[iii]
Whilst the report is essential, it should be concise, focussed and timely
I’ve received voluminous reports, mountains of paper showing every single thing that you talked about, it doesn’t really get you anywhere. [iv]
I try to get an action list out within two days and the report out within a week[v]
Post-workshop
The post-workshop activities are essential to the success of the value management activities. Ideas may need further development prior to a decision, and the implementation of decisions made needs to be followed through.
Follow-up/wrap-up meetings may be held two to three weeks after the workshop. Follow up is sometimes through the normal, regular, design team meetings or is undertaken by the project manager or value manager.
These(meetings) are not as common as we’d like. Perhaps 60% of projects have a meeting though for 100% of projects we will take it upon ourselves to make a few nagging follow up calls.[vi]
Follow- up is crucial to ensure that ideas are not dropped, either because individual participants responsible for the development of a specific proposal were not fully committed to the initial decision, or they are too busy to undertake the development work.
[i] VMWT page 113
[ii] VMMDA p110
[iii] VMCapro p115
[iv] VMMDA p110
[v] VMCB p107
[vi] VML p126