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Concept of Value Management
- 1. MEMBERS: KAMLESHNEE DEENANATH I15009396 DYG NURUL SHAFIZAH I14006956 MAYAMIN SALLEH I12001278 ERNELLY ROBIN I15009108 VALUE MANAGEMENT
- 2. DEFINITION AND AIM OF VM IN GENERAL AND FROM THE PERSPECTIVE OF CONSTRUCTION
- 3. Value Management Examine + analyse alternative materials Purpose same & better selection at least $ Innovation, novelty + advancement Process of: • Control + monitor + manage team. • Redesign spaces & components. • Optimisation of production to meet goals. Minimum resources. Managing resources, $ saving
- 4. VM in Construction 1. Necessary to engage stakeholders, knowledge. 2. Design team recommendations 3. Non-professional perspective. 4. Functional analysis differs e.g.: Structural column. • Whole life cost • Return on investment • Stages of project Functions: Quality Reliability Performance Satisfaction
- 5. TERMINALOGIES USED IN VM
- 6. Value Methodology to the process, principles and techniques adopted in the conduct and practice of value management and it includes practiced at value planning, engineering, and analysis phases. Value Planning associated with 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.
- 7. Value Control related to VM is concerned with managing value throughout all stages of a project where cost control is practized. VC direct link to cost control which is not the same as value management, justifying the reason why the term is not common among value management experts, analysts, or researchers. Value Analysis related to completion phase, indicating that the practice is related to the value of completed project. This is inclusive of the use and re-use stages of a project. Management is a general term inclusive of improvement and assurance, that ‘value improvement’ and ‘value assurance’ are synonymous with value management. Value Engineering Is a creative, organized approach whose objective is to optimize cost and/or performance of a facility or system. VE is concerned with achieving a given at minimum cost with the assumption that function is an objective characteristic which is awaiting to be identified
- 8. RISKS OF VM IN CONSTRUCTION
- 9. 1. Sufficient Time for the Study concern over the period of time it takes to complete an exercise Insufficient time to value the whole project the lack of full and necessary information of all the costs – to value Issues of cost - difficult to predict inflation and other economic 2. Completeness of Cost Information
- 10. 3. Related Functions of Components or Elements Items or elements with related function - difficult to measure the quantity difficult to assign/divide the right functions to specific elements Due to; 1. elements of building that serve more than one function 2. two or more elements performing the same function Each project is not the same and has its own unique characteristic. The uniqueness of a project affects the function of some elements and components of the project. VM team not able to identify the functions of various element 4. Uniqueness of Construction Projects
- 11. 5. Quality of End Product the availability of historical data and the required information on the product; the analysis of the difference in exposure to weather and other conditions between the present or past and the current situation to examining the conditions of the use of the products. members of the team are varied and unlikely – not from same area the selection of the wrong people - contribute nothing or negatively to the practice 6. Selection of Team Members
- 12. 7. Representation of Original Design Team unwilling to agree and accept changes/ideas to the project that arise from the exercise the establishment of criteria for the selection of members of the original team The number of team member is large and the cost of paying for their service Lack of leadership skill, team control, and other management skills, competence Lack of knowledge, understanding, and no experience Not able to direct, guide, and control other team members 8. Choice of Facilitator
- 13. 9. Support for the Practice the level of support from clients, statutory or regulatory bodies as well as from top management staff of an organization. the initial acceptance of the practice of value management by stakeholders 10. New Concept for Stakeholders
- 14. 11. Timing of the Exercise the choice of the right stage of a project at which to implement it initial phase before the production of final drawings- may not be sufficient information for the team to work with after the production of detail drawings - the project will have to be delayed for at least a week for the exercise to be conducted and alterations of the existing design which may be at extra cost to the design team before the commencement of a project - the feedback from the exercise will surely slow down the pace of work, may lead to rework, and an eventual waste of resources
- 15. COSTS INVOLVED IN VM
- 16. 4.0 Cost of Value Management in Construction 1. Cost of Facilitator 2. Cost of Other Participants 3. Cost of Venue 4. Administrative Cost 5. Information Gathering Cost 6. Indirect and Other Costs
- 17. 4.1 Cost of Facilitator A facilitator is an experienced value manager tasked with many responsibilities. The facilitator will be paid accordingly since he or she is a professional who devotes his or her time to the success of the exercise.
- 18. 4.1 Cost of Facilitator (cont’d) The cost may include: - Professional fee. - Transport costs. - and the like. The payment may depend on several factors including: - Experience of the facilitator. - Type and nature of the project. - The mode of engagement. - The size and cost of the project.
- 19. 4.1 Cost of Facilitator (cont’d) The payment may be made according to: - an approved scale of fees basis, - based on man-hour rate, - or any other method (which must be agreed upon and approved prior to the commencement of the exercise).
- 20. 4.2 Cost of Other Participants The participants are other members of the value management apart from the facilitator. May or may not be experienced in value management. Payment should be settled before the exercise and it can be through any of the remuneration means discussed for the facilitator.
- 21. 4.3 Cost of Venue A conducive environment with basic facilities and amenities is fundamental to conducting productive meetings. The venue is expected to be good enough for members of the team to be able to perform their function without any form of hindrance. 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.
- 22. 4.3 Cost of Venue (Cont’d) Example; If a 40-h procedure is to be adopted, it is better for it to be organised as a retreat in a secluded place, preferably a hotel or guest house with conference and accommodation facilities. An alternative is an E-workshop where discussions are held via the Internet, thus eliminating the cost of a venue.
- 24. 4.5 Information Gathering Cost A key principle of value management is the comparative analysis of alternatives. This implies that the more alternatives there are and the more detailed information is available about them, the better the ability of the value management team to brainstorm and identify the best alternative, using the principle of function and cost.
- 25. 4.6 Indirect and Other Costs They are necessary in achieving the overall goal of the practice. The indirect cost may include: - the cost of buying equipment to actualise recommendations emanating from the value management exercise, - the costs required in altering or changing the original or existing design to accommodate proposals from the exercise, - and the general cost of following up on the understanding and the implementation of the recommendations.