This document outlines a value management case study conducted for the laboratories of the School of Chemical Engineering at Universiti Sains Malaysia. The study identified a need for more space to accommodate growth. Two alternatives were proposed: building a new facility or renovating the existing one. Through workshops, space function analysis identified a 28% reduction in required space. Cost analysis found the new building option would save RM330,000. An action plan was created with timelines and responsibilities assigned. Value management provided an effective way to deliver objectives and user requirements within budget.

1. Cost Value Engineering –
Group Assignment
Title:
Case Study Report for project
implementing Value
Management in the Construction
Industry .

2. Group Members
1. Chian Chee Yong
2. Hong Kok Hang
3. Wong Yee Yung
4. Fu Yih Shyang
5. Tan Rou Jin
6. Tie Tung Lik
7. Vincent Kah Wee Sen
8. Lim Chze Wei

3. 1.0 Introduction
• Value Management was first introduced in 1986 by Prof. Roy
Barton to the QS Department of UTM in Malaysia.
• The implementation of value management in construction
industry is less practiced by the private sector compared to
government projects which mostly using the value management
application as a structured approach.
• The key justification is construction field in Malaysia is lack of
knowledge and experience in value management

4. What is Value Management?
Value Management is a rigorous systematic effort to
increase the value and optimize the cost of project, facilities
and systems.

5. According to Dell I’sola, the relationship between Value, Function,
Quality and Cost can be defined as follow:
퐕퐚퐥퐮퐞 =
퐅퐮퐧퐜퐭퐢퐨퐧 + 푸풖풂풍풊풕풚
푪풐풔풕

6. Evolution of Value
Management
1940s Value Analysis
1960s Value Engineering
1980s Value Management

7. Benefits of Value Management
1. Solves immediate and high priority problem
2. Established least cost goals
3. Encourage communications among the team
4. Reduce time
5. Reduce commercial risks
6. Spread cost consciousness
7. Develop hidden abilities and talents
8. Identifying & eliminating unnecessary cost
9. It encourage staff development & promote system thinking
10. Optimising resources by saving time , money & energy
11. It is a risk management
12. Updating standards, criteria and objective
13. Increase value and improve quality of building.
14. Enhance competitiveness in the industry.
15. Better focus on clients and project’s objective.
16. Offer a second look at key design decision
17. Encourage creativity and innovation of new ideas
18. Simplify and improve methods and procedures or schedules in construction to reduce time for completion
19. It can achieve balance between economic, social, environmental outcomes and needs.

8. Space Management
• The space management is to increase overall usage and
effectiveness of existing space.
• It is also reduce the need for additional space, fast response to
users request and achieving harmony among the space
provided.
• The major elements that used to described space included type
of space, quantity of space, facilities provided, finishes and
security level.

9. • Space is considered as critical resources that an organization has to provide and
manage. In clause 4.0, ISO 9001:2000, it is clearly stated that requirement for
compliance to quality management system standards. The main purpose for
space in an organization is to provide working space, security, allow circulation
and received visitors or clients. The well planned and managed space can
provide the cost effectiveness of the operation and optimize usage of resources in
the organization.
• There are alternatives in providing space for organization which are:
– Buying new building.
– Building new building.
– Renting space.
– Extending existing building.
– Refurbishing and upgrading the existing space.
– Rearranging the layout space usage.
– Sharing existing space.

10. Space Management
Objectives
Objective Explanation
Functionality To ensure organisation functionality is suitable with optimisation of building space.
Consistency
To ensure space management is carried out consistently and systematically in achieving
organization objectives.
Efficiency
To ensure space being used efficiently, in good control and bring maximum profits to
the organization.
Flexibility
Even though space management required control over space usage, the element of
flexibility is not ignored such as when there is expansion of staff or staff reduction.
Cost
The effective space management which have considered planning, execution and
monitoring elements will result in overlal cost reduction and maintenance cost
decrease.

11. 2.0 Case Study
• Value Management methodology was adopted in finding alternatives
and selection of the suitable solutions to address new space
requirement in School of Chemical Engineering, USM.
• Attentions were given to consider the wide range of influencing
factors and parameters and defining critically and accurately the real
needs of the school.
• The value management workshops have helped the school
members to discuss and analyse the issues comprehensively as a
team enabling them to achieve consensus quickly.

12. • Among the challenging but critical stages of the workshop were:-
Space Function Analysis that provided clear definition and purpose of
space required linked to objectives of the school and work process. Actual
floor area requirements were obtained based on actual work areas
required.
Creativity session to generate ideas on all possible ways and strategies to
provide space and even considered means to improve work processes
and management structure.
Using the Evaluation Matrix to define and rank criteria to evaluate the
alternative solutions proposed by the workshop members. This gave very
clear justifications on the selection of the final solution and helped
tremendously in achieving consensus.

13. Value Management studies were commissioned to achieve the
following objectives:
To provide adequate space and facilities to enable the enhancement
and development of Chemical Engineering to achieve international
recognition.
To accommodate the large number of students
To save cost
To propose new alternative/ ideas

14. Executive Summary
• A Value Management workshop was conducted for the laboratories
of School of Chemical Engineering in Universiti Sains Malaysia
(USM) which is located at Nibong Tebal which is about 50 km from
USM Main Campus in Penang Island.
• The School of Chemical Engineering is one of the leading institution
in the country offering both undergraduate and graduate
programmes in chemical engineering.
• Their student population are currently totalled to about 352
undergraduates and more than 50 postgraduates.
• However they only have an office, two lecture rooms, six tutorial
rooms, a computer lab and eleven laboratories in the same building.

15. • There are several issues being faced by them which need proper
improvement. The following are the issues being proposed:
Inadequate space to accommodate the increasing activities and the
amount of equipment as well as materials used in the laboratories.
Improper and not enough facilities and provision for safety and security
session.
Research works is not able to be expanded.
Negative image and impression given by the industrial clients during the
visiting of those laboratories.

16. • After a preliminary discussion with the heads of laboratories
together with a one day visit and inspection to the eleven
laboratories, a one and a half day intensive Value Management
workshop was done which involve the relevant staffs working in
the laboratories.

17. Based on the preliminary discussion with the school’s management,
two alternatives were proposed to manage the issues and meet the
requirements as follows:
 Provide new building to house the laboratories.
 Renovate and upgrade existing laboratories by providing improved
and added facilities and building services. Significant changes would
have to be done to the layout of equipment and circulation system
within the laboratories and might require additional spaces to be
provided as annexes to existing building. Management system and
scheduling of activities would also require changes.

18. • After the Evaluation Matrix had made, the final decision is to
provide new building to house the laboratories. Hence, in order
to achieve the objectives stated previously, Space Function
Analysis is used.

19. Linear Process of Space Planning Management with improved application of Value
Management Methodology (Source : Che Mat MM & Zulkarnian, 2006)

20. There are 5 phases of value management job plan to be taken in Universiti
Sains Malaysia (USM)
Identification of actual space requirements
through collection of comprehensive data and
information
Brainstorming session to identify alternative
solutions through creativity
Evaluation of alternatives by teamwork and
consensus
Final selection of recommended solutions
according to the ranking of alternatives
The End

21. 1. Evaluation Matrix
Priority Setting Matrix

22. Weighted Scoring Matrix

23. Space Function Analysis
Component
Function
Kind
Cost Area
(m2)
Worth Area
(m2)
Value
Index
Remarks
Verb Noun
Ground Floor
Lobby Receive Visitor S 20.00 20.00 1.00 NO CHANGE
Process Control Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Chemistry Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Environmental and Separation Process Research
Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Reaction Engineering Research Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Service (M&E) House Service RS 100.00 100.00 1.00 NO CHANGE
SUB-TOTAL 840.00 640.00
Level 1
Analytical Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Environmental Control Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Petroleum and Gas Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Bioprocess Engineering Research Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Service (M&E) House Service RS 100.00 100.00 1.00 NO CHANGE
SUB-TOTAL 820.00 620.00
Level 2
Thermodynamics Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Biochemical Laboratory Test Student B 180.00 130.00 1.38 28% REDUCTION
Service (M&E) House Service RS 100.00 100.00 1.00 NO CHANGE
SUB-TOTAL 460.00 360.00
TOTAL 2,120.00 1,620.00

24. • The workshop successfully worked out an approximate 28%
savings to the original proposal and request of space made by
the school’s management.
• The school was also able to decide on the location of the new
building within their existing complex area with ease.

25. 3.0 Sketches before and after design
showing proposed changes

28. 4.0 Reasons Supporting the
Selection of Alternative
The final decision is to build a new building to house the laboratories
instead of renovate the existing building. The followings are the reasons
to support the decision made:
1. Student enrolment in universities is on the rise
2. Reduce health and safety issues
3. Growing IT needs
4. Meet regulatory compliance
5. Compete with other universities

29. 5.0 Cost Analysis
Item Description
Area
Before After
m2 m2
Ground Floor
1 Lobby 20.00 20.00
2 Process Control Laboratory 180.00 130.00
3 Chemistry Laboratory 180.00 130.00
4
Environmental and Separation Process Research Laboratory
180.00 130.00
5 Reaction Engineering Research Laboratory 180.00 130.00
6 Service (M&E) 100.00 100.00
7 Toilet 35 35
Level 1
8 Analytical Laboratory 180.00 130.00
9 Environmental Control Laboratory 180.00 130.00
10 Petroleum and Gas Laboratory 180.00 130.00
11 Bioprocess Engineering Research Laboratory 180.00 130.00
12 Service (M&E) 100.00 100.00
13 Toilet 35 35
Level 2
14 Thermodynamics Laboratory 180.00 130.00
15 Biochemical Laboratory 180.00 130.00
16 Service (M&E) 100.00 100.00
17 Toilet 35 35

30. Item Description
Cost (RM)
Before After Before After
per m2 per m2 Total Cost Total Cost
Ground Floor
1 Lobby 1,200.00 1,200.00 24,000.00 24,000.00
2 Process Control Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
3 Chemistry Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
4
Environmental and Separation Process Research
Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
5 Reaction Engineering Research Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
6 Service (M&E) 100.00 1,500.00 10,000.00 150,000.00
7 Toilet 1,000.00 1,000.00 35,000.00 35,000.00
Level 1
8 Analytical Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
9 Environmental Control Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
10 Petroleum and Gas Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
11 Bioprocess Engineering Research Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
12 Service (M&E) 100.00 1,500.00 10,000.00 150,000.00
13 Toilet 1,000.00 1,000.00 35,000.00 35,000.00
Level 2
14 Thermodynamics Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
15 Biochemical Laboratory 1,500.00 1,500.00 270,000.00 195,000.00
16 Service (M&E) 100.00 1,500.00 10,000.00 150,000.00
17 Toilet 1,000.00 1,000.00 35,000.00 35,000.00
TOTAL 2,859,000.00 2,529,000.00
Hence, the estimated saving cost is RM330,000.00.

31. 6.0 Action Plan
Ground Floor
Element
Recommended
Solution Task Action by Timeline
Lobby No change Architectural Design Architect
Detailed Design Stage
Process Control Laboratory
Reduction in space /
Space Optimisation
Structural Design Engineer
Chemistry Laboratory
Cost Plan
Consultant
Quantity Surveyor
Environmental and Separation
Process Research Laboratory
Implementation per
recommendation Project Manager Construction Stage
Reaction Engineering Research
Laboratory Ensure implementation as
per recommendation
Value
Management
Facilitator Implementation Stage
Service (M&E)
No change
Review and audit
implementation and
approval
Client /
Stakeholder
Implementation Stage and
post implementation
Toilet No change

32. Level 1
Element
Recommended
Solution Task Action by Timeline
Analytical Laboratory
Reduction in space /
Space Optimisation
Architectural Design Architect
Environmental Control Laboratory Detailed Design Stage
Structural Design Engineer
Petroleum and Gas Laboratory
Cost Plan
Consultant
Quantity Surveyor
Bioprocess Engineering Research
Laboratory
Implementation per
recommendation Project Manager Construction Stage
Service (M&E)
No change
Ensure implementation as
per recommendation
Value
Management
Facilitator Implementation Stage
Toilet
No change
Review and audit
implementation and
approval
Client /
Stakeholder
Implementation Stage and
post implementation

33. Level 2
Element
Recommended
Solution Task Action by Timeline
Thermodynamics Laboratory Reduction in space /
Space Optimisation
Architectural Design Architect
Biochemical Laboratory Structural Design Engineer Detailed Design Stage
Service (M&E)
No change Cost Plan
Consultant
Quantity Surveyor
Toilet
No change
Implementation per
recommendation Project Manager Construction Stage
Ensure implementation as
per recommendation
Value
Management
Facilitator Implementation Stage
Review and audit
implementation and
approval
Client /
Stakeholder
Implementation Stage and
post implementation

34. Conclusion
• Value Management has provided an effective way to deliver
objectives and fulfil user’s requirements.
• The system based functional analysis of Value Management
allows consideration of complex interrelationships.
• Consequently, Value Management has a broad range of
applications, with principle opportunity of gains in the early
stages of development of programs and projects.
• It is particularly useful in focusing or distilling objectives and
priorities, and in generating alternative solutions.

35. In the project of constructing a new building to house the laboratories of School of
Chemical Engineering, USM, it clearly shows that there is an obvious cost reduction
by implementing Value Management. There is a total of RM 330,000.00 cost
reduction based on the space function analysis. It has shown that Value
Management is an effective tool in the planning of space requirement. There are
clear and obvious impact and advantages gained in applying the concept of Value
Management in the planning of space as follows:
 Systematic and comprehensive process
 Able to provide solutions in a short time compared to conventional process
requiring time to gather information and integrate requirements from various
parties.
 Cost effective – able to provide large savings through defining real requirements
and avoid or minimize wastage or irrelevant elements.
 Clear justification on selection of solution which enables efficient process of
modification or revision of solution if the need arise.

36. Recommendation
• The implementation of Value Management should be a standard
practice for every project as it is able to provide a better value
for money for the client in the project.
• The benefits of implementing Value Management such as
increase in the value of the project should be introduced to
client to encourage them to practice the implementation of
Value Management into the projects.
• The Government should create more local guidelines in order to
promote the use of Value Management in the projects.