DEFINITION AND AIM OF VM IN GENERAL AND FROM THE PERSPECTIVE OF CONSTRUCTION TERMINALOGIES USED IN VM RISKS OF VM IN CONSTRUCTION COSTS INVOLVED IN VM

1. Value Management
Cost Control 2
Section: 1S1
Lecturer: Mdm Noorhidayah Sunarti
Chan Yip Yan I15008556
Koh Chiun Liang I15008561
Lim Chin Khai I15008564
Tai Swee Jiang I15008572

2. Definition
• Management Process - control, monitoring and managing .
• Possible resources and opportunity to improve value of component.
• Multi-disciplinary technique – optimization of function and cost.
• Functional analysis - the best value for the component.
• Whole life cycle principle - achieving best function of the whole project at lowest
possible cost.

3. AIM
• Minimum resources to achieve project goals.
• Using least cost to provide the services in the same quality.
• Team member easily participate.
• Provide best function at the lowest possible overall cost.
• Enhancing the value of money and return on investment of client,
financiers, owners or sponsors of the project.

4. Terminologies
Value Methodology
• Process, principles and techniques adopted in the conduct and practice
of value management
• Includes those practised at value planning, engineering, and analysis
phases
Value Planning
• Associated with achieving project value during the planning stage
• Value at earl stage, namely, conception, inception and so on
• Subset of value control
• Derived from principle of cost planning and cost control

5. Value Control
• Concerned with managing value through all stages of a project
• Indicates a direct link to cost control
Value Analysis
• Associated with post-construction or completion phase
• Inclusive of the use and re-use stages of a project
• Improvement and assurance, implying that ‘value improvement’ and ‘value
assurance’
Value Engineering
• Closest term to “value management”
• Described as study of value at the design, construction, and engineering stage
of a project
• More related to ‘value’ and ‘management’
• Explains all the concepts, principles, processes, and participants

6. Risk of Value Management in Construction
• Sufficient Time for Study
▫ Adequate time should be allocated at initial period.
• Completeness of Cost Information
▫ Lack of necessary information of all costs associated with an component.
• Related Functions of Components
▫ Component of primary and secondary function are difficult to quantify.
• Uniqueness of Projects
▫ Distinctiveness of project affects the function of some components.
• Quality of End Product
▫ Predicting end-product quality of an component through examination of current
or past situations.

7. Risk of Value Management in Construction
• Selection of Team Members
▫ The selection of wrong people who may contribute nothing or negatively to the
success of VM.
• Representation of Original Design Team
▫ Design team members are unwilling to agree and accept changes to the project.
▫ Selection of members of original team since not all can be invited to be part of
VM team.
• Support of Practice
▫ Level of support from client
• New Concept for Stakeholders
▫ Recommendations of VM can change the existing proposal. This may not be
welcomed by some of the members.

8. Cost of Value Management in Construction
• various cost associated with a value management exercise
• challenging area when convincing clients and stakeholders to adopt a
VM exercise
• When adopt value management, the cost of the project is relatively
cheap

9. Cost involved in value management
• Cost of facilitator
• Cost of other participants
• Cost of Venue
• Administrative cost
• Information Gathering Cost
• Indirect and other costs