Beruflich Dokumente
Kultur Dokumente
Engineering College
Civil Engineering Department
ABSTRACT
This note gives a summary of Value Management (VM) in terms of its history,
definitions, terminologies, applications. It also guides how to develop project charter
and identify stakeholders and clarifies their roles and responsibilities with a view to
increase the value study performance in the project. It also defines terms and techniques
used in the processes of VM and Soft Value Management (SVM). In addition, this note
highlights the VM workshops in different countries, mentions the opportunities points
for its applications in projects and defines hard and soft problems.
A number of VM references were mentioned in the end of this note to help postgraduate
students to understand and consolidate VM knowledge, tools and techniques during
their studying the VM course.
Keywords: Value Management, Value Engineering, Value Analysis, Saudi Arabia.
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CONTENTS OF note
Contents
page
ABSTRACT
LECTURER RESUME BRIEF
ii
iii
ABBREVIATED TERMS
CONTENTS OF NOTE
iv
ABBREVIATED TERMS
TABLE OF CONTENTS
vi
LIST OF FIGURES
vii
LIST OF TABLES
viii
REFERENCES
26
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ABBREVIATED TERMS
Acronym
APM
AVC
BS
CVS
FAST
GCCP
ICE
ISO
IVM
JIC
MEP
MODA
MOMRA
MWE
RCJY
RIBA
RICS
SABIC
SAVE
SC
SDSF
SMART
SPS
USGBC
VA
VE
AVS
VM
VMB
VP
WLCC
WLV
Description
Association for Project Management
Associate Value Specialist
British Standard
Certified Value Specialist
Function Analysis System Technique
Government Construction Clients Panel
Institute of Civil Engineers
International Standard Organisation
Institute of Value Management
The Jubail Industrial College
Ministry of Economic and Planning
Ministry of Defence and Aviation
Ministry of Municipality and Rural Affairs
Ministry of Water and Electricity
Royal Commission for Jubail and Yanbu
Royal Institute of British Architects
Royal Institution of Chartered Surveyors
Saudi Basic Industries Corporation
Society of American Value Engineers
Sustainable Construction
Sustainable Defined Stakeholder Factors
Simple Multi Attribute Rating Technique
Saudi Public Sector
United States Green Building Council
Value Analysis
Value Engineering
Associate Value Specialist
Value Management
Value Management Board
Value Planning
Whole Life Cycle Cost
Whole Life Value
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Table of Contents
ABSTRACT ....................................................................................................................... ii
Lecturer Resume Brief ........................................................................ iii
ABBREVIATED TERMS....................................................................................... v
Table of Contents ....................................................................................... vi
List of Figures .................................................................................................. vii
List of Tables ..................................................................................................... viii
VALUE MANAGEMENT.......................................................................................................... 9
1.1 INTRODUCTION............................................................................................................... 9
1.2 HISTORY OF VM .............................................................................................................. 9
1.3 DEFINITIONS OF TERMINOLOGY ............................................................................. 10
1.3.1 VALUE ANALYSIS ................................................................................................. 10
1.3.2 VALUE PLANNING ................................................................................................. 10
1.3.3 VALUE ENGINEERING .......................................................................................... 11
1.3.4 VALUE MANAGEMENT ........................................................................................ 12
1.4 WHY DO VM STUDY? ................................................................................................... 14
1.5 THE VM WORKSHOPS .................................................................................................. 15
1.5.1 THE AMERICAN VM JOB PLAN ........................................................................... 16
1.5.2 THE UK VM JOB PLAN .......................................................................................... 17
1.6 THE TIMING OF VM STUDY ........................................................................................ 18
1.6.1 THE OPPORTUNITY POINTS OF APPLYING VM .............................................. 19
1.6.2 THE TYPES OF VM WORKSHOPS........................................................................ 21
1.7 SOFT VALUE MANAGEMENT (SVM) ........................................................................ 21
1.7.1 DEFINING HARD AND SOFT PROBLEM ............................................................ 22
1.7.2 SMART VM METHODOLOGY .............................................................................. 23
1.8 THE DEVELOPMENT OF VM IN SAUDI ARABIA .................................................... 24
1.9 SUMMARY ...................................................................................................................... 25
REFERENCES .......................................................................................................................... 26
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List of Figures
Figure 1.1: Value terminologies .................................................................................................. 10
Figure 1.2: Value Methodology Process Flow Diagram (SAVE International 2006) ................ 17
Figure 1.3: The generic VM process (Male et al. 1998) ............................................................. 18
Figure 1.4: Value opportunity points application on a modified RIBA (Male et al. 1998) ........ 19
Figure 1.5: Value opportunity points application on AIA (Male et al. 1998) ............................. 19
Figure 1.6: Four workshops related to a project (Hayles and Simister 2000) ............................. 21
Figure 1.7: The outline methodology of smart VM Adopted from (Green 1994) ...................... 24
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List of Tables
Table 1.1: Definitions of Value Engineering .............................................................................. 12
Table 1.2: Definitions of Value Management ............................................................................. 13
Table 1.3: Comparison of various VM workshops ..................................................................... 16
Table 1.4: Value study objectives, duration and participants adapted by the author from (Kelly
et al. 2004) .................................................................................................................................. 20
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VALUE MANAGEMENT
1.1 INTRODUCTION
VM is employed to achieve best value for money in construction projects by coping
with challenges that might happen in these projects. Thus, value studies should not see
as a cost saving exercise or cost reduction. However, it has the fact that a certain amount
of unnecessary cost is inevitable in construction projects life cycle due to the
complexity and uncertainty of these projects. This chapter aims to introduce the
historical imperatives for VM in terms of history, definitions of terminologies,
objectives and job plan. It also defined terms and techniques used in the processes of
VM and Soft Value Management (SVM).
1.2 HISTORY OF VM
VM evolved within the manufacturing industry during the Second World War due to
shortage of materials. In 1947, General Electric Company appointed Mr Lawrence D.
Miles to produce a method that would both make changes in manufacturing techniques,
or design, which led to substantial cost reduction. He developed a systematic approach
called Value Analysis (VA), which aims to realise value for money by meeting the
required function with minimising the whole life cost of a project and without detriment
to quality and performance of the project (Dell'Isola 1997). The first Value Analysis
workshop training was conducted in 1952 (Younker 2003). In 1954, the US Navy
Bureau of Ships applied Value Analysis to cost improvement during design, terming it
after Value Engineering (VE). Since its inception, it has promptly developed and
broadened across many industries and countries (Ashworth and Hogg 2000). In the
early 1970s, VE techniques were exported outside the United State of America to many
countries such as: Japan, Korea, India, France, UK, Germany, Hungry and Saudi Arabia
in addition to Canada, South America, Taiwan and South Africa and other countries
(DellIsola 1997).
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ValueTerminologies
ValueManagement
ValueEngineering
ValueAnalysis
Strategiclevel,
Briefingstage
Detaildesignstage
Thecompletingofa
project
Outlinedesignstage
Constructionstage
The term Value Analysis is broadly used in the United Stated of America (Pasquire and
Maruo 2001). VA describes a value study of a project that is already built or designed to
see if it can be improved, i.e., its application is after the completion of a project
(Zimmerman 1982; Ashworth and Hogg 2000). The Department of Defence (DOD) in
the United State defines VA is an after the fact activity during production and after
finishing the project (Pasquire and Maruo 2001).
1.3.2 VALUE PLANNING
Value Planning (VP) is applied in the earliest stages of a project prior to the decision to
build the project or at the concept phase of a project (Kelly and Male 2004; Ashworth
and Hogg 2000). Pasquire and Maruo (2001) stated that the ICE (1996) observes that
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VP is implemented into the concept phase of a project and used during the developing
the brief to ensure that value is planning into the whole project from its beginning.
1.3.3 VALUE ENGINEERING
The term Value Engineering is used during the detailed design and construction stages,
and it is largely used in the United State (Pasquire and Maruo 2001). Moreover,
Zimmerman (1982) stated that VE describes a value study during the project design and
construction phase. This is confirmed by the Department of Defence (DOD) in the
United State that defines VE is as a before the fact activity during the design stage
(Pasquire and Maruo 2001). Whereas, Kelly et al. (2004) claimed that VE is a subset of
the VM process, where the concentration is on improving value in the design and
construction stages of the technical project and he concluded that VE connects to the
principles of quality assurance.
The number of VE definitions presented in Table 1.1 highlights numerous imperative
expressions and phrases. It has been recapitulated that VE is a systematic, organised
creative, problem-solving, function-oriented approach that implies a sequence of
processes. VE uses a multidisciplinary, proactive, creative team approach to achieve
best value for money in a project during the design and construction stages. It identifies
and removes unnecessary costs without detriment to quality, safety, performance,
reliability, maintainability, as well as optimises whole life cycle cost in order to satisfy
critical factors that can meet or exceed the customers and users requirements and
expectations.
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Authors
Definitions
Miles (1972)
Zimmerman
(1982)
Connaughton and
Green (1996)
DellIsola (1997)
Standing (2001)
The systematic and creative process for the provision of the necessary
functions of a project at the lowest cost by efficient identification and the
elimination of unnecessary cost without detriment to: safety, quality,
reliability, performance and delivery.
Hayles and
Simister (2000)
The process of identifying and eliminating unnecessary cost during design and
construction stages.
JSVE (2005)
The term VM was originated by the United State General Service Administration in
1974 (Zimmerman 1982). It is used to explain the whole philosophy and range of
methods to describe the application of the processes of value studies at the earliest
strategic stages of a project. VM is broadly term used all over the UK and Europe
(Pasquire and Maruo 2001). In the UK, VM is generic, for the whole process including
Value Engineering, Value Analysis and Value Planning (Ashworth and Hogg 2000).
Moreover, Kelly et al. (2004) declared that VM explains the whole framework of
maximising the value of a project for a client from the concept phase to operation and
commissioning and this was corroborated by Zimmerman (1982) who ascertained that
VM is a methodology employed in achieving value into a project.
Furthermore, Kelly et al. (2004) claimed that VM connects well to the principles of
total quality management. The number of VM definitions shown in Table 1.2 underlines
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numerous essential terms and expressions. It has been encapsulated that VM is a means
to cope with most difficult aspects associated with achieving the best value for money
into a project, by taking into account of both internal and external considerations. The
objectives are to enable all stakeholders to accomplish their objectives with the efficient
use of resources. VM also concentrates on creation of a suitable environment to bring
the key stakeholders and decision makers in one place at the earliest stages of a project
to reach consensus in terms of the project objectives and the achievement of value for
money in the project.
Table 1.2: Definitions of Value Management
Author
Definitions
Green (1994)
Connaughton and
Green (1996)
Barton (2000)
Standing (2001)
British Standards
Institution
BS EN 12973
(2000, p.6 and
8)
Standards
Australia and
Standards New
Zealand (1994,
p.4)
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Several fundamental attributes have been summarised below from the definitions of
VM. These are:
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Information
Analytic
Creative
Evaluating
Presentation
Implementation
Information
Creativity
Judgment
Development
Presentation
GSA (2005)
Information
Function analysis
Creativity & Idea
Generation
Evaluation and
selection
Development
workshop
Information
Speculative
Evaluation
Development
Report
SJVE (2005)
Information
Creative
Judgment
Development
Recommendation
Authors
Information
Creativity
Evaluation
Development
Presentation
SAVE (2006)
Information
Analysis
Creativity
Judgment
Development
Zimmerman (1982)
Selection
Information
Function
Creation
Evaluation
Investigation
Recommendation
Authors Workshop
DellIsola (1997)
workshop
Male et al (1998)
Fallon (1980)
Miles (1972)
Mudge (1971)
Authors
Information
Function
analysis
Creative
Evaluation
Development
Presentation
The Society of American Value Engineers (SAVE) international (2006) defined the
Value Methodology as a systematic procedure used a multidisciplinary team to achieve
the value into a project through the analysis of its function. The main aim of the Value
Methodology Job Plan is to direct the VM study team during the process of
identification and focus on the key functions of a project to generate new ideas that may
result in value enhancements. The Value Methodology is generally applied under terms
value analysis, Value Engineer, Value Planning, VM and Value Control (VC) (ibid).
The American Job Plan is based on a 40-hour (five-days, which does not include the
Pre-Workshop and Post-Workshop efforts) carried out by an external team at the 35
percent of design phase (Pasquire and Maruo 2001). However, the application and
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duration of the VM Job Plan depends on a number of factors: the size and complexity of
the project, the stage of project development and the estimated cost of the project
(SAVE 2006). Figure 1.2 demonstrates the VM Job Plan process flow.
Figure 1.2: Value Methodology Process Flow Diagram (SAVE International 2006)
1.5.2 THE UK VM JOB PLAN
Male et al. (2007, p.110) defined a study style as the outcome and configuration of the
VM process that is required to intervene in a particular sage in a project life cycle; or
in an organization, process, product or service delivery. The generic VM process is
summarised in Figure 1.3, which comprises of eight phases (Male and Kelly 1998). The
VM workshop is part of this generic process and consists of five stages. However, there
are varieties of Job Plan, in the UK, applied at different stages of the project
developments depending on organisations. Several organisations point out that VM
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workshop can be implemented at construction phase (Pasquire and Maruo 2001). The
VM Job Plan generally takes between two and nine days including one to two days for
the application of the VM workshop. However, size and complexity of the project and
its sensitivities may affect the duration of the VM job plan (Kelly et al. 2004).
The timing of VM studies is very essential to its successful. They must be knotted
intimately at all stages of project developments. This section introduces the
benchmarked intervention points for applying value studies at along stages of the
project developments as illustrated in Figures 1.4 and 1.5. Each value study objectives
and its durations, as well as the suggested participants of the study and the size range of
the team are summarised in Table 1.4. However, all these factors can be influenced by
the size and complexity of the project and its sensitivities (Kelly et al. 2004).
Figure 1.4: Value opportunity points application on a modified RIBA (Male et al.
1998)
Figure 1.5: Value opportunity points application on AIA (Male et al. 1998)
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Table 11.4: Value study objectives, duration and participants adapted by the author from (Kelly et
al. 2004)
The Study
VM1
Study objectives
Duration
4-7 days
including
- 1 day for
the
workshop.
4-8 days
including 12 days for
workshop
4-8 days
including
1-3 days
for the
workshop
4-8 days
including 23 days for
the
workshop
4-9 days
including 25 days for
the
workshop
2-6 days
including 15 days for
the
workshop
Rep. of contractors
production planning,
purchasing, project
management,
suppliers and/or
subcontractor.
Client, design team,
client consultant
project managers.
The size 6 to 10
people.
VM2
VM3
VM (C)
VM4
VM5
Participants
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Moreover, Connaughton and Green (1996) suggested five opportunity points for VM
workshops. These points VM workshops are suggested to be applied at each phase as
illustrated below:
The concept phase:
Hayles and Simister (2000) contended that there are two types of workshops employed
in the project life cycle: strategic and technical. Strategic workshops are illustrated as
VM1 and VM2 in Figure 1.6, whereas technical workshops are illustrated as VE1 and
VE2 in Figure 1.6. The aim of VM1 and VM2 is to aid the client to identify
requirements and develop a number of value objectives to benchmark all upcoming
decisions taken associated with the project. The aim of VE1 and VE2 is related to the
detailed technical assessment of options suggested by the project team to satisfy the
requirements and expectations of the client and user.
Figure 1.6: Four workshops related to a project (Hayles and Simister 2000)
1.7 SOFT VALUE MANAGEMENT (SVM)
SVM is specifically designed to deal with difficult problems experienced at earliest
stages of the project, whereby many stakeholders are involved in the course of action
and high-level facilitation skills are vital to its accomplishment (Barton 2000). It derives
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from the body of knowledge known as group decision support, which is defined as any
process that supports a group of people seeking individually to make sense of, and
collectively act in, a situation in which they have power (Bryant 1993). SVM is
designed to reach a consensus on a collective statement of needs and values between a
set of stakeholders. It is based upon the hypothesis that people will have a variety of
views about the real and intended functions that a system, process or item does (Barton
2000).
The identification of function in Hard VM is discovered in a pre-existing fact. While in
Soft VM, the task of functions are not inherent in the system, product or service and the
identification of function is produced by creating common understanding of the shared
and viewpoints of the participants. In other words, the main task of SVM studies is to
develop shared understanding of the primary purpose(s) of the system, process or
product (ibid).
Dallas (2006) stated that SVM is less appropriate in problem-solving but more efficient
in problem-shaping. He mentioned three guiding principles consist of identification that:
(1) the situations of decision-making are dynamic, ill-defined and multi-perspective; (2)
people are conceptualised as dynamic factors; (3) the perceptions of stakeholders are
required in identifying the problem. SVM workshops are usually conducted over two
days duration. The first day is a divergence, about transformative learning, creating a
new knowledge base and possibilities, and shared understanding. The second day is a
convergence, about evaluating ideas and developing proposal to meet to defined study
objectives (Barton 2000). Five factors are vital to be considered in the facilitation.
These are: openness, willingness to share all valid information, free and informed
choice, inclusiveness and individual commitment to decisions and outcomes, in addition
to positive attitudes towards learning (ibid).
1.7.1 DEFINING HARD AND SOFT PROBLEM
who observe soft and hard situations at opposite ends of the identical continuum. Hard
problem are well defined and understood and can be described within a clearly defined
system boundary, whereas soft problem is not well defined and cannot be described
within a clearly defined system boundary.
1.7.2 SMART VM METHODOLOGY
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Figure 1.7: The outline methodology of smart VM Adopted from (Green 1994)
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