Value Management and Value Engineering - Coursework Example

Value Management and Value Engineering Name Institution Course Tutor Date Value Management and Value Engineering Strategic Definition Introduction Value is the benefit that a client attains from the project. Value management is a process that involves a systematic and analytic method that used in order to complete a project with the lowest cost while surpassing set levels of quality and performance. In the project above, a value management study is carried out on a proposed construction project of a facility in Dubai. The project proposes the construction of facilities by the local authority, which will provide leisure and communal services to the community. The aim of conducting this value management is to identify unneeded spending, promote innovation, eliminate redundancy, improve team performance, optimize resources and save time and money. Value engineering is defined as the focused on the value and not the cost of a product. Value Drivers In the case study, the proposed project involves the creation of an all-round community facilities center in a site in Dubai. The value drivers’ analysis is crucial. It determines the benefits that can be attained from a project and the information obtained is used in decision-making. Since the case study requires the creation of several communal amenities such as health care, education, leisure, local authority resources on one site, analysis of value drivers will be diverse. In the case of construction, a variety of value drivers are assessed and they include strategic analyses of monitoring and evaluation, electrification process, grievances from surrounding community, land acquisition and workforce development. The value drivers are maximizing of business effectiveness, effective program management and delivery, achievement of set financial goals, positive impact on the community, minimal operational and maintenance cost, minimal environmental impact and effective complying with third party requirements( Marr 2006). Value Drivers Applied To the Case Study Third party requirements involve requirements from statutory bodies and include health and safety aspects before, during and after the construction. Maximizing business effectiveness depends on the whether the business satisfies the goals of the construction. This involves comfortable environment for business and staff and production costs that meet financial goals. Optimum financial performance is achieved when the capital, maintenance and operational costs balance with its total value. The operational and maintenance costs of the building must be minimized as well as the environmental impact. To ensure effective project management and delivery, a project team of experienced professionals is constructed and must be involved from the planning to completion stages. The selected project team must be a mix of different professionals that are paramount in the construction industry. The project team will assess the project performance using key performance indicators in the industry (Swan et al 2004). The stakeholders in the project are the local government authority, business people that will use the facility and the community that will be served by the facility. The local authority’s need is to provide local authority, community and leisure services from the single facility. The community will benefit from the facility in leisure, communal and authority ways. The key risks that will indirectly affect the stakeholders are construction delays caused by less labor or shortage of materials. Others include planning delays caused by regulatory bodies hurdles, communal disruption due to environmental concerns or protests, legal compliance costs such as fines and breaches, additional costs caused by poor communication, negative media, consultants, complains and mediators and project cancellation due to community unrest. These are the main factors that will directly affect the stakeholders in project initiation and implementation. In order to achieve set financial performance, the financial costs must be balanced and proper budgeting should be done. The project team has been allocated £9.5 million. This capital must be budgeted for in business case including all costs, which entail construction costs, legal fees, labor costs, and consultancy costs. Others include value management study fees, fees paid to regulatory bodies, fees incurred in procurement of materials, logistical costs, fees paid to energy suppliers, plumbing costs and payment to specialist project supervisors such as engineers, surveyors, cost managers, architects and designers. The business case and investment appraisal must highlight the balance between whole life and capital costs and adhere with cost and quality benchmarks. In order to impact its locality positively, the building must be of good quality, impact the diverse community socially and economically, affect its environment positively, be easily accessible, and easy to adapt to changes in the social, economic and technological sectors. It should also reflect the local government authority through branding, culture and values. It should also be enjoyable to the people that will visit it daily (NAO 2010). Minimizing environmental impact and operational and maintenance costs is a key driver that directly relates to value for money. The structure, layout and engineering systems of the building should allow for minimum maintenance costs. The value management team will uphold this role. Future repair, remodeling and reconstruction fees that may arise must be low and the building should be resistant to wear and tear, these two factors will reduce maintenance costs. It is recommended that energy use for lighting, cooling, heating and ventilation should be minimized as well as the amount of carbon dioxide emission from the building. This will create an environment that allows for conservation of water and energy. In order to comply with third party requirements several factors must be put into consideration. Stakeholder opinions must be considered in all the stagers of project development, all statuary bodies must be consulted in good time, safety and health statutes must be adhered to and guidelines set by the UAE government on construction must be followed(Green 1994). Evaluation of Project Success The successful of the completion of the project must be evaluated on grounds of specific project parameters. It is also paramount to consider key performance indicators in the construction industry in evaluating the efficacy of the project. According to Print (2003), there are several performance indicators in a construction project; quality, cost, time, safety and financial indicators. Project success evaluation will be done through analysis of several factors that include: quality of completed building, accessibility of the building, total cost of the building, client satisfaction, stakeholder satisfaction and the performance of the building with regard to the performance indicators of the construction industry. It is after analyzing the operational and maintenance costs in comparison to the total whole life cycle costs that the profitability of the £9.5M is analyzed. Additionally, it is evaluated by being compared to the business case that was set before construction started (Brady et al 2005). Project Development and value studies RIBA plan of work 2013 The RIBA Plan of Work is used in the designing, construction and post occupation analysis of construction designs. The RIBA Plan of Work 2013 has eight stages compared to its 2007 plan that had 11 stages. They include strategic definition, preparation and brief, concept design, developed design, technical design, construction, handover and close out and in use. Stage 1 is the preparation and brief stage that defines the tasks in the preparation and briefing of a task. The technical design is involved in planning of the technical requirements and may at times introduce changes to the design aspects of a building. Stage 7 is one of the main stages that involve project performance evaluation after the completion. Each of the stages is defined using taskbars. These include core objectives, procurement, program, planning, key support tasks, sustainability checkpoints, information exchanges and government gateways (RIBA 2013). With reference to the RIBA Plan of Work, the two main stages that must involve value management analyses are the technical design and the preparation and brief stage. Value management is effective if done in the planning and design stages. In the case study, technical planning involves planning on the materials used, design improvements that may reduce cost but retain value, innovative engineering systems that will reduce waste and labor used. The planning stage in the case study will involve understanding stakeholder requirement of the construction, allocated budget, business case, allocated time and expected quality (Fewings 2013). A value management study always entails a group of people that are of different disciplines that work together while following a set plan. The participants of a value management study are people that are involved in a project that are contractors, designers, stakeholders, project managers, project directors, sponsors and the investors that look forward to achieving best value for money. Teams led by professional facilitators carry out most value management studies. The aim of any value management system is to ensure that there is value for money. In order to understand the value management study of the preparation and brief process one must first understand the tasks that are involved in the process. The preparation stage points out the needs of the stakeholders, defining project requirements, surveys, clarified budgeting, analyzing feedback on project from stakeholders in the community, assembling and describing functions for project team, risk assessment, defining program strategy and procurement strategy. The technical design processes are the project activities that happen in a project after the developed design has been made. It may continue in other Plan of Work stages such as construction or in use stages. The technical design is carried out by the designers and involves suppliers and subcontractors, architects and project engineers. By the completion of the technical stage all mechanical, structural and architectural and related technical specifications are defined and set. This stage contributes to the minimization of maintenance and operational costs after the project completion through consideration of value for money in the design. According to Seidel (2012), value engineering on some of the items that are part of the technical design reduces cost of the project by eliminating unnecessary costs and improves its productivity, innovation and adaptability. Value Management Study 1: Preparation and Brief Stage Objectives i. Identify stakeholders’ needs and expectations which will determine project outcomes. ii. Using identified priorities and budget, develop a business case. iii. Recognize cost saving areas in the business case. iv. Define the safety and health strategy of the project. v. Develop an improved business case to present to stakeholder and client. Participants and Time Since the preparation and brief stage is among the first stages it is important that it is carried out with caution. Five major participants in the team are the stakeholders. These will include the lead designer, representative from the design team, members of the community, representative from the local authority, project finance specialists and project manager. This stage requires a team of professionals that are very experienced because it determines the entire project execution. The workshop will include a visit to the site and additional meetings to discuss the objectives of the value management study. The site visit may take a day and another day spent in meetings that will discuss objectives of the value evaluation and come up with a value management report. The value management study aims at identifying the key risks that will affect the project and affect its progress as well as point out the values of the project that are regulated to ensure value for money. The process of involving members of the community will help in understanding the main needs of the community and hence help in ensuring that the needs of the community are understood, met and will reduce cases of project disruption by the community. The team will be able to ensure that the facilities that are put up by the local authority are useful for the community; risk assessment will ensure that additional costs such as legal costs, bad media coverage costs and accident care costs are reduced. Early planning of the project program and strategy will reduce cases of time wastage of time and money due to poor planning which may to lead to delays in construction (Francis 2014). Value Management Study 2: Technical Stage Objectives The main objectives of the technical value management study are; i. Understand stakeholder needs, allocated time and allocated budget. ii. Understand the design of the building. iii. Point out essential needs and nonessential requirements of the building. iv. Come up with ideas that will create a quality and value for money building. v. Create a technical cost budget that will be served to the clients. vi. Write a recommendation report on the technical design that was agreed upon highlighting the areas of value management. Participants and Time A value management study that happens in the technical design RIBA stage requires that there is a team of technically specialized team and aims at reducing waste. It will involve a representative of the client that is the local authority, an architect, service and structural engineers, design team, quantity surveyor and a cost manager. This team will contribute the most in value engineering and their professional input will determine project technical cost that ensures that the project cost, maintenance and operational costs will maximize the project needs. It will be involved in a two-day workshop with up to six hours site survey at the building site and the rest of the time spent in analytical meetings. After the technical value management team understands the needs of the stakeholder, the allocated budget, the time frame and the project program set in the stage zero (0) of the project they can analyze what is at the site and compare the knowledge with acquired knowledge with fresh ideas that will come up depending on the expertise and experience of the team. The process involves pointing out the main ideas of the project, main functions, additional functions, coming up with alternative ideas that will involve innovative value engineering, evaluating team ideas and creating a report from the study that will be used for value management and value engineering (Honour 2004). In the area of value engineering, as stated by Jergeas et al (2001), quality and cost effective materials can be used in the building and changes can be made to the roofing or structural design. The technical aspects of the building that can be value engineered include exterior and interior walls, stairs construction, roof construction, electrical systems, ceiling finishes, interior finishes, exterior landscaping, plumping systems, water supply systems and doors. Materials that are used must be robust and resistant to wear and tear, as this will help in minimizing maintenance and operational costs by reducing repairs after the project is completed. The technical team that does the value engineering must be people that are very experienced in their individual fields to create an effective an action plan. In recent trends, the main areas of value engineering that are most rewarding are the site (proper space utilization), reduced electrical installation and materials cost, flooring finishes and reduced plumping systems cost. Some factors in construction cannot be value engineered because they are made when ready such as elevators, fire protection methods and some furnishings (Seidel 2012). Conclusion The paper above has highlighted key performance indicators in the construction of the high quality community facilities. They include respect for people indicators, environmental indicators, cost indicators, time indicators and quality indicators. It has also highlighted value drivers that are helpful in the project planning and execution to ensure completion of the building. An analysis of value management studies and value engineering has been carried out in two stages of the RIBA Plan of Work 2013. These two stages have been helpful in understanding the case study and coming up with the appropriate suggestions of how value for money can be attained through value engineering and value management factors in dealing with value management of the company. Reflective analysis After writing the report, checking for similarity using a plagiarism checker was the next crucial step. The process is important as it enabled me improve my final paper to make it original. I had to avoid cases of similarity in the paper. I checked for plagiarism and got 7% and I believe this came from direct copying of the statements from other people’s work. With the checker, I was able to establish my weakness and improve on it accordingly. I replaced the plagiarized parts of my paper with my own words. The aim was to make the paper original and creative. I referenced appropriately where I had information from other authors. I learnt that by using plagiarism checker, my interests and the interest of other authors are fully protected. I personally developed rationally during the process as I was able to use a different approach in trying to solve the problem of similarity. List of References Brady, T., Davies, A., & Gann, D. M. 2005, Creating value by delivering integrated solutions. International Journal of Project Management, 23(5), 360-365. Available at: http://eprints.brighton.ac.uk/5765/. [Accessed 25 Oct 2014] Fewings, P 2013, Construction Project Management: an integrated approach. Routledge. Available at: http://books.google.co.ke/books?hl=en&lr=&id=eYMmLJHGrmgC&oi=fnd&pg=PP2&dq=Construction+Project+Management:+an+integrated+approach&ots=pBl9I-vYr3&sig=8cR2mmRN7b3eNvNPVIkJeyV4cAg&redir_esc=y#v=onepage&q=Construction%20Project%20Management%3A%20an%20integrated%20approach&f=false. [Accessed 25 Oct 2014] Francis, E 2014, Construction Health and safety policy and procedures, British Land Construction Health and Safety Policy. Available at: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fwww.lwplc.com%2FConstHS_Policy1109.pdf&ei=r0FRVOW7KdCu7Ab9xoHoDw&usg=AFQjCNEGmpO7UF1-crHPh2TiqCAndRr2gw&sig2=vVCqsTkND_-7wg_ocxzlHQ. [Accessed 25 Oct 2014] Jergeas, G., & Put, J. V. D 2001, Benefits of constructability on construction projects. Journal of Construction Engineering and Management, 127(4), 281-290. Available at: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCEQFjAA&url=http%3A%2F%2Fwww.civ.utoronto.ca%2Fsect%2Fconeng%2Ftamer%2FCourses%2FCIV1278%2FREF%2Fbenefits.pdf&ei=Ux1RVLWQFMb5yQOcmoHABA&usg=AFQjCNF8oqPHW-bybuOxChwcI5JW9wMywQ&sig2=w4fIaWeojPIn2rvkOMUJOg. [Accessed 25 Oct 2014] Marr, B 2006, Strategic performance management: leveraging and measuring your intangible value drivers. Routledge. Available at: http://books.google.co.ke/books?hl=en&lr=&id=k6iIBkz9YLcC&oi=fnd&pg=PP2&dq=Strategic+performance+management:+leveraging+and+measuring+your+intangible+value+drivers.&ots=d7cIC_hgpP&sig=zC0eXtLW4VLtOdZalQLBE90FR0s&redir_esc=y#v=onepage&q=Strategic%20performance%20management%3A%20leveraging%20and%20measuring%20your%20intangible%20value%20drivers.&f=false NAO, 2010, Getting value for money from construction projects through design, National Audit Office. Available at: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fwebarchive.nationalarchives.gov.uk%2F20110118095356%2Fhttp%3A%2Fwww.cabe.org.uk%2Ffiles%2Fgetting-value-for-money-from-construction-projects-through-design.pdf&ei=FxpRVMLMLYblywOS24H4DA&usg=AFQjCNH72fmXwuKOZqastDEp_QJRvNvJgg&sig2=EGxfCHcszzVT361zzT94kw. [Accessed 25 Oct 2014] Green, S. D 1994, Beyond value engineering: SMART value management for building projects. International Journal of Project Management, 12(1), 49-56. Available at: http://www.sciencedirect.com/science/article/pii/0263786394900094 . [Accessed 25 Oct 2014] Print, M 2005, Overview of the construction industry KPIs, Constructing Excellence. Available at: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fweb.achilles.com%2Fnews%2Farticles%2Fpdf%2F128%2Fmartin-print-kpi-presentation.pdf&ei=7hhRVPvVOojXyQOL94CYDA&usg=AFQjCNFJ5-yi76vMMlTbFMR1vsnruDX6gg&sig2=uTUou1b9rA6dKQtMY9bfbg . [Accessed 25 Oct 2014] Honour, EC, 2004, Understanding the value of systems engineering, In Proceedings of the INCOSE International Symposium (pp. 1-16). [Online].available at: www.saylor.org/site/wp-content/uploads/2013/08/Value-of-SE.pdf [Accesses 25th Oct 2014]. Seidel, 2012, value engineering trends in the construction industry, Ohio State University. Available at: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CCoQFjAC&url=http%3A%2F%2Fkb.osu.edu%2Fdspace%2Fbitstream%2Fhandle%2F1811%2F51819%2FHonorsThesis.pdf%3Fsequence%3D1&ei=ThdRVLzFD-G_ygPV-oCoCA&usg=AFQjCNEq7dOgzLnJ7MihgQXConb57s--JQ&sig2=GqFexX0nLpLlgYpmOlhsBw. [Accessed 25 Oct 2014] Swan, W. & Kyng, E 2004, Introduction to key performance indicators, Center for Construction Innovation. [Online] Available at: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fwww.ccinw.com%2Fimages%2Fpublications%2FCCI_KPI_Report.pdf&ei=PxhRVJ-NIKPgywPCoYH4Aw&usg=AFQjCNGKZPhkiR17XI6uhviIzEV5nJxaBw&sig2=gucQzJd_YEwk8yULT57zDQ. [Accessed 25 Oct 2014]. RIBA Plan of Work 2013, RIBA Plan of Work 2014. [Online] Available at: http://www.ribaplanofwork.com/PlanOfWork.aspx. [Accessed 25 Oct 2014] Read More