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Value

management differs from Value Engineering(VE), in that VE is concerned with achieving defined function at minimum cost ( or whole life cost). Whereas VM is concerned with defining what value actually means within a particular context, agreeing a clear statement of objectives and ensuring that solution are consistent with those objectives.

VM/VE/VA
Value management- decision to invest- do we need a

project, project concept and scope-what form of project do we need; outline design-what should be the major elements Value engineering- project design; design of project elements Value analysis- improvement of a construction, manufacturing or management process; post project review.

Definition of VM
A structured and analytical process which seeks to

achieve value for money by providing all the necessary functions at the lowest total cost consistent with required levels of quality and performance.

VM process
VM is undertaken as a series of stakeholder workshops

held at key stages during the development of the project or review of process or service. it is flexible , team based activity, planned and directed by an independent VM facilitator and driven by consensus. The workshops are short durations ( 6 hours to 2 days) , intense and highly structured.

Areas to be identified for key learning's

Need to focus on strategic and conceptual planning

phases of projects Need for integrated rather than co-ordinated outcomes from projects Need for larger groups as for strategic and conceptual planning

Areas to be identified for key learning's


Need for a more inclusive approach to value definition Recognition of the inadequacy of v=f/c in defining value Recognition of soft systems thinking Shift from earlier to even earlier

Areas to be identified for key learning's


Use of co-facilitators Need for a consensus-seeking methodology Formal (mathematical) methods are generally inappropriate

Characteristics of typical value management study


A systematic , staged approach
Clear definition of objectives and scope at the outset-

focus on the customer requirements Consideration of the organizational environmentinternal and external influences Multi-disciplinary team effort-positive human dynamics Function analysis

A workshop format with a structured job plan that

separates creativity from evaluation and development Effective use of methods and tools-independent facilitation

Principal stages of value management


Preliminary phase- client briefing (2-3 people)
Strategic diagnosis, study planning (4-8 people) The workshop(s) (depends upon the need number of

will be chosen) De-briefing or wrap up meeting (4-8 people) Final report/close

Stages of a workshop(job plan)


Information
Function analysis (value tree)- functional analysis is a

technique that assembles the functions of a project in a hierarchical diagram. Speculation( risks & winning ideas ) Evaluation Development Decisions/implementation Report

value
In value management , value is the level of importance

that is placed upon a desired function, or combinations of functions. Value= function/ whole life cost (or) what you get (or want)/ what you pay Value is improved by increasing the worth of the functions relative to the cost. Ratio of cost to worth is known as value index.

VM and project development stages


Asset management stage ; project identification- VM
Feasibility-VM Options development-VM

Outline design-VM/VE
Choice of procurement route-VM Detail Design of project and elements-VE Preconstruction-VE Operation and maintenance-VE, VA Post project review-VA

Pre-requisites required for VM study


Attitude of key person
Quality of information Clarity of objectives

Independent, qualified facilitator


Team structure and skills Positive team building and human dynamics during

the study Careful planning Time for workshop

Benefits of VM
Any ambiguities and misperceptions are resolved
Clear definitions or roles and responsibilities Improved team and client relationships

Improved communications
Enhanced value culture

Two Cycles in VBM


Foundation / Planning Cycle On-Going Management Cycle
Strategic Plan
T

Organization Values Goals Results

I M E

Q U

Rapid Prototype VBM

Detailed Analysis

A
F I I N T A NQ U Y C I A AN L T I T Y L

Design

Implementation
Process Goals Results

Activities Goals Results

Performance
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5.6 Strategic Systems in Operations


Z Figure 5.7 p166

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VM process and organizational structure provides


demonstrating the true cost of operations Highlighting non productive/high cost elements Reducing time Improving customer support by identifying right first time practices Enhances understanding by all or ht e true costs and functions of operations Improving the ability of all to contribute to cost management Increasing competitiveness