Value management Flashcards
What is meant by value in construction?
The ratio between the benefit derived from the a course of action and the cost or effort required to achieve it (RICS, 2017).
How can you increase the value of a construction project?
Value engineering (VE) and value management (VM) both help increase the ratio between benefit and cost or effort required.
Explain the concept of value?
Value is a relative concept. Different project stakeholders will have their own perspectives. It is based on the relationship of satisfying needs and objectives and the resources required to achieve them.
What is the aim of value management?
It is all about organisational / project improvement, setting clear goals, improving productivity and return on investment. It’s a method highlighting opportunities to create value within a project, subsequently managing solutions to ensure value is continuously generated.
Why is value management important?
It encompasses the whole life cycle of a project and beyond. It deals with high level and complex strategic issues affecting a project, it helps achieve the right project brief. It can lead to reduced design and construction time. It uses creativeness and innovation.
What are the challenges for value management?
1) The benefits and costs occur at different stages of projects.
2) Increasing cost and decreasing impact from introducing change as a project progresses.
3) Managing the imbalance in a holistic and transparent manner is a big challenge.
What are some value management techniques?
1) Function Analysis System Technique (FAST) diagram
2) Ishikawa Technique (Fishbone Analysis)
3) Lessons Learned Technique
4) Brainstorming
5) Cost Benefit Analysis
6) Criteria Weighting Technique
7) Excursion / Metaphors
8) Objectives Hierarchy
9) Risk Analysis
10) Process Mapping
What is value engineering?
A method used to eliminate any unnecessary costs, in order to achieve value for money in a project. The techniques are used throughout the life cycle of a project. With its aim to find better alternative solutions that meet the functionality of the structure whilst offering lower costs. RICS state it will achieve the same out, at a lower cost.
Both VM and VE:
Are not for lowering the material specifications in the design to reduce the cost.
The impact of design and construction on operating costs and business processes should be considered.
They focus on value rather than cost and whole-life cost and time.
They are structured, auditable and accountable.
They’re multidisciplinary.
Are VM and VE isolated processes?
No they aren’t isolated or stand-alone processes and to be linked with other PM aspects such as Risk management, Lifecycle costing & lean construction.
What are the benefits of VM and VE?
1) Reducing project cost
2) Earlier consideration of design, build-ability and maintainability.
What are the 5 steps for a VM / VE study?
1) Information gathering
2) Creative thinking
3) Analysis, evaluation and shortlisting
4) Development
5) Presentation
Both VM and VE studies generate a report summarising the process steps and recommendations to enhance value.
What are similarities of VM and VE?
1)Both are about optimising overall value, within the constraints.
2) They make recommendations for future events.
3) Achieve the same desired results but for less cost, with no detriment to the functionality of what is required.
4) Try to provide more cost effective ways pf achieving the desired outcomes - RICS
5) Both should be used to guide and direct project design and construction.
6) Maximise project value given the time, cost and quality constraints.
What are the differences of VM and VE?
1) Strategic Value Management and Tactical Value Engineering.
2) In VM, a multidisciplinary approach is needed for the strategic and often highly complex problems being considered.
3) In VE, engineering solutions to the problems being considered.
4) A VM report may be a strategic document aimed at a broad collection of stakeholders, whereas a VE report is more likely to be a technical analysis written for an engineering or project-focused reader.
