VALUE MANAGEMENT IN CONSTRUCTION: A CLIENT'S GUIDE

John. N. CONNAUGHTON and Stuart D. GREEN

Construction Industry Research and Information Assoociation, Special Publication 129.

Contents

Part 1 Why Read This Guide?

1.1 What is value management?

1.2 Why use value management?

1.3 Who should use this guide?

1.4 Coverage

1.5 How to use this guide

1.6 Basis of guidance

Part 2 Why Use Value Management?

2.1 What can be achieved?

2.1.1 The main benefits

2.1.2 Reducing costs and achieving value for money

2.2 Value management defined

2.2.1 Value management and value engineering

2.3 Value for money in construction

2.3.1 What is value for money?

2.3.2 Establishing objectives and building effectively

2.4 Achieving value for money

2.4.1 Is value management not what professionals do anyway?

2.4.2 The importance of a planned approach

2.4.3 Decisions need to be rational

2.4.4 Decisions need to be explicit

2.4.5 Decisions need to be accountable

2.4.6 Key success factors

Part 3 Getting Started: An Overview of Value Management

3.1 The core principles

3.1.1 A creative approach to problem solving

3.1.2 The importance of workshops

3.1.3 The planning and timing of workshops and the need for advice

3.1.4 The design of workshops

3.1.5 Participation in workshops

3.1.6 Value management as a continuous process

3.2 How to use value management: a plan of action

3.2.1 Finding the right approach

3.2.2 A framework for value management

3.2.3. Using the framework

3.3 Project uncertainty and risk

3.3.1 What is risk?

3.3.2 Risk management and value management

3.3.3 Workshops

Part 4 Agreeing clear objectives: value management

4.1 Introduction

4.2 Preparation

4.2.1 Key activities

4.2.2 Select and brief value manager

4.2.3 Initial statement of need

4.2.4 Identify stakeholders

4.2.5 Value management awareness

4.2.6 Workshops

4.2.7 Report, implementation and feedback

4.3 Value management at concept stage (VM1)

4.3.1 Objectives

4.3.2 Key activities

4.3.3 Duration and structure of workshop

4.3.4 Who to involve

4.3.5 Results

4.4 Value management at feasibility (VM2)

4.4.1 Objectives

4.4.2 Key activities

4.4.3 Duration and who to involve

4.4.4 Results

4.5 Procurement strategy and value management

4.5.1 Traditional

4.5.2 Design and build

4.5.3 Construction management

Part 5 Building cost-effectively: value engineering

5.1 Introduction

5.1.1 What does value engineering do?

5.1.2 Right first time

5.1.3 Value engineering and cost planning

5.2 The principles of value engineering

5.2.1 Key requirements

5.2.2 The importance of 'function'

5.2.3 Eliminating unnecessary cost

5.2.4 Cost targets for value engineering

5.3 Using value engineering

5.3.1 Responsibilities

5.3.2 Value engineering awareness

5.3.3 Value engineering reviews

5.4 Design option appraisal

5.4.1 Appraisal principles

5.4.2 Appraisal methods: life-cycle costing

5.4.3 Buildability appraisal

5.5 Value engineering approaches

5.5.1 Concurrent studies

5.5.2 The value engineering workshop and job plan

5.5.3 Composition of the value engineering team

5.5.4 Duration and timing of workshops

5.5.5 Contractor's change proposal

5.5.6 Implementation and feedback

5.5.7 Design liability/responsibility

5.6 Procurement strategy and value engineering

5.6.1 Traditional

5.6.2 Design and build

5.6.3 Construction management

Part 6 Value Management in a Client Organisation

6.1 Implementing a value management system

6.1.1 Appoint a champion

6.1.2 Develop and document value management guidelines

6.1.3 Awareness seminars

6.1.4 Pilot workshops

6.1.5 Facilitator training programme

6.1.6 Establish value management unit

6.2 Maintaining a value management system

6.2.1 Strategic importance of feedback

6.2.2 Post-project evaluation

6.2.3 Continued innovation

Appendices

1. Glossary of terms

2. Appointment of a value manager: key selection criteria

3. Workshop toolbox

3.1 Workshop arrangement

3.2 Brainstorming guidance

3.3 Workshop reports

4. Evaluation techniques

4.1 Structuring objectives/developing a value hierarchy

4.2 Criteria/importance weighting and matrix analysis

4.2.1 Criteria/importance weighting

4.2.2 Matrix analysis

4.3 Function analysis

4.4 Life-cycle costing

5. Typical cost elements on construction projects

6. Further reading