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VALUE
MANAGEMENT
By : Associate Professor Sr Ts. Dr Afzan Ahmad Zaini
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Course Learning Outcome : CLO2
▪ At the end of this lecture, students should be able to:
▪ Apply the concept of value management in the context of construction industry, its
concept, terminologies, related guidelines, processes and application.
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Outline
▪ 1. VM Definition
▪ 2. VM Methodology
▪ 3. VM at initial stage
▪ 4. VM Process
▪ 5. VM Benefits
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What is Value Management?
▪ Value Management is concerned with the creation of sustainable value, either
at project, product, process, organisational or social level. It is concerned with
improving and sustaining a desirable balance between the needs and wants of
stakeholders and the resources needed to satisfy them.
▪ (Institute of Value Management)
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Value Management
▪ The primary purpose of value management is to identify and remove
unnecessary costs.
▪ However, the comparative prominence shifted from the basic
requirements; material, cost and quality to an enhanced philosophical
approach to value, which encased time, cost, performance, knowledge
and technical proficiency.
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Value Management
▪ Value Management are methodologies that principally aim at defining, optimizing
and meeting value for money in any construction project.
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Value Management Methodology
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Value Management at the initial stage
▪ VM is integrated into the project management methodology during the initial
stages of the project.
▪ VM does not only benefit a project from a quality and cost but on an
intangible standpoint as well.
▪ It improves agreement between stakeholders through clearer objectives while
reducing risks for undergoing changes in scope of the project along its
lifecycle.
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Value Management at initial stage
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Value Management Process
Value Value Value
Planning Engineering Analysis
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Value Management Process
▪ VM is a continuous process, which is attained through workshops where
construction parties meet to ensure the delivery of the construction project; by
achieving value for money.
z Value Management Process
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Value Management Process
▪ VM is objectively a team based-approach which ensures that best value is achieved along
the whole life cycle of the project.
▪ VM provides an objective approach that defines the project’s scope and objectives from
the client’s point of view, which emphasize on the predicted outcome of the project.
▪ At the planning stage, cost estimates are prepared on basis of functional purpose, which
forms part of value planning.
▪ The design stage follows the strategic brief where the process for project delivery is
established when concerned parties and stakeholders have mutually defined, understood
and agreed upon the project outcome expressed on the basis of estimated benefit for the
client’s business case.
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Benefits of Value Management
▪ The process of VM will be dependent upon the level of risk associated with a
project.
▪ A critical project will justify a complete and continuous VM process along the
project life cycle since it involve high risk with a high value.
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Benefits of Value Management
▪ VM optimizes a mutual understanding among the client and the users to
ensure that needs and expectations are concurrently met on the basis of
priorities.
▪ VM provides a systematic base for decision-making along the project life
cycle in terms of value and function for instance solving queries relating to the
design of a particular structure by consulting the brief to ensure that the
solutions are subjective and sustainable.
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Benefits of Value Management
▪ VM ensures clarity of the project brief that enhances communication among
stakeholders to mitigate clashes resulting from constraints in regards to the
expectations and project’s requirements.
▪ VM ensures that the project is being delivered in the most beneficial way while
addressing the business need. In so doing, VM exercises address both
monetary and non-monetary attributes.
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Benefits of Value Management
▪ Functionally, VM provides the basis for design development that involves the close
study and engineering of material selection that would provide enhanced technical
solutions with improved performance and quality.
▪ For example going for a structural steel frame rather than a precast frame which
would fulfill the same function but with better value for money while optimizing
resources and enhancing environmental sustainability (Steelconstruction.info, 2015)
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Benefits of Value Management
▪ VM ultimate aim is to create value for the construction parties, the project and the
client.
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THE END…
