Value management process steps

While the process originated in the manufacturing industry, the key initiating question ‘what function does a component perform and how else can this function be performed’ is equally applicable to a wide range of disciplines, including construction.

The process of value management includes value engineering, which is a more systematic approach to ensuring that specific functions are satisfied to the required standard for the least cost. It assesses a range of possible solutions against the values required by the client.

Tools and techniques

The principles of value management can be used by all, ranging from the basic tools to more advanced facilitation. A number of commonly-used techniques include:

• function analysis;
• function analysis system technique (FAST);
• cost/worth;
• SMART methodology;
• value drivers;
• value benchmarking or value profiling;
• options selection;
• criteria weighting;
• creative techniques;
• evaluation techniques;
• scenario techniques;
• target costing;
• function performance specification (FPS);
• brainstorming or mind showering;
• cost benefit analysis;
• process mapping;
• excursion;
• objectives hierarchy;
• issues generation and analysis;
• pair wise comparison;
• pareto analysis;
• risk analysis;
• SCAMPER;
• stakeholder analysis;
• SWOT analysis; and
  
• value analysis.

Value management and value engineering is often implemented by applying a review process at key interventions during the project life cycle. These interventions typically take the form of stakeholder workshops which will vary in duration to align with the scale, complexity and stage of the project.

A key attribute to value management and value engineering is the deliberateness and structure of approach. This structure is a classic problem-solving cycle, i.e. it is necessary to define and understand the problem before exploring solutions.

Value management is most effectively applied as a team-based activity in a workshop setting. The essential component of such workshops is a team analysis of the functions that need to be provided to achieve the client’s objectives. The changed perspective that results from a value management approach encourages the development of creative solutions, potentially eliminating causes of poor value on projects.

Value management is a more complex activity than value engineering since it involves the client and stakeholders in investigating, synthesising and making explicit the technical definition of the project. This complexity in terms of project definition, the politics of the implied client organisational change and the management of the participants to maximise contribution and agreement may require a skilled and qualified value management facilitator.

The value management process follows a logical overall study plan sequence. At its heart, is the workshop which follows the workshop job plan. The 2 plans described below are to be adapted to suit the circumstances and objectives of each individual value management study and stage in the project life cycle.

Study plan

The study plan establishes the overall value management strategy and makes use of the following stages:

• study briefing: this enables an independent facilitator to plan the strategy;
• preparation meeting: a strategic review of the project and challenges to be addressed and subsequent planning of data-mining assignments;
• value management workshop;
• de-briefing and review of draft reports: final reports prepared and issued; and
  
• implementation: team delivery of decisions made.

The study plan confirms the need for the study, defining its scope, objectives, timing and logistics. It ensures the correct team is selected, critical constraints recognised and that appropriate preparation and data mining for the workshop is assigned.

It ensures the workshop agenda is tailored to target the specific objectives highlighted in the study as agreed with the client and project stakeholders. The outcomes of these meetings are distributed by the value management lead to all team members to form a pre-workshop brief.

Post workshop, the agreed action plans are issued as part of a report and implementation of the plans agreed.

Workshop plan (agenda)

The workshop job plan is set within the study plan and is customised as a specific agenda based on the following:

Job plan phase	Typical objectives	Typical questions	Typical activities
Information	Confirm VM objective Clarify assumptions Provide information base Set scope of study	What is VM purpose? What is rationale? What is timetable?	Presentation Graphics Cost, Energy, area models Pre-reading Through life costs
Analysis	Rationalise data Clarify functions Understand system links Test parameters Select high result functions	What does it do? What does it cost? What must it do? What are performance criteria? What are quality criteria?	Function analysis F.A.S.T Function hierarchy Priority matrix
Creativity	Generate alternative ideas Gain multi-discipline input Maintain non-judgement environment Encourage the unconventional	What are the alternatives? What else satisfies the function?	Brainstorming Lateral thinking Creative thinking Subtopic focus Subgroup Facilitation
Judgement	Assess and cull ideas Promote further options Focus on solutions Target value improvements Promote communications Seek group/team consensus	What do alternatives cost? What alternatives are functional? What ideas link together? Acceptability of options?	Rating/weighting Through-life costs Multi-disciplinary input Group/team interaction Common/corporate sense
Development	Refine improvement options Document rationale Present outcomes and recommendations Engender ownership	What are the value improvements? Why charge from status quo? What further actions are needed? What decisions are required?	Cogent reporting + executive summary Clear action resolution Co-ordinate actions action plan + follow-up

Table 2: Workshop job plan.

© IHS, reproduced with permission from BRE BR 396.

Notes on the use of the workshop plan:

• To facilitate informed recommendations including implications on programme, cost, function and risk. Sufficient time should be allocated for value management workshops, which may include the project team working in groups. This may sound like a drain on resource, but will ultimately accelerate decision making and can often save weeks or months on the design programme.
• It may be that the development requires research or the participation of specialists not present in the existing project team. In these circumstances, the workshop will be suspended, with an action plan agreed for the team to disperse for a period of post-workshop development. A follow-up workshop is then scheduled where the team can present their action plan findings for client approval.

Experience has shown that the widespread use of standard specification clauses and design details can often result in over-engineered design solutions and overly tight tolerances. A positive review of the design, based on a clear understanding of client needs will ensure the best outcome for the client and project team in removing any inhibitors and can result in significant cost savings, while maintaining quality. It is the use of tried and tested standard specifications that provide security to the client and project team, but that can delay the adoption of new innovations, which may offer improved performance at reduced cost.

The wide range of options available to the design team during the option appraisal stage makes value management a complex process, commonly involving a wide range of design alternatives. It is important these options are properly evaluated. Criteria that should be used as part of the assessment include best fit with client requirements, capital costs (CAPEX), operating costs (OPEX) and whole life costs (WLC).

The prime residential market

The prime residential market provides an ideal opportunity for the application of value management where design at concept stage can directly impact on sales values. Aside from geographical location, the single greatest driver of sales value, a grasp on the fundamentals driving sales values is vital to a project’s success.

The specification does not necessarily need to include best of breed materials, but align with the purchaser's frame of reference for a quality specification, so often informed by the hospitality industry and retailers to include wide plank timber floors or luxury carpets, large format marble floor and wall finishes, built-in joinery and branded kitchens. That said, finishes must always be to the highest standard as expensive materials installed badly will reduce sales values.

Floor-to-ceiling heights and dimensions of a room provide an impression of space. Rather than number of bedrooms, a master suite with his and hers en-suite bathrooms and larger second bedrooms positively influences sales values. Where this is not possible natural light will help to provide the impression of space preferably by providing dual aspect. The impression of space can also be provided by intelligent space planning and use of light and reflective finishes.

Amenities should be considered including concierge, car parking, gyms, private dining rooms or outdoor spaces for hire, spa facilities and swimming pools, these all add potential for increased sales values and sales velocities.