VALUE ENGINEERING / VALUE MANAGEMENT

Central to the project manager’s goal of delivering built assets that meet the functional and operational needs of a client are the techniques of value engi-neering and value management. (Originally known as value engiengi-neering, or VE, the technique was later re-badged as value management.) This approach is now widely practised in both public and private sectors. SAVE (the International Society of American Value Engineers) defines value engineering as:

A powerful problem solving tool that can reduce costs while maintaining or improving performance and quality. It is a function-oriented, systematic team approach to providing value in a product or service.

It is used at various stages during the project, but the earlier in the process it is introduced, the greater its impact. The basis of value management is to Figure 2.1 BREEAM scoring of variable and fixed processes

Adapted from BSi PD 6079-4:2006.

analyse, at the outset, the function of a building, or even part of a building, as defined by the client or end-user; then, by the adoption of a structured and systematic approach, to seek alternatives and remove or substitute items that do not contribute to the efficient delivery of this function, thereby adding value. The golden rule of value engineering / management is that as a result of the value process the function(s) of the object of the study should be maintained and if possible enhanced, but never diminished or compromised.

The terms in common usage are:

• Value analysis – the name adopted by Lawrence D. Miles for his early studies and defined as an organised approach to the identification and elimination of unnecessary cost. As if to emphasise the importance now being placed on value engineering, in the year 2000, Property Advisors to the Civil Estate (PACE) introduced an amendment to GC/Works/1 – Value Engineering Clause 40(4). The amendment states:

The Contractor shall carry out value engineering appraisals throughout the design and the construction of the Works to identify the function of the rel-evant building components and to provide the necessary function reliability at the lowest possible costs. If the Contractor considers that a change in the Employer’s Requirements could effect savings, the Contractor shall produce a value engineering report.

• Value management – value management involves considerably more emphasis on problem solving as well as exploring in depth functional analysis and the relationship between function and cost. It also incor-porates a broader appreciation of the connection between a client’s corporate strategy and the strategic management of the project. In essence, value management is concerned with the ‘what’ rather than the ‘how’ and would seem to represent the more holistic approach.

The function of value management is to reduce total through-life costs, comprising initial construction, annual operating, maintenance and energy costs and periodic replacement costs, without affecting the indeed improving performance and reliability and other required design parameters. It is a function-oriented study and is accomplished by evaluating functions of the project and its subsystems and com-ponents to determine alternative means of accomplishing these functions at lower cost.

Using value management, improved value may be derived in three predomi-nant manners:

1 Providing for all required functions, but at a lower cost.

2 Providing enhanced functions at the same cost.

3 Providing improved function at a lower cost – the Holy Grail.

Among other techniques, value management uses a value engineering study or workshop that brings together a multidisciplinary team of people.

A value engineering study team works under the direction of a facilitator, who follows an established set of procedures, for example the SAVE Value Methodology Standard (see Figure 2.2), to review the project, making sure the team understands the client’s requirements and develops a cost-effec-tive solution.

FUNCTIONAL ANALYSIS

GENERATE ALTERNATIVES (RISK ANALYSIS) (WHOLE LIFE COSTS)

DEVELOP ALTERNATIVE SOLUTIONS

Figure 2.2 Value management

The key player in a VE study is the facilitator or value management practi-tioner, who must within a comparatively short time ensure that a group of people work effectively together. A variety of techniques are used during the study including:

• value trees,

• decision analysis matrices,

• Functional Analysis System Technique (FAST) diagrams, and

• criteria scoring.

There are numerous variations and adaptations of, not only the approach to conducting a value engineering workshop, for example the classic SAVE 40-hour, five-day value engineering workshop (see Figure 2.3). The workshop team is made up of six to eight experts from various design and construction disciplines, who are not affiliated to the project, as it has been found that the process is not as vigorous if in-house personnel are used. In addition, an independent facilitator is recommended as less liable to com-promise on the delivery of any recommendations. The assembled team then commences the workshop, following the steps of the SAVE methodology.

At the start of the week the group is briefed on the project by the workshop personnel and members of the design and construction teams and the scope of the study is defined. Costs of the project are also carefully examined and analysed using a variety of techniques as well as compared to other facilities with a similar function. Value management / engineering studies should be linked with both risk and whole-life cost assessment, as will be discussed later in this chapter.

DESIGN

Design management / specialist design / BIM

Design management takes place over the entire lifespan of the project. New procurement routes, shorter project timescales and the like make the man-agement of the design process a critical task for the project manager. The nature and the degree of design management will depend on the procure-ment path.

Traditional procurement is a linear process, with one process being completed before the next stage can begin. However, other procurement paths, for example design and build, management systems and package deals, allow design, procurement and construction to occur simultaneously.

Management contracting, for example, requires that each work package is carried out by a separate work package contractor. The management contractor will be responsible for drawing up the list of packages and there is a case for the lead consultant getting involved / assisting in this process, issuing specifications, clarifying package scope and setting out constraints of packages, for example. Producing a co-ordinated set of designer’s draw-ings and specifications can lead to fewer claims and disputes during the course of the projects.

The project manager should ensure that the design of the development is managed in order that:

• the design is completed on time for each stage,

• the design reflects the cost limit and budgets,

• the quality of the design matches the client’s aspirations and percep-tions, and

• changes are incorporated in a transparent way.

In order to achieve this, the project manager should establish a framework to monitor the design development with the lead designer. Traditionally, the lead designer role and the lead consultant role are undertaken by the same individual, although there may be circumstances where it is appropriate to separate the two roles.

Lead consultant

Traditionally the lead consultant has been the architect (lead designer).

What does the lead designer do? These are typical responsibilities:

• co-ordinate preparation of the work stage programme,

• co-ordinate design of all construction elements including work carried out by specialist, suppliers and consultants,

• determine the nature of design outputs and their interface with other factors,

• verify that design,

• liaise with the client on any major design matters, and

• establish a design review framework.

Although the lead designer will have overall responsibility for the co-ordi-nation of the design development with other consultants and specialists, it is advisable for the project manager to draw up a design development plan.

There may be some resistance from the lead consultant / lead designer to

doing this but nevertheless the project manager should persist. The design management plan should consider:

• schedule of information required together with dates,

• BIM data drop dates,

• procedures for introducing design changes,

• monitoring resources,

• responsibilities,

• format of information,

• information exchanges, and

• agreement dates of value engineering exercises and sustainability checkpoints.

The advantages for the project manager for adopting BIM are:

• A BIM model allows the project manager to build before the project is built, highlighting any clashes and sequencing issues.

• Updates can be dynamic, removing some risks associated with data management.

• Increased confidence and risk reduction, such as design co-ordination (e.g. structure and services), construction logistics and timelines.

• Cost and programme implications, ideally, would be real-time (but will need a sense check to understand all the implications, e.g. whether weekend working is required).

• Improved communications between the project manager, stakeholders, owners, end-users and third parties. The project team and client can vis-ualise, simulate and analyse a project before actual construction begins.

It allows the visualisation of phasing and subsequent impact on logistics, cash flow and sales (e.g. you cannot sell prime residential apartments if they are still under construction).

• Integration of design and programme increases confidence in comple-tion dates and refines project preliminaries.

• Depending on a project’s position on the BIM maturity model, change management should be simplified and easily identifiable (what will not be evident is why the change is being considered) and the change impact will immediately be reflected throughout the model.

• If performing design management, BIM will co-ordinate a change made anywhere in the model: in 3D views and drawing sheets, schedules and elevations, sections and plans, and scope gaps can be checked for per-formance management of the design and construction team, the design updates are readily available (or as parts are designed off-line, tested

and uploaded to BIM) for performance review and checking against programme.

• BIM is updated during construction to create an ‘as-built’ record and the model becomes a record to support facilities management. The objects link to data about each component, which facilitates delivery of the building record documents.

Design co-ordination at each stage of the RIBA Plan of Work BIM Outputs

STAGES 0 & 1 – STRATEGIC DEFINITION AND PREPARATION AND BRIEF

1 Data Drop 1: Model represents requirements and constraints

Advise the client on the purpose and the advantages of using BIM and agree on the level of BIM adoption; e.g. 2D or 3D. Agree intellectual property rights and model ownership and definition of responsibilities. Consider Soft Landings and the scope of BIM including In Use issues.

At this stage the model can generate room data sheets illustrating:

• function of the space,

• environmental conditions of the space, and

• finishes.

STAGE 2 – CONCEPT DESIGN

The focus is on design. The objective at this stage is to decide the scope of the individual studies necessary to develop the project to the completion of the scheme design. This is a stage of intense creative activity and evaluation of alternative strategies for the project. The use and integration of modern methods of construction, discussed in Chapter 3, should be considered at this point.

Although during this stage of the design process drawings will be pro-duced, it should not be forgotten that the purpose is to create a concept;

this stage is concerned with strategy rather than detail. The structural engineer should investigate ground conditions to assess the best possible solution for the substructure, which should be co-ordinated with the lead designer. The M&E consultants should consider the best place for large items of plant, risers, etc.

• Arrange a pre-start meeting.

• Commence initial model-sharing with design team.

• Identify key model elements.

STAGE 3 – DESIGN DEVELOPMENT

At this stage the main part of the detailed co-ordination work should be undertaken, including:

• BIM,

• data sharing and integration for design co-ordination,

• integration of design components,

• export data for planning,

• technical analysis,

• agree extent of performance specified work, and

• enable design team to access BIM data.

2 Data Drop 2: Model represents outline solution

At this stage the model can generate design solutions illustrating:

• function of the space,

• environmental conditions of the space,

• finishes,

• furniture and equipment,

• various schedules, and

• tender documentation.

STAGE 4 – TECHNICAL DESIGN

3 BIM Data Drop 3: Model represents construction information

At this stage the model can be used for construction purposes. Various sched-ules, doors, windows, etc. can be produced. The model is fully co-ordinated technically, and fully co-ordinated drawings can be generated. All inputs from the contractor are incorporated into the model:

• data sharing and integration for design co-ordination and detailed anal-ysis including data links between models,

• BIM data used for environmental performance and area analysis,

• export data for planning, and

• data sharing for design co-ordination.

STAGE 5 – CONSTRUCTION

4 BIM Data Drop 4: Model represents operations and maintenance (O&M) information

The data being collected at this stage is the operational and detailed func-tional information supplied by product manufacturers. Particular attention needs to be focused on the needs of the first year of operations as many and any valid warranties. The model represents the project as built and contains all the information provided by various contractors to maintain it. Information can be extracted from the model that is relevant for FM in order to:

• agree timing and scope of Soft Landings,

• co-ordinate end of construction BIM model data,

• detailed modelling, integration and analysis,

• embed specification to model,

• enable access to BIM model for contractors,

• integrate subcontractor performance specified work model information into BIM model data,

• review construction sequencing with contractor (4D),

• agree timing and scope of Soft Landings, and

• use BIM data for contract administration.

STAGES 6 AND 7 – HANDOVER AND CLOSE OUT

5 Data Drop 5 (and subsequent drops): Model represents post-occupancy validation information and ongoing O&M

• FM BIM model data issued.

• Study of parametric object information contained within BIM model data.

Design changes

There will be times during the design process when, for any number of reasons, it will be necessary to change the design or form of construction.

The project manager should inform the client and other members of the project team at the outset that the earlier changes can be proposed / evaluated and incorporated, the smaller the impact on the project in terms of cost and effectiveness. See Figure 2.4 for an illustration of the design change process.

Alternatives requested

Evaluation of alternatives

Select alternatives

Amend cost plan

Impact on programme Costs

Revised costs Additional resources Yields Life cycle

costs Preliminaries

Completion

Impact on budgets

Inform design team Inform client

Drawing production

Abortive work Specialist involvement

Disruption Impact on

other elements

Figure 2.4 Design change process

Contractor involvement in the design process

Traditionally, it has been normal practice for designers to appoint special-ist subcontractors as part of the design and procurement process, typically to prepare the detail design for kitchens shown on the designer’s general arrange-ment drawings. However, new procurearrange-ment routes and forms of contract mean that quite often a contractor can have a significant input into design.

It is important for the project manager to appreciate the sometimes fine line between liabilities and obligations that designers face, which often necessi-tates that a number of design processes are considered to manage the associate design risks. In practice, much of the contractor’s design work will be carried out by subcontractors, either domestic or named, and in rare circumstances nominated, although it is the contractor who retains responsibility for design.

It may be the case that the type and extent of the works is defined in a per-formance specification instead of the more traditional prescriptive approach.

Figure 2.5 illustrates the interaction of timing and consequences of intro-ducing VE into the design process.

Contractor-designed portions

The project manager should understand the impact of the design supply chain on procurement and design responsibilities and the necessity for it to be successfully integrated into design process.

The extent of contractor design will vary from project to project but should be determined as early as possible:

Cost to change Potential savings

Figure 2.5 Interaction of timing and consequences of introducing VE into the design process

• to enable tendering contractors to allow for any design work in their bids, and

• to enable the design to be developed.

Once the extent of the contractor-designed portion has been decided – and the project manager may have their own views on this – and has been final-ised, it should be recorded in a design responsibility matrix. JCT contracts have for a number of years now addressed the need to contractually agree the extent of design work undertaken by specialist contractors (Performance Specified Work). The RIBA Plan of Work 2013 suggests the preparation of a design responsibility matrix so that it is clear at the outset to all parties in the project team which aspects of the design will be undertaken by specialist contractors and which aspects will be constructed on site from information prepared by the design team. The matrix sets out who is responsible for designing each aspect of the project and when. This document should set out the extent of performance and specified work. The document should be created at strategic level at Stage 1 and fine-tuned to the concept design at the end of Stage 2, to ensure that there are no design responsibility ambigui-ties at Stages 3, 4 and 5.

STATUTORY APPROVALS / PLANNING PERMISSION

In document 0415732395 (Page 96-108)