Multi-Level Performance Measurement for Value Engineering of Large-Scale Construction Projects

(1)

Multi-Level Performance Measurement

for Value Engineering

of Large-Scale Construction Projects

Jong-Kwon Lim (CEO/Ph.D./CVS)

Heung-Min Park (CVS)

Sung-Hun Kim

Infra Asset Management Inc. Ltd.

[email protected] [email protected] [email protected]

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Contents

Introduction

Multi-Level Performance Measurement

Case Study

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(4)

z External Growth Oriented

z Introducing VE at Construction Stage for only Construction Firms

z Public Works Efficiency Policy

Announced for VE

z Seongsu Grand Bridge Collapsed

z Sampung Department Store Collapsed

KOREA VE History

(5)

z VE Study Required By Korea Construction, Technology &

Management Law

z VE Review base

- All Public Construction Projects More than 50 Billion Won(5,000 Million $)

- Based on Structurally Important Projects : Class # 1 & 2

z VE Study Projects Expanded (50 →10billion $)

- All Projects More than 10 Billion $ - Eliminating Class # 1&2

KOREA VE History

(6)

KOREA VE History

2006

z SKVE (Society of Korean Value Engineers) Founded

z KCVE (Korea Construction Value Engineering Research Institute) Founded z KLC/KRNA/Seoul City/Pusan City Newly Introducing VE Process

z Research Project for Efficiency of Construction VE z Revision of VE Acts

(7)

Challenging Issues - Results

Focusing on Cost Reduction

Decreasing Performance

Sacrificing User Needs and Demands Functions

Poor Communication

Poor Satisfaction of Clients and Stakeholders

Poor Implementation

(8)

Challenging Issues - Reasons

Lack of Knowledge of VE Concept

Without VE Workshop

A Kind of Design Review

(9)

Research Projects Relating to LCC for VE of

Clients KEC & KOWACO

I

AM

Effort

Invited Seminar supported by KICEM

Awards by KOWACO & KEC

(10)

Muti-Level

(11)

Backgrounds

Characteristics of Korean Clients & Engineers

Qualitative

Quantitative

VE Service for DB Project

Simple Measurement

Detailed Measurement

Use

Muti-Level Performance Measurement

Better Communication and Decision

(12)

Definition & Purpose

Performance Attribute Attr. 1 Attr. 2 Attr. 3 Attr. n · · ·

Evaluation for Complex, Large Scale Project isn’t

Objective but Subjective

Existing

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Definition & Purpose

Performance Attribute Attr. 1 Attr. 2 Attr. 3 Attr. n · · · · · · · · · More Detailed Performance Evaluation & Objective Assessment for Large Scale Project

Proposed

DetailedAttr. 2-1

Detailed Attr. 2-2 Detailed Attr. 2-3 Sub Project 1 Sub Project 2 Sub Project 3 ※ 20~30 Performance Attribute

(14)

Process

Attr. Weight Attr. Weight P-01 (A) p-01 (B1) p-02 (B2) p-03 (B3) ：：：： 1st Level 2nd Level

Pre-Study

Study

Information

Preparing Draft of Performance Attribute(P.A.)

Review Original Design Concept

Modify P.A.

Brainstorm P.A.

Set up P.A. of Level 1 & 2

Determine Weight for Each

Attribute

Divide Major Sub-Projects

Allocate Contribution to Each

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Process

Example)

Attr. Weight Attr. Weight Important

Index Weight Important Index Weight P-01 (A) p-1.1 (B1) (C1) (D1) (E1) (F1) p-1.2 (B2) (C2) (D2) (E2) (F2) p-1.3 (B3) (C3) (D3) (E3) (F3) ：：：：：：：： 7~9 Items 20 ~ 30 Items 1st Level (Caltrans) 2nd Level

(Detailed) Sub Project-1 Sub Project-2

A, B is Calculated by “Value Matrix(Caltrans & WSDOT)”

Important Index ( 0 ~ 5 )

1 : not Important

2 : not Much Important 3 : Important

4 : Very Important 0 : No Effect

(16)

Process

Example)

Attr. Weight Attr. Weight Important

Index Weight Important Index Weight P-01 (A) p-1.1 (B1) (C1) (D1) (E1) (F1) p-1.2 (B2) (C2) (D2) (E2) (F2) p-1.3 (B3) (C3) (D3) (E3) (F3) ：：：：：：：：

7~9 Items 20 ~ 30 Items D1 = A*C1/sum(C)

1st Level (Caltrans)

2nd Level

(Detailed) Sub Project-1 Sub Project-2

D, F is Calculated by Distribution of A, Considering C, E

Important Index ( 0 ~ 5 )

1 : not Important

2 : not Much Important 3 : Important

4 : Very Important 0 : No Effect

(17)

Function

Derive Upper Functions For Each P.A.

Evaluate Functions Focusing on Performance

Speculation

Evaluation

Evaluate Ideas at 1st Level

Development

Quantify More Objective Performance

Change Between Original Concept and

Alternative Concept

Presentation

Discuss Evaluated Detailed Performance

Change with Stakeholders

Implement

Sell Alternative

(18)

Comparison

A : Design & Construction Schedule b c a/d e

B : Performance on Vasco b/c b b C : Performance on Freeway c c D : Right-of-Way / Access d E : Maintenance 0.5 5.0 3.5 35.0 3.5 35.0 1.5 15.0 1.0 10.0 TOTAL % 21.0 100.0

(19)

Comparison

Caltrans Value Analysis Report Guide

0 10 20 30 40P-01 P-02 P-03 P-04 P-05

Simple, Efficient !

But Little Bit

(20)

Comparison

A : Design & Construction Schedule b c a/d e

B : Performance on Vasco b/c b b C : Performance on Freeway c c D : Right-of-Way / Access d E : Maintenance 0.5 5.0 3.5 35.0 3.5 35.0 1.5 15.0 1.0 10.0 TOTAL % 21.0 100.0

Muti-Level Performance Measurement

(21)

Comparison

Muti-Level Performance Measurement

0 5 10 15p-1.1 _p-1.2 p-2.1 p-2.2 p-2.3 p-2.4 p-2.5 p-3.1 p-3.2 p-3.3 p-3.4 p-3.5 p-4.1 p-4.2 p-5.1 p-5.2 p-5.3

Detail Assessment

of Original

&

Different Weight

by Sub Projects

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Consist of Attribute

Project

· · ·

1st

-Level

2nd

-Level

3rd

-Level

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Resent VE Experiences

Project Name Cost

(Billion Won) ROI VE Study Timing

Ho-Nam High Speed Railroad 5,800.0 1623 Preliminary 50% Gunnam Flood Control Dam 123.6 243 Preliminary 50% Housing Land Development in Songpa 382.4 1702 Preliminary 70% Housing Land Development in Namyangju 223.2 166 Preliminary 90% Sungnam Filtration Plant 90.0 331 Detailed 50% Hwasung Industrial Water Tubing 17.7 54 Detailed 50% Existing Road Relocation for Hwabuk Dam 65.0 49 Detailed 50% Janghang Sewage Disposal Plant 17.7 23 Detailed 50%

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R.O.I. for VE Study Timing

Detailed Design Preliminary Design 0 25 50 75 100 25 50 75 100 (%) 0 500 1000 1500 2000

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R.O.I. for Construction Cost

Preliminary Design 0 100 200 300 400 500 (Billion won) 500 1000 1500 2000 Detailed Design

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Ho-Nam High Speed Railway

Construction Projects

Project Summary

Length : 233.19 km

Project Cost : 6,137 Billion won

VE Workshop

☞

8~11. Oct. 2007, 4days

Major VE Target

☞

Vertical Alignment

Existing Seoul-Busan KTX Ho-Nam KTX (Daejon-Mokpo)

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Derive Performance Attributes

8 1st-Level Items Derived

29 2st-Level Items Derived

Rank Using Caltrans 10 Ranking Points

(29)

VE Process

Preparation Function Development Speculation & Evaluation Information Presentation Implementation

(30)

Performance Attribute Tree

Project

Convenience of Operational Safety Constructability Environment-Friendly Maintenance Convenience of Users Landscape / Beauty Connection with High

Plan p-1.1 p-1.2 p-1.3 p-1.4 p-1.5 p-5.1 p-5.2 p-5.3 p-8.1 p-8.2 p-4.1 p-4.2 p-4.3 p-6.1 p-6.2 p-6.3 p-7.1 p-7.2 p-7.3 p-3.1 p-3.2 p-3.3 p-3.4 p-3.5 p-3.6 p-3.7 p-2.1 p-2.2 p-2.3

(31)

Performance Attribute Tree

Project

Convenience of Operational Safety Constructability Environment-Friendly Maintenance Convenience of Users Landscape / Beauty Connection with High

Plan

Minimizing Construction Period

Optimum Ground Volume Minimizing a Civil Appeal Constructability of a Field of

Work

Accessibility of Work Field Approach to a field of Work Optimizing Construct Method

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Performance Attribute Weight

19 P-01 17 P-02 8 P-03 11 P-04 14 P-05 22 P-06 6 P-07 3 P-08

< Project >

1st Level 2nd Level 3.9 5.8 2.6 3.4 3.3 5.6 5.9 5.6 1.2 1.3 1.0 1.0 1.2 1.0 1.2 3.7 3.4 3.9 5.9 4.8 3.3 8.1 8.1 5.7 2.0 2.1 1.9 1.5 1.5

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Define Sub-Projects

Sub-Project-1 (L=39.64km) Sub-Project-2 (L=32.13km) Sub-Project-3 (L=31.40km) Sub-Project-4 (L=32.70km) Sub-Project-5 (L=40.45km) Sub-Project-6 (L=48.74km)

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Performance Attribute Weight for Sub

Projects

19

P-01

2st Level

Attr. Sub-01 Sub-02 Sub-03 Sub-04 Sub-05 Sub-06

p-1.1 3.8 - 3.8 4.5 4.3 3.8 p-1.1 5.1 3.8 3.8 3.6 3.5 3.8 p-1.1 5.1 15.2 3.8 3.6 3.5 3.8 p-1.1 5.1 - 3.8 3.6 3.5 3.8 p-1.1 - - 3.8 3.6 4.3 3.8 Sum 19.0 19.0 19.0 19.0 19.0 19.0 ：：：：：：：

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Performance Attribute Weight

19 P-01 17 P-02 8 P-03 11 P-04 14 P-05 22 P-06 6 P-07 3 P-08

< Sub Project - 02 >

1st Level 2nd Level 3.8 15.2 -5.1 6.8 5.1 1.5 1.5 1.1 0.4 1.5 1.1 1.1 4.0 3.0 4.0 10.5 3.5 -11.0 11.0 -2.0 2.0 2.0 1.5 1.5

- : This Detailed Attribute Weight is Calculated

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Performance Attribute Weight

19 P-01 17 P-02 8 P-03 11 P-04 14 P-05 22 P-06 6 P-07 3 P-08

< Sub Project - 02 >

1st Level 2nd Level 3.8 15.2 -5.1 6.8 5.1 1.5 1.5 1.1 0.4 1.5 1.1 1.1 4.0 3.0 4.0 10.5 3.5 -11.0 11.0 -2.0 2.0 2.0 1.5 1.5 --

-- : These Detailed Attributes doesn’t Affects

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Assess Performance of Original Concept

Contribution-Based Rank Based

(38)

Possibility of Performance Predicting

(39)

Assess Performance

Contribution-Based Rank Based

(40)

VE Conclusion

Performance : 6.1% Improvement

Cost(LCC) : Reduce 232.4 Billion won

(3.8% Reduction)

Value : 10.3% Improvement

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Summary

Construction Projects

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Performance Measurement Methodology

Existing Proposal

Required

Additional Time - Not Additional

Number of P.A. 7~9 20~30

Quantification Subjective Objective Precision • Performance May be

Overestimated

• Performance Could be Rationally Estimated

Communication Not Bad Excellent

Satisfaction Not Bad Very Satisfied

Decision

• Difficult for Engineers • Not Easy for Value

Facilitator

• Easy for Engineers • Very Easy for Value

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Conclusions

More Objective Performance Evaluation is Essential

for More Efficient VE.

Proposed Performance Measurement Approach is

Very Useful for Large Scale Construction Project.

Better Communication with Clients, Stakeholders.

Proposed Method is Very Efficient for Rapid