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Value management is a service which manages the project by fulfilling all its functional values through developing the project from its initial stage to its successful completion, as per the requirements of the client or customer through correspondence and audit of all decisions against a value system. (John Kelly, steven male, 1993). This process is carried by stakeholders, technical specialists, decision- makers and others to bring out value-based results in products, services, processes and systems (Roy Barton, 2000).
For application of value management it could be a construction project, a manufacturing industry, service in banking, insurance or public services like education and health etc. And the client may be single person or an organization. Value management is a process with three generic phases: orientation and diagnostic phase, workshop phase and implementation phase. And for every value management program there will be a project manager and he should be in a position to understand the basic problem and structure a process to a bring value system together and produce further improvements. (John Kelly, value management). It is an adjustable activity with a group of members planned and managed by a Value management facilitator and driven by overall agreement. Initially it starts with concentration on root cause, wants and strategic goals. Further there will be an orientation meeting between stake holders and developers of the project about the need for service, the scope, risks and key functions, in the context of wider business objectives. Most cost effective means of implementation is developed and through this opportunities for innovation are explored. And value management considers whole project as one. Next comes the work shop phase it is most crucial phase for succession of the project, to ensure that the full range of influences are properly addressed by people with the right balance of knowledge skills, experience and judgement. Moreover, in case of absence of stake holders team members will be responsible. There will be no imposed solutions, the decisions taken by teams resulting in improving prospects for implementation and avoidance of scope creep. Some of the characteristics of value management are:
A systematic, staged approach,
Clear definition of objectives and scope-Focus on the customer requirements,
Multi-disciplinary team effort-positive human dynamics,
Consideration of organizational environment- internal and external influences,
Adequate use of methods and tools- independent facilitation
A job plan that differentiates creativity from evaluation and development by an effective workshop format.
Further, the project undertaken should reflect the entire principal needs and interests of all the stakeholders.
Preliminary phase-client briefing
Strategic diagnosis , study planning
De-briefing or wrap up meeting
Preliminary phase: Value management facilitator should discuss with stakeholder and project manager about, how and whether the Value management could assist a certain project. Then the project manager should be in the position to explain issues, circumstances and decisions to be made, process and running stage of the project. This gives a clear picture to the value management facilitator about the project to give appropriate advices on value management techniques, and possible format , time scale to study it and information requirement.
Strategic diagnosis - study planning: Through this meeting all clients or stake holders agree with objectives of the project, scope and constraints, workshop objectives and the information required for the study. All the team members should discuss all the skills which address the key issues within the project. All the time tables, structure of the workshop and its planning are delivered by workshop handbook is delivered by the facilitator.
Workshop: the facilitator leads the workshop through a group discussion process, to achieve the workshop objectives set out at the strategic diagnosis meeting. And the phases within the workshop are team briefing; function analysis option selection and improvement; idea evaluation; discussion building and implementation (Harry Hamersley). This workshop generally held's for 1 or 2 weeks with a maximum of 16 people.
Audit: The accuracy of study and workshop is reviewed to clarify the aims and expectations of the project if necessary and to provide feedback for other studies.
De-briefing feedback: The results of follow up action arisen from workshop and which are to e reflected in final report are presented by the team members of the project.
Final report: The draft report with several forms, summary of key points at each phase, decisions and actions, comprehensive document suitable for the public domain containing all the working material and background to the decisions, complete audit trail are presented to the stakeholders by value management facilitator. (Harry Hamersley).
The Job Plan: Job pal is a North American value engineering team approach to study value in logical and sequential way. According to Miles' original job plan,
Orientation: What is to be accomplished needs of stakeholder, and desirable characteristics.
Information: Determination of amount of effort which should be expended on the study, understand the manufacturing process and secure all drawings, manufacturing methods, specifications, costs, quantities, samples and prototypes.
Speculation: every minor problem should be identified and solved using workshop sessions. All suggestions from members should be recorded.
Analysis: Estimation of local money value is necessary for each idea and grade as per highest gain and maximum likely acceptability. Best ideas should keep in discussion.
Programme Planning: Design, production personnel, suppliers, identifying operations and other manufacturing programmes are established. Creativity is to be developed in all involved parties.
Programme execution: pursue the programme, evaluating and appraising further suggestions from suppliers, etc.
Status summary and conclusion: If in a position of making and executing decisions then act on new ideas, if not make recommendations to those who are to make them. (John Kelly, vim in construction and design).
Aims of Value management:
Value management essentially aims to produce solutions creatively and with minimum cost by analyzing unnecessary expenditure, saving money, time and energy, challenging assumptions, generating alternative ideas, promoting novelty, optimising resources, eliminating excessive items, simplifying methods and procedures, updating standards, criteria and objectives.
Some of the benefits from value management are
A better understanding of needs and he functions necessary to meet those needs.
A good definition of program or project objectives.
A better definition of performance standards and quality.
Clear briefs for every issue and solutions for every problem.
Controlling of wastage of resources.
Savings in capital find.
Improved operational efficiencies
Team building and strategies which create a climate of shared understanding
Risks and conflicts can be reduced
Create innovative ideas for improved outcomes.
Enhance skills and knowledge of the participants.
Communication and networking can be enhanced through the workshop process, this in turn can have a significant impact throughout the program planning and project development processes.
Improve definition and articulation of value.
Opportunities of value Management:
From many years value management has been adopted for use as a Value -for-money measure within construction industries of a number of countries.
The developments in value management have reached a plateau and therefore this is an opportunity time to encapsulate the development in value management in construction.
The history of Construction project management in u k can be tracked through landmark projects, as a result employment of constant project management was relatively rare but soon recognized as a better way of doing business. (John Kelly 1)
When coming to opportunities for value management at curriemuir sherrif court project will be, as the process in entire estate is not yet developed there will be lot of opportunities if there is an effective team undertaking the project. There are many Opportunities for value management in developing this project, Firstly, better business decisions should be supported by providing sound bias for choice, a facilitating technical and organizational novelties, creating effective team building and all members in the team should be in good communication and understanding of main favourable factors. Workshop approach is a good encouraging program phase which assists the process of exploring effective result, alternative solution for problems, key issues and essential functional requirements can also be discussed. The project will be more successful if all the clients participate in the workshop including SCS senior priority officer. Workshop participants can clearly identify opportunities for improved project functionality and purpose a range of opportunities for cost reduction without impairing effectiveness. (Peter waterhouse, 2007).
The adequate preparation and involvement of appropriate key stakeholders results in success of value management. Value management can also be used for correction of financial issues, which can avoid design progress disruptions and promotes team collaboration. Further, when other major problems and issues require well-founded and considered resolution it provides a highly effective tool, and it can be generally accepted by all stakeholders. (Peter waterhouse, 2007).
According to steven male, there are six value opportunities they are
Outline sketch design workshop
Final sketch design workshop.
It should be noted that the workshops with their associated value opportunities should not be regarded as compulsory. These points can take place at any phase of the project and they can vary from project to project.
Value management has a broad range of applications throughout the strategic planning and procurement processes. Value management is especially useful in analysing service in strategic planning process and in producing alternate and innovative options for meeting service needs. Mainly in strategic planning process value management is used to analyse and examine planning assumptions, it runs with a general agreement and clear vision, establish master planning principles and objectives, and define key challenges and strategies.
At the project level it can be used to:
Solve various problems at fundamental levels, needs and set priorities are clarified, Generate options for detailed analysis, share information and clarify expectations, produce customers commitment, clarify whole of life cycle costs, generate alternatives to achieve project goals, options for detailed analysis, and action plan to progress the project,
! Align the project functions to resources, and
! Create/review action plan to progress the project
At the project level Value Management should be planned on an integrated basis.
Strategic business outline reaserch establishes the business need for the proposed project and any resulting investment in resources. When the project is recommended to be continued, the SOC provides direction to the project sponsors on how best to develop nd implement it. SOC makes it possible to clarify objectives and scope of the project, identify options for satisfying the objectives, decide how best to proceed based on a high-leel assessment such as qualitative, assessment of the strengths and weakness of each opinion.
The possible results after application of strategic business outline case are abandon the project, perhaps on grounds of affordability, inability to handle the risks effecvely or unacceptability to stakeholders, redefine the program o make it more manageable and improve likelihood of a favourable result, undertake a prototype exercise and use outcomes to understand how best to proceed with the project. Strategic outline business case is ahigher level and in detail.
The SOC should be viewed as a scoping and planning document, designed to
-establish the strategic context and need for the project
- identify key dependencies between the project and other developments
- identify the view of main stakeholders and gatekeepers and the position of
potential public sector partners and other potential partners
- identify a wide range of viable options for meeting the service objectives
- appraise the relative efficacy of the options and their affordability and, where
feasible, identify a short-list for more rigorous assessment at the OBC stage
- identify the critical success factors for de eloping and implementing the
project with emphasis on risk management and benefit realisation
- identify what further work needs to be undertaken to inform the development
of the OBC and the procurement process. (Technical Advisory Note
Issue 5 October 2002).
Value Based Management practices-some evidence from the field
Teemu Malmiâˆ- , Seppo Ikäheimo
Department of Accounting and Finance, Helsinki School of Economics, P.O. Box 1210, FIN 00101 Helsinki, Finland
Received 31 July 2001; accepted 10 June 2003
An introduction to value management. D. I. SPEIRS, Value Engng, June (1969), p. 41. Value Management
is the term used to define the application of the Value Analysis techniques to the operation of a
company. The team concept used in product Value Analysis is retained. The composition of the Value
Management team is defined and the role of the team chairman explained. A Value Management project
is divided into six clearly defined phases--Organization, Evaluation, Speculation, Investigation, Decision
and Implementation. The action required at each phase is discussed and the underlying reasons explained.
In the final section of the article the benefits that a company may expect from Value Management study
are examined.(69 th journal in sciencdirect, introduction to value management search)
level decisions, like capital investments, acquisitions and divestments, industries in which to remain and
where to invest, are solely outcomes ofVBMmetrics without any strategy decision making beyond VBM.
These tools will be used, and strategising will be located, within the business units. Headquarters will
become very lean with the dismantling of large strategic planning departments (Mouritsen, 1998).
sciencedirect---explain vale management ----16---value based magm some based field evidence
Using valu management to produce project outcomes,
Application of alue management becoming accepted as a key contributor to successful construction projects. But what is it? By peter waterhouse, independent value management facilitator, value solutions limited , Auckland.2007