Value Management of Construction Projects

About the Authors JOHN KELLY was, until his recent retirement, the principal of Axoss Ltd, a company promoting and undertaking consultancy, training and research in value management, value engineering, whole life costing and whole life value. Prior to forming Axoss he was Professor of Construction Innovation in the School of the Built and Natural Environment, Glasgow Caledonian University. STEVEN MALE is Director of Steven Male Associates Limited, a specialist company dealing with consultancy assigments, research, and training in value-for-money in property and physical infrastruture asset management. He is currently working on a series of transport-related assignments for the World Bank. Prior to this Steven was Professor in Property & Infrastructure Asset Management at the University of Leeds. DRUMMOND GRAHAM is a Director at Thomson Bethune Property and Construction Consultants, Edinburgh. He has gained over forty years experience in the construction industry with government and private sector clients, covering a broad spectrum of projects and procurement routes, including PPP/PFI. His experience includes over 200 Value and Risk Management studies mostly at the early stages of projects across the building and transportation sectors.

Preface xi Glossary xiii Part 1 Introduction and Evolution of Value Management 1 1 Introduction 3 1.1 The aims and objectives of the book 3 1.2 Developments in UK construction 6 1.3 Developments in value management 9 1.4 The structure of the second edition 12 References 13 2 Evolution of Value Engineering and Value Management 15 2.1 Introduction 15 2.2 Historical background 16 2.3 Definitions, terminology and practice - Phase 1: 1947 to 1963 17 2.4 Definitions, terminology and practice - Phase 2: 1963 to 1989 19 2.5 Definitions, terminology and practice - Phase 3: 1989 to 2014 20 2.6 The Project, Portfolio or Programme of projects 23 2.7 The 1998 international benchmarking study of VM and VE 24 2.8 Standards and procurement guidance 32 2.9 International research into value management 40 2.10 Implications for value management and value studies 42 2.11 Conclusions 46 References 47 Part 2 The Anatomy of a Value Study 51 3 Value Study Styles 55 3.1 Introduction 55 3.2 The inception of a project 56 3.3 The specification and procurement of a value study 57 3.4 Value studies within the project management process 59 3.5 The three generic phases of a value study 59 3.6 Study styles, processes and deliverables 61 3.7 Project development tracks 61 3.8 Value study type 1: Strategic briefing (project planning and business definition) 63 3.9 Value study type 2: Project briefing (the technical specification) 66 3.10 Value study type 3: Concept design (the technical solution) 70 3.11 Value study: Charette 73 3.12 Value studies 4 and 5: value engineering 75 3.13 Other study styles 79 3.14 Case study 84 3.15 Conclusion 95 References 96 4 Function Analysis 97 4.1 Introduction 97 4.2 Discussion of function as a concept 98 4.3 Strategic function analysis - Information discovery and synthesis 102 4.4 Strategies, programmes and projects 109 4.5 Strategic function analysis - Function diagramming 110 4.6 Project function analysis - Function diagramming 114 4.7 Function space diagramming 124 4.8 Elemental cost planning and elemental cost control 128 4.9 Element function analysis 130 4.10 Managing element clusters 133 4.11 Evaluating function 133 4.12 Conclusion 138 References 138 5 Managing Value Study Teams 139 5.1 Introduction 139 5.2 The Value Study Leader 140 5.3 Groups, teams and team dynamics 148 5.4 Implications for team management in value studies 154 5.5 Value workshop management skills 166 5.6 Conclusions and lessons from practice 169 References 171 6 Innovation, Implementation and Benefits Realisation 173 6.1 Introduction 173 6.2 Innovation 174 6.3 Evaluation and development 186 6.4 Implementation 187 6.5 Benefits realisation 188 6.6 Conclusion 189 References 189 7 Case Studies 191 7.1 Case studies 191 7.2 Case study 1 - Headquarters for a financial institution 193 7.3 Case study 2 - Replacement of silo storage and process plant in food manufacturing facility 197 7.4 Case study 3 - Rail infrastructure programme 200 7.5 Case study 4 - Magistrates Court project 205 7.6 Case study 5 - College campus library project 209 7.7 Case study 6 - Material production facility expansion project 215 7.8 Case study 7 - Social housing project 219 7.9 Case study 8 - Crown Court project 223 7.10 Project level: An overview of case studies 1 to 8 226 7.11 Case study 9 - Organisational change 226 7.12 The lessons learnt from the studies 236 References 237 Part 3 Whole-Life Business Value 239 8 Value Management and Asset Management 241 8.1 Introduction 241 8.2 The importance of asset management as a discipline 243 8.3 Defining and positioning asset management 244 8.4 The characteristics of asset management 251