Using value networks to boost construction performance

2012

TILLMANN, P.A. A Conceptual Framework to Improve Value Generation in Complex Construction Projects. 2012. Doctoral Thesis (Doctor of Engineering) – Civil Engineering School, Post graduate Programme in Civil Engineering, Federal University of Rio Grande do Sul, Porto Alegre. This research was motivated by a practical problem with potential theoretical contributions. The problem in hand is the difficulty to generate value in complex construction projects, a problem observed in a large urban regeneration programme in Porto Alegre. Past research indicate that in the last decades there was an increase in project complexity, posing challenges to traditional managerial practices. According to some authors, such complexity is partially due to an increasing concern to understand how project’s outputs contribute to generating change and delivering benefits to different stakeholder groups. Within this context, the lack of managerial support provided by traditional project management approaches...

This research was motivated by the identification of a practical problem with theoretical relevance. Empirical observation of a large infrastructure programme pointed out managerial difficulties to achieve the expected outcomes of that construction project. The observed problem is related to the challenge of collectively defining and pursuing a project's value proposition throughout its entire implementation. In order to better understand the nature of this problem and search for potential solutions, this research focused on evaluating the contributions of existing practices to solve the problem in hand. For that, a design science research methodology was adopted and with emphasis on the evaluative aspect of such method. Two existing practices were evaluated: the BeReal model, being developed and tested in healthcare infrastructure projects in the UK; and the Lean Project Delivery System (LPDS), being developed and tested in different construction projects in the US. While the BeReal model was specifically designed to support project teams to collectively define and pursue outcomes throughout project implementation, the LPDS brings critical elements for establishing the desired conditions that allow teams to collectively pursue value. The findings of this research indicate that it is necessary to combine the different underlying rationale of the analysed approaches to improve value generation in the construction industry: engagement of key players in a value definition and value pursuit effort; the establishment of favorable conditions for them to work together and the formulation and specification of goals, which are aligned with business strategy and reviewed and refined by key players.

Advances in Civil Engineering

Over the past half-century, value engineering (VE) has emerged as an effective tool to manage time, costs, and quality with an aim to maximize value. It has been shown to be a highly effective approach for evaluating current construction projects. However, this tool’s application in the construction domain is quite variable. This research aims to provide an in-depth quantitative and qualitative content analysis of the application of VE in construction projects. It is found that new research over the past decade has continuously improved the efficiency and productiveness of VE practices. Current work focuses on integrating VE with other disciplines, applying VE in diverse project domains, assessing VE performance, and developing new VE technologies. This broad review highlights some of the key areas of interest that required future investigation to ensure the continued delivery of value in the ever-changing and evolving construction industry.

Value Management (VM) is a proven methodology that provides a structured framework using supporting tools and techniques that facilitate effective decision-making in many types of projects, thus achieving "best value" for clients. It offers an exceptionally robust approach to exploring the need and function of projects to be aligned with client"s objectives. The functional analysis and creativity phases of VM are crucial as it focused on utilising innovative thinking to understand the objectives of clients" projects and provide value-adding solutions at the early discovery stages of projects. There is however a perception of VM as just being another cost-cutting tool, which has overshadowed the fundamental benefits of the method, therefore negating both influence and wider use in the construction industry. This paper describes findings from a series of case studies conducted at project and corporate levels of a current public funded infrastructure projects in Malaysia. The study aims to investigate VM processes practised by the project client organisation and evaluate the effects of project team involvement in VM workshops during the design-stage of these projects. The focus of the study is on how issues related to "upstream" infrastructure design aimed at improving "downstream" construction process on-site, are being resolved through multi-disciplinary team consideration and decision-making.

2012

Value Management (VM) is a proven methodology that provides a structured framework using supporting tools and techniques that facilitate effective decision-making in many types of projects, thus achieving ‘best value’ for clients. It offers an exceptionally robust approach to exploring the need and function of projects to be aligned with client’s objectives. The functional analysis and creativity phases of VM are crucial as it focused on utilising innovative thinking to understand the objectives of clients’ projects and provide value-adding solutions at the early discovery stages of projects. There is however a perception of VM as just being another cost-cutting tool, which has overshadowed the fundamental benefits of the method, therefore negating both influence and wider use in the construction industry. This paper describes findings from a series of case studies conducted at project and corporate levels of a current public funded infrastructure projects in Malaysia. The study aim...

International Journal of Project Management, 2012

The paper distinguishes between value management and value engineering on the basis of their underlying assumptions. The traditional approach to value engineering is analysed, and is found to reflect the optimizing paradigm of hard systems thinking. In contrast, the alternative approach offered by value management is based on the learning paradigm of soft systems thinking. While the objectives of value engineering are dominated by cost reduction, the purpose of value management is to develop a common understanding of the design problem and to identify explicitly an agreed statement of design objectives by the project stakeholders. smart value management is introduced as the means by which these ends can be achieved. It is further suggested that this approach enables project managers to exert an increased level of control over the early stages of building design. It also ensures that different interest groups within the client organization are actively involved in the design process, and that they thus ‘buy in’ to the decisions which are made.

2016

Construction businesses balance market and project risks in resourcing innovation and value creation. Technical, technological and management innovation are considered using the marketing lens of the service-dominant logic. The co-creation of value is a primary concept, which is largely unexplored in construction, especially related to innovation. Co-created by main contractors and clients is defined as value generated in context and use. The paper is part of a programme of work, applying an interpretative qualitative approach. The method for data collection was semi-structured interviews, derived from six major international main contractors. Thirty-nine interviews were conducted with a range of senior management, functional heads and project managers responsible for identifying innovation and value creation opportunities. The overall findings fall into three main areas. First, management perceived construction to be suppliers of technical expertise. Second, projects are perceived ...

Proc. 27th Annual Conference of the International Group for Lean Construction (IGLC), 2019

Value configuration is a term from the business literature that describes how companies are rigged for delivering value. The paper argues that modern day construction projects adheres to a value shop configuration rather than a value chain configuration. Where the focus of the value chain is the transformation of inputs into products, the focus of the value shop is to (re)solve customer problems. The main theoretical foundation of Lean Construction for understanding value delivery is the Transformation-Flow-Value (TFV) theory of production. While this provides a solid basis and model for understanding value delivery in value chain configured construction projects, it comes up short with regards to value shop configured projects. The paper presents a newly developed conceptual model for the value delivery in value shop configured construction projects, and shows how it can be beneficial vis-à-vis the TFV theory with regards to understanding the fundamentals of value delivery in value shop configured construction projects

2014

The construction industry is widely recognised as a laggard in terms of productivity improvement. This research study identifies the factors inhibiting collaboration and provides a model for developing a collaborative network approach. The case studies conducted examine the factors impacting on collaboration in the project networks of three large construction organisations. It was found that excessive fragmentation in the industry together with disparate project management processes and non-standardised information is impeding efficiency gains. A panel of project experts reviewed the findings to explain the basis of the practices. This has led to four primary conclusions: (1.) the construction industry lacks the 'strength' of relationships necessary to create a network of organisations that trust and have shared values; (2.) design processes should include both value engineering and lifecycle costing; (3.) procedures and information need to be standardised; (4.) there should be more emphasis on value adding project management activities.

There is a clear link between the building design and the value creation by the businesses and users of the buildings. Measuring project success is a complex task and has traditionally been associated with criteria like time, cost and quality in the project society. However, modern project management literature has revealed that other objectives should be taken into consideration in order to achieve overall success in projects. Understanding the owner's and the users' strategic objectives and translating them into functional buildings seem to be an essential factor for understanding the true value of a project. Fulfilment of these objectives can primarily be assessed when the building is in use. Value creation of a building is therefore directly linked to the effects that owning and using the building have over its lifetime. This paper is aiming towards outlining a method to identify and understand the owner's and user's strategic objectives and use this knowledge to optimize the design of buildings in order to enhance the value creation of projects. The suggested framework is the first step towards developing a method for enhancing value creation in construction projects. The framework is developed based on a qualitative research using literature studies and discussions with fellow scholars and experts. The research reveals that value in a life cycle perspective is created when needs are fulfilled and strategic goals are achieved. In a project perspective, the efficiency and effectiveness of suppliers is also of importance. The framework presents a method that enables the project to move the focus from the project perspective to lifetime perspective. Implementing such a method will help the decision makers to move the focus from what is best for the project to what is best for the users and the owner.