Value for Whom?

Over the years, the focus on value creation has shifted from hard, tangible economic benefits to the soft, intangible outcomes related to sustainability and broader social issues. Within the extant value creation literature, there are many perspectives on the concept of value and its generation; however there is a dearth of studies on value creation in a construction context. Through a systematic review of current literature and drawing from the stakeholder theory, this study examines the common approaches in value creation and proposes a framework to value creation for stakeholders in construction. In particular, the new framework conceptualizes two categories of value creation to construction firms and their projects: independent and co-creation. The main insights from this conceptual framework include: 1) value creation process is a strategic issue that needs to be addressed by organizations through resources exchange, information sharing, effective relational governance and continuous interactions; 2) projects, as vehicles for value creation in the construction industry, create value for stakeholders in the form of delivery outputs and overall outcomes; 3) relationships between stakeholders (i.e. transactional, cooperative and collaborative) are an effective way to maximize project value. Further research about value creation for stakeholders is essential to develop value creation theory in construction.

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.

The importance and huge potential of considering Value delivery from the very early stages of building & infrastructure projects have broadly been recognized. Lean Thinking elevates Value to the customer as a fundamental principle in the manufacturing sector and the consideration of Value in this way has transferred into Lean Construction. Consequently, satisfaction of customer requirements has predominated over satisfaction of societal issues. Based on the situation described, the following hypothesis is formulated:-The dependence of society on buildings and infrastructure elevates the needs of society within customer requirement priorities and drives the need to expand common understanding of Value from a Local to a Global context‖. This hypothesis does not ignore the importance of money and other parameters such as quality, function, etc. used to deliver Value. This paper proposes society is dependent on construction and it should predominate over particular interests, if the construction industry potential is to be fulfilled. Based on the experience achieved to date, Lean Construction can use its huge potential to move towards an expansion of the common vision of Value, going far from current production process activities. Finally, a preliminary, conceptual model of Value in a Global context is presented that demonstrates how a project can be positioned within the value parameters.

Engineering, Construction and Architectural Management, 2019

PurposeThe purpose of this paper is to present the current knowledge surrounding social value (SV) and show how lean approach supports SV realisation in the delivery of construction projects.Design/methodology/approachA critical literature review was adopted, to gather the current knowledge surrounding SV from mainstream management sciences, construction management and lean literature. A total of 70 studies were critically reviewed.FindingsThe study establishes that the current level of awareness on SV is still low and there is a dearth of scholarly publications on SV especially in the construction management literature. The investigation reveals the potentials of lean approach in supporting the delivery of SV on construction projects.Social implicationsThis study conceptualises the community and the physical environment around where the construction project is executed as customers using lean production approach. It shows that the transformation, flow and value view supports smooth...

Proc. 30th Annual Conference of the International Group for Lean Construction (IGLC)

Increasing efforts are being made by lean researchers and practitioners to improve value delivery in the built environment. However, the preliminary process to identify a substantiated list constituting the interests, desires, requirements, and design essentials of different stakeholders on projects is still vague and unorganized. Establishing the Value Attributes List (VAL) is considered fundamental for delivering value. Thus, to answer the question of how to develop the VAL, a set of guidelines and steps are provided. The process was constructed by performing action research and engaging two case studies depicting two Canadian public projects. This paper also provides a generic list of value attributes to be the starting point for the project team. The list included the major categories to be considered on projects. Findings suggested that developing a customized team-led list is particularly important and pursuing a clear direction on the subsequent steps for monitoring is required. The research concludes that an in-house advocate is needed to (1) promote the process and move it onward, and (2) to make sure the whole team and project stakeholders understand the importance of these value discussions.

In the current global and competitive business environment, the delivery of construction projects is a recognized challenge. However, the separation of design-construction-operation responsibilities has been a significant source of issues, resulting in poor 'triple constraint' project performance and negatively impacting long-term benefits realization. Stakeholder theory proposes that organizations can create value by improving stakeholder relationships and a substantial body of literature on strategic and project management proposes that project delivery models (PDM) that recognize and value these relationships better support value creation (VC). In consequence, this study undertakes a systematic review of extant literature and drawing mainly from the takeholder theory, examines how PDM support the VC process (independently or co-created) in construction projects and their contribution to the project value. This study identifies three fundamental VC drivers for selecting a suitable PDM: early involvement, integration, and contractual agreements. A conceptual VC framework is proposed based on different forms of client-contractor relationships. Four environments called transactional, coordinative, cooperative, and collaborative are recognizable, each with its own characteristics attributable to the degree of interaction and trust between parties necessary to maximize long-term value within construction projects. The framework developed serves as a platform for future knowledge development and research into VC theory in the construction industry.

In the current global and competitive business environment, the delivery of construction projects is a recognized challenge. However, the separation of design-construction-operation responsibilities has been a significant source of issues, resulting in poor 'triple constraint' project performance and negatively impacting long-term benefits realization. Stakeholder theory proposes that organizations can create value by improving stakeholder relationships and a substantial body of literature on strategic and project management proposes that project delivery models (PDM) that recognize and value these relationships better support value creation (VC). In consequence, this study undertakes a systematic review of extant literature and drawing mainly from the stakeholder theory, examines how PDM support the VC process (independently or co-created) in construction projects and their contribution to the project value. This study identifies three fundamental VC drivers for selecting a suitable PDM: early involvement, integration, and contractual agreements. A conceptual VC framework is proposed based on different forms of client-contractor relationships. Four environments called transactional, coordinative, cooperative, and collaborative are recognizable, each with its own characteristics attributable to the degree of interaction and trust between parties necessary to maximize long-term value within construction projects. The framework developed serves as a platform for future knowledge development and research into VC theory in the construction industry. Keywords: project delivery model, project value, relationships, value creation.

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.

… Group for Lean …, 2005

Value is the end-goal of all construction projects and therefore the discussion and agreement of value parameters is fundamental to the achievement of improved productivity and client/user satisfaction. The word 'value' tends to be used rather loosely in daily practice. Similarly, terms and interpretations vary within construction management literature. The aim of this paper is to put forward a number of definitions that may be used in a common language for discussing and implementing value through lean construction. Value creation and value delivery are clearly defined within a four-stage model that maps key process functions. Mapping the process provides a framework in which to highlight the differences between value-based management, value management and value engineering activities. The concept of external and internal values is also introduced. The model described is being implemented on pilot projects in Denmark, by consultants NIRAS and contractors MTHøjgaard. The model is grounded in extensive practical work and underpinned by theoretical constructs.

World Scientific News, 2016

Value management is a process whereby the project is evaluated and scrutinised to obtain maximum value for money by following a prescribed methodology. It focuses on the value, rather than cost, in relation to the function of the element of the project. However, value relates to what an element does. The key benefit of VM is the financial benefits to the client; other benefits include a clearer brief, improved communication, use of local materials etc. However, there are barriers to its application such as inadequate training and education, the unwillingness to entertain new ideas, lack of regulatory framework etc. Also, the following drivers of VM approach were identified: establishment of a regulatory framework, client's awareness, establishment of a group support system on VM etc. This paper considers value management from a functional value perspective and argues for greater recognition for it to form an integral part of projects.