Analysis of Value Management in a Construction Project: A Report

This report delves into value management within the construction industry, emphasizing its role in defining client objectives while optimizing value and life solutions. The methodology section details a value management exercise on a construction site, focusing on cost analysis including labor, materials, equipment, profit, and overheads. The report explores alternative methods like green building design, bridging, and design-assist. A value management log is presented, outlining various ideas, their statuses (accepted, rejected, pending), and associated cost implications. The conclusion highlights the importance of value management in minimizing errors and reducing overall project costs, recommending its implementation for increased efficiency and value. The report references key academic sources in construction management and value engineering.

Running head: CONSTRUCTION MANAGEMENT
Construction Management
Name of Student
Institution Affiliation

Running head: CONSTRUCTION MANAGEMENT
Introduction.
Value management refers to an approach which is term-based used to define the
objectives of a client while ensuring the best value and whose life solutions are important in
satisfying those objectives (Alexander, 2013). To obtain maximum benefit, it is advisable to start
carrying out value management at the very initial stages of the project.
This process of value management involves the engineering of value, which entails a
systematic approach to making sure that given functions are satisfied to the best standard with
little cost (Kelly et al, 2014). Similarly, value management process can be used to recover the
costs that may diverge from the project that may be seen earlier when the design reports are
being written.
Every procedure, concept, and practice must have been preconceived, actualized and put into
practice at any one point in time or the other by a group of people or an individual in either a
formal or an informal organization establishment or an industry. In this project, we will look at
the value management in the construction industry.
Methodology.
‘ This is a value management exercise of a construction site.
This process of value engineering or value management exercise was initiated to help
achieve the best standard at a relatively low cost.

Running head: CONSTRUCTION MANAGEMENT
The overall cost of the project was the total amount of money needed to acquire and
utilize the specified functions. The cost was given by the summation of such factors as labor,
material, equipment, profits, and overheads and supervision. That is
Cost = labor + material + equipment + profit + overheads and supervision.
Labor $3000000
Material $11000000
Equipment $2500000
Profit $1500000
Overheads and supervision $800000
Cost = 3000000 + 11000000 + 2500000 + 1500000 + 800000
=$18800000
On the other hand, worth of the project was the least cost of the specified functions
required by the user. Its worth was calculated by comparing the functional equivalents of the
project.
Apart from value management, the following alternatives could be used instead.
 Green building design – it reduces the overreliance on the non-renewable resource,
reduces environmental degradation. Green building design should be embraced due to its
friendliness to the environment, ability to save money by reducing the expense of utilities

Running head: CONSTRUCTION MANAGEMENT
such as electricity and water. In addition, it also improves the image of a construction
firm (Larson & Gray, 2013).
 Bridging – this is another alternative method where the architect and the design-build
contractor deliver a complete and finished building to the owner. Bridging is a
combination of two traditional methods, that sis, design-build (DB) and design-bid-build
(DBB) (Martinsuo & Killen, 2014).
 Design-Assist – this is a hybrid of the two traditional methods with the addition of the
subcontractor experience (Myerson, 2012).
A value management log.
ID
number
VM idea/
concept
description
accepted rejected pending Comments/action.
Sc1 Provide
allowance for
site signage
50000 Increase the site
signage to
allowance.
Sc2 Review extent
of architectural
and chain link
fence.
-50000 Review the final
design
Sc3 Temporary roof
patch due to
schedule
-2000000 Review final
design

Running head: CONSTRUCTION MANAGEMENT
Sc4 Evaluate
landscape
analysis
-40000 Review final
design
Sc5 Not used
Sc6 Enclose south
service yard
area.
60000
Sc7 Steel vs
concrete frame
for non-early
delivery spaces.
-2000000 Time/value study
review w/CRL
Sc8 Evaluate site
lighting
36000
Sc9 Fuel tanks
above grade vs
below.
40000
Sc10 Culvert entire
site
26000
Sc11 Reduce amount
of roof access
points
-140000
Sc12 Enlarge
drainage
150000

Running head: CONSTRUCTION MANAGEMENT
detention basin
Sc13 Main roadways
to be improved
over the site.
300000
Subtotal. -1794000 -1834000 60000
Recommendation.
A construction project is very complex and costly, requires mechanisms by which errors
can be minimized by giving attention to complex issues as well as attempting to reduce the
overall cost incurred. It was realized that with the correct implementation of the value
management, savings of about 10-15% were made in the in the total cost of the project. Due to
the increased completion in the construction industry, there is a growing importance and need for
increased efficiency, value for money and effectiveness. It is notable that value management
addresses these factors directly and effectively. It is therefore advisable and I recommend that for
the benefits to be fully realized then the above value management process is a truly beneficial
process that should constitute a vital part of the project and must be accepted and implemented.
References.

Running head: CONSTRUCTION MANAGEMENT
Martinsuo, M., & Killen, C. P. (2014). Value management in project portfolios: Identifying and
assessing strategic value. Project Management Journal, 45(5), 56-70.
Alexander, K. (Ed.). (2013). Facilities management: theory and practice. Routledge.
Myerson, P. (2012). Lean supply chain and logistics management. New York: McGraw-Hill.
Larson, E. W., & Gray, C. (2013). Project management: The managerial process with MS
project. McGraw-Hill.
Kelly, J., Male, S., & Graham, D. (2014). Value management of construction projects. John
Wiley & Sons.