Importance Of Value Management In Construction

1215 Words3 Pages
bulb-icon

Recommended: Pitfalls of Value Based Management

Why Value Management:
The main objective of any construction project is to assure that the project completes on committed time and within the budget allocated. Two major challenges faced are Time and cost which increase the urgency to adapt new and innovative techniques for the project to be successful.
Reduction of cost of construction is persistent goal for any construction firm. One of the most prominent methods for cost saving/reduction is implementation of value Management. Value Management plays a crucial role in cost saving with no compromise in quality and enhancing the performance.
What is value Management?
Value Management is a systematic application of identified techniques which identify the function, establish the value of those …show more content…

Also, a large number of firms/companies are directly or indirectly associated with construction industry. For example, houses, hospitals, schools, offices, townships as well as urban infrastructure, roads metros, railways, airports, highways, power plants, ports, dams …show more content…

The need for advancement in order to sustain the competition has become predominant in every firm. So, they are coming up with many new, innovative tools/techniques/solutions to reduce the bid price as lower as possible.

One of the main tools which are widely being implemented worldwide is Value Management. Recently, implementation of VM is must as per many standards being followed internationally. It became a part of project and it is a continuous process right from initiation to hand over. It is being implemented even in operation and maintenance phase.

Value management is a powerful tool in reducing cost while improving or maintaining quality and performance requirements. It improves decision making for optimal spending of funds. The main reason for its success is its ability to identify opportunities to eradicate unnecessary costs along with assurance of all critical factors that meet/exceed satisfaction of customers.

There are many tools and techniques which are being adopted in process of Value Management. The major tools identified used which are being used worldwide are as follows:
• FAST Diagram
• Life Cycle Costing
• Creative thinking

Show More
Related

  • Business Analysis of Two Airlines

    1354 Words  | 3 Pages

    In a high competitive world market and with the increasing rational buyers a company can only win by creating and delivering the best customer value than the others competitors do. To succeed, a company needs to use the concepts of value chain.

    Read More

  • value stream mapping

    1558 Words  | 4 Pages

    A value stream includes both the value added and non-value added actions that are required to bring a product through the main flows essential to very product. The value stream mapping perspective works on the big picture of the production cycle, not just the individual process, thus improving the process at micro level and macro level.

    Read More

  • Marketing: Burberry Target Audience

    944 Words  | 2 Pages

    Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.

    Read More

  • IBM And IBM Value Chain Analysis: IBM

    984 Words  | 2 Pages

    The aim of the value chain structure is to maximize the value creation while minimizing costs. Value Chain Analysis is a useful tool for working out how you can create the greatest possible value for your customers. Value chain analysis relies on the rudimentary economic principle of competitive advantage -companies are best served by operating in divisions where they have a relative prolific benefit compared to their competitors. Concomitantly, companies should ask themselves where they can deliver the paramount value to their customer. To conduct a value chain analysis, the company begins by identifying each part of its production process and recognizing where steps can be purged or enhancements can be made. These improvements can result

    Read More

  • Apple Ipod Value Analysis

    1500 Words  | 3 Pages

    Value has different aspects which include company values; which relates to new innovations, job growth, reducing costs, as well as long term production and so forth. Value must meet customers’ needs which they benefit from the product or service.

    Read More

  • Use of Value Engineering (VE) in Civil Engineering Projects

    2710 Words  | 6 Pages

    One of the main advantages of VE is that building an approved and confident work environment in which all parties and project team members are engaged in the project and working as the owner from initial stage of civil engineering projects. Also, VE is more focusing on value improvement and not just savings of cost. Additionally, Value engineering enhances the client’s satisfaction by knowing their exact needs and expectation (DBIA, 2010).Moreover, it strengths the collaboration between the client and the contractors therefore the contractor will participate by been proactive in any likelihood of risk by giving advice to mitigate risks.

    Read More

  • Starbucks Quality Management Plan Paper

    1929 Words  | 4 Pages

    Project Management Institute’s Project Management Body of Knowledge breaks the practice of Quality Management into three process groups:

    Read More

  • The Coca-Cola Company: Market Based Management and Value Driven Management Strategies

    1315 Words  | 3 Pages

    According to Pohlman (1995), the purpose of Value Driven Management is for employees to consider the implications, positive and negative if any, of how certain proposed actions or decisions will affect the respective organization over time. VDM was constructed as a more encompassing approach to building a successful organization. In this context, employees consist of all leadership, management, and staff because they all share those same responsibilities in a broad manner (Pohlman, 1995). ...

    Read More

  • Compare And Contrast The 4p Marketing Approach

    710 Words  | 2 Pages

    What I would expect to be the same if two companies that use this approaches are the expectation of the outcome that they will get in terms of their sales and profit. What I would expect to be different between two companies who apply these concepts is the level of satisfaction of their costumers since the “Value approach” has a custumer oriented

    Read More

  • Value Chain Analysis: A Strategic Analysis Of Unilever

    2016 Words  | 5 Pages

    Value chain analyses a firm 's internal activities such as planning, production, and development, packaging and distribution so as to create value for clients. The function of the value chain is to identify the sources for cost reduction along with quality improvement. It means value chain is used to identify the strong and weak points, positive and negative points, the scope of improvement; in a nutshell, the advantages and disadvantages of the activities taking place in the system. The value chain is also called as a strategic analysis tool and it is a well-known concept in business management industry.

    Read More

  • Value Chain Analysis

    1170 Words  | 3 Pages

    Many organizations do not achieve the profits they anticipate by using incorrect methods or models to determine the true costs of products and services. This failure to correctly assess the costs associated with business not only affects the profit margin, but the organizations competitive advantage as well. In order to asses whether the organization is failing to realize optimum resource allocation, the organization should look at the methodology first popularized by Michael Porter titled the Value Chain Analysis (VCA). "VCA seeks to define the entire chain through which goods are supplied to a customer" (Booth, 1997, 2). The VCA can be a powerful tool in increasing an organization's competitive advantage; by correctly pricing products and assessing the true costs of materials and labor, organizations can align the improvements in efficiency, quality, and profits with its strategic objectives.

    Read More

  • Introduction and Overview of Infosys

    1152 Words  | 3 Pages

    The organization traditionally concentrated on the lower end of IT value chain from 2000-2004, this shifted to higher value IT services in order to obtain the competitive advantage. Value chain offers organizations ways to improve value to its customers; it can also be defined as generic strategies of differentiation and cost leadership (O’Connell, 2010).

    Read More

  • Essay On Value Chain Analysis

    1447 Words  | 3 Pages

    The value chain analysis allows the firm to understand the parts of its operation that create value and those that do not. This is important for firms to understand because the firm earns above-average returns only when the value it creates is greater than the costs incurred to create that value. The value chain analysis has two parts which include the value chain activities and support functions. The value chain activities are “activities or tasks the firm completes in order to produce products and then sell, distribute, and service those products in ways that create value for customers” (Hitt, Ireland, & Hoskisson). The support functions are the “activities or tasks the firm completes in order to support the work being done to produce, sell, distribute, and service the products the firm is producing” (Hitt, Ireland, & Hoskisson)

    Read More

  • Ford Motor Company

    1840 Words  | 4 Pages

    2. What is the difference between a.. Explain how the company’s value chain activities can be better linked to create value for the company. A chain value is a diagram that a company uses to determine its activities and components such as its functions or management from top to bottom or vice versa.... ... middle of paper ...

    Read More

  • The Importance Of Time Management

    672 Words  | 2 Pages

    During the project initiation stage the business problem or opportunity is outlined whilst simultaneously various TM techniques and tools can be adopted to enhance productivity and overall project success. Value engineering is a technique which can be adopted to seize the opportunity to add value in the early stages of the project. The value of a system’s outputs is optimized by crafting a mix of performance (function) and costs. Allocating time for this technique is crucial during the initiation phase, as it deals with the value process solely during the inception and conception of a new product.

    Read More

More about Importance Of Value Management In Construction

Open Document