The construction industry (architecture, engineering, construction, operations/facility management, business product manufacturers, oversight and regulatory groups), like most other sectors, is in a state of rapid change.
Construction delivery methods are at the center of this ongoing transformation as they dictate the structure, tone, and legal requirements of any project. Thus, whether you are involved with construction, renovation, repair, and/or sustainability projects… Integrated Project Delivery – IPD, for new construction, Job Order Contracting – JOC, for minor new construction, renovation, repair, and sustainability and Public Private Partnerships – PPP, are examples of collaborative construction delivery methods that are rapidly replacing traditional and somewhat dysfunctional methods such as Design Bid Build (DBB).
While collaborative construction delivery methods have been in existence for decades and are well proven, they are only recently being more readily adopted. The drivers for change include environmental, economic, and technology factors. We are all aware of shrinking resources whether budgetary or non-renewal energy related, as well as associated environmental regulations relative to global warming, the latter of which will become increasingly stringent. That said, disruptive technologies such as BIM (Building Information Modeling) and Cloud Computing are also a major causal factors as well as enablers relative the business process change so desperately needed with the construction sector.
As collaborative construction delivery methods become more common, the need to share information transparently becomes paramount. Project teams need to adapt to early and ongoing information sharing among distributed team members and organizations. In the case of JOC (also known as SABER in in the United State Air Force), technology has been available for over a decade to support virtually all aspects of collaborative project execution from concept thru warranty period. An example is 4Clicks Project Estimator combined with RSMeans Cost Data, and/or organizational specific unit price books. With all parties leveraging the same data and following robust, collaborative processes from concept, thru site walk, construction, etc., the net result being more jobs being done on-time and on-budge with fewer change orders and virtual elimination of the legal disputes, the latter be unfortunately common with traditional methods.
How built environment stakeholders share information and work together will continue to evolve. The methods in which we, as Owners, Contractors, AEs, etc. participate in this exchange within our domains will determine our ultimate success or failure.
As show in the following graphic, the project delivery methods, while a fundamental element, is just one “piece of the BIM pie”.
Multiple “activities” , business processes” , “competencies”, and “supporting technologies” are involved in BIM.
BIM is “the life-cycle management of the built environment supported by digital technologies”.
Attend a presentation titled Climate Change Adaptation for Built Infrastructure. During this presentation, Kim Magraw (US Department of Interior), Bridget Deemer (Washington State University), John Hall (US Department of Defense), and Ann Kosmal (General Services Administration) will provide the latest update on the preliminary results on research and information needs identified in the FY 2013 Agency Adaptation Plans.
The details for the meeting are as follows:
Wednesday, June 19, 2013
9:00 a.m. to 10:15 a.m.
Keck Center of the National Academies
500 Fifth Street NW
If you are planning to attend in person, please register on-line at the following website to ensure that your name is on the security guard’s sign-in sheet.
For those that will not attend in person, you can view the presentation via WebEx; please register on-line at the following website:
Above is from the Federal Facilities Council and shared via 4Clicks.com – leading provider of cost estimating and efficient project delivery software and services for JOC – Job Order Contracting, SABER, IDIQ, MATOC, SATOC, MACC, POCA, BOA, BOS and more. Featuring an exclusively enhanced 400,000+ RSMeans unit price cost database and integrated contract, project, and document management, as well as visual estimating and electronic quantify takeoff (QTO).
Building Information Modeling, BIM, is the life-cycle management of the built environment supported by digital technology. As such, the core requirements of BIM include collaboration, standardized information, multiple domain competencies, and several supporting interoperable technologies.
Let’s face it, BIM continues to languish. Sure a lot of architects use it for pretty pictures to win business, and there are several “case studies” surrounding clash detection, etc. etc. However, life-cycle and/or ongoing facility management using BIM? No so much.
This is not only sad but economically and environmentally imprudent. The efficient life-cycle management of the built environment is critical to both global competitiveness and preserving sustainable resources.
Why is BIM of to a slow start? Too much focus on 3D visualization, too much “reinventing the wheel” trying to fit a square peg in a round hole, and virtually NO EMPHASIS upon the requirements for life-cycle management… associated competencies, domains, technologies, ongoing collaboration, integration, and continuous improvement.
Design-bid-build and “low bid” awards are the downfall of the Architecture, Engineering, Construction, Owner, and Operations sector. The method is antagonistic, wasteful, and typically delivers poor initial and ongoing results.
Focus upon CHANGE MANAGEMENT and building awareness relative to both COLLABORATIVE CONSTRUCTION DELIVERY METHODS AND LIFECYCLE, TOTAL COST OF OWNERSHIP MANAGMENT is the only thing that will “kick start” BIM.
Integrated Project Delivery (IPD) and Job Order Contracting (JOC) are both collaborative construction delivery methods that have been proven for decades, however, awareness remains low. IPD’s focus is upon major new construction, while JOC focuses upon the numerous renovation, repair, sustainability, and minor new construction projects so critical to efficient use of our current infrastructure.
The below diagram outlines the competencies, technologies, and process required for the lifecycle management of the built environment.
via http://www.4clicks.com – Premier cost estimating and efficient project delivery technology solutions for JOC, SABER, IDIQ, SATOC, MATOC, MACC, POCA, BOS, BOS… Featuring an exclusively enhanced 400,000+ line item RSMeans Cost database, document/contract/project management, and visual estimating / electronic quantity take-off, QTO.
Source: International Journal of Facility Management, Vol 4, No 1 (2013), via http://www.4Clickscom – Premier cost estimating and efficient project delivery software for JOC, SABER, IDIQ, SATOC, MATOC, MACC POCA, BOA, BOA… including exclusively enhanced 400,000+ RSMeans line item cost database, contract/project/document management, and visual estimating/QTO.
BIM is the life-cycle management of the built environment supported by digital technology. Unfortunately, too much emphasis has been placed upon 3-D visualization and other technology components vs. the process of life-cycle management.
Facility / Infrastructure Life Cycle Cost: Costs associated with designing, acquiring, constructing, adapting, maintaining, repairing, and operating a built structure.
While Value Management is used as term in this paper, it is arguably interchangeable with Capital Planning and Management (CPMS). The latter is a process involving the construction and management of physical and functional conditions of a built structure over time.
A CRITICAL REVIEW OF VALUE MANAGEMENT AND WHOLE LIFE COSTING ON CONSTRUCTION PROJECTS
Abdul Lateef A, Olanrewaju
Department of Civil Engineering, Universiti Teknologi PETRONAS,
Bandar Seri Iskandar 31750 Tronoh, Perak Darul Ridzuan
It is the aim of this paper, to present the complexity of the body of knowledge capturing the range of conflicting assumptions and understanding on the theories and practices of value management (VM) and life cycle-cost (LCC). Life cycle cost in facility construction projects is a management tool that is used to analyze the cost of constructed facilities in terms of cost of acquiring the facility and as well as maintaining and operating the facility. It makes a lot of sense to consider the capital costs of projects with their associated operation and maintenance costs. This is so that the project that is procured would economically viable through its entire life span. The recent increase in demand for sustainable or green buildings is further making the consideration of life cycle cost an issue.
However, life cycle of the project alone is not sufficient as source of creating value to the clients and end users. Consequently, the need for value management emerges. Based on extensive literature review this paper has shown that the life cycle costing techniques is a tool in the value management methodology an basic finding from the connection is that both VM and LCC can be embedded into the wider context of FM.
Keywords: life cycle cost; value management; reflexivity in research, facility management, best value; construction projects
In this paper, our aim is to represent the complexity of the body of literature capturing the range of conflicting assumptions and understandings about the theories and practice of VM and LCC. Before proceeding however, it is important to acknowledge what although we attempt to offer a balanced portrait of opposing views, our opinions and biases will come through whether we want them to or not. Although we are more comfortable with usual impersonal academic writing style, we believe it will help readers to differentiate what we believe from what other believe if we are honest and explicit about where we stand on some of these issues under investigations. We do this here and again wherever we view it is necessary. This kind of discussion of the preference and opinions of an author is reflexivity paradigm, and it is particularly important in value management issues, in which so many divergent assumptions are often left unsaid or asserted as truth. While some could argue that some issues are better left unsaid, it is not at any one interest to continue to pretend as everything is right and thus failed to present our side of the case. At least, this could serve as impetus to some writers and commentators.
Published literature revealed a wide range of opinion which tends to polarize either towards life cycle costing or value management. In other words, there are misconceptions and misunderstandings as to which of the two techniques is more involving, proactive and can ultimately create and sustain best value for construction projects. However, the purpose of life cycle costing is to maximize the total cost of ownership of the projects over the project’s life span (Morton and Jaggar, 1995 and Arditi and Messiha, 1996). It is also defined as the total cash flow of the project from the conceptual stage to the disposal stage (Bennett, 2003). Life cycle analysis takes into account the capital costs of the project as well as costs of operation and maintenance. The fundamental issue in the LCC is the determination of the operation and maintenance costs of all possible alternatives which are then discounted to present worth of money (Pasquire and Swaffield, 2006) for analysis.
However, while selecting alternative proposals or elements, the criteria of selections are more than just the issues of total costs. Many criteria, in addition to the cost criterion must be analyzed and adequately considered if maximum value is to be delivered to the client (Ahuja and Walsh, 1983). VM takes into accounts all the criteria that the client / user desire in their project. Value management involves the identification of the required functions and the selection of alternative that maximize the achievement of the functions and performance at the lowest possible total cost (Best and De-Valennce, 2003). The value management approach reduces the risk of project failure, lower cost, shorten projects schedules, improve quality, functions, performance and ensure high reliability and safety. While, life cycle costing is useful when a “project” has been “selected or defined”, value management is introduced much earlier. Value management is introduced when a decision has not been made yet either to build or not. At this stage, the “project” is still soft; the client’s solution to the client’s problem might not even be constructed facilities. For instance, if a client wants higher return for investment, value management is introduced to determine the kind of project that will provide to the client the expected return on investment (Kelly and Male, 2001). Perhaps the project in this case may be for the client to invest in agricultural activities. So from the beginning, the clients and other stakeholders are explicitly aware of the kind of project in which to invest.
This paper used literature review to achieve its aim. The remainder of the paper is organized as follows. It commences in II “epistemology of reflexivity, in this section, overview of reflexivity are presented. This section is preceded with the section on the “introduction”. Section III; dwell on the “principle of life cycle costing”. The section III reviews literature on the technique of life cycle costing. The purposes and methodology of the technique were provided and discussed. In section IV, the principle and methodology of value management were discussed. In this section, explicit references on the two important phases in the value management methodology where life cycle analysis is mainly used were outlined. Analytical comparisons of the two techniques are then presented in section V as discussion. However, before detail information on comparing the two techniques is provided, linkages between facilities management, value management and life cycle cost are provided. A basic finding from the connection is that both VM and LCC can be embedded into the wider context of FM. The paper is concluded in section VI by bringing together major themes of the paper in: “conclusion and observations”.
II. EPISTEMOLOGY OF REFLEXIVITY IN RESEARCH
Research could involve quantitative or qualitative data or both. The degree of influence the researcher has on a research depends on the type of data being collected. For instance data collected through interviews are more prone to bias as compared to survey questionnaire instrumentation. Being reflexive involves being conscious on how the researcher’s personal values, opinions, views, actions will not creep into the data collection, analysis, results and interpretations. For instance, bias could also creep into research because of how the researchers analyze and interpret previous related works-i.e. through literature review. However, bias could creep into research knowingly or unknowingly. According to Dainty, there is a “traditional of reflexivity in qualitative enquiry where researcher openly questioned the effectiveness of their research methods on the robustness of their results and debate the influence and effect that their enquiry has had on the phenomena that they have sought to observe” (Dainty, 2008). Cohen, et al., (2006) also outlined that reflection occur at every stage of action research. In that regards, in actual practice, biasness is difficult to eliminate in all type of research. However, being aware of it and the ability to control or minimize it is the most important element in research. In order to minimize biases, researchers should apply to themselves the same decisive criteria they set for other people works to pass through (Cohen, et al., 2006). However, we are consciously aware of the effects of the reflexivity on this study. In other words, we recognized the influence our sentiment, perceptions, values, feelings, thoughts and understandings may have on this study. For these reasons, we have made all possible efforts to be on the fence– yet to be decisive and analytical. In other words, as far as this issue is concerned, we have not taken a neutral position but a middle course position.
III. LIFE CYCLE COST TECHNIQUE IN CONSTRUCTION PROJECT
While information on the exact time, on the origin of LCC and the time it was first applied to the construction projects is not available, but it can be safely concluded that it preceded the VM techniques. Life cycle costing is also being referred to as whole life cost or cost-in-use. However, life cycle cost is preferred here as it is the most familiar time term even among the practitioners. Regardless of the nomenclature, the main purpose is to consider future costs in the determination of true cost of projects. In other words, LCC is a technique that is used to relate the initial cost with future based costs like running, operation, maintenance, replacement, alteration costs (Ahuja and Walsh, 1983; Morton and Jaggar, 1995; Bennett, 2003 and Kiyoyuki, et al., 2005). Elsewhere, it is defined as the total cost of project measured over a period of financial interest of the clients (Flanagan and Jewell, 2005). LCC enables a practical economic comparison of the alternatives, in terms of both the present and future costs. This is to allow in the final evaluation, to find out how much additional capital expenditure is warranted today in order to achieve future benefit over the entire life of the project. It is therefore the relationship of initial cost and other future based cost. Certainly, there is a need to relate capital cost with operation and maintenance costs in order to procure buildings that present value for money invested to the clients. This requirement is becoming more of a necessity with the increase in drive and subsequent demand for sustainable or green buildings. Since the 1960s, studies have shown there are the needs to balance capital costs against the subsequent maintenance costs of the buildings (Seeley, 1996).
Decision regarding the life cost of a project has to be ascertained right from the project’s conceptual stage as to whether to reduce the initial cost at the detriment of the maintenance and running costs. This depends on the client’s value system on the projects; however, effective balance must be strike to ensure meaningful selection. In addition to the initial construction costs which are foreseeable cost, other unforeseeable cost that should be considered are the operation cost, cost of energy usage, maintenance cost, disposal cost / salvage cost. Today clients are wiser, as they seem to prefer investing little more today for tomorrow savings. Clients are becoming knowledgeable about construction projects, as to what the future might likely portray regarding collateral costs. Issues of LCC are more important to the owner-occupier than to the developer who only builds to let or sell the construction projects on completion or over a certain period of time. In this case, end-users are left to bear the maintenance costs. The modern procurement system (i.e. design, building and operate) is possibly a good channel to consider building life cycle. In fact, the LCC is a tool that is often used by the management team to procure value for money invested
IV. VALUE MANAGEMENT IN CONSTRUCTION PROJECT
Various terms – value engineering, value control, value analysis and value engineering- have been used to describe the principle of value engineering. However, in this paper all the terms are synonymous. The most common are value management and value engineering, though. The two terms are used interchangeably in this paper. VM was developed due to shortage of materials and components that faced the manufacturing industry in the North America during the WW11. VM is both problem solving and problem seeking processes. As a problem seeking system, it identified problems that might arise in future and develop or identified solution to the problem. Value management is a proactive, problems solving management system that maximizes the functional value of a project by managing its development from concept stage to operation stage of a projects through multidisciplinary value team (Kelly and Male, 2001). It make client value system explicitly clear at the project’s conceptual stage. It seeks to obtain the best functional balance between cost, quality, reliability, safety and aesthetic. The approach could be introduced at any stage in the projects’ life cycle, but it is more beneficial if it is introduced from the pre-construction phase of the projects; before any design is committed (Ahuja and Walsh, 1983).
The tools and techniques of VM push stakeholders to provide answers to questions that might not ordinarily be considered if other approaches were used (Olanrewaju and Khairuddin, 2006). Value engineering identifies items of unnecessary costs in a project and develops alternative ways of achieving the same functions at the lowest possible cost, without impairing on the quality, aesthetic, image, safety and functional performances of the building and at the same time improves the project schedules. VM programs commonly take the form of arranging a workshop in which the client, contractors, suppliers, manufacturers, specialists and other stakeholders involved take part and put forward suggestions for discussions and investigations (Harry, 2000). This will make the consultants and designers understand what a client will accept as the benchmark to measure the outcome of their investment (Leung, Chu and Lu, 2003).
Consequently, the client will be provided with projects they can occupy, operate, maintain, at their preferred location, on schedule without compromising the require quality, function, aesthetic and images with acceptable comfort. If the client value system is not made explicit, consultants and designers merely focus on requirements that were not intended by a client. Thus, opportunity for maximizing concept, design, construction and maintenance might not be possible. However, the VM workshop or session is different from the normal project meeting as the objectives of each are distinct.
Value management is defined as an organized set of procedures and processes that are introduced, purposely to enhance the function of a designs, services, facilities or systems at the lowest possible total cost of effective ownership, taken cognizance of the client’s value system for quality, reliability, durability, conformance, durability, aesthetic, time, and cost (Olanrewaju and Khairuddin, 2007). The methodology is about being creative, innovative, and susceptible to changes, consensus, enhancing the use of resources, analytical, togetherness and good communication (Stevens, 1997). Value engineering program is commonly carried out in the systematic stages of; feasibility, concept design, design development, construction and operations and occupancy phase of the projects (Table 1). The work activities are strategically carried out in the job plan. The job plan is the frame works that guide the systematic maneuvering of ideas to ensure that alternatives are not unnecessarily omitted (Ahuja and Walsh, 1983).
Table 1.Value Management’s Job Plan
The value management job plan is an organized framework that guides the processes of analyzing the project, products, services or components under study, to enable the development of numbers of viable economical and functional alternatives that meet clients’ requirements. The strict adherence to the framework ensures maximum benefits and offer greater chances for flexibility. It also ensures that no step or phase is over-sighted or omitted. The value management process can be broken down into various phases. Regardless of the number of phases in the process, the major activities still holds. In many cases, the phases are however broken down into five major phases. However, in this paper, it is broken onto nine major phases for easy understanding. Life cost of project of an item or element is mainly considered during two of the value management phases, namely, the evaluation phase and the development phase. Therefore, the next two sections will discuss in-depth the two main phase.
IV.1 The evaluation phase
This is the fifth phase in the value management methodologies. The evaluation phase is some time call the investigation phase. The evaluation phase is very important phase of the value management process. It is a strategic planning stage of the process (Stevens, 1997). The phase should be considered with the spirit of creative thinking that is associated with the analytical phase. The refined and modified results of the analytical phase are considered in detailed in evaluation phase, on one to one basis judging among themselves. Primarily, the basic activities of this phase is elimination, pruning, modifying and combining ideas in order to reduce the large quantity of ideas collected from the analytical stage to meaningful and workable ones. Generally, alternatives are evaluated in terms of its total cost, availability, technology, its merits, its constraints, ease of construction, effect on schedules of works, safety, ease of procurement, coordination (Bennett, 2003). The evaluation should not just be based on what similar design had cost before or currently cost, but the comparison should include physical appearance, similar properties, and methods of designs, technology and maintainability (Ahuj and Walsh, 1983).
In the course of pruning ideas, some ideas might appear to have potentials but perhaps due to the prevalent technological advancement, they might not be considered. Those ideas should be put aside for later discussions with interested manufacturers or vendors for productions or purchase (Dell’Isola, 1982) where possible. Overall, the project must be looked at from different dimensions. In order to avoid fall-out during the evaluating process, a benchmark should be set against which to establish and measure whether idea should be rejected, pruned, modified or combined. However, it is important to invite some if not all members of the designing team in order to listen to their opinion regarding the evaluated alternatives, particularly, those that were selected. This is important in case they might have considered inculcating some of the analyzed alternatives earlier on. And, if they had, a request should be made as to why they did not consider using these alternatives. Their ground of rejection might be important to the study team (Kelly and Male, 2001) in search for better alternatives.
IV.II: The development phase
Based on the outcome of the evaluation phase, some or the entire item will require further development so that best value proposal can be made more explicit. In other words, the purpose of this phase is to enable further development of the alternative proposals. The major activity that is performed in the development phase includes the preparation of alternative design and cost so that a justification can be made on the viability and feasibility of the new proposals (Dell’Isola, 1982; Ahuja & Walsh, 1983 and Ashworth, and Hogg, 2002). Further benchmarking is to be considered here aside the one in the preceding phase such as; if the idea will work and meet the client’s requirements considering the prevalent advancement of technology. In addition, the interests of the clients who will approve the recommendations require systematic consideration to avoid unnecessary objections. All the relevant information regarding the development of a project must be documented, as this will later be presented to the clients as evidence. The associated risk inherent in the alternative proposals are determined, documented and solutions proffer in advance (James, 1994).
This section discusses the crossing point between value management and life cycle cost. But before proceeding, a brief discussion on how the two strategies relate with facility management is provided. The question can be asked, whether LCC or VM fit with facility management? Facilities include all fixed properties of an organization such as buildings, plants and equipments. Assets entail both fixed and non-fixed properties of an organisation. Facilities contribute significantly to the enhancement in productivities, profit-abilities and service quality of an organization. Facility management (FM) involves the management of all the services that support core business of an organization (Amaratunga, et al., 2000). FM focuses on meeting organization’s performance in terms of relationship between operational facilities and business outcome. Although, both VM or/ LCC are applicable to all classes of facilities (management), the focus of the classes of the facilities that this paper is concerned with are the constructed facilities and the building projects in particular. Building in this context involve the building’s fabrics, structure and engineering services. The value of a building is determined in relation to its current ability to provide user functional requirements, the current market value and the building condition and performance rating in comparison to that of a new building (Kyle, 2001). The roles are consistent with functions of professional including value managers, asset managers, facility managers and the real estate managers.
One of the major functions of facility management is to ensure that building projects receive adequate maintenance in order to continue to function efficiently and effectively to support the organisation’s corporate objectives. Maintenance process is a fundamental stage in the building life cycle. Maintenance has to be initiated if the building is still functionally sound and cost-efficient to do so against procuring new building or embarking on activities including refurbishment, conversion and alteration. In order to ensure high building performance, maintenance must be considered from the initiation of the buildings. From the foregoing, the opening question is pertinent, because LCC is a technique that is used by the facility management organisation or team to procure value for money invested (Flanagan and Jewell, 2005). In other words, LCC enables facility managers to make informed decisions on how much to invest today for future economic benefits. While the needs for space requirements in an organisation can be triggered by organisation’s asset / facility management unit, the strategic nature of VM allows it to be explicitly clear whether the proposed facility is require and what nature and form it should takes. Generally, the primary functions of the facility managers concern the coordination of the needs of properties users, equipments and plants and operational activities taken place within the space (IREM, 2006). This role is different from that of the value managers. The feedback from the post occupancy evaluation, which forms part of the FM directive, can also serve as feedback to the VM workshop in order to provide best values to the stakeholders. In general, VM can be integrated into the largest context of FM (Green and Moss, 1998) as FM provides a wider platform for decision making throughout the building life cycle. Therefore, FM focuses on space planning. Thus, the combination of VM and FM would produce good outputs. Having provided connections between facility management, life cycle costing and value management, in the remaining paragraphs the discussion emphasises LCC and VM.
Issues relating to LCC of facility have received wider acceptance, because what appears to be cheaper might in actual fact be expensive taking into account future-based costs. Therefore, when selecting a design solution capable of achieving the client value system, alternative that has the lowest cost, will in most cases be the first to be selected, if other performance criteria are satisfied. However, criteria like aesthetic (inspiring and harmonious), images (reputable and progressive), fitness for purpose, sustainability, buildablity, maintainability, technology, quality, safety, convenience, comfort, reliability must be included if best value is to be achieved. Construction clients are becoming more demanding, complex, sophisticated and in fact wiser compare to how they use to be in the past. Today’s clients want to see and in fact have projects that will perform the required functions; that costs less, be sustainable, completed within shortest possible time and also meet other basic requirements (Fong, 1999). Whereas, life cycle costing concentrate on the cost criteria (capital, operation and maintenance cost though), value management takes account all of the criteria within the client value system. Indeed, today clients are taking into account various set of complex algorithm that defined value to them (Halil, and Celik, 1999). The benefits and satisfactions they are getting from other industries like the automobile, aircraft industries are all fascinating experience. These are also making them to be more aggressive with the construction industry. The LCC techniques might be capable of providing best price, but best price does not in any way connote best value.
LCC is introduced after it has been decided that the best alternative proposals that will meet the client’s corporate objective is construction project, whereas VM examine the client’s business case to establish what type of “projects” a client required. Project in this stage is not necessarily a construction projects, but any alternatives that would provide the best return for the client’s investment in terms of money, time and other criteria of their value system.
VM precedes other strategies in that it is introduced before the design even commences (Kelly and Male, 2001; (Qipping, and Liu, 2004 and Shen, 2004). It is also unique in that it makes explicitly the client value system and goes ahead to determine weather the projects is desirable, viable and feasible before any commitment is made to whether to build or not. In that regards, it entail getting it right from the concept. It is only when the correct problem is identified that the correct solution can be developed. Regardless of the sophistication of the instrument used, if the client’s needs and wants are not known, it is either the projects is abandoned, completed but unoccupied or very expensive to operate and maintain. While LCC is tactical; VM is both strategic and systemic. While the LCC could be described as a strategy that provides answer to the question “how do we do it efficiently”, VM ask and provide answer to the question “why do we do it-why do we need the projects”. This is achieved using the functional analytical procedure of the VM. VM is certainly not a replacement alternative to the previous cost saving approach but it is certainly a viable alternative for achieving client value system (Ahuja and Walsh, 1983).
In the value management of construction projects, techniques like the supply chain, risk management, procurement, system engineering, concurrent engineering, safety management and partnering are applied during the development stage of the VM workshop; when developing alternative proposals, elements, components, equipments, items, materials and construction methods that provide value for money to the client. Therefore, these techniques are tools in the kits of the value management process. Apart from the LCC technique, VM makes used of other tools and techniques including, functional analysis, decision matrix, criteria scoring, brainstorming and functional cost model, SWOT analysis, supply chain analysis, risk analysis and checklists. To underscore the holistic and uniqueness of value management, various writers including Male, et al., (1998) and Fong (2004) have found that value management is more involving and unique than many methods / systems including total quality management, supply chain management, risk management, time management, cost management and lean construction.
VI: CONCLUSION AND OBSERVATIONS
The study has been able to investigate the relationship between value management and life cycle costing through literature review. This is done by bringing the theory behind each of the concept into context through literature survey. The paper has revisited the debate on VM and LCC which began sometime ago perhaps unnoticed. While the exact time cannot be traced the debate probably began on the arrival of the VM into the construction scene around 1960. This paper should be regarded as reflective contributions of the authors to the debate about the two concepts and tools. Life cycle costing technique is specific to particular stages and it is useful when it has been established that a “project” will satisfied the client requirements. The techniques and tools used in VM are not new per se, however the methodologies, consistent, systematic and holistic ways they are applied in VM is prominent. While value management has reached certain level of popularity and maturity, the LCC is yet to gain similar recognition even in the construction.
In conclusion, hopefully, we have been able to provide intermediate interpretations of the two concepts because we do not intend to provide extreme viewpoints. This paper does not claim that total cost of building is not important, but what it claimed is that, the value of projects does not ends with the consideration of the cost alone. Many “soft or qualitative” issues in actual fact are more important to the “hard or engineering” issues in majority or all of the cases. Perhaps, we should also add that considerations of the quality and completion time of project are also engineering or hard issues. Our aim is to provide a broad overview over a significant, yet complex issue and the emphasis has been to demonstrate the connection between the two concepts. Since we are aware of the bias that might creep into research like, attempts were made consciously to bring them to the barest level even though it is very difficult to eliminate it altogether. The conclusions of this paper are based on literature review In future primary data through survey or case studies will be collected from those that are consider to have adequate knowledge on the two techniques to see how our opinions differ from that of others’. On a final note, VM is about getting the initial concept right from the word “go”!
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A recent study by NBS provides a snapshot of BIM (Building Information Modelling) implementation within the UK’s construction industry.
Conducted between December 2012 and February 2013, a cross section of 1,350 professionals spanning a range of business sizes and disciplines from across the industry including architecture, engineering and surveying were included.
71% of respondents to the NBS survey agreed that BIM represents the ‘future of project information’.
39% confirmed that they were now actually using BIM.
Fewer than half of respondents are aware of the different levels of BIM, despite Level 2 being mandatory on all Government projects by the end of 2016.
74% agreeing that ‘the industry is ‘not clear enough on what BIM is yet’.
Only one-third of those questioned claim to be ‘very’ or ‘quite’ confident in their BIM knowledge and skills.
Despite the uncertainty around the subject, the survey once again supported the view that the greater use of BIM is unstoppable with 73% agreeing that clients will increasingly insist on its use, 66% saying the same about contractors and 51% confirming that the Government ‘is on the right track with BIM’.
Of those who have adopted BIM, more than half believe that the introduction of BIM has resulted in greater cost efficiencies whilst three-quarters report increased coordination of construction documents. Improved productivity due to easy retrieval of information and better quality visualisations were other gains.
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Understanding facility life-cycle costs is a core component of any BIM strategy for Owners, AE’s, Contractors, Subs, Business Product Manufacturers, Oversight Groups, Building Users, … or any stakeholder.
There are many components of life-cycle costs:
- First Costs – Planning, Selection, Acquisition, Construction
- Maintenance, Repair – Routine, Preventive, Unscheduled (typically expenditures of $10,000 per job or less)
- Capital Renewal (major system/subsystem cyclical replacement)
- Renovation, Adaptation (altering, updating spaces based upon functional needs)
- Operations (utilization, utilities, security, safety, sustainability, waste, cleaning, grounds management )
- Deconstruction, Transition, Disposition
BIM is just now beginning to lay the foundation for new processes and supporting technologies to enable more efficient life-cycle management of the built environment. An important challenge is the establishment of common terms, definitions, metrics, and ‘best-practices’. Some off these will be new, however, many/most will likely be existing… the latter simply better shared, communicated, and consistently applied.
BIM is not about software or technology but about CULTURE CHANGE and CHANGE MANAGEMENT.
BIM is about simplifying and adding visibility to the life-cycle management of the built environment. You are either “on-board” or “not”. It’s up to you.
BIM and FM are synonymous. Unfortunately there are very few instances of BIM.
The biggest mistake made by most people new to BIM is to assume that BIM is all about technology, and so focus all their efforts on mastering the technology rather than considering the impact that the application of this technology will have on the processes among Owners, AEs, Contractors, Subs, Business Product and Service Providers.
IFMA BIM Lifecycle Operations Community of Practice (BIMLO COP) Kickoff Meeting Video – http://www.gosee.tv/bimlco/
- Organizational Commitment
- Collaborative, Efficient Project Delivery Methods (IPD- Integrated Project Delivery, JOC – Job Order Contracting …)
- Standards (OMNICLASS, COBie, IFC), Common Terms, Definitions, Metrics, Cost Data (Standardized Cost Data, example-RSMeans)
- Life-cycle Information
- Open digital technology supporting the above
- Continuous Training and Improvement
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A workshop with members from the BIM Academy, NBS, and various other was recently held to postulate on this topic.
As one might expect topics encompassed; design, procurement, policy and standards, technology, education and culture, success to date, areas for innovation, challenges, and barriers to adoption.
As facilities costs are second only to personal/labor costs for most organizations, the need for breadth, consistency and transparency of BUILDING INFORMATION to understand, articulate, prioritize, and act upon requirements is readily apparent. Information must be timely, accurate, transparent, actionable, traceable, and shared collaboratively.
Change management is a requirement, and those adapt will excel, those that do not will fall behind.
A core, yet perhaps obvious observation was that ” There is a growing realization of the importance of data structure, quality and transferability, rather than geometry alone. We need to stop talking less about “the model” and more about “the data”.
“One participant noted a recent US comparative diagram mapping CAD adoption in the 1980s and recent BIM adoption. The trajectory has been much more rapid for BIM, however from recent discussions with US practitioners it appears the US is advanced in geometric, spatial and visual BIM uses but progress in the productive use of structured data, particularly into the operational phase, seems to be falling behind the UK.”
BIM management is misunderstood by some clients who regard it as purely a technological challenge which can be simply be solved by a software purchase and training, others are intimidated by a perceived complex restructuring of management processes. The truth lies somewhere between and follow the principles of Latham – get the process right before you think of the technology.
The role of IPD (Integrated Project Design) and JOC (Job Order Contracting) will become even more important. It was also noted that collaborative working doesn’t necessarily demand multidisciplinary organizations. There is a balance to be struck between the efficiency gained from freshness and innovation often achieved from different organizations coming to together on a project basis and working collaboratively, however traditional disjointed methods of procurement common in industry, such as design-bid-build or even design-build or CMAR do not fully encourage this. IPD and JOC, the later a form of IPD for facility renovation, repair, and construction are proven methods of developing long term, win-win multi-party relationships. “It’s crucial to get the right people involved early enough and understanding what outcomes they need from the start.”, and both IPD and JOC enforce this behavior.
Perhaps most importantly the topic of education rose front and center:
“It was agreed that this community also needs to escape from its silos. Some universities are starting to adopt a multidisciplinary curriculum supported by BIM, but this needs to become the standard not the exception. “Why not have a combined construction degree with final years dedicated to a specific discipline and practical work experience in between?””
July 16th, 2012 – NIBS Report – National Institute of Building Sciences Consultative Council
Per the NIBS Consultative Council there are four areas where our industry needs to focus highlights four in order to improve buildings and infrastructure.
- Defining High-Performance and Common Metrics
- Codes and Standards Adoption and Enforcement
- Energy and Water Efficiency; and
The Consultative Council provides findings and recommendations to the President and Congress on issues impacting the built environment. A summary of the report, “Moving Forward: Findings and Recommendations from the Consultative Council,” is in the Institute’s 2011 Annual Report to the President of the United States.
- The building community should work to define metrics for achieving high-performance buildings—including both qualitative and quantitative measures.
- The National Institute of Standards and Technology, the U.S. Department of Energy, the Institute and others should encourage cities and smaller communities to adopt and enforce updated model codes.
- Regulators and the building industry should support efforts by codes and standards developers and adopting jurisdictions to format criteria in ways that simplifies and enhances the ability to verify compliance.
- Software developers, regulators and building professionals should support the development of building information modeling (BIM ) for use as an automated code-checking tool that can improve compliance and streamline the approval process.
- The U.S. Government should develop incentives for state and local governments to require water metering of all buildings and to adopt and enforce comprehensive “green” building or plumbing codes.
- The U.S. Government should provide a tax incentive for building owners who voluntarily get their buildings audited and that implement the recommendations to reduce energy and water use.
- Policy makers and members of the building community are encouraged to use a common definition for sustainability.
- The building community needs mechanisms (e.g., budgets, insurance and tax incentives) to help finance sustainable life-cycle performance for buildings and related infrastructure.
There is virtually nothing “new” in any of the above, nor any plan to gain traction in any particular area, let alone all. Until our industry and our Nation realizes the importance of efficiently managing the life-cycle of the built environment and defines processes and deploys digital tools to support requisite changes, BIM doesn’t have a chance.
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Consultative Council members that contributed to the 2011 report include: ASTM International; American Institute of Architects; American Society of Civil Engineers; ASHRAE; Associated General Contractors of America; Building Owners and Managers Association, International; Construction Specifications Institute; ESCO Group; Extruded Polystyrene Foam Association; Glass Association of North America; Green Mechanical Council; HOK; Illuminating Engineering Society; International Association of Lighting Designers; International Association of Plumbing and Mechanical Officials; International Code Council; Laborers’ International Union of North America; National Insulation Association; NORC at the University of Chicago, and United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry.