Value Management (VM) aims at maximizing the cost that is incurred in the construction. VM is vital during the initial stages of development since it enables one to identify the objectives and also the aspirations of the client through observing the client's perspective. It should be clear that VM allows individuals to figure out the optimum balance of the project through understanding the costs, benefits, and risks (Freeman, 2019). On the other hand, it is prudent for managers or constructors to understand the whole life cost in a project. The initial costs, operational costs, maintenance, and repair costs, upgrade, and disposal costs are all amount together in Whole Life Costing (Oke, 2017). Whole-life costing assesses the total value of a particular asset throughout its life through the use of investment appraisal and management tool. The two are very important in construction and considering the purchase of a building. In The Education Bureau in Hong Kong, deploying both aspects will minimize the expenses of constructing classes, one in six-storey buildings, and four classrooms on each floor.
Value management is commonly used to compare the different materials to choose on the best equipment, which has the lowest possible cost (Netto, 2020). For instance, in The Education Bureau in Hong Kong, plan to set up The building of one six-storey building, having four classrooms on each floor, at every primary school in each educational zone – a total of 20 buildings in all. , the materials provided should durable basing on the life span compared to the previous building materials. The constructor should purchase roofing sheets for the first installation, which is expected to last for 30 years. The Grade 25 Reinforced Concrete Slab is also designed to last for 35 years before renovation. This was only done by initiating Value Management in the process. It helped to acquire the best materials, which could last for long before being replaced or repaired. The articles will be more efficient in building the new classrooms of a total of twenty classes under a four-story construction.
Benefits of Value Management
As indicated before, VM is involved in the process during the initial stages. The VM is considered vital in several ways. It is through the exercise that the lowest possible cost for construction is achieved. In modus operandi, while constructing, people expect to use the least amount reasonable. It should be remembered that despite using minimum costs on construction, the materials used should also be of value (Netto, 2020). This significantly shows that the process requires a lot of time. The constructor should look for the best materials for the project to enhance the durability of the building
On the other hand, Grade 25 Reinforced Concrete Slab is intended to last for 35 years. The repair takes place at intervals of 35 years. This means that the building will only require the reconstruction of Grade 25 Reinforced Concrete Slab once. The use of the material is more affordable. This indicates the importance of initiating VM in construction, be it small scale or large scale construction (Netto, 2020).
Notably, VM helps in facilitating agreements between the stakeholders (Oke, 2017). It provides objectivity hence avoiding prejudice. It offers the basis for the reduced chances of changes that may take place later. As illustrated easier, VM enables one to project the changes and what will be expected then on the construction site. For instance, in appendix two provided, it is easy for the stakeholders to agree since the required information regarding material, maintenance, and repair are provided. The span at which the contents should last after the first installation is provided. Also, subsequent maintenance and replacement are provided. Therefore, with this, it is easy for the stakeholders to have an agreement based on the fact that the facts are available.
VM has several steps that should be incorporated to ensure that the process is successful through functional analysis to add value to the project. It is not only a cost reduction method, but it also aids in budgeting. For minimum investments, improved designs are required. Excellent value options are chosen while starting a business case solutions by involving the creative process. The three significant steps are illustrated in the figure below.
It should be noted that VM is a continuous process. The site is budgeted until the whole life cycle. Therefore, the number of times the structure is to be repaired and renovated is included, making the VM a continuous process (Netto, 2020). As a constructor, therefore, one should be able to follow the steps. At first, value planning is integral. This is the step where several things occur. Client briefing, brainstorming, evaluation, and weight value criteria take place in the phase of value planning. In value engineering, several things happen, which include: confirmation of the project, objectives, function analysis, speculation, evaluation, VE proposals, and final, and an implementation which is accompanied by following (Netto, 2020). It is also essential to consider value review or analysis. This is a crucial stage that should not be ignored. Therefore, this phase's monitoring, value process, correction of defects, and feedback to subsequent occurs.
However, the VM project includes a team. The process cannot be carried out with one alone. As indicated earlier, it is dependable on facts. This guarantees it to be objective. Figuratively, the client provides the scope of the project. Here a person can give the outcomes on how the project should look. This happens during the preparation stage. During this time, the estimates on the cost are calculated on the functional purpose, which is part of Value Planning. After the strategic briefing, the designing process follows. After then, the project delivery is arrived upon after both stakeholders have mutually agreed. The agreement comes after understanding and having the clue of the cost the structure could cost. Here, also, the performance of the project is classified according to the three phases. This could include speciation of significant items, the aim of the design, aspect of the project, the project priorities, and the project site. Value engineering is also included at this stage on the grounds of time cost and quality.
Detailed Value Engineering Proposals for Internal Walls and Floor Finishes as a Result of Undertaking a Value Engineering Workshop
Grade 25 Reinforced Concrete Slab initial installation: 600 by 12,000 by 20=144,000,000
Clay tiles with Timber structure initial installation: 680 by 13,000 by 20=176,800,000
Whole Life Costing
This can simply be defined as the total amount of ownership in a lifetime over an asset. This concept is also known as mas Cradle to Grave or Womb to Tomb or Life-Cycle Cost (LCC) (Xu, 2016). This means that all the costs are included in the Whole life costing. Among the included expenses is the financial cost. Other costs are social costs and environmental costs, which, according to research, are harder to calculate than monetary values, which is easy to calculate. Whole life costing also involves areas of expenditure such as design, planning, operations, and construction, acquisition, rehabilitation, renewal, maintenance, and depreciation costs, including funds for disposal or replacement. For instance, one can be able to calculate the whole life cycle in appendix two through amounting all the expenditures and adding other costs like design, planning, disposal funds among others (Xu, 2016).
Whole life costing is a process involved when procuring and evaluating an asset or during decision making, at least to minimize the expenditure on an asset (Freeman, 2019). The process is also vital in making a comparison between actual costs and other similar asset types or even as feedback for designs in the future and acquiring decisions. The benefit of the concept is that prices that come after construction or acquisition of an asset, including operation, disposal, and maintenance are vital in decision making. Therefore, the follow-up costs enlighten a stakeholder on what will be expected next in terms of expenditure, hence building on decision making (Regan, 2016). For instance, in appendix two, through totalling the amounts required for constructions, one can estimate the follow-up expenses hence helping him or her in decision-making. This means that despite the capital, one may have to put up a structure, so the need to consider how to harvest another amount to the cutter for the construction in the future is core. With this, therefore, it is advised to put up a beneficial structure, that is, which can be able to maintain itself and also allow one to make a profit. For the investors, this is a critical element that they consider before building or even acquiring a structure (Regan, 2016).
While establishing a structure, one should be able to incorporate VM in the process. This is because MV allows one to attain the best materials for the structure at the lowest cost. The material used on a structure determines the span at which the structure will be able to serve. For this reason, low development costs result in high maintenance costs. To be on the safer side, the investor should invest heavily in the development during construction by using required materials rather than spending cheaply on the development and using vast amounts on the maintenance. In modus operandi, maintenance cost should not supper the development cost. This is because it only involves repair and replacement, unlike an actual building, which requires everything (Freeman, 2019).
Considering that Initial installation cost 650m2 roof area at LKR 10,000/= per m2, replacement of insulation at 30 years intervals in 4000/= per m2, repair of the Zn Al sheets and roof structure at 40 years intervals in 7000/= per m2, annual electricity cost for ventilation and lighting LKR 500,000/= per annum. The residual value of the roof is none, no demolition cost, the expected cost of contracting the roof will accumulate to:
Initial installation 650 by 10,000=6,500,000
Replace insulation 650 by 4000=2,600,000
Repair of Zn Al sheet 650 by 7000=4,550,000
Electricity and ventilation 500,000 by 70=35,000,000
Total whole life costing for roofing =48,650,000
Environment analysis and social impact are also as good as gold in the whole life costing concept (Freeman, 2019). For instance, while setting up a nuclear power station, several factors should be considered before establishing it. Water is highly needed. Understanding this makes one build the station in environments where there is plenty of water near the river, dam, lake, or ocean. Through the study of the situation, one will be able to know how much we will be spent on the environment cost (Regan, 2016). To minimize expenditure. The best environment is, therefore, suitable to avoid expenses in the whole life costing. Social impact determines the population around.
For any construction site, be it small scale or large scale, it is as good as gold for the stakeholders to incorporate the two concepts, value management, and whole life costing, to minimize their expenditure. The two are twins, whole life requiring highly depend on the Value management; hence it is hard to separate them.
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