Evaluating a project’s value management principles
Commercial property construction, like premium manufacturing, is a process that uses physical materials to produce a high-value finished product. Unfortunately for developers, costs can spiral out of control unless an innovative management system is in place. In this article, we revisit the concept of value management – one of the most useful cost-reducing systems available today.
What value management is all about
Value management is an approach that allows project managers to analyse the material inputs and processes involved in constructing a commercial building.
After this initial analysis, the system presents several alternative ways of achieving a similar result by substituting more cost-effective materials and processes for those commonly used in the industry.
As part of the value management system, the following factors are usually considered:
- A detailed breakdown of all materials used throughout the construction process (similar to a bill of quantities).
- A process analysis that lists the stages of the construction process and the specific tasks, skills and labour requirements for each stage.
- A cost benefit analysis of the materials and processes used in the project, with alternative materials and building methods included for comparison.
Armed with this information, developers and project managers can then take crucial decisions that may end up reducing the total cost of the project substantially. What’s more, green building materials and techniques can be optimised to produce a more sustainable project at the same price or less than a structure built using traditional methods.
Given the long-term trend for green office space in the greater Cape Town area, value management could give developers a distinct edge in the Mother City’s competitive market.
What expertise is required to implement value management on a project?
The value management approach requires a detailed analysis of building materials, and for that reason it is usually carried out by a quantity surveyor. However, if a bill of quantities for the project already exists, an experienced project manager may be able to carry out the analysis independently.
If contractors are willing and able to produce detailed quotations for alternative building methods, the project manager’s task becomes even simpler.
It’s always worthwhile to run the numbers past a quantity surveyor before the project commences to avoid unforeseen costs and budget overruns later in the process.
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