CS- Construction Management III e-Portfolio

Construction Management III
32-CM-503- 001-   
Winter / Spring Quarters 2008

Course Objectives:
The course uses "Project Based Learning" to develop the students' knowledge and skills in performing Value Engineering (VE).  Students will analyse architectural projects from the class "Problem in Architecture III"  to experience VE concepts discussed in the class. .

Cognitive Objectives (Knowledge):

- Learning Value Engineering and Constructability Concepts in the Design-Construct-Operation Cycle of construction projects.

- Learning the Project  Manager Role in Improving Overall Project Value

- Learning Methodologies for Conducting Value Engineering and Constructability Studies for Various Projects

Behavioral Objectives:

- Developing Skills to work in group settings

- Improving Problem Solving Skills using Case studies and Problem Solving

- Improving communication skills: Oral (presentation) and Written (report)

Attitudinal Objectives:

- Gaining Appreciation for Work Ethics in working collaboratively

- Gaining Appreciation of Leadership skills required for working in teams

- Gaining Appreciation to the diversity of skills and knowledge that individual team members bring to the team 

Syllabus_2008.doc

Books
- Dell' Isola “Value Engineering in the Construction industry” 1997 R.S. Means
- Dell'Isola A., Life Cycle Costing for Construction. 1981McGrawHill, Inc
- Stein, Mechanical and Electrical Building Construction
- Allen I., The Architectural Studio Companion, Technical Guidelines for Preliminary Design, Wiley
- Zimmmerman, L, Value Engineering: A Practical Approach.., Van Nostrand
- Construction Industry Institute: Constructability, A Primer and A Guidelines for Implementing Constructability Studies

- Web Sites
Institute for Defense Analysis: http://ve.ida.org/ve/ve.html
Society of Value Engineers: http://www.value-eng.org/
Construction Criteria Base  http://www.wbdg.org/ccb/
Association for Advancement of Cost Engineers international: http://www.aacei.org/
VE -GSA: http://www.gsa.gov/Portal/gsa/ep/channelView.do?pageTypeId=8195&channelId=-12893
Lawrence Delos Miles Value Foundation: http://www.valuefoundation.org/

Value Engineering (VE) is a creative systematic approach whose objective is to optimize project function with respect to cost, reliability, and performance of a product or project. The techniques of optimizing cost, reliability and/or performance are not new when considered one factor at a time.  What is different is the systematic approach to the optimization process for all these factors combined.

VE utilizes a functional analysis that eliminates anything that adds cost to the project without contributing to its required functions. VE analyses functional requirements of the materials, methods, components, energy requirements, and subsystems of a project for the purpose of achieving essential functions at optimal total costs (initial, operation, and maintenance) while maintaining necessary value.

VE is Different from Design Technical Review in that it consistently seeks alternative solutions to address the main function (s) as opposed to validate the existing design.

VE_Methodology.pdf

9401-_VE_vs_Design_Technical_Review.pdf

 Value Engineering uses a systematic Job Plan. The Job Plan outlines specific steps to assure effective analysis of a product or service and to assure development of the maximum number of alternatives to achieve the required functions of the products or services under study. Adherence to the Job Plan will better assure maximum benefits while permitting great flexibility.

Source: SAVE Association

I.  PRE-STUDY   User/Customer Attitudes Complete Data File Evaluation Factors Study Scope Data Models				III.  POST-STUDY    Complete Changes Implement Changes Monitor Status
		II.  VALUE STUDY
Information Phase Complete Data Package Finalize Scope	Function Analysis Phase Identify Functions Classify Functions Function Models Establish Function Worth Cost Functions Establish Value Index Select Functions for Study	Creative Phase Create Quantity of Ideas by Functions	Evaluation Phase Rank and Rate Alternative Ideas Select Ideas for Development	Development Phase Benefit Analysis Technical Data Package Implementation Plan Final Proposals	Presentation Phase Oral Presentation Written Report Obtain Commitments for Implementation

9305_Example_Conceptual_Design.pdf

Two keys to the successful application of a value study are the skills and experience of those applying the methodology. While  the methodology can, and often is, used by individuals, for significant projects it has been proven that a well organized team obtains the best value for effort performed.

The Team Leader performs a key role and is a significant factor in the degree of success. The Team Leader must have thorough training in both VM and team facilitation. The requirements include strong leadership, communication skills. and experience working with users/clients.

The size and composition of the team is project dependent. The members should represent a diverse background and experience that incorporates all the knowledge required to fully cover the issues and objectives of the project. Typically these include cost estimating, procurement/materials, and those technical disciplines unique to the project such as design, manufacturing, construction, environmental, and marketing

.

It is most advantageous if either the team leader, or a team member, will have the responsibility for implementation of the approved value proposals at study completion.

It is most desirable if the teams are selected and empowered by the top operational executive. This executive informs the team(s) that they are responsible for the development and implementation of value improvements, and not merely their recommendation.

9336-_Team_Building.pdf

2044-_Facilitating_VE.pdf

VE Ideas

 The creation of ideas in a VE study is a key activity of the team-centered process.  The initial phases of the VM Job Plan (Information, Function Analysis) are designed to prepare for the creative session; those that follow (Evaluation, Development, Presentation) expand the ideas into viable alternatives for improving value. There are four critical aspects of the Creative Phase:

Function Based

Deferred Evaluation

Trust in Process

Safe Environment

There are many idea generation techniques; however, group brainstorming is almost universally used because it is simple to facilitate. In functional terms, the higher order function of the brainstorming session is to "Generate Wide Variety of Ideas"; the basic functions are to "Encourage Free Flow of Ideas" and "Generate Unusual Ideas".

Inconsistent results and criticism of the brainstorming method, that "it is a tool for constructive group discussion rather than a tool for creative idea generation", calls for a re-examination of ways to improve this VE practice.

9941-Brainstorming_with_Paper_and_Pencil.pdf

FAST Diagram

 Functional Analysis with FAST diagram assists the team in identifying the various functions of the project and focusing on the BASIC/ primary functions.  It displays an analysis of the VE basic function into several subfunctions.The FAST diagram also displays the (Why/ how) relationships between these subfunctions. The analysis of the VE basic functions into subfunctions helps in solving a large complex problem by breaking it down into manageable individual problems. The FAST development process provides the VE team with a basic understanding of the project and the relative importance of the subfunctions and opens up communications among the owner, designer, users, and the VE study group

FAST_Techniques.pdf

9925-_Focusing_VE_Program_with_FAST.pdf

Functional analysis is what separates Value Engineering from other cost reduction techniques. Each component in the design has some basic and secondary functions. The basic function is the primary purpose of the design component. All other functions could be eliminated but this one could not. Meanwhile, secondary functions are not required for their own sake; they only augment the basic functions, hence secondary functions may be modified or even eliminated. An item may possess more than one basic function. Secondary functions are not required for their own sake; they only augment the basic functions.  

Functional Cost analysis separates costs required for basic functional performance from those incurred for nonessential secondary functions.  Once these costs are identified, it becomes easier to reduce the cost of nonessential secondary functions drastically while still providing the appeal necessary to permit the design to be attractive.

Each Component of the project has Basic and Secondary Functional elements. Each element has an associated cost. By assigning full weight to the cost of the elements with Basic functions and zero weight to elements with Secondary functions, and adding th ecost of all Basic Elements, the worh of the component can be calculated. The ratio of Cost/Worh of each component will determine Components that may have unnecessary cost. This analysis highlight areas of cost improvement.

Cost/Worth- Source SAVE conference Paper (attached)

Functional_Cost_Example.pdf

Weighted Evaluation- Source (Dell' Isola)

Weighted Evaluation is an organized process for the selection of optimum solutions in areas involving several criteria each carrying a given degree of importance (weight) depending upon the circumstances of the project. In VE, low initial costs and follow-on costs should be weighed against other important noneconomic criteria such as aesthetics, environmental impact, reliability, etc.   Weighted evaluation forces the individual or team to put down in an organized fashion their thoughts, reactions, and recommendations.  These can then be reviewed by the decision maker when determining appropriate implementation. 

The procedure is broken down into two processes requiring the use of two forms:

·         Criteria Scoring Matrix

·         Analysis Matrix

The Criteria Scoring process isolates important criteria and establishes their weights or relative importance.

1.      Assign a letter to the important criteria. 

2.      Criteria should be unique and not overlapped by other criteria.  For example, reliability, maintainability, and proven quality have too many overlapping properties and only one should be listed.

3.      Criteria are compared to one another and the degree of importance is established.

4.      The degree of importance A relative to B can be defined as major preference (B= A-4), medium (B= A-3), minor (B= A-2), slight (B= A-1) and no preference (B/A one point each).

5.      The letter of the favored criteria and the number of established difference is entered into the criteria scoring matrix

6.      For each criteria, the numbers are added to determine a raw score for each.

7.      The raw scores are then converted to a scale of 0-10.  10 being the criteria receiving the highest raw score.

8.      Before using the criteria and weights developed, the total process should be reviewed to make sure that they are representative of actual conditions.

·         In making comparisons, each criteria must meet minimum requirements.  If we are comparing aesthetics vs. improved maintenance and operation, the comparison is not between an alternative having an unsuitable looking facility vs. one having unsatisfactory maintenance & operation.

·         In the analysis matrix, each alternate is evaluated against each criteria (previously developed) and ranked against that criteria:

 Excellent                      -      5
Very Good                    -      4
Good                            -      3
Fair                              -      2
Poor                            -       1        

•  For example, if evaluating against initial costs criteria, the alternate that is most economical would usually be ranked the highest and if significantly more economical would be ranked Excellent. 
• The rank and weight of each constraint are then multiplied and totaled.  The alternates are then ranked for selection, the one having the highest total is the top selection 

Example_Health_Facility.pdf

Operating cost through the life of the projects is a major expense that can't be ignored.  Although the initial cost of construction of a typical building project is about 42% of the building total cost,  the operating and maintenance (O&M) cost added to the repacement (R) cost are estimated to be 25% of the total cost of the project. Hence ignoring (O&M) and (R) cost in VE analysis means ignoring a major cost from the optimization of VE Analysis.

Life Cycle Costing can be incorporated as one of the criteria in the weighted evaluation matrix of the project. The analysis is done by comparing the present values of cost of all perpetual expenses of the alternatives  and incorporating the salvage values of these alternatives and capital outlay required for construction.. 

2035-_LCC_to_improve_VE.pdf