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Exploration of Parallels in Lean and VM Methodology in Construction

This article discusses the similarities and differences between Lean Construction and Value Management (VM) methodologies, exploring how they can be used together to improve project delivery and maximize value. It examines the main drivers, approaches, objectives, benefits, and tools of both methodologies, highlighting the potential benefits of integrating them in construction projects. The article also raises the question of whether Lean practitioners should incorporate VM techniques into their toolbox and vice versa.

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Exploration of Parallels in Lean and VM Methodology in Construction

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  1. Exploration of parallels in Lean and VM methodology in constructionSteve Parker, Institute of Value Management

  2. Our credentials Me • Value Management • Risk Management • Benefits Management • Lean Six Sigma You • Lean? • VM? • Both?

  3. Definitions Lean Construction… is a production management-based project delivery system, emphasizing the reliable and speedy delivery of value. The goal is to build the project while maximizing value, minimizing waste, and pursuing perfection – for the benefit of all project stakeholders. Value Management (including VE)… is the process of making explicit the functional benefits of a project and appraising those benefits against a value system determined by the stakeholders. VM is strategically and organisationally focused and ensures strategic fit. VE is technically focused on space, elements and components and provides the necessary functions at the lowest cost and at a specified quality.

  4. Core proposition • Lean focuses mainly on process (how something is done) • Organisational or operating process; management process; design process; production process or a project delivery process (main drivers - increased efficiency, reduced waste and cost) • Value management focuses mainly on product (what something is) • Project scope, project design, system design, component design or widget design (main drivers – required function, reduced waste and cost)

  5. Approach to improving value Lean (Six Sigma) DMAIC phases – How to run a process improvement project Define the problem and the objectives. What do we need to improve? Can we measure this? Analyse the process. Define factors of influence. Identify and implement improvements. Assure that improvements will sustain. Value Management (VE) Job Plan phases – How to run a product improvement project Review and define the current project conditions. Define, chart, analyse and prioritise the project functions. Identify other ways to perform the project’s functions. Select the ideas that offer the potential to improve value. Develop the best ideas with supporting business cases. Report or present the ideas and how they should be implemented.

  6. Objectives of value improvement Lean Construction Value Management Identify vision and objectives Define aligned scope Improve function Distinguish between needs vs wants Eliminate over design Reduce whole-life cost Option evaluation • Improve predictability • Reduce design and construction cost • Reduce design and construction time • Rationalise resources • Identify blockers to activity • Better performance visibility

  7. Benefits of value improvement Lean Construction Value Management Demonstrable ‘line of sight‘ Platform for benefits modelling Appropriate design Efficient design with regard to function Valued intangibles Decision audit trail Lowest whole-life cost • Shorter programme • Design process cost savings • Construction process cost savings • Increased programme reliability • Better working practices - efficiency

  8. Tools for value improvement Lean Construction Value Management VM Job Plan (Charrette) Value Tree Client Value System Function Analysis FAST Diagrams Function/Cost Analysis Relative importance Brainstorming • DMAIC (PDCA, Kaizen) • Voice of Customer • Critical to Quality • Process Mapping • Value stream mapping • 8 Wastes • 5Y’s • Statistical analysis

  9. More tools …. Lean Construction Value Management Multi-Criteria Analysis Value metrics / Value Index Value for Money Ratio Discounted Cash Flow Cost Benefit Analysis Functional Performance Specification Contract value engineering clause • Pugh Matrix • Quality Function Deployment • Visualisation Management • 5S’s • Collaborative planning and buffer scheduling • NEC (or other) collaborative contract

  10. In common, they focus on…. • What the client precisely needs or wants • Value improvement and value for money • Facilitating stakeholder engagement and consensus • War on waste • Eliminating unnecessary cost

  11. Causally, they both…. • Drive learning and knowledge transfer • Drive continuous improvement • Deliver innovation • Improve communication • Improve team working and morale

  12. But individually…. • Lean focuses on improving process or production effectiveness and efficiency • Value Management focuses on improving product function and form

  13. Discuss…. • Should the Lean Practitioner in construction have Value Management techniques in his/her toolbox and vice versa?

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