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2000 Volume 1 Number 2 Special Issue: Value Management FROM INDIVIDUAL PERSPECTIVES TO A GLOBAL VM POTENTIAL Roy Woodhead Centre for Construction Management, School of Architecture Oxford Brookes University Abstract This paper begins a special edition of the Journal of Construction Research by setting a tone of challenge. It does not provide deep explanations of the historical context that links Value Analysis (VA), Value Engineering (VE) and Value Management (VM) together as stages of an evolutionary process; this is taken on board by other papers presented in this publication. It does however challenge the fragmented value-community to think about the possibilities of global unity to advance value creation as the principal purpose of our endeavours. It is because of this aim that the papers title links individual perspectives to a concept of global VM potential. The electronic discussion group named VEAMAC has allowed practitioners and academics to share their insights and communicate frequently thus allowing barriers to be recognised and challenged in a way that was not previously as accessible. The dominant research methodology in VEAMAC is ethnographic (Gill & Johnson, 1991) as the VM community test their ideas in a public forum and then adapt their practice in light of the lessons learned; Value Management is thus as Green (1997) claims, a socially constructed reality that also attempts to influence the future. The purpose of this publication is to extend the debate beyond email and draw more people into the larger action research (Lewin, 1946) experiment created by VEAMAC. FROM SCIENTIFIC MANAGEMENT TO PROCESS ENGINEERING: THE SPONTANEOUS THEORY OF TECHNOLOGICAL VALUE IN THE DESIGN OF WORK IN ORGANIZATIONS Dan A. Seni School of Management, Université du Quebec ŕ Montreal, Canada Abstract. We view the activity of design as being the "plain vanilla" or mundane, every-day-sort of invention which goes on all the time and in all the various kinds of technological practice, from medicine to architecture, to public policy planning, to organizational process change, to product and production engineering. In other words, we construe the central task of technological practice to be invention. And we understand technology to be taken in its broad or general sense. Moreover, we construe the practice of technological design to be theory-laden. In other words, we see every act of design as resting on assumptions and hypotheses concerning how a particular slice of the world is, how it works, and in particular, how it can be improved. We submit, therefore, that every kind of design practice rests on a technological theory - a theory of what is of value and how such value can be attained. We illustrate our views in this paper by proposing the notion that Scientific Management as first expounded by F. Taylor (1967) in 1911 was the intellectual progenitor of a number of modern design technologies, Process Engineering being among them. As is true of every technological theory, both rest on a number of basic or foundational concepts (Seni and Hodges 1996) even though their authors may not have spelled them out clearly or may not even have been aware of them. Consequently, both share a common, albeit mostly implicit and spontaneous philosophy of technology. We briefly suggest that the core of this common perspective is the problem of the design or invention of technological value by the firm. FACILITATED TEAM LEARNING IN VALUE MANAGEMENT TEAMS Patrick Sik-wah FONG Department of Building & Real Estate, Hong Kong Polytechnic University Abstract This paper deals with the concept of team learning within value management study teams. It describes the concept and processes as well as the importance of learning for participants involved in the study. Specifically, the study will explore the process and outcomes of learning in teams within value management studies. The goal is to conduct research on the patterns, processes and experiences employed by teams when attempting to create new knowledge. Using interview, observation and document analysis, this study will provide insights into team learning outcomes, processes, and phases, as well as the team and organisational conditions that facilitate or impede team learning. SOFT VALUE MANAGEMENT METHODOLOGY FOR USE IN PROJECT INITIATION - A LEARNING JOURNEY Roy T. Barton University of Canberra, Queensland University of Technology Abstract A learning journey is described which began by investigating the application of traditional Value Engineering to construction projects in Australia. The journey takes the form of an action-research program in which hundreds of Value Management studies of real projects were undertaken. Through two major iterations of the action-research cycle (as well as many sub-iterations) a number of key learnings were identified which led to substantial changes to the Value Management methodology. As the journey continued, a "soft" form of Value Management evolved focusing on strategic and conceptual planning and particularly upon capturing requirements in complex circumstances such as in project initiation. Major emphasis is placed upon effective facilitation. MANAGEMENT OF VALUE AND UNCERTAINTY IN CONSTRUCTION PROJECTS. Jason Le Masurier, David Blockley and David Muir Wood Department of Civil Engineering, University of Bristol, UK. Abstract. Uncertainties present opportunities as well as risks. By managing uncertainties projects can achieve better value, for example through avoidance of problems that reduce value; or through identification of efficiencies which lead to increased value. Traditional approaches to risk management seek to identify and eliminate risks early in the project. However, attempts to eliminate risks can have adverse consequences. For example designing for the worst case can lead to complacency since it will be assumed that every eventuality is covered. Conditions may transpire which were completely unexpected, and with no strategy for detected and dealing with them, can lead to a hasty redesign or sometimes a project crisis. An alternative approach is to identify the uncertainties then monitor and manage them throughout the project life cycle. An approach used in geotechnical design provides a model for managing uncertainty. The Observational Method involves an initial assessment of the uncertain conditions followed by designs based on a prediction of the most likely manifestations of those conditions. Alternative designs or contingency plans are prepared to cover for the worst conceivable conditions. When combined with Value Management the Observational Method can provide an integrated system for managing various project uncertainties. THEORY MEETS PRACTICE: PROPOSAL FOR A DYNAMIC VALUE AND RISK METHODOLOGY FOR PROJECT MANAGEMENT Devadass P. Mootanah Construction Industry Research and Information Association London, UK Abstract Amongst the plethora of hard and soft value methodologies (Green, 1994/b; Barton, 1996), there is little consensus on how uncertainty and risk can be identified and managed. In this paper, a dynamic approach for managing value and risk is proposed within the context of participatory group decision-making in the management of projects. This approach is based on the interface between both hard and soft group decision methodologies and is derived from a conceptual model (Mootanah, 1998) developed for integrated risk and value management (VM). The methodological interface bridges different features from methodologies such as Greens soft Smart VM based on participation and perceptual decision modelling (Green, 1994/a), Kelly and Males life-cycle VM methodology (Kelly and Male, 1993; Male et al., 1998), a holistic risk management methodology (Mootanah, 1997) and the SAVE methodology (SAVE, 1998). The underlying theory supporting the methodology emerged from surveys of current practice and interviews with practitioners, participant-observations of value and risk studies, document analysis of reports of VM studies and a continuous literature review. This multi-methodological research supports the interaction between theory and practice and produces an integrated approach to managing risk and value in project management. RISK MANAGEMENT IN SINGAPORE CONSTRUCTION JOINT VENTURES Kwok Hok Choong Andrew, Danny Then and Martin Skitmore School of Construction Management and Property Queensland University of Technology, Australia ABSTRACT The risks of failure of construction joint ventures (JVs) are high and the financial consequences are expensive. This paper sets out to identify the nature of these risks and the means by which they are managed, through the study of the critical factors that contribute to successful JVs and the risk factors associated with JV operations. The results of a survey of JV participants in Singapore are presented. These indicate the overall risk factors facing contractors, the risk management measures that are felt to be effective, and the critical success factors involved at different stages of the project. LEARNING BY DOING IN SINGAPORE CONSTRUCTION Willie Tan and Yahya Elias School of Building and Real Estate, National University of Singapore ABSTRACT This study examines the significance of LBD in Singapore construction using the production function approach. Learning was found not to be significant, possibly as a result of the industrys high dependence on imported construction technology, industrial fragmentation as well as transient, and largely unskilled, foreign workers. Learning is socially rather than technologically driven and occurs at individual, project, corporate and industry levels. Since learning by doing is an important determinant of productivity, measures should be implemented at all levels to encourage it. In particular, the fragmentation of the industry is a serious impediment to learning since small firms generally do not have adequate resources to learn effectively. PREDICTING MATERIALS SUPPLIERS BAD DEBT J. Nicholas, G. D. Holt and M. Mihsein School of Engineering and the Built Environment, University of Wolverhampton Abstract Present methods for evaluating contractors creditworthiness have been found to be ad-hoc and bespoke. As such, materials suppliers place themselves in a position of considerable risk when they furnish contractors with credit. Very often, the result of this is bad debt for the supplier. By considering a UK nation-wide survey of suppliers credit control and debt collection practices, this paper presents two multivariate discriminant analysis models. The first, models suppliers percentage bad debt incurred in financial year 1997-8. The second model complements the first, by investigating the relationship between suppliers targeted profit margins (minus bad debt incurred), for the same time period. The first model identifies that percentage of bad debt incurred is related to: i) whether suppliers implement a standard procedure for collecting overdue accounts; and ii) their philosophy for checking contractors creditworthiness. The second model identifies that suppliers targeted profit percentage (minus bad debt incurred) is related to: i) their standard terms of payment imposed onto debtors; ii) whether they insure against bad debt; iii) whether guarantees are sought for substantial orders; iv) their financial growth trend; and v) method(s) used to establish contractor credit limits. The paper shows that failure by suppliers to realise the risk they expose themselves to when granting credit, is directly linked to the level of bad debt they incur. IMPROVING SAFETY KNOWLEDGE THROUGH TRAINING - THE CASE OF HONG KONG Francis K.W. Wong, Steve C.M. Chan, Raymond.Y.C. Tse Department of Building and Real Estate, The Hong Kong Polytechnic University Peter E.D. Love School of Architecture and Building, Deakin University ABSTRACT The Enhanced Green Card Scheme (the Scheme) for safety training was introduced in Hong Kong in 1996. As a result those wishing to work on construction sites are required to possess an EGC to certify that they have been on an approved safety induction-training course. With this in mind this paper uses a questionnaire to determine the effectiveness of the Scheme by evaluating the enhancement of safety knowledge of construction workers on site after they have received training under the Enhanced Green Card Training System. The findings indicate that the enhancement of knowledge after receiving the CITA enhanced Green Card Training is quite significant. Enhancement of knowledge after receiving the training has a positive relationship with the academic background of the trainees but negative relationship with the age and experience of trainees. In addition, the results indicate that knowledge enhancement of the workers has no effect on reducing the accident rates in Hong Kong. The paper concludes by highlighting some limitations of safety training. CONSTRUCTION MANAGEMENT RESEARCH: A BLEND OF RATIONALIST AND INTERPRETATIVE PARADIGMS Gary D. Holt The Built Environment Research Unit University of Wolverhampton Olusegun Faniran School of Civil and Environmental Engineering, The University of New South Wales ABSTRACT There are those that question the robustness, validity and usefulness of construction management research (CMR). In the main, this is a result of the ontological viewpoint whereas in reality, CMR is as much concerned with both ontological and epistemological research paradigms. This paper reviews the role of CMR, and proffers that it is not always taken as seriously as it might be, particularly by those outside of the discipline. The role of CMR and the significance of its contribution to construction practice and the wider research community is discussed. It is concluded that CMR cannot be packaged under existing standard (typically engineering biased) research domains and therefore needs to be: i) more clearly delineated; ii) more seriously recognised as a research discipline per-se; and resultantly iii) afforded more distinct recognition. *** |