What is construction value management?
Construction value management refers to the process of analysing how to achieve the best results in the shortest space of time and at the lowest cost. The main premise for property developers using construction value management is to carefully explore all costs and processes and add value to the project.
In terms of value, this often refers to cost savings. But in some cases, it’s about increasing the project’s value on completion by investing wisely in materials and upgrades. Every project is different, but succeeding in property development requires thorough planning to achieve the best outcomes.
Key considerations in cost management for construction
When managing construction costs, you need to really be on top of everything. Every project is different, and every developer has different needs and priorities. Below are some of the key considerations when conducting value management for construction.
Cost
Value management is primarily about cost, so analysing the price of every material is important. Consider whether cheaper alternatives exist, and if they’re capable of performing the same function. This could be as simple as finding different suppliers, or it may involve finding different materials that do the same thing without compromising on quality.
Function
When considering materials, inclusions, design choices and all other factors, you need to know what their function is. For example, can a different item perform the same function for a lesser cost? Or are there items that cost slightly more but deliver long-term benefits, such as energy efficiency?
Longevity
Experienced property developers want to build high-quality homes and townhouses. Cheap, ineffective materials just cause a raft of problems down the track. That’s why value management also involves looking at the durability of materials and the warranties on offer.
Time
The lead time for materials or contractors is an important factor. Having everybody coordinated, including the delivery of materials, ensures fewer construction delays. For many property developers, time is of the essence, so it may provide more value to pay more to acquire materials or confirm contractors’ availability.
Benefits of value management on construction projects
Primarily, property developers undertake value management to reduce their costs. This can be done in numerous ways, such as finding cheaper materials, more cost-effective tradespeople and more. The possibilities to add value to a construction project are practically endless. As an experienced construction project management team in Brisbane, we see the benefits every day. Aside from just saving money, here are some other benefits of construction value management.
Better relationships: When all of the tradespeople and stakeholders work together on a well-planned project, trust between all parties is built. Contractors know they’re working on a professional project, and there’s more impetus to completing projects on time and under budget.
Smarter construction decisions: There are usually a lot of chefs in the kitchen, so to speak, when planning a property development project. Architects, designers, specialty contractors, builders and owners are all involved. While this can be complex to manage, it also ensures a more thorough consideration of the options available.
Contingency planning: Even the most perfectly planned projects can run into unexpected issues. If you’ve already conducted a comprehensive value management process, you can build in some protection against unforeseen costs.
When should construction value management take place?
Ideally, construction value management should occur during the planning stages. During this pre-construction phase, you can make changes to the schedule far more easily than once construction starts. If you start construction and then need time out to assess options for materials, contractors, or anything else, the project will be delayed.
While it is obviously best practice to finalise all of your costs, orders, contractors and services during the planning stage, unexpected costs may appear during construction. If the budget looks to be in trouble, it may be pertinent to pause and conduct value engineering mid-construction.
Best practice and potential challenges of construction value management
Like any large project, there are always going to be challenges along the way. However, with careful planning, you can mitigate some of the risks and potential challenges you might face. Here are some tips to make your value management process more comprehensive.
Research thoroughly
A detailed value management process requires a lot of research. An experienced construction value engineer goes over every expense with a fine-tooth comb, searching for better options. The more you research, the more savings you’re likely to find. Research also helps to mitigate the risk of poor-quality materials or unreliable services.
Managing contractors
It can be difficult to manage contractors, but it’s important to involve them in the value engineering process. They often have specialty knowledge that can help reduce costs. An even better option is to work with experienced property development builders who already have a network of trusted professionals.
Construction cost tracking
While most value management occurs in the planning phase, staying on top of everything is important once the project starts. If you’re still finalising aspects of construction, there may be changes along the way, so you must keep all plans, schedules and construction cost tracking documents up to date.
Looking for professional construction value management?
Groove Properties offers an end-to-end service for property developers, incorporating everything from feasibility studies and planning to construction design and development. As experienced property developers and builders, we understand the benefits of construction value management at all project stages. Whether you’re in Bulimba, Morningside or any other Brisbane suburb, we’re here to help. Start your construction development today by contacting our friendly, professional team.
