Discrete Costing Versus Collaborative Costing.

Abstract

The UK construction industry has witnessed a recent shift towards integrated and collaborative approaches. Such collaborative efforts include the use of integrated systems like BIM, lean and innovative procurement options which are now reshaping project delivery systems. However, in the UK, most efforts have focused primarily on the conventional project management system, which is coherent and contract-based and has brought the separation in the processes of costing/design and production. In fact, cost and design processes are still treated as independent and separate functions which are carried out discretely within the current project delivery system. This neglect, and the lack of a holistic and collaborative approach in costing, arguably accounts for much of the cost overrun that is still prevalent in the UK industry. Traditionally, cost management has been the chief duty of Quantity Surveyors (QSs) in the UK. Recently, Target Value Design (TVD) has emerged as a management approach under the lean philosophy that aims to deliver exactly what the customer needs in terms of value within stipulated project constraints. The technique is aimed at making the budget become an input in the design and decision making process rather than an outcome of a design. The growth of collaborative approaches such as TVD opens new opportunities for project participants to deliver more value for clients and work collaboratively. This paper reports on the literature review that aimed at developing a framework to improve the current cost management practice towards a more collaborative system against the existing discrete form of costing that inhibits collaboration.

Maturity of TVD Implementation in Norwegian Public Building Projects

“…Moreover, the study further explored the "conceptualization of design processes" which describes TVD as a lean design management method. Namadi et al (2017) described, based on the identified findings in the literature, five TVD characteristics: Instead of designing and then converging later for group reviews and decisions, the concept emphasize on working together to define the issues, produce decisions then design to those decisions.…”

“…In order to determine the TVD maturity and to answer the RQ, a scorecard has been developed based on identified TVD characteristics in cited and well-known articles investigating TVD (Ballard 2008;Pennanen and Ballard 2008;Ballard and Morris 2010;Lee et al 2012;Zimina et al 2012;Denerolle 2013;Namadi et al 2017). A TVD 'characteristic' is an element or an activity which has been identified in the literature to be a part of the TVD process.…”

“…The origin of TVD can be tracked back to Target Costing. Though, the iterative process of evaluating value and purpose in design against constraints predefined in the business case distinguish TVD from other managerial tools (Ballard and Pennanen 2013;Chen et al 2014;Namadi et al 2017).…”

“…Furthermore, the use of the method increased the accuracy of conceptual estimates (Ballard and Pennanen 2013) and lowered the contingency needed for each project (Zimina et al 2012;Chen et al 2014). The method also helped to manage complexity and prevent 'overdesign' (Lee et al 2012) by focusing on common goals and objectives (Namadi et al 2017).…”

Identification of Lean Opportunities in a South African Public-Sector Projects Cost Management Framework

“…This is very much an isolated task driven solely by the cost manager on the project with little regard to collaborative costing by all project participants. The practice of neglecting collaborative approach to costing has arguably been the major cause of cost overruns experienced on construction projects (Namadi, Pasquire and Manu 2017).…”