The Chinese construction industry is one of the major industries in the national economy in China, and is also one of the most rapidly developed industries. With the transformation of China’s economy from a central planned economy to the market economy, the Chinese construction industry has made many changes. Following the expansion of construction’s scale and the elevation of the technology level, the Chinese construction industry offers a great contribution to the development and stability of the society.
Ten years ago, the application of value management in construction projects was very limited and the industry has lagged behind others in recognizing how critical they are to building clients confidence and in meeting their requirements, (Fewings 2005). Clients over the years have become uncomfortable with time, cost and quality wastage on their projects. Fewings (2005) further explained that clients have become more sophisticated they have made more demanding targets that have left room for manoeuvre and these have led to tighter budgets, more innovative technology and less tolerance of time slippage, which is often connected to more onerous penalties for lack of performance. In response to the clients’ challenges, the industry invented series of technology and management tools such as Risk Management and Value Management. OGC (2005) affirmed that Value Management is an essential tool for the success delivery of construction projects. Value Management (VM) is widely accepted as important tools in the management of projects.
According to Ellis et al (2005), Value Engineering originated within USA manufacturing, and it was applied to UK construction projects during the mid 1980s. in the course of developing Value Engineering, Kelly and Male (1988) undertook research into value engineering and quantity surveying practice and concluded that Value Engineering had a place within the industry but that its form would need to be adopted to suit UK practice. During the 1990’s Value Engineering evolved into a much broader-based approach to achieving best value and the term Value Management (VM) became more popular, (Ellis et al, 2005).
As a new and innovative technique, Value Management was identified by Kelly and Poynter-Brown (1990) as a natural progression for the Quantity Surveyor and as an opportunity for them to develop their leading-edge skills. It is suggested that on the common run of construction projects, the Value Management service has been largely championed by the Quantity Surveyor/Cost Consultant organisation, and some have argued (Norton and McElligott, 1995) that Value Management is of greater importance than, and should precede, cost management efforts. In Hogg’s (1999) research into the application of Value Management by Quantity Surveyor practitioners, it was observed, rather surprisingly, that Quantity Surveyor profession was reluctant to develop the service.
OGC (2005) said value means ensuring that the right choices are made about obtaining the optimum balance of benefit in relation to cost and risk. While it explained that Value Management provides a structured approach to the assessment and development of a project to increase the likelihood of achieving these requirements at optimum whole life value for money.
The following questions are intended to be answered in order to satisfy the aim and objectives of this research work.
- What constitutes value to the business from delivery of a project?
- Is China construction industry using Value Management in it construction activities?
- If yes, is there any regulatory provision by either the Government or the industry in the practice of Value Management?
- Does Value Management suit China construction practice?
- What are the Value Management activities, techniques and processes in use in China Construction industry?
- What are the outcomes of these activities and practice in China construction industry?
- What are the principles of Value Management in the context of construction projects in China?
- What are the practical steps that need to be taken or that are been taken over China’s construction projects lifecycle?
- According to Male et al (1998a, 1998b), there are three significant characteristics which are common to all their recommendations. First, that there are various levels at which Value Management may be productively engaged, this generally reflected Kelly and Male (1993) analysis of concepts, spaces elements and component. Secondly, that there are opportunities for a sequence of Value Management interventions, at pre-brief, briefing, concept outline sketch design, final sketch design and during site operations, but that the earlier it is introduced within the project cycle, the greater the potential impact. Thirdly, Value Management interventions, at whatever level or stage, should follow the job plan sequence (or something very similar to it) using analysis techniques such as SMART and FAST. Indeed Green (1999) claimed that SMART Value Management has been assimilated into best practice. Are these characteristics (as explained by Male et al ) in practice in China construction industry?
AIM AND OBJECTIVES OF THE RESEARCH WORK
The premise of this research work is to measure the processes and outcomes of Value Management in China construction industry. In order to achieve this and answer the research questions, the following objectives form the basis of the study:
- To examine the usage of Value management in China construction industry.
- To identify the principles and techniques of Value Management in China Construction industry.
- To identify and assess the effect of Value Management on project value within time, cost and quality constraints.
- To investigate the availability of regulatory policies on the practice of Value Management in China construction industry.
- To measure the processes and outcomes of Value Management practice in China construction industry.
NEED FOR THE STUDY
Li (2005) said that “China needs to learn management skills from overseas. Management within a market economy is new in China. The requirement for management with a planned economy has meant that managers in construction companies do not take responsibilities in making decisions and risk. There is a shortage of more efficient management information and control systems with more effective cost control, construction planning, resource allocation, value management and quality assurance systems. Finance management is still new for most Chinese construction companies. Planning, organizing and controlling construction process for large-sized projects need further improved. There is a general weakness in management of public construction projects”.
He explained further that “there are many construction sites in China, which is currently seen as one big construction site. Such a huge construction sector brings about both opportunities and challenges for both domestic and overseas construction participants. China is adopting rapid urbanization that leads to huge demands for urban residential buildings, commercial buildings, industry and office buildings, infrastructures and public spaces”. Based on the volume of construction and Li’s comment, it can be discovered that construction management generally has not found a solid foundation in China construction industry, and every efforts through researches and other means need to be employed in bringing China construction industry into a solid footing. This is what necessitated this research work.
SCOPE AND LIMITATIONS
China is one of the world’s largest countries with 9.6million square kilometers. Construction productivity in different regions is different. Construction activities in China ranges from building road, railways, airport, port, water conservancy and hydroelectric power, electric power, mining, smelt construction, oil and chemical construction, urban public utilities, communication, mechanical installation to fitting out.
For the purpose of limited time available for this research work, the study will be limited to Value Management processes and outcomes within Public building projects in China.
An appropriate methodology of research is a very important tool in research work. Therefore, a research methodology that can answer the specific questions and objectives of the research will be used.
THE TARGET POPULATION
The target population for the study will include the construction firms, the construction project consultants, the clients, and the relevant Government agencies in China. Lists of respondents will be sorted out from all the relevant construction and professional bodies in China. The study will target population within the following cities in China; Beijing, Shanghai, Hangzhou, Tianjin and Xi’an.
SAMPLE TECHNIQUE AND SAMPLE SIZE
China is highly populated (with about 1.26 billion people) such that getting a sample size might be difficult. The lists of respondents according to their categories will be compiled using random sampling techniques.
DATA COLLECTION AND ANALYSIS
Data will be obtained through the use of well structured questionnaire, personal interview and archives. Information in relation to the processes and outcomes of Value Management will be sort. If Value Management is in use, data will be collected on projects where it is used and comparison with projects where Value Management was not used will be made in term of time, cost and quality of project delivery. The data collection tools will include the use of the internet, postal services, personal visit and telephoning. Data collected will be subjected to appropriate statistical analysis that can provide appropriate analysis on the data collected.
CONFIDENTIALITY AND ETHICS OF RESEARCH
In the course of the research work, all ethical issues in respect of the right and privileges of the respondents will be strictly adhered to. In doing this, the respondents will be brief about the research and will be given assurance of the confidentiality in any information given for the success of this research work. The ethics of research demand that the consents of the respondents be sort. This will be done appropriately and within the law and the ethics. The researcher is aware that he owns the respondents duty of protection and more so, at any point in time the respondents are free to withdraw from participation. The respondents will be informed about their right to the outcome of the research if they so desire.
EXPECTED CONTRIBUTION TO KNOWLEDGE
The study will contribute to the body of knowledge in the following ways:
- It will help China construction industry in assessing the effects of Value Management in their construction activities.
- It will be a source of reference for further studies in future relevant research work.
- It will be an added research work material in the library of research collection.
- The research will act as a catalyst for change in direction in the way projects are managed in China construction industry.
It will help the industry in re-structuring the entire industry activities and policies.