A decision-making formula for value engineering applications in the Sri Lankan construction industry

Abstract

Purpose-Construction industry in many developing countries is reluctant to apply Value Engineering (VE) due to uncertainty of outcomes. Thus, the purpose of this paper is to examine existing practices of VE techniques and make recommendations to organisations and national construction regulatory bodies to standardise VE practices to achieve value for money for all stakeholders. Further, a decision making formula is introduced to determine profitability of VE applications prior to implementation. Methodology-A broad literature review consisting of six case studies with 39 semi structured interviews and six experienced professional's interviews were conducted with construction professionals having extensive knowledge on VE techniques in Sri Lanka, to gather data. Building projects which applied VE were selected as case studies. Content analysis and cognitive mapping were used to analyse data within case studies. Findings-Findings revealed that application, knowledge and experience on VE techniques among construction professionals is unsatisfactory. Recommendations include reducing contractor's design responsibility, introducing proper VE guidelines and statutory regulations. Accordingly, a framework is introduced with recommendations to assist authorities to standardise application of VE techniques. Finally, a decision making formula is suggested to determine margins of contractor's portion due to VE techniques and original profits gained. Value-The formula can be used as a decision making tool by construction industry practitioners to determine successfulness of proposed VE techniques and proposed framework can be used to guide construction professional bodies to standardise VE practices to achieve value for money.

The concept of value engineering and its assimilation in Sri Lankan construction industry: a literature review

“…However, in Sri Lankan context, VE is often perceived in the form of proposal submitted by the contractor during project execution, where contractor aims to achieve hidden benefits along with delivering the work for lesser cost with reduced time (Kosala and Karunasena, 2015). Implementation of alternatives derived from VE practices generally depend on the experience and expertise of the stakeholders in a project (Karunasena and Gamage, 2017). Furthermore, it was also disclosed that VE practices are executed as per the project stakeholders to correspond with the project.…”

“…As a standalone organisation in construction industry, many changes could be made into one of organizations' practice on VE techniques which could disperse rapidly due to the merits of such work (Kosala and Karunasena, 2015;Karunasena and Gamage, 2017). One best recommendation is that each organisation should conduct an induction or training programme on VE among workers of the firm (Xiaoyong and Wendi, 2012;Oke and Aghimien, 2018).…”

“…Diversifying knowledge base through awareness by educating client should also be made to encourage the increased use of VE in selected projects. Provision of extended support by felicitating units which practice and execute VE in construction projects could act as a driver for other members of the organisation to follow such practices (Kosala and Karunasena, 2015;Karunasena and Gamage, 2017;Oke and Aghimien, 2018). Integrating a VE expert into a design team could significantly progress an entity towards following VE practices and its importance in construction projects.…”

“…However, regardless of the merits expressed and implied by practicing VE, its application in Sri Lanka is highly limited (Karunasena and Gamage, 2017). VE is not been explicitly identified by previous studies within Sri Lanka.…”

“…Also, since there is no standardised procedure to seek value rich construction projects in Sri Lanka, VE would be a best fit technique to achieve such project which subsequently would enhance better economic output of Sri Lankan construction industry. Commonly identified reasons for drawbacks in practicing VE in Sri Lanka were lack of awareness of VE and its application among personnel in construction industry, vagueness of the results derived from such analysis, shortcomings in the extended support by government or governing bodies, extra cost involved when performing VE and formalising into a report, increased time duration to conduct analysis, unavailability of proper expertise and absence of rules and regulations to such practice in construction industry (Karunasena and Gamage, 2017).…”