ABSTRACT
Value Management (VM) has played a broad role in supporting effective decision making on construction projects, increased project performance and quality, balance project objectives, and manage community expectations in many countries around the world. But applicability of VM in Nigeria construction industry has experienced setbacks compared with rest of the world. It is on this basis that the study examined the factors responsible for the setbacks with a view to recommending sustainable solutions. Primary data was collected from construction professionals (architects, quantity surveyors, civil engineers and estate surveyors) through closed ended questionnaires. The study sampled 235 professionals across the construction firms in Abuja through simple random sampling technique. The study employed descriptive statistics and factor analysis to analyze the data collected from the respondents. Descriptive statistics (mean item score and relative importance index) identified four (4) value management tools used in VM practice. These include brainstorming, life cycle cost analysis, function analysis and evaluation matrix. Fourteen (14) benefit factors of VM were identified which constituted 66.169% variance in original variables. These include performance benefit, technological benefit, effective cost, quality standard, functional performance, innovative benefits, professional benefits, wastage avoidance, functional quality, cost benefit, efficient benefit, technical benefits and client value management. The result of factor analysis revealed six factors which constituted about 65.690% variance in the original factors hindering value management application, which include technical and public policy factors, professional negligence, non- complacency and management defects, human factors and inflexibility, lack of manpower and project focus, and poor knowledge. The study recommends that workshops and seminars be organized by professional bodies from time to time so as to create more awareness of value management in the construction industry. The result of factor analysis was used to develop a framework. The researcher recommends that the framework developed in this study be used by government for VM implementation. Project stakeholders should be proactive in addressing the aforementioned factors as they posed critical setbacks to value management implementation by Nigerian construction professionals.
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background to the Study.
Value Management (VM) is a management strategy principally dedicated to motivating people, developing skills and promoting synergies and innovation, with the aim of maximizing the overall performance of an organization. This, however, has not been fully embraced in Nigerian construction industry (Oke and Ogunsemi, 2016).
Construction industry all over the globe has not been static and the reasons for this include clients’ growing demand, complexity of construction projects, advancement in technology, introduction of new innovations and environmental sustainability issues amongst others. Aghimien et al., (2015) established that value management identifies and eliminates areas of needless designs which affects cost but has no efficient benefits, reduces construction cost and time and enhances worth for money thereby giving an overall satisfaction to the client.
Olawumi et al., (2016) describes value management as a process whereby the project is subjected to scrutiny to obtain maximum value for money by following prescribed methodologies. It focuses on the value, rather than cost, in relation to the function performed by the elements of the project under contemplation. Robertson and Sterlin (1996) defines value management as an organized multidisciplinary team study of purposes to creatively produce alternatives which will satisfy the users’ needs at the lowest life cycle price.
Oke and Aigbavboa (2017) describes Value Management as a procedure that involves the control, monitoring and managing of project team members, redesigning of spaces and components, appropriate choice of materials, as well as the optimization of the method of producing a product in order to meet the stated development goals.
Value management can increase the value of a property by providing the required project purposes but at a lower cost, by providing other functions without increasing the price, and by providing additional functions and at the same time to decrease the cost. For instance, if two or more designs of a project are compared, each producing the same functional and aesthetic requirements, then the difference would most likely be an unnecessary cost, which could be as a result of unnecessary components, materials, project buildability and life cycle costs.
Value Management is important to the success of projects as it offers a basis for improving value for money in construction (Ashworth and Hogg 2000). It focuses on value rather than cost and seeks to achieve an ideal balance between time, cost and quality (Kelly, 2007). Liman (2010) defines value management as a mixture of planning tools and approaches to find the optimum balance of project benefits in relation to project cost and hazards. Demand for value management all over the globe is on the increase as noted by Maro and Kikwasi, 2009) and Nigeria will soon be fully part of it.
According to College of Estate Management (1995), value management is getting an increasing amount of attention within the construction industry and global project management community that clients are insisting that value management should be practical to their construction projects and such could probably be attributed to the usefulness of value management as a tool for guaranteeing value for money. Also clients are gradually enquiring and demanding that it is used during the main stages of their construction projects and the existence of greater rivalry in the market place ever before, therefore it is important that resources are useful as efficiently as possible and wastes in any form reduced to a minimum.
Currently, VM has been widely practised in many countries around the world. However, concepts and applications of VM do not seem to be well embraced in the construction sector of the majority of developing countries (Bowen et al., 2010). For example, in Malaysia and China, VM is still at its early stages and it has not been well-accepted (Jaapar, 2009; Li and Ma, 2012). VM is seldom applied in the Southeast Asia construction industry (Cheah and Ting, 2005). It is also less commonly practiced in South Africa. Malla (2013) discovered that the concept of VM is very much new in Nepal. The practice of VM in Myanmar and Nigerian construction industry is very low and it is not popular among construction professionals (Phyo and Cho, 2014; Aduze, 2014).
The case of Nigeria as one of the emerging nations of the world is different as the concept of value management is gaining ground among Nigerian construction professionals. A good number of professionals in Nigeria built environment have been involved in the practice of VM. This was revealed by Olarenwaju and Khairuddin (2007), where about 36%, 30%, 11% and 19% of the research population that are familiar with value management are quantity surveyors, engineers, architects and estate managers respectively.
Thus, in order to promote the application of VM practice in Nigerian construction industry, this study will identify the extent of value management practice among construction firms, the factors hindering the successful implementation of VM among the firms and assess the benefits associated with the implementation of VM in Nigerian construction industry.
1.2 Statement of the Problem.
In recent times, not only in Nigeria but the rest of the world has been facing tough economic challenges. It is therefore, important that available resources are utilised to optimize value for money for project stakeholders. Client expectation of value of products in the Nigerian Construction Industry has not been adequately achieved (Sabiu and Agarwal, 2016). The failure of such of clients in achieving their expected value causes them to be disappointed with their investment in the Nigerian Construction Industry. Construction industry is generally identified with poor productivity, postponement in project duration and cost overruns. Production outputs attributed to construction sector has been comparatively low compared to manufacturing industry (Adebowale,2014). Though attempts have been made to improve the situation, the problem still persists. As an alternative to Nigeria’s existing practice, efforts have been made by previous researches recommending the adoption of VM in order to facilitate the achievement of the client value system, but the implementation is yet to be welcomed due to the absence of a framework on VM practice and lack of government policy on VM implementation in the Nigerian construction industry.
Despite the huge number of benefits of VM as widely proclaimed by many international construction industries in advanced countries, which includes improved products and services, encouraging the use of local resources, elimination of unnecessary designs, and adoption of new construction techniques amongst others, value management has not been fully incorporated in Nigerian construction industry (Oke and Ogunsemi,2016).
Therefore, the study assesses the extent of value management practice by construction professionals in Abuja with a view to identifying the impediments facing its implementation so that a framework can be developed for its practice in the Nigerian construction industry.
1.3 Aim and Objectives of the Study
1.3.1 Aim of the Study
The aim of the study is to assess the extent of value management practice by construction firms in Abuja, with a view to developing a framework for its implementation in the Nigerian Construction Industry.
1.3.2 Objectives of the Study
1. To identify tools used in VM practice in Abuja construction companies.
2. To examine the extent of the application of VM by construction professionals in Abuja.
3. To assess the factors hindering the application of VM practice in the construction companies.
4. To examine the benefits associated with the practice of VM in construction firms in Abuja, Nigeria.
5. To develop a framework for implementation of VM in Nigerian construction industry.
1.4 Research Questions
1. What are the tools used in VM practice by construction professionals?
2. To what extent is the application of VM in Abuja Construction firms?
3. What are the factors hindering the application of VM in Abuja construction companies?
4. What are the benefits associated with implementation of VM in Abuja?
5. How can a framework be developed for implementation of VM in Nigerian construction industry?
1.5 Justification for the study
Nigerian construction industry has suffered many setbacks in terms of completion of projects at stipulated time and within budgets (Mohammed and Isah, 2012). This, however, may be largely due to non-implementation of VM practice, which aids timely completion of construction projects and enhances value for money for building clients in the construction industry.
A VM process was carried out by four (4) different value management teams for four (4) different proposed projects in Ondo State, Nigeria (Aghimien and Oke, 2015). The research found that, apart from providing a more functional design, value management can also lead to great savings in cost of construction of any project, as there was 28% saving for case study one (1), 38% for case study two (2), 31% for case study three (3) and 15% saving for case study four (4).
Value management plays a vital role in the construction industry’s pursuit for continuous improvement and innovation” (The Institute of Value Management, 2009). It thus becomes imperative for stakeholders in the construction industry to embrace the practice of value management which encourages the use of minimum resources to achieve project objectives and enhances value for money for building clients.
In Abuja in particular and Nigeria in general, VM is not yet a concept well known and practiced by all the parties involved in the building industry. It is important for Nigerian construction industry professionals to become aware of and familiarize themselves with VM practice. Nigeria is a few steps behind in VM practice compared to some of the industrialised countries like Britain, Australia, North America and China.VM is a function-oriented method that has proven to be an effective management instrument for achieving improved design, construction and cost effectiveness in various construction and transportation projects around the globe. It is anticipated that the successful implementation of a VM agenda will result in additional benefits beyond improved design and cost savings. Benefits include constant updating of standards and policies, accelerated combination of new materials and construction techniques; employee interest from participation in decisions and increased skills obtained from team involvement.
1.6 Scope of the Study
The study covers the practice of value management by construction professionals in Abuja construction firms. The study looks at the extent to which value management is being applied to construction projects by construction professionals in Abuja, the Federal Capital City of Nigeria. The study also looks into various tools/processes of VM practice employed by the construction professionals in construction projects in Abuja, in order to enhance the value of construction projects, not necessarily only by cutting costs. Processes and steps employed by the construction firms to deliver the building project that is value-oriented will be examined in this study. The study identified inherent factors hindering the application of VM in the study area. The study also examined the benefits of application of VM in Abuja construction companies.
The fundamental reason why Abuja is selected for this study is hinged on the fact that Abuja is the capital city of Nigeria and it is fastest growing city in Nigeria in terms of construction development. This confirms why there is large concentration of construction firms in Abuja and the outcome of this study can be a true reflection of what obtains in the entire country.
1.7 The Study Area
Abuja is the study area and it is the capital city of Nigeria. Abuja is selected for study on the basis of the existence of heavy property market transaction and due to presence of high level housing infrastructural services provision and development which cannot be compared with any city within the country.
Abuja Municipal Area Council (AMAC) was designed into four phases (I-IV) of development, and located in the northern part of the Federal Capital Territory (F.C.T.) FCT comprised landmass of 275.30 and 7,315 square kilometres respectively. Furthermore, FCT is divided into four phases of development, phase 1 and phase 2 are well developed in housing infrastructure and majority of districts in phase 3 and 4 are also well developed. Abuja, the Federal Capital Territory is on the longitude 60 44’ to 70 37’ E (East of the Greenwich Meridian) and latitude 80 23’ to 90 28’ N (North of the Equator). The city is bounded to the North by Kaduna state, to the south by Kogi state, to the east by Nassarawa state and to the west by Niger state. By existing roads, the distance of FCT is approximately 150km from Kaduna, 156km from Bida and 112 km to Minna.
In 1976 FCT was carved out from part of Nassarawa, Niger and Kogi states in the central part of the country. The city is confined by a rock called Aso Rock, and the city experiences two annual climatic conditions in a year; the raining and the dry seasons. The city is located at sub region of Guinea Forest-Savanna of West Africa. The landscape the city is characterized with plain, gullies and rough terrain. The major gullies and rough terrain is found around Gwagwa plains where the pitches of rain forest occurrence are predominant. The annual range of rainfall is 127.3mm-118.5mm with average temperature between 21.20 C and 31.90C.
This material content is developed to serve as a GUIDE for students to conduct academic research
FRAMEWORK FOR VALUE MANAGEMENT IMPLEMENTATION IN ABUJA CONSTRUCTION COMPANIES, NIGERIA
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