Leveraging Target Value Delivery to Drive Preconstruction Excellence

In today's competitive construction landscape, preconstruction and operations teams are constantly seeking ways to enhance project outcomes for clients and drive operational excellence for internal efficiency. One powerful approach gaining traction is target value delivery (TVD). This method focuses on delivering maximum value to clients by integrating target value design, lean construction and operational efficiencies from the project's inception. Here, we explore how preconstruction and operations teams can leverage TVD to benefit clients and improve overall project performance.

Understanding Target Value Delivery

TVD is a comprehensive approach that integrates the client's goals and budget constraints throughout the entire project lifecycle, distinguishing it from traditional models like construction manager at risk (CMAR). Unlike CMAR, which often focuses on cost control after the design phase, TVD ensures that cost, schedule and design objectives are aligned from the outset through early and ongoing involvement of key stakeholders. Within TVD, the target value design process is deeply integrated with the overall project goals, emphasizing continuous cost management and iterative development. This approach not only streamlines the design phase but also ensures that value is consistently delivered across all stages of the project, from initial concept to field operations, leading to a final product that fully meets the client's expectations.

Best Practices for Implementing Target Value Delivery

As companies consider integrating TVD into their operations there are several best practices to consider from the beginning to make sure it is successful. These include:

• Pre-concept client education and continuous engagement: Educating clients on the benefits of the TVD approach before the project even begins is essential for aligning their value drivers and setting realistic expectations. By engaging clients early, outside the project lifecycle, they can make informed decisions about choosing TVD. Following this initial education, regular client meetings throughout the project ensure that any changes in scope, budget or schedule are promptly addressed, keeping the project aligned with the client’s goals.

Tip: Schedule regular alignment meetings with clients to discuss project goals, budget constraints and potential value optimization opportunities. This fosters a collaborative environment and builds trust. Make sure these are done consistently with an understanding of a shared output to keep everyone on the same page.

• Collaborative planning and perpetual design: TVD necessitates moving away from siloed planning toward a collaborative approach where architects, engineers, contractors and clients work together in iterative target value design sessions. By involving all stakeholders early, potential issues are identified and resolved before they escalate, minimizing costly rework and delays. Target value design plays a crucial role here by supporting target value delivery, ensuring critical decisions are made early in the project to keep everything on track.
   
• Early procurement and trade partner selection: TVD also emphasizes the importance of early procurement and selecting trade partners at the concept phase. Engaging these experts early allows for valuable cost feedback and design assistance, ensuring that the project benefits from their expertise from the start, leading to more informed decision making and smoother project execution.

Tip: Implement pull planning sessions with all stakeholders to develop a realistic and achievable master schedule that includes preconstruction and construction schedules. Use these sessions to continuously refine the design and construction plans based on real-time feedback. The pulling planning approach in construction involves working backward from the project deadline to determine the necessary steps and milestones, ensuring that each task is completed just in time to avoid delays and optimize workflow efficiency.

• Robust cost management and transparency: Maintaining cost control is a cornerstone of TVD. Establishing transparent cost tracking systems allows teams to monitor expenditures against the target budget and make informed decisions to stay within financial constraints. Having target value design establishes the project cost goals ensures clear understanding of controls throughout the project.

Tip: Utilize cost management software to provide real-time budget updates and cost projections. Share these reports with clients to maintain transparency and build confidence in the project's financial health. It’s best to start these reports after the alignment meeting in target value design to keep consistent with cost understanding.

• Focus on constructability and value engineering: Incorporating constructability reviews and value analysis from the early stages in target value design helps identify the most efficient construction methods and materials, optimizing both cost and quality. This focus should be maintained throughout the project.

Tip: Conduct constructability reviews regularly with the entire project team to identify potential construction challenges and develop cost-effective solutions. Require value analysis workshops to explore alternative materials and methods that can deliver better value. A value analysis workshop is a collaborative session where project stakeholders systematically analyze the functions of a project to identify cost-saving opportunities and enhance overall value without compromising quality or performance. It’s best to establish this understanding early to avoid any delays due to budget reworks.

Key Questions to Consider

When thinking about implementing TVD it’s important to think strategically about your projects and business practices. There are implications for training, development and process improvements to consider, including:

• How can your preconstruction team better engage with clients early in the concept phase to understand their value drivers and budget constraints?
• What strategies can be implemented to improve collaboration and communication among architects, engineers, contractors and clients?
• How can you ensure continuous cost management and transparency throughout the project lifecycle?
• What steps can be taken to integrate constructability reviews and value analysis into your project planning process?

By adopting these best practices and leveraging the principles of target value delivery, preconstruction and operations teams can significantly enhance project outcomes, delivering greater value to clients and driving operational excellence.

If you are ready to explore how TVD can benefit your projects or have questions about implementing these strategies, contact FMI for expert guidance and support.