WHERE LEAN CONSTRUCTION AND VALUE MANAGEMENT MEET

Abstract

The lean construction (LC) community's key vision and goal is to provide value, yet they are increasingly challenged with understanding and dealing with the concept of value, with reports that value is one of the weakest points. Regardless of the previous studies and contributions already made on the concept of value in LC, the absence of a consistent understanding of value has resulted in misperceptions and indistinct boundaries with other construction value-related disciplines. Without a consistent understanding of value, the full potential of applying value-established concepts will not occur. Thus, the study of different concepts in construction will open new opportunities to deliver value in the future. Literature reviewed only revealed a small number of interdisciplinary comparisons of Lean manufacturing and LC with value management (VM)/value engineering (VE) on value. Secondary data was used to present an in-depth comparison of the principal points of the current practice and theories of LC and VM, which are seen as ways to improve the delivery of value to clients and building users. The study revealed a range of similarities at a high level, which could easily point to an early conclusion that LC and VM are interchangeable, leading to the same goal of value delivery and shared misapplication of cost reduction techniques. However, a more detailed examination indicates significant differences in the philosophy and scope in different areas, including project timing, practitioner duties, and areas of practice which could complement each other. Also the study identified that LC is a broader philosophy which covers more aspects than VM, it is evident that LC has advanced over the years towards discussions on the concept of value. The current work in LC on value relies less on other construction value-related disciplines such as VM, VE and partnering. Furthermore, LC literature still views value as a confusing concept associated with different interpretations, forming the basis of its understanding. The study established that value plays a central role in both LC and VM. Their combination could offer great synergy regarding the concept of value.

Full text

Musa, M.M., Pasquire, C., and Hurst, A. (2016). “Where Lean Construction and Value Management
Meet.” In: Proc. 24th Ann. Conf. of the Int’l. Group for Lean Construction, Boston, MA, USA, sect.1 pp.
103–112. Available at: <www.iglc.net>.
103
Section 1: Theory
WHERE LEAN CONSTRUCTION AND VALUE
MANAGEMENT MEET
Muktari M. Musa
1
, Christine Pasquire
2
, and Alan Hurst
3
ABSTRACT
The lean construction (LC) community’s key vision and goal is to provide value, yet they
are increasingly challenged with understanding and dealing with the concept of value,
with reports that value is one of the weakest points. Regardless of the previous studies
and contributions already made on the concept of value in LC, the absence of a consistent
understanding of value has resulted in misperceptions and indistinct boundaries with
other construction value-related disciplines. Without a consistent understanding of value,
the full potential of applying value-established concepts will not occur. Thus, the study of
different concepts in construction will open new opportunities to deliver value in the
future.
Literature reviewed only revealed a small number of interdisciplinary comparisons of
Lean manufacturing and LC with value management (VM)/value engineering (VE) on
value. Secondary data was used to present an in-depth comparison of the principal points
of the current practice and theories of LC and VM, which are seen as ways to improve the
delivery of value to clients and building users. The study revealed a range of similarities
at a high level, which could easily point to an early conclusion that LC and VM are
interchangeable, leading to the same goal of value delivery and shared misapplication of
cost reduction techniques. However, a more detailed examination indicates significant
differences in the philosophy and scope in different areas, including project timing,
practitioner duties, and areas of practice which could complement each other.
Also the study identified that LC is a broader philosophy which covers more aspects
than VM, it is evident that LC has advanced over the years towards discussions on the
concept of value. The current work in LC on value relies less on other construction value-
related disciplines such as VM, VE and partnering. Furthermore, LC literature still views
value as a confusing concept associated with different interpretations, forming the basis
1
PhD Research Student, Centre for Lean Projects, School of Architecture, Design and Built
Environment, Nottingham Trent University, UK, +44(0)7990412973
muktari.musa2012@my.ntu.ac.uk
2
Professor, School of Architecture, Design and Built Environment, and Director Centre for
Lean Projects, Nottingham Trent University, UK, +44(0) 115 848 2095
christine.pasquire@ntu.ac.uk
3 Senior Lecturer, School of Architecture, Design and Built Environment, Projects, Nottingham
Trent University, Nottingham NG1 4BU, UK, +44(0) 115 848 2878 alan.hurst@ntu.ac.uk

Muktari M. Musa , Christine Pasquire , and Alan Hurst
104 Proceedings IGLC-24, July 2016 | Boston, USA
of its understanding. The study established that value plays a central role in both LC and
VM. Their combination could offer great synergy regarding the concept of value.
KEYWORDS
Lean Construction, Value Management, Value, Value-related disciplines, Integration.
INTRODUCTION
In recent times, there has been increased focus in current lean construction (LC) literature
towards understanding the management of value, which is the end-goal of all
construction projects (Emmitt et al., 2005; Salvatierra-Garrido and Pasquire, 2011). The
LC community’s key vision and goal is to provide value (LCI, 2016b). Although
understanding, managing, and dealing with value has become a topic of growing
importance when applying lean thinking by stakeholders, it is reported to probably be the
most difficult to approach in managing construction projects and one of the weakest
points of LC (Bertelsen, 2004; Bertelsen and Koskela, 2004; Emuze and Saurin, 2015).
Munthe-kaas et al. (2015) further argued that the management of value in construction
is difficult and unpredictable due to the change of perspectives and nature of human
beings. Recently, researchers have asserted that if value is not agreed upon initially in
construction, then it will be challenging to maximise it (Drevland and Lohne, 2015).
However, the agreement of value parameters and the use of the concept of creating value
for the customer as the fundamental purpose of a project has contributed to the success of
many projects. Additionally, the importance and achievement of improved productivity
and client/user satisfaction has been recognised (Emmitt et al., 2005; Munthe-kaas et al.,
2015; Salvatierra-Garrido et al., 2009).
The absence of a consistent understanding of value in construction has resulted in
misperception and indistinct boundaries with other construction value-related disciplines.
In agreement Emuze and Saurin, (2015) reports that discussions on value raise
contradictions that impair a general understanding of the concept that could find
alignment in contemporary thinking throughout a number of disciplines. Mossman (2013)
asserted that value is a concept that requires continual updating and adjustment. In this
respect, understanding the full potential of the management concept of value requires
integration and iteration, considering its complex nature; thus, the study of different
concepts in construction opens new opportunities to deliver value in the future (Kevin
and Fadason, 2012; Salvatierra-Garrido et al., 2009).
The extensive progression of the concept of value in construction can be accredited
to disciplines like LC and value management (VM). Seni, (2007), clearly emphasised the
need to know about value in VM and other value disciplines. It is imperative for value to
be explored in concepts such as partnering, VM, and other disciplines, like lean, as it has
been found that the application of the concept of value is predominantly a part of these
concepts (Wandahl, 2015). Literature reviewed only revealed a small number of
interdisciplinary comparisons of Lean manufacturing and LC with VM/value engineering
(VE) with the aim of identifying synergy in the way value is understood and delivered.

Where Lean Construction and Value Management Meet
Section 1: Theory 105
Previous researchers have documented that lean manufacturing and VM are
established disciplines with complimentary merits and flaws; it is claimed that lean
manufacturing tools and techniques may be used to improve VM studies and vice-versa
(Nayak, 2006; IVM, 2015b).There have been many varied attempts to develop a clear
understanding of the conceptual and practical perspectives of value in the IGLC
community. A prevailing perception of value as a ‘thing’ as opposed to an emerging and
dynamic phenomenon has had a varying and restricting effect on construction. High-level
discussions and contributions of theories and management concepts, such as VE, VM,
and lean thinking, etc., has led to fragmented individual perceptual representations of
value. Consequently, the concept of value remains a rich field to explore (Salvatierra-
Garrido et al., 2009). This paper considers LC and VM, as ways to improve the delivery
of value to clients and building users.
METHODOLOGY
The study leading to this paper adopted an extensive and multi-disciplinary literature
review in an attempt to bring together construction value-related concepts towards a
consistent understanding of value according to the purposes of LC. A study aimed at
comparing LC and VM views towards the concept of value was carried out to identify
synergy in the way value is understood and delivered. To achieve a more general context
to gain a more detailed understanding of the topic, a comparative study was conducted
with high quality secondary data, which covered the intended population that focused on
studies that shared the same view through identification of the main features of current
theory and practice of LC and VM in the context of value in construction.
Several academic databases, including Scopus, Proquest, and Google Scholar, were
searched in order to identify peer-reviewed journal articles, conference papers, and
priority books. The search criteria primarily included the period of publication, key
terms, and ranking criteria, with the period of publication set at 26 years to date because
LC is a newer concept in construction management.
The articles selected to form the database of this study were chosen based on two
considerations: context (i.e., construction/project management) and relevance (i.e., both
academic/research papers and books related to the value concept). From a sample of 35
papers and books identified as related to value, the following concepts were documented:
LC, VM, concept of value, value-based management, partnering, etc. This paper aimed at
identifying a clearer path for a larger doctoral research study, where the result of this
secondary data will be used to frame part of the questions for interviews to help confirm
the initial findings. This study only considered secondary data due to lack of primary
data.
THEORETICAL LITERATURE
VALUE IN THE CONTEXT OF LEAN CONSTRUCTION
A key vision and goal of the LC Institute is to provide value by achieving both customer
and supply chain partner value throughout the project life cycle (LCI, 2016b).Womack

Muktari M. Musa , Christine Pasquire , and Alan Hurst
106 Proceedings IGLC-24, July 2016 | Boston, USA
and Jones, (1996) stated value as the first principle of lean thinking. In LC, numerous
definitions and terminologies of the concept of value have been identified in literature.
According to Salvatierra-Garrido, et al., 2012, the LC perspective of value has been
strongly influenced by the value generation view of the transformation flow value
generation (TFV) model by Koskela. As stated in Koskela, (2000) each of these three
concept (TFV) concentrates on certain aspects of production phenomenon: value-adding
transformation on Transformation concept; non-value-adding activities on Flow concept;
and control of production from the customer point of view on Value generation concept.
Ballard and Howell, 1998 also argue that value is created through a process of
negotiation between the customer’s ends and means.
Additionally, according to Emmitt et al. (2005), value is grouped into internal and
external values. While Macomber and Howell, (2004), stated that the basic prerequisite to
understanding value is to properly understand waste. Lindfors (2000) advocated that
value is the product/service that increases profit, decreases time and cost, improves
quality for the company, and generates profit/value for the customer. Wandahl and Bejder
(2003) introduced value-based management, which looks at different values to improve
effectiveness and efficiency in the construction industry. Emmitt et al. (2004) proposed a
three-phase model (value/process/operation) and identified six value parameters.
Salvatierra-Garrido and Pasquire (2011) presented the first and last value model
(F&LVM), which aims to widely visualise value in the construction sector.
Brimson and Antos (1999) suggested that value depends on the supply chain
synchronisation, while Bertelsen and Emmitt (2005) argued that clients represent
different interests from three main groups, who value different things at different times
throughout the life cycle of construction projects: owner, users, and society. From
extensive reviews of literature, Salvatierra-Garrido, et al., 2012 concluded that value is
still unclear with various definitions contributing to its understanding with the subjective
part of value looking more significant while the delivery of value is more focused at the
project level. Emuze and Saurin (2015) asserted that little importance has been given to a
constant and internally coherent understanding of value in LC. There have been steady
and substantial contributions to the development of value from the LC community
through a multitude of relevant aspects.
VALUE IN THE CONTEXT OF VALUE MANAGEMENT
According to Kelly et al. (2015), the concept of value reported in volumes of literature by
VM researchers shows a reasonably steady approach to its meaning. The most agreed
upon expression is that value is stated in the context of units of function, which may be
obtained for a unit of cost, as it is most usually expressed as a ratio of function to cost.
The VM practitioners have associated value with user requirements, purpose, perception,
and influence. Dell’Isola (1997) presented value as ‘the most cost-effective way to
reliably accomplish a function that will meet the user’s needs, desires, and expectation’.
Guiwen et al. (2006) argued that value considers the satisfaction of the user requirements,
which are determined by their decisions, expectations, and views for cost paid. The
comprehension of value is influenced by a chosen combination of benefits compared with
acquisition costs.

Where Lean Construction and Value Management Meet
Section 1: Theory 107
Kelly et al (2015) assert that the key weaknesses and difficulties of VM have been
acknowledged at the implementation stage of projects and is seen to be declining due to
its cost-cutting legacy, one-off intervention predominantly at or around the concept and
sketch design stages, with its image creating confusion with other management
techniques dealing with value. Over the years, VM have acknowledged other concepts
such as benefit realisation, value based thinking style of management etc. However, it can
be argued that VM has focused towards the relationship between the user-required
functions and cost.
FINDINGS
The principal points of current theory and practice of LC and VM are compared in tables
1 and 2 below. The references for Tables 1 and 2 are listed with numbers. The numbers in
the tables refers to these Authors: (Table 1& 2 in Abdelhamid, 2008 [1]; Cell and
Arratia, 2003 [2]; Drevland and Lohne, 2015 [3]; Emmitt et al. 2004 [4]; EN, 2000 [5];
Forbes and Ahmed, 2011 [6]; Gui Wen et al. 2006 [7]; Hines et al. 2004 [8]; IGLC, 2016
[9]; IVM, 2015b [10]; Kelly and Male, 1993 [11]; Kelly et al., 2015 [12]; Koskela, 2000
[13]; LCI, 2016a [14]; LCI, 2015 [15]; LLC, 2015 [16]; Leinonen and Huovila, 2000
[17]; Nayak, 2006 [18]; Norton and McElligott, 1995 [19]; Ogunbiyi et al. 2011 [20];
Salvatierra-Garrido et al. 2009 [21]; Salvatierra-Garrido & Pasquire, 2011 [22];
Salvatierra-Garrido, et al. 2012 [23]).
Table 1: Points of Similarity
Value Management and Lean Construction: shared attributes
Objective
Value creation throughout the whole life cycle. [18], [15]
Origin
1940’s manufacturing – influenced by post-WW2 resource scarcity [12]
Techniques
Each has a set of recognised tools and techniques accredited exclusively to
themselves i.e. lean tools, VM tools. But use other tools as appropriate [20][18][6]
Environment
and Culture
Collaborative, multi-skilled team environment supported by higher management.
Process requires innovation and the involvement of stakeholders in the
development of value propositions.[18][12],[6]
Approach
Acknowledge the importance of innovation, benefit realisation, whole life value,
asset management, projects, programme & portfolio management, soft & hard
value, value-based management, and consider impact on society. [12] [23]
Usage/
Application
Applicable in various sectors of the economy beyond manufacturing and
construction including government, transportation, business, communication, and
services with reports of enhancing other practices. [10] [15]
Mis-use/
Application
Frequently the name is used to describe cost reduction activities and tools used to
reduce inputs with a corresponding reduction of outputs [8] [12]
Understanding
of Value
Lack a sound theoretical explanation of value but consider it in terms of objective,
subjective, use, esteem, cost and exchange [7] [23].[17]
Customer
Focus
Understand customer as a combination of commissioners and
stakeholders[12][18]

Muktari M. Musa , Christine Pasquire , and Alan Hurst
108 Proceedings IGLC-24, July 2016 | Boston, USA
Table 2: Points of Difference
Value Management
Lean Construction
History
The founding practice was developed
by Lawrence D Miles for GE in the
USA.[12]
The founding practice was developed by Taiichi
Ohno for Toyota in Japan.[6]
Focus
Service oriented and push driven.[12]
Philosophy oriented and pull driven. [6][2]
Structural
model
Emphasis on issues on: Value
generation [1]
Emphasis on issues on: Transformation of input
to output, Flow of work and Value generation
[13]
Process
Has a formal standard (BS EN
12973). VM is an extract of the
delivery process and commissioned
separately to support the project
delivery model. It is practiced and
operationalized through interventions
called value studies at specific
phases (value opportunities) and
time. It is often used to correct budget
overruns [5][12] [21]
No formal standard. LC is a project delivery
model in its own right and is chosen rather than
commissioned.
However, individual tools and techniques are
often commissioned separately as project
correction interventions. It does not have
specific value opportunities, as value is a
continuing focus.[6]
Learning
It deliberates on problems and
learning is between projects.[12]
It deliberates on process flow, and learning is a
continuous improvement within projects across
the whole process.[6]
Scope
Manages design and feasibility
studies, which improve the value for
money of the end product in use
(building or structure) through design
optioning and redesign in specific
workshops. [11] [21]
Manages scope and recognises the delivery
process during design and construction. The
difference between desired value and realised
value is minimised through the elimination of
value loss. Considers control and monitoring of
value delivery e.g. built in quality, Last Planner®
System etc.
Value
Delivery
Value achieved through the
relationship and balancing of cost,
time, and quality. [12][19]
Value achieved by reducing value loss (waste)
without a trade-off of time, quality, and cost.
[1][14] [17]
Customer
Focus
Customer is understood as a series
of values and value systems: client’s
value system, the client’s project
value system, corporate and business
values, project value system,
practitioners’ value system,
consumers’ (users’/customers’) value
systems and stakeholders’ value
system. [12] [18] [23]
Customer is understood in three ways;
External customers paying for (and affected by)
services and goods
Internal customers receiving services and goods
between departments/sections of an
organisation
Next customer in a process considering the
hand over between tasks
Customers are recognised as dynamic across
the whole life process. [18] [22]
Research
Theoretical development is limited
and the view of value and has not
really expanded from that developed
by Miles i.e. Value is the ratio of
function to cost. Other studies
Much research has been carried out to
understand value in lean for example the
transformation, flow, value generation model;
first and last value; value based management;
external and internal value; process and product

Where Lean Construction and Value Management Meet
Section 1: Theory 109
surrounding value have concentrated
on the relationship between the user-
required functions and cost, including
value based thinking. [7]
value; value, process, and operation model; the
five features of value; and recently the nine
tenets of value and so on.[3] [23]
Early
Project
Stage
VM contributes to a clear customer
perspective of value from the early
stage of projects. [22]
LC generally acknowledges its lack of
addressing the concept of value at the early
stage of design. Recent advances include lean
design, lean and BIM, integrated project delivery
and target value design [4]
Implemen
tation
Project
Stage
It is reported to be weak at the
implementation stage. [12]
Many examples of lean applied within on-site
activities exist, the theoretical framework behind
lean construction advocates that value is defined
in design and lost in the process.[23]
Academic
Support/
Body
No academic/theory developing body
exists purely to support VM –
development is embedded in more
general bodies such as CIB, ARCOM
etc. The Institute of Value
Management (IVM) is largely
industry/practice led consequently the
knowledge base for VM is practice
led.
The International Group for Lean Construction
(IGLC) as an academic led body for the
development of LC theory to which practitioners
make a strong contribution. The IGLC pre-dates
the Lean Construction Institute (industry body)
and its global satellite organisations. The
knowledge base for LC is theory led. [9]
Process
Drivers
Value study participants are the
primary drivers of value proposals but
are not always engaged in the project
decision making process. [12]
The people engaged in the process and
encouraged to look for ways to enrich the project
processes directly. [6] [16]
CONCLUSIONS
This investigation recognises a range of similarities at a high level (Table 1) that could
easily point to an early conclusion that LC and VM are interchangeable, leading to the
same goal of value delivery. This is most evident in their shared misapplication as cost
reduction techniques. However, a more detailed examination indicates significant
differences in philosophy and scope in different areas, including project timing,
practitioner’s duties, areas of practice, and project application. Furthermore, both LC and
VM have recognised each other in the past. The ongoing trend of linking VM and lean in
topics of discussion for value practitioners is evident at conferences both in the UK
(IVM, 2014; LCI UK, 2015) and in the US (SAVE International, 2015a; SAVE
International, 2015b). With the institute of value management UK appointing a Lean
Construction Group Liaison (IVM, 2015c). Both LC and VM share common origins and
methods from the manufacturing sector (IVM, 2015a).
Some known subsets of VM, namely value analysis and VE, have been used in target
costing in the manufacturing industry to attain additional cost reductions (Womack et al.,
1990). Further, VE and LC have been reported to systematically apply methods to
processes/services in order to deliver an enhanced product/service to the customers that
fulfils their needs in a timely and cost-effective way with the main aim of maximising
value and minimising waste. In addition, LC practices intend to complement rather than

Muktari M. Musa , Christine Pasquire , and Alan Hurst
110 Proceedings IGLC-24, July 2016 | Boston, USA
compete with VE (Lehman and Reiser, 2004). Also, there have been suggestions of using
VM for the practical application of the value generation view on production (Koskela,
2000). LC is a broader philosophy which covers more aspects than value management,
it is evident that LC has advanced over the years towards discussions on the concept of
value. The current work in LC on value relies less on other construction value-related
disciplines such as VM, VE and partnering. Furthermore, LC literature still views value
as a confusing concept associated with different interpretations, forming the basis of its
understanding.
Although both lean and VM, when applied individually, are beneficial, their
combination offers great synergy regarding the concept of value (Cell and Arratia, 2003).
The study established that value plays a central role in both LC and VM. Future study
should investigate empirically their possible integration towards identifying synergy in
the way value is understood and delivered. Which is the next goal of the authors.
Moreover, if the view of no single approach being greater in respect to others is accepted,
it can be easily established that there may be theories, methodologies, and techniques in
each discipline that could support the others (Nayak, 2006). Salvatierra et al. (2008)
affirmed that the integration of the concept of value through exploration of VM and lean
thinking would add value for delivering satisfactory solutions.
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