Deconstructing the Construction Industry Through Value Engineering on Site

The Construction Industry is going through a revival and restructuring phase everywhere. As much as the Government is enforcing the  bitter pills, the consumer base is in an ostrich mode. All Bank Finances are  waiting for the nod from the policy makers, raising the funds on the standing  inventory will become a twister once the new rent agreement for late  deliveries is enforced. However, corresponding sales and the demand gaps are  creating a skew in the whole chain.

We had been to the site of a Pune based Builder today and found the pace of work plagued by the new policies and regulations. Our past  exposure and experiences reveal a lot about the difficult times. We are  indeed in the middle of difficult times. Value Engineering in Design is a preposition we promote for the wavy market conditions of today.

Purpose is to reduce total cost of the design with respect to  the materials in addition to manufacturing cost heads (viz. labour,  equipment, …) and assembly cost heads ( like labor, equipment, …). The same  cannot be achieved without adding the cost of quality control (conformance testing, scrap, rework…) and the cost of failure and replacement.

We have witnessed local optimization in the projects at the cost of adding to the total cst of the work. For example, Purchase department gets  the lowest cost and gets the material in bulk. However, when the projects get  delayed by any other reason, the huge inventory sits on the cost table. Getting more material by weight does not help the project in faster assembly or fitment, as it may not be required on site, but the purchase is done to ensure that the lowest cost is achieved and the KPI score of the department  is achieved.  

The reasons for unnecessary Cost are:

1)      Lack of an idea

2)      Lack of information

3)      Habitual thinking(mental roadblocks, natural resistance to change)

4)      Honest misconceptions

5)      Negative attitudes

6)      Shortage of time

7)      Changing technology(unaware or current capabilities or state-of-the-art technology)

8)      Out-dated specifications

9)      Poor human relations(including  faulty communications)

10)    Lack of understanding of the meaning of good value

While understanding the Customer and its expectations, we  explored the Six Sigma Methodology for the answers and found Kano’s Matrix being used extensively. Well! It is useful for Construction Industry too. Kano’s Diagram is a starter for the  thinking brains to categorise the features into the essential ones and the delighters. Kano’s diagram is referred here in one diagram.

Getting the basis for drawing the Kano’s Diagram, we must  conduct a Voice of Customer Survey. VOC as it is generally referred is an extensive exercise and should be done with full consciousness about the  Customer Segment we choose to survey.

Here are top 10 ideas on Value Engineering which can be  implemented at site:

1)     Plumbing Lines must be re-examined for the excess pipes or angles /fittings

2)     Electrical Points are often redundant with multiple points in the same zones

3)     Pre-fab Components can be thought of as an alternative to fluctuating labour attendance

4)     Quality Variations can be a source of lot of dysfunctional assemblies at the site

5)     Tiling can be modified into Design-Verified sizing of the Tile Sizes

6)     Marble sizes can be optimised

7)     Granite for the kitchen Otta

8)     Window Shutters

9)     Glass used in the Glass Shutters (ratio of Glass and Aluminium  portion)

10)   Light and Safety Indicators used

We intend to create an awareness of the systematic approaches  and methodology that exists. Let us see a paradigm shift being induced in the Industry and setting the sail for the whole industry becoming recession proof.