Value Management - 650 Words

Student ID: 15672856 PROCUREMENT PERFORMANCE AND VALUE MANAGEMENT INTRODUCTION To realize the success of a project, the value must be attained through the core objectives and goals of the project to the stakeholders. This could be achieved by using the right processes throughout the project life cycle. VALUE MANAGEMENT Value Management (VM) is a well structured or established process that is used for defining and maximizing value of money (OCG, 2007 p.3). It is applicable to all sort of projects regardless of being big or small and the duration and it runs throughout the project life cycle from the inception to completion. Its benefits have been found to be efficient and effective when an external facilitator being a consultant or†¦show more content†¦al., 2011). EXAMPLE FROM PUBLIC SECTOR Value Management was applied in the California Department of Transport (Caltrans) when Anthler’s Bridge Crossing was being re-constructed by saving  £7million and increases its traffic operation performance by 19%. This has aided in solving the problem of transportation from the previous constructed bridge and its traffic congestion and reduces life cycle cost to maximize project performance (OGC, 2007 p.39) EXAMPLE FROM PRIVATE ORGANISATION The Dow Chemical Company over the last four years has developed a vision, functional systems, and tools, for the ‘value management’ of its Intellectual Assets (IA). This initiative has developed some competencies in the area of ‘measuring and valuing’ IA, and in developing systems that support the leveraging of IA for maximum value (Petrash, 1999) CONCLUSION In conclusion, PM’s must ensure alignment of value management and procurement performance management to have effective procurement process since the two are correlated. Implementing these two concepts reduces waste and defects, increases production efficiency, reduce cost and also help in decision making. REFERENCE Capital Development Guidelines, (CDG) (2010), Value Management [Online]. Available from http://www.capital.dhs.vic.gov.au/capdev/PlanningEvaluation/ValueManagement/ (Accessed: 18 June 2011) Knudsen, D. (1999), Procurement Performance Measurement system [Online]. Available fromShow MoreRelatedValue Management : Is It Important? 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