Process Benchmarks: Target Value Design: Current Benchmark (1.0)

Process Benchmarks: Target Value Design: Current Benchmark (1.0)

2011

DOI: https://doi.org/10.60164/71a1f5b4f

Author: Glenn Ballard

Citation:

Ballard, G. (2011). Target Value Design: Current Benchmark. Lean Construction Journal 2011 pp 79-84.

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Abstract:

The University of California, Berkeley’s Project Production Systems Laboratory periodically publishes a description of the current benchmark in each project management process that is a subject of research. This reports on the current benchmark in Target Value Design (TVD), a revision of the original benchmark published in November, 20052. The first successful adaptation of target costing from product development to construction was the St. Olaf’s College Tostrud Fieldhouse Project, completed in 2002. Roughly a dozen projects have been completed since that time, all in the building sector, either healthcare or education; most of them testing and developing modifications in the TVD process. Further development of TVD will occur, both within and beyond the building sector. This benchmark is based on research to date. In the building sector, it has been customary for architects to work with customers to understand what they want, then produce facility designs intended to deliver what’s wanted. The cost of those designs has then been estimated, and too often, found to be greater than the customer is willing or able to bear, requiring designs to be revised, then recosted, and so on. This cycle of design-estimate-rework is wasteful and reduces the value customers get for their money. Cost has been an outcome of design. Cost, time, location and other constraints are conditions that must be met in order to deliver value to customers. Target Value Design is a management practice that seeks to make customer constraints drivers of design for the sake of value delivery. Implementation of TVD has also consistently resulted in the delivery of projects faster (where that is valued by customers) and under budget, both against market benchmarks and project targets. Consequently TVD is both a method that assures customers get what they need (delivers value) and also a method for continuous improvement and waste reduction.