Target Value Design in Construction
“People have had enough of traditional delivery methods.”
That’s a bold statement from Join’s Co-Founder, Andrew Zukowski. It’s true, though.
What drives your business? Building buildings, right? And you can’t build buildings without clients. Now more than ever, construction companies must deliver not just what owners want but what owners demand. And owners are increasingly demanding that GCs bring more innovation and collaboration to the table when estimating a project.
Andrew Zukowski, Co-Founder of Join preconstruction software says, “We’re hearing TVD (Total Value Design) on the lips of many of our customers and we’re hearing that because many of their customers, large owners and even mid-size owners, have come to understand the value that a collaborative approach between the design side and the construction side can deliver for their projects.”
What is Total Value Design in Construction?
According to Join, Total Value Design is “a collaborative approach used throughout all phases of design and construction to deliver projects at a target budget, while meeting the operational needs and values of the client.” The idea is for the entire team work together to deliver the best project for a client within a certain budget.
Image courtesy of Leanconstructionblog.com
This alternative approach focuses heavily on collaboration between design, preconstruction, operations, and owners. Andrew says, “It emphasizes early engagement from folks who understand cost and schedule and then working together as the design moves from a conceptual level to a detailed level that’s actually constructible.”
With architects that don’t know much about cost and construction teams that aren’t “the best equipped to make design decisions,” traditional methods of estimating and building a project “leads to really frustrating value engineering processes that just leave a ton of value on the table for customers,” says Andrew.
All estimators wish they had more time to value engineer a project; however, Join predicts that even value engineering is on its way out and that Total Value Design is on the “bleeding edge” of construction trends. Andrew says, “…the integrated approach embodies the key to the future of the industry.”
And why is that?
Because it leads to better outcomes. When preconstruction teams embrace TVD, design no longer dictates cost. The Total Value Design methodology means that cost and schedule can inform design and prevent the pain of cost and schedule overruns. When you can share real-time information, you empower all involved in a project to make the best decisions while also meeting the owner’s needs. It is helping build better buildings and creating happier owners.
At the 2022 Advancing Preconstruction conference, an owner panel revealed that owners are overwhelmingly asking contractors for TVD delivery methods. In fact, Join’s clients are saying they are winning work and selling work because their precon teams employ Total Value Design.
When you “get preconstruction teams out of spreadsheets” and into real-time estimating, estimators are “able to track and trend and present and understand at a number of different levels,” says Andrew.
What are the Challenges of Target Value Design?
There is a tremendous amount of pressure on precon teams to deliver estimates at a rapid pace, so Andrew suggests handling Target Value Design delivery in an incremental and trended approach—by providing cost feedback daily and weekly to stakeholders. Integrated software like Join and DESTINI Estimator that provide easy-to-understand dashboards make it simple for stakeholders to engage in the process. Andrew says, “There’s much less that has to be revisited. And there’s fewer frustrating conversations with owners.”
Instead of focusing on certain milestones as estimating teams would do traditionally, providing cost feedback is a continuous communication effort between everyone involved in a project. That way everyone understands options and decisions.
To meet the rapid-pace challenge of TVD, precon teams utilizing this method aren’t necessarily presenting complete estimates but providing deliverables that continue to build on each other as the project progresses. Andrew says, “We’re seeing teams lean into communicating that cost information out and making it actionable to other teammates.”
The Results of Target Value Design
Teams embracing TVD are:
- Seeing the contractual structures in place
- Have time to work together
- Engaging stakeholders
- Making better decisions earlier
- Building trust with owners