What is Target Value Delivery (TVD)?

Target Value Delivery (TVD) is a management process applied from conceptual design through final project turnover. TVD ensures the projects are completed within the specified budget while fulfilling the client’s operational goals. TVD incorporates client objectives and financial constraints over the project lifecycle by setting project value and cost targets before design. This complete strategy facilitates customer value and reduces waste of time, money, and human effort.

Unlike traditional models, in which design typically drives costs, TVD reverses the process by allowing the project’s scope to influence the budget, eventually guiding design and construction toward maximum value.

Origins and History of TVD

Target Value Delivery (TVD) evolved in the 2000s as a new approach to project management in construction. The Lean Construction Institute (LCI) comes first with this idea.

TVD traces its origins back to Toyota’s lean manufacturing concepts of the 1950s, which highlighted waste elimination, value maximization, and continual improvement. Later the construction industry adopted these principles, which resulted in the Lean Construction movement.

The Target Value Design Process

The Target Value Design is a systematic strategy that brings together the design team and project stakeholders to deliver the client’s operational needs and values within the specified budget.

1. Define Values and Requirements: The client’s values, requirements, and project drives are defined and prioritized. This involves functionality, operating efficiency, sustainability, and future flexibility.

2. Set the Target Cost: Using the client’s value proposition project’s cost is evaluated, benchmarking data, and market situation.

3. Develop Design Alternatives: The design team collaborates to provide several design options that correspond to the established values and requirements within the allocated budget.

4. Estimate Costs and Validate Designs: Every design is profoundly evaluated, and costs are determined by the models and simulations.

5. Detailed Design and Documentation: The selected design is further improved, and construction documents are prepared, guaranteeing that the design stays within the budget.

6. Construction and Delivery: The project team keeps an eye on cost during the construction phase and makes changes as needed to guarantee that the final product is delivered within the budget.

Team Roles and Responsibilities

Owner/Client: Authority person for addressing the project demands, allocating the cost, and directing the intended results and value offerings.

Architects: The person who can convert the client’s idea into an aesthetically pleasing design that meets the target cost.

Engineers: Assuring the design’s technical viability and constructability while complying with budget and legal constraints.

Contractors and Trade Partners: Contribute real-world building experience to the team by offering suggestions, supply materials, and timelines.

TVD Facilitator: Contributes an integral role in enabling collaborative efforts, and teamwork, making sure that TVD principles are followed throughout the project.

Challenges and Pitfalls

Target Value Delivery (TVD) may cause several problems. Recognizing and addressing these problems ensures project success.

Common problems in implementing TVD:

Cultural Shift: TVD demands a culture shift in the organization, away from typical project delivery approaches. Overcoming aversion to developing a collaborative atmosphere among stakeholders can be frustrating.

Lack of Expertise: TVD is a new method, and finding skilled professionals seems challenging. Proper training and guidance are essential to successful implementation.

Establishing Trust: For effective collaboration building trust is the most important factor. Encouraging open communication can be difficult, particularly in the starting phases of TVD implementation.

Setting Realistic Targets: Determining the exact cost can be tough, particularly for projects with specific requirements. Inaccurate objectives might result in scope reductions or lowered project quality.

Stakeholder Alignment: Maintaining alignment among all stakeholders is key to TVD’s success. Conflicting priorities or a lack of buy-in might jeopardize the process.

TVD Software and Tools

Integrated Project Delivery (IPD): The whole project team can communicate and share data easily with these cloud-based systems. Trimble Connect, Procore, and Autodesk BIM 360 are some examples.

Target Value Design (TVD) Software: In the design and construction stages, teams can create and manage costs, record cost projections, and make data-driven decisions with specialized software programs like DPR True Value and the Target Value Delivery Tool.

Cost Estimating and Tracking Tools: Cost estimation and tracking are important in TVD, tools like RS Means, Saga Estimating, and proEst help to provide thorough cost estimation. Whereas Procore Construction OS and Autodesk BIM 360 provide cost-tracking and management benefits.

Lean Construction Management Tools: TVD and lean principles are closely related. Tools like Touchplan, Vico Office, and LeanKit support practices like pull planning, constraint management, and visual management, which are essential for successful TVD implementation.

Mobile Apps and Field ToolsOn field staff may access and update the data in real time using mobile apps like PlanGrid, BIM 360, and HoloBuilder. These apps provide thorough and up-to-date information for cost and value tracking.

Case Studies and Success Stories

St. Olaf College, Northfield, Minnesota

A $33 million science centre was constructed at St. Olaf College using the TVD method. The project was completed 15% below the market price with having a similar facility and saved more than $5 million thanks to collaborative target setting and cost management.

Sutter Health, Multiple Locations

Leading healthcare provider Sutter Health implemented TVD on multiple hospital projects, one of them being Sutter Santa Rosa Regional Hospital which cost $320 million. Stakeholders of this project aligned around the cost, and optimized design choices and that is how Sutter Health was able to complete the project within the specified budget.

Emerging trends shape the future of TVD:

Integration with Digital Technologies: Building Information Modeling (BIM), AR, VR, and data analytics are transforming the construction industry. Integration of these technologies with TVD enables more accurate cost estimation.

Expansion into New Projects: Commercial and industrial projects are the main applications of TVD, although they can be applied in other projects such as healthcare, infrastructure, residential, and educational. As the benefits of TVDs become well-known, their use is expected to rise across different industries.

Sustainability and Lifecycle Costs: Clients are increasingly giving sustainability priority and taking ownership and operating expenses into account. In line with the increased emphasis on sustainable building, TVD methods may be used to optimize designs for energy efficiency, reduce waste, and account for lifecycle costs.

Importance of TVD in modern construction and project management

The conventional technique estimates cost based on design documents, thereby if there are significant discrepancies between the estimated cost and the target cost, the project may need to be redesigned or even returned to the planning phase to evaluate the project’s requirements.

In the meantime, the TVD process prevents quality and cost from straying significantly from the aim since this balance is examined concurrently during the pre-design phase, seeking economic rationality before beginning design. It also reduces the need for re-design, reducing design and construction timelines.

How to implement TVD

To implement TVD, first understand the project scope, goals, and value proposition with the client. It is crucial to build a team with all stakeholders and appoint a leader to guide the TVD process. Manage the collaborative workshops and meetings to construct and improve the design and test and evaluate the value. Monitor and track the project performance, changing design and delivery as needed to fulfill the target cost and value.

Lastly, evaluate and track the project result to see the key findings and best practices for the future. TVD helps you to get better outcomes for you and your clients too. However, it requires a shift in culture, contracts, skills, and technology that can be tough to implement, so be prepared to deal with these obstacles to take advantage.