Home > Value Management > Value Management in Your Sector Value Management in Transport &  the UK Railway Industry

This page focuses on how London Underground embraced Value Management

• Background
• How is Value Management Applied?
• The Benefits

Background
London Underground embraced Value and Risk Management (V & RM) in the early nineties and started to use it in earnest in the mid nineties. Value Management (VM) was applied to the capital investment programme in the form of Value Engineering during the Outline and Detailed Design phases of projects. The objective was to deliver identifiable reductions in the capital costs of projects and thereby grab the attention of senior managers in the company.

The introduction of V & RM was accompanied by a series of one-day awareness sessions aimed at making attendees knowledgeable participants in workshops and intelligent buyers of V & RM services provided by outside consultants.

The use of V & RM was optional and the take up after an initial flurry was slow. At this point we started to offer some short internally facilitated VM workshops on less complicated projects without a charge for the service. This coincided with an imposed need to trim money from the capital programme to meet a revised funding profile. Project Teams soon realised that it was better to have a "trimmed" project rather than no project at all and the take up was good.

How is Value Management Applied?
London Underground's focus switched from an optional process during the design stages to a mandatory process around a series of project gates. The emphasis of the gates was during the planning and design stages prior to implementation and then gates to ensure successful handover and after completion to review the delivery of the benefits.

As more workshops were run the next step was a further round of much improved and more focused awareness training and in addition to this we ran facilitator training to achieve PVM, the European Professional in Value Management. A fair proportion of VM studies are now run by internal facilitators.

The Benefits
Reduction in Capital Cost - during the early days the focus was very much on providing the same benefits at a reduced cost. Many millions of pounds of potential savings were identified whilst still delivering the required benefits.

The focus now is from much earlier in the project lifecycle which has dramatically improved project definition and subsequently refined implementation and reduced wasted cost.

Shared understanding, ownership and commitment - London Underground thought it had a good project team environment but from early on one of the major benefits from VM was that it provided a shared understanding within the project team by each member seeing the project from the other members' point of view. The project definition, design and implementation through VM is owned by the project team and through this understanding and ownership comes the commitment of the project team to its successful implementation.

Not just projects! - London Underground has successfully used VM in such areas as reorganizations, business and production processes, in decision support and the development of risk mitigation.

It is hoped that with the advent of the Government's Public Private Partnership plans for the Underground that the private infrastructure companies in needing to provide and maintain the assets will expand the current use of VM to the whole lifecycle of its assets.