02 Feb The Best Value Approach Works in the Face of Resistance: Roofing Case Study
*This is a summary and analysis of the following publication. For full references and research details, please see original publication.
Rivera, A., & Kashiwagi, D. (2019). A Large Private Organization Tests the Best Value Approach Against Traditional Roofing Practices. Journal for the Advancement of Performance Information and Value, 11(1), 34-51.
Available at: http://journal.cibw117.org/index.php/japiv/issue/view/2
Development of the BVA
The Best Value Approach (BVA) is a new supply chain management approach that assists organizations in the delivery of services from procurement to closeout. It was developed by Dr. Dean Kashiwagi in 1991 at Arizona State University and is used around the world today. The BVA differs from traditional client centric approaches which focus on managing, directing, and controlling vendors. Instead, BVA is a vendor centric approach which identifies and utilizes expert vendors. The approach has been applied and investigated by organizations all over the world including University of Botswana, Brunsfield (Malaysia), Democratic Republic of Congo, NEVI (Netherlands), United States Army Medical Command, Hazim Consulting (Saudi Arabia), and Simon Frasier University (Canada). In the last 28 years, with the guidance of PBSRG, 92 organizations have used the BVA to receive higher performance. The BVA has been proven and documented by PBSRG on over 2,000 projects valuing at more than $6.6B with 98% client satisfaction, <.1% vendor cost and schedule deviation, and 10-30% cost savings.
Difference Between BVA and Traditional Project Implementation
Though the BVA has led to phenomenal success, it has experienced difficulty in its implementation [more prominently in large organizations]. Some of the major issues organizations have experienced in following the BVA process include:
- Resistance to the process from the client’s personnel.
- Client’s personnel making decisions to modify the process.
- Client’s BVA supporter unable to explain the value of the process to the C-Suite.
- Client’s BVA supporter retires or leaves the organization.
The difficulty and resistance to following the full BVA process is largely due to the contrasting nature of the BVA compared to traditional project delivery practices (see Table 1).
Table 1: Difference Between Traditional and BVA Project Practices
Interestingly, despite the resistance by a client’s personnel to fully implement the BVA, it has the ability to overcome those issues and still lead to high performance. This article will review a case study of a roofing project for a large private organization that shows how the BVA can lead to high performance even when there is resistance within an organization.
Case Study: Applying the BVA on a Roofing Project
In the Spring of 2017, the global facility management director for a large private organization, identified an opportunity to pilot and document the BVA on a roofing project. The organization needed to replace their 18-year-old Roof. The roof was 70,000 square feet and covered many important upper management personnel (i.e., lawyers and C-suite executives). The project was put as high priority since monsoon season was 6 months away. Although the BVA had the full support of the director, his project management (PM) staff had difficulty abiding by and understanding the BVA paradigm. The PM staff were accustomed to a more technical and hands-on approach to managing the project. They had a hard time releasing control and utilizing the vendor’s expertise to deliver the project. Two examples of this include:
- While creating the RFP, the PM staff was accustomed to creating a lengthy project requirement. This type of information was identified as unnecessary in the BVA as the client would rely on the vendors to be the experts. The PM staff decided to deviate from the BVA process and include their traditional specifications which required two additional roof walks, a moisture scan, and core sampling. The deviation delayed the project by two weeks and did not change the results.
- Late in the process, the PM staff added a new requirement which involved a “pull test” and bringing in a professional structural engineer to verify the integrity of the roof. The additional requirement, similar to the first example, was unnecessary and delayed the start of the project by a month. The delay put the project at risk of not completing before monsoon season.
The project resulted in selecting an expert vendor $70K below budget and $127K below its alternative. The provided roof exceeded the performance requirement of the client with 30 references, an average age of 5 years, and a maximum age of 15 years. Despite numerous interruptions to the process, the project was only delayed by one month and it was under-budget. This was only possible because of the BVA’s ability to utilize the expertise of the expert vendor. Luckily, the monsoon season was not in effect at that time, so the delay was a non-issue. In total, due to the BVA process’ proprietary method of identifying and utilizing the expertise of an expert vendor, the organization saved $270,000 on the roofing project and gave a satisfaction rating of 10 out of 10. Due to the cost savings, the client decided to use the BVA again to replace a similar roof.
Conclusion
Despite the high performance and decrease in management, Dr. Dean identified that the biggest issue in implementing BVA at large organizations is due to the resistance caused by the technical personnel not wanting to switch their traditional approach of management, direction, and control (MDC) of the vendor to the utilization of their expertise. Despite the technical personnel not fully adhering to the BVA process and recommendations of the BVA experts, it is able to override such resistance and still deliver amazing performance.
To assist organizations to overcome the resistance of the BVA’s new ideas, the process has consistently been adjusted over the last 10 years by PBSRG and its creator Dr. Dean Kashiwagi. The focus has been on continually simplifying the process and automating normal project delivery methods, to minimize the decision making of the client and ensure the process is followed and can show its value.
Interested in Implementing the BVA?
If your organization is reading this article and has an interest in learning more about implementing the BVA, click below:
- Free membership for latest tips and news: https://pbsrg.com/membership/
- For latest books, events, and licensed partners: https://pbsrg.com/resources/
- Latest BVA journal publications: www.cibw117.org/
- Annual Best Value Conference in January: https://bestvalueconference.ksm-inc.com/
- Latest presentations and videos: https://www.youtube.com/channel/UCxBi26nXLDTqG4ZRV6p0iiQ