Assessing Suitability of Target Value Design Adoption for Real Estate Developers in Brazil

Carolina Asensio Oliva1, Ariovaldo Denis Granja2, Glenn Ballard3 & Reymard Savio de Melo4

1PhD Student, Construction Management Research Laboratory (LAGERCON); Univ. of Campinas, Brazil. carol_oliva@yahoo.com.br
2Associate Professor, Construction Management Research Laboratory (LAGERCON); Univ. of Campinas, Brazil. adgranja@fec.unicamp.br
3Research Director, Project Production Systems Laboratory, Civil and Environmental Engineering Dept., Univ. of California, Berkeley, 407 McLaughlin Hall, CA94720-1712, USA. gballard@berkeley.edu
4Research Director, Project Production Systems Laboratory, Civil and Environmental Engineering Dept., Univ. of California, Berkeley, 407 McLaughlin Hall, CA94720-1712, USA. gballard@berkeley.edu

Abstract

Target Value Design (TVD) has shown positive results on schedule, budget and products’ delivery with higher benefits for the owner. Familiarity with basic requirements of its elements and collaborative business practices have been hallmarks of successful TVD adoptions, particularly in healthcare. However, there has been little discussion about the TVD suitability for the real estate market so far, particularly when the project is driven by developers as opposed to users. Furthermore, the Brazilian real estate context poses some characteristics that could challenge the adoption of the TVD benchmark successfully. Therefore, the research puts forward the proposition that the adoption of the current TVD benchmark for developing products for sale in the Brazilian real estate sector poses some challenges and opportunities for strengthening TVD benefits in this environment. The aim of the research is to discuss about the adoption process of the TVD elements, in order to provide benefits for real estate developers in Brazil. The authors also intend to raise new research questions to better guide its future adoption in this situation. Evidence from an exploratory case study in Brazil is used to support the claim that the benefits already gained on traditional TVD situations, i.e. where clients build for their own use, seems to be insufficient alone to motivate Brazilian property developers to change from traditional practices. Initial assessment shows that, among other TVD benefits, developers acknowledge the improvements for their competitive advantages as the main one, as real estate companies are facing fierce competition currently in Brazil. The findings generate initial discussion about the suitability of the current TVD process benchmark in this context and derive directions for future research.

Keywords

Target value design, target costing, integrated project delivery (IPD), Real estate, Property developers

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Reference

Oliva, C.A. , Granja, A.D. , Ballard, G. & Melo, R.S.D. 2016, 'Assessing Suitability of Target Value Design Adoption for Real Estate Developers in Brazil' In:, 24th Annual Conference of the International Group for Lean Construction. Boston, USA, 20-22 Jul 2016.

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