Fundamentals of techniques and principles used to enhance the value of capital projects

Prinsloo, M. J. (2001-12)

Thesis (MBA)--Stellenbosch University, 2001.

Thesis

ENGLISH ABSTRACT: "Imagine improving the value of a capital project by 30%, or increasing the throughput of an organisation with 20% less capital expenditure!" The normal reaction to this sort of statement is that it is impossible and only looks good on paper. However, by applying proper principles and techniques, an organisation or project team can embark on a journey which will allow them to creatively apply those skills and knowledge in order to maximise the value of the organisation, project or venture. It will allow business to evaluate and extract value by analysing business cases, process- and engineering design issues, project development and implementation plans. Too frequently project teams find themselves tied up with the nitty gritty issues of projects, causing them to loose sight of the bigger picture. The existence hereof of this is often indicated by too much focus on actions to reduce capital expenditure and too little on the impact thereof on operational cost and value adding potential, destroying overall value of the venture in the process. This aim with this document is to provide the reader with an overview of tools, techniques and principles to aid organisations to enhance the value of capital projects. It is not intended as a handbook or manual to enable the reader to become a skilled practitioner in this field, but rather to give the interested novice, general manager or project leader a background overview of, and insight into, the steps, tools, techniques and principles available, to improve the value of a project. The basic fundamentals are not rocket science, but it is the process of becoming involved in applying lateral thinking to each phase of a project, or existing operation that unlocks the true value. This document firstly gives background on the reasons why value adding potential usually exists in capital projects, and identifies tell tale indicators of hidden value opportunities in projects. Basic fundamentals are discussed to familiarise the reader with general concepts used in later chapters. Subsequently, the steps for execution of a value improving intervention are discussed, to give the reader a thorough background and understanding of the value improving processes involved.

AFRIKAANSE OPSOMMING: "Verbeter die waarde van 'n kapitaal projek met 30%, of verhoog die deurset van 'n organisasie met 20% minder kapitaal spandering!" Die verwagte reaksie op hierdie tipe stellings is dat dit onmoontlik is en net goed lyk op papier. Die aanwending van toepaslike beginsels en tegnieke kan 'n organisasie egter in staat stel om daardie vaardighede en kennis, waaroor hulle reeds beskik, te benut om die waarde van die organisasie of projek te maksimeer. Dit kan besighede toelaat om waarde te evalueer en te ontsluit deur besigheidsplanne, proses- en ontwerp aangeleenthede, projek ontwikkeling en implementeringsplanne te analiseer, te verstaan en te verbeter. Te dikwels bemoei projekspanne hulle met die detail van projekte, wat veroorsaak dat hulle die groter prentjie uit die oog verloor. Die teenwoordigheid hiervan word veral aangedui deur te veel fokus op aksies om kapitaal spandering te verminder, en te min op resulterende bedryfskoste en waarde skeppende potensiaal te konsentreer. Hierdeur word die algehele waarde waartoe die projek instaat is ondermyn. Die doel met hierdie dokument is om 'n oorsig te gee na die gereedskap, tegnieke en beginsels wat beskikbaar is ter ondersteuning van organisasies wat die waarde van kapitaalprojekte wil verbeter. Dit is nie bedoel om 'n handboek of voorskrif te wees om die leser instaat te stel om 'n vaardige verbeteringspraktisyn te word nie, maar eerder om aan die geinteresseerde leek, projekbestuurder of algemene bestuurder agtergrond en insig te gee oor die stappe, gereedskap, tegnieke en beginsels wat beskikbaar is om die waarde van 'n projek te verhoog. Die grondbeginsels is nie kwantumfisika nie, maar behels 'n proses om betrokke te raak in die toepassing van laterale denke en kreatiwiteit in elke fase van 'n projek of besigheid, om die werklike waarde te ontsluit. Hierdie dokument gee eerstens agtergrond oor die redes waarom potensiaal vir waarde toevoeging in kapitaalprojekte bestaan, en identifiseer 'n aantal indikators van die teenwoordigheid van verskuilde waarde aan. Grondbeginsels wat in verdere hoofstukke gebruik word, word bespreek en toegelig. Daarna word die stappe ter uitvoering van 'n waarde verhogingsintervensie bespreek, om 'n deeglike agtergrond te verkry van die betrokke proses.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/52279
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