The construction industry is in the midst of a progressive change in the way projects unfold from design and development to closeout and maintenance. There is a greater demand on contractors to build projects faster, with higher quality and an increased level of detail, while keeping costs lower than ever. Therefore, to meet such demands contractors must turn to an alternative approach of improving product and process with target costing. However, the adoption of target costing by the construction industry has been slow due to limitations in user understanding of the system. The objective of this paper is to identify an effective approach for teaching target costing to construction-focused individuals, by establishing improved user understanding with visual aids, and by determining if user comprehension is influenced by the complexity of the visual supports provided in the lessons. The study challenged the long-implied assumption that the construction community is composed of visual learners, while also differentiating between the levels of success for supporting figures based upon their degree of detail. Results of this study will provide the basis for the development of target costing material that is designed specifically for use in the education of construction industry professionals in Target Cost Estimating.

Target costing is widely accepted across the automobile manufacturing industries such as the Toyota Corporation followed by other manufacturing companies such as Nissan, Chrysler, Boeing, Sony, etc. However, its use in the construction industry has been limited. The application of target costing in the construction industry has been referred to as Target Value Design (TVD), which forms an important fragment of the whole lean delivery system, Integrated Project Delivery. For the purpose of studying the team dynamics and the impact of cost on aesthetics, this research is split in to the following two parts. 1. Conducting simple experiments /simulations with students, such as designing and building a product to target cost to explore the impact of cost on the design of the product and the team dynamics. 2. Exploring the challenges faced by the teams while working on TVD through literature review and Focus Group Interviews with construction industry professionals with experience in the TVD process. Similar to other lean simulations like the airplane game and the dice game, aimed at demonstrating the impact of lean, this simulation of designing a two feet (2’) tall wine glass holder with materials such as paper, Styrofoam plates, cups etc. is an attempt to understand the challenges of designing to target cost process. The simulation conducted is to mirror the real world TVD process. Results of the experiment conclude that cost does not have a negative influence on the design. There is no correlation between the high costs and better design, that is, the most expensive solutions are not always the best solutions. However, correlation existed between the target cost and the design aesthetics. Indeed, cost as a constraint aided the team in focusing on the design and developing solutions within the project constraints. The results of the experiment are similar to the practice of the TVD in reality as case studies and interviews arrive at similar conclusions. Finally, the experiment depicted that collaborating and working in a team might result in arguments but generates competitive design solutions without affecting the team dynamics. The research is of significance to construction industry professionals and owners to investigate the challenges and implications of implementing target costing in designing to target cost.

Integrated Project Delivery (IPD) combined with Target Value Design (TVD) is a better way to deliver value for the client than traditional guaranteed maximum price (GMP) methods. With traditional GMP delivery methods, the interests of the parties are often at odds. The goal of IPD is to align all party interests in order to achieve a win-win scenario. Due to the aligning nature of IPD and the fact that each party’s success is dependent on achieving the project objectives as a whole; a non-biased, transparent, decision-making process is necessary in order to deliver the project objectives within the constraints of the TVD. Thus delivering the expected value for the client and ensuring that all parties achieve project success. The need for this transparent decision-making process is compounded by the fact that a “target” based system rapidly declines to a less than optimal state if there is no unbiased decision-making process in place. If we treat the entire lifespan of a project as the complex system that it is, we can begin to take advantage of the hierarchical nature of complex systems. The goal of this paper is to show that by modeling the life span of a project through a multi-criteria decision making model, built on a hierarchical framework will allow you to find a non-inferior solution to your TVD. I’m proposing to use Hierarchical Holographic Modeling (HHM) as the framework for an Analytical Hierarchical Process (AHP) multi-criteria decision-making model complete with post-optimality analysis as the preferred project management method.