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Introduction to Lean ConceptsSeptember 14, 2010

Introduction to Lean Concepts

12/14/2010

Agenda

I. Lean Construction Concepts

II. DPR Case Study

III. What do you do Tomorrow Morning?

Why Lean?

In less than 6 months, John J. Kirlin is seeing the benefits.

(Blue is weekly planning, Red is standard)

Why Lean?

Baker Concrete’s Successes:— Better Safety.

— Better production.

— Less variance in production.

— Happier people.

— At Thyssen Krupp Mill: Two identical lines, one lean, one not:

� Non-Lean line – 12 months, 500 men.

� Lean line – 7 months, 300 men.

� 50,000 manhours less.

� $700,000 less in equipment.

� $400,000 less in forms.

Why Lean?

Rodger’s Experience at CPCC

• Those engaging in LPM saw savings (5 to 7%).

• Project contractors work collaboratively in a team atmosphere.

Why Lean? DPR – Sutter Medical Center Castro Valley

1

Schedule• 7 month acceleration due to

collaborative work with OSHPD allowing phased design approval

$30 million savings from :• Removing bent plate at

exterior edge of slab and replacing w/light gauge metal

• Using full height posts in lieu of traditional kicker wall braces

• Changing wall spec from full height walls to partial height walls while maintaining design intent

• Using “Composite Architectural Precast Panels” instead of standard precast panels to reduce steel tonnage

Lean Construction Concepts

Understanding the Current State

Traditional Construction Project Structure

Architect

Civil

StructuralMechanical

Electrical

Plumbing

LandscapeElevatorsInteriorParking

CM/GC

Site

Concrete Mechanical

Electrical

Plumbing

LandscapeFraming

Floor CoverPainting

Owner

Geotech

Materials

Food ServiceTraffic

Medical Equip

BirthingSurgery

PharmacyAdmin

ER

Operations

Diagnostics

McDonough Holland & Allen PCAttorneys At Law | www.mhalaw.com

Traditional Approach

CO

MM

ON

UN

DE

RS

TAN

DIN

G

CM/GC Hired

Major Trades Hired

Pre-Construction Services

Architect Hired

Engineers Hired

≤100%

SD DD CD

Construction

Level of Common understanding

TimeMcDonough Holland & Allen PCAttorneys At Law | www.mhalaw.com

Current Practice faces many Problems

• CPM Scheduling Methods do not produce predictable workflows. Push scheduling requires no commitments from trade contractors.

• Localized productivity improvements lead to even more unreliable workflow, reducing project performance.

• Any value creation and improvement efforts are local –collaboration and learning are limited.

Current practice encourages participants to perform in their silos, and does not align them

toward maximizing project value.

• Organization: How is the project participant control structure organized?

• Commercial Terms: You get the behavior you contract for – what is the contractual relationship?

• Operating System: How you operate and plan dictates how the project participants behave.

Domains of Project Delivery

Traditional Project Delivery Practice

Critical Path Method Scheduling

© Lean Construction Institute, 2010

Typical construction agreements are top down agreements, which presume that the Owner will receive the minimum the contractor and designer can get by with, and drive territorial and counterproductive behavior.

© Lean Construction InstituteUsed with permission

Sutter Health’s Big Ideas

The Three Opportunities of Lean Construction

By looking at construction from a lean perspective, we create three connected opportunities:

How do Lean Construction Methods Answer this?

What is Lean?

Lean Production: It is a production practice that considers the expenditure of resources for the creation of value for the end customer. The goal is to create value and eliminate waste.

Lean is less WASTE.

Key Definitions:

Value is defined in terms of the end-user. This is not cost (in fact you are trying to increase value while decreasing cost).

Waste is defined by anything that does not contribute to value in the end user’s eyes. Toyota defines 8 forms of waste, to which we add two more.

The Many Forms of Waste

1. Under-Utilized People - not tapping into people's education, skills, experience, knowledge, creativity, etc.

2. Waiting - waiting for man, machine, materials, information, (waiting on someone to complete layout, RFIs, etc.)

3. Defects – any form of rework or anything that is thrown out (in the office or on the jobsite).

4. Overproduction - making more than the next process needs (or making it early). Eg. Building all base cabinets before they are needed, or completing all walls on a floor before MEP is ready

5. Motion - any movement that does not add value to your product or service. Including trucks getting lost on the jobsite, or going to wrong areas.

6. Inventory - anything in excess that is not being worked on currently (bone pile, excess wood for forms, etc.)

7. Transportation - moving people, materials and information around the organization. Especially if you move it twice.

8. Over-processing - additional effort that adds no value from the customer's viewpoint.

9. Making Do – Not addressing the problems as you see them.

10. Not Speaking and Not Listening – Not paying attention to others as they address problems and not speaking out.

Do we really believe the accuracy of our CPM schedu les?

[Liu and Ballard, 2008]

LPS™ shown to increase PPC

Productivity positively correlated with PPC

Ballard’s PhD research (2000)Approx 450 weeks’ worth of data

Weekly PPC

Contractor 1 33%

Contractor 2 52%

Contractor 3 61%

Contractor 4 70%

Contractor 5 64%

Contractor 6 57%

Contractor 7 45%

Average 54%

Developed Last Planner System (LPS) ™

Impeccble Coordination

From JJK/NCSU presentation to LCI (13 Aug 10)

Set Milestones, Set Strategy,

Identify Long Lead Items

Specify handoffs, Indentify

Operational Conflicts

Make Ready and Launch

replanning when needed.

Promise

Measure PPC and Act on

Reasons for Failure

Master SchedulingMilestones

Phase “Pull” Planning

Make Work Ready Planning

Weekly Work Planning

Learning

Should

Can

Will

Did

Last Planner™ Method 5 Connected Conversations

"CPM is the tool for you if you believe what you know is more important than what you can learn, and if you prefer being ‘In Charge’ to getting the project done, and if out-of-date plans are more useful than a team prepared for action.“ – Greg Howell

Last Planner vs. CPM SchedulingThe primary function of scheduling and planning is optimizing production.

Last Planner™ Method

Five Connected Conversations

Master SchedulingMilestones

Phase “Pull” Planning

Make Work Ready Planning

Weekly Work Planning(by Foreman and Supts)

Learning

Traditional CPM Scheduling

(Command and Control)

Master Schedule Development(Consultant)

Look Ahead and Resource Scheduling

Monthly Updates

Con

stan

t

Col

labo

ratio

n

Push

Push

CM

Driv

en

Wee

kly

Building the Network of Commitments

Things to remember about commitments:

• Are conditions of satisfaction clear to both parties?

• Am I competent to perform this, or do I have access to this competence and other wherewithal?

• Have I estimated the amount of effort and time required to deliver on this promise?

• Do I have the capacity (resources) available and allocated for this effort?

• Am I NOT having a private conversation with myself hoping someone else breaks their promise so I won’t have to really keep my promise?

• Will I be responsible and clean up any mess caused by my failure to deliver as promised?

Last Planner at CMC Hanover Square

Last Planner at CMC Hanover Square

Last Planner System – Weekly Work Plan (WWP)

• WWP – Submitted by each onsite subcontractor supt/foreman each Tuesday

Impeccable Coordination

Improve your reliability and remove waste.

Last Planner System – Thursday Meeting Agenda

• Sub Agenda – Focus is on future work not what happened this week.

The Theory – The bulk of this meeting has the sub supt/foreman looking at and thinking about schedule activities 2-6 weeks out, not about what went wrong this week.

The Reality – It Works! Sub involvement and coordination in the meeting has gone way up. The schedule is changing more than I hoped, but it is reflecting how we can really build the building. Meetings have been 1:15 to 1:30 long, but productive.

I. General Information/Logistics 10 min.A. Safety & Site Clean Up B. Site Logistics – Work Hours & Access RoadsC. LEED Considerations

II. Review of 6-Week Look Ahead Schedule – Identify Cons traints 30 min.A. Review Week of October 18th 10 minB. Review Week of October 11th 10 minC. Review Week of September 27th 10 min

III. Review of this Week’s Performance (PPC-VAR) 5 min.

IV. Preparation of WWP – Week of 20 September Coordinati on 30 min.A. WWP Due to RodgersRussell by 2:00 pm on Tuesday

V. Open Discussion of Other Issues 5 min.

END OF MEETING

Learning

Lean is about Continuous Improvement: Don’t accept that failures “just happen”. Look for trends and root causes so you can fix them.

Working around problems or planning buffer time into work is a waste – don’t accept it!

Use Root Cause techniques:— Five Why Analysis.

— Fish Bone Analysis.

— Pareto Charts

Be Tough on the Issue, not on the People.

Plan

Act

Check

Do

Projects as Collective Enterprises.

Owner

CM / GC

Civil

Structural

Mechanical

Electrical

Plumbing

Site

Steel

Mechanical

Electrical

Plumbing

Concrete

Landscape

Landscape

OtherConcrete

IPD Team

Core Group

A New Way to Build:

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A / E

Integrated Project Delivery

Time

CO

MM

ON

UN

DE

RS

TAN

DIN

G

CM/GC Hired

SD DD CD

Construction

Architect Hired

Engineers Hired

100%

Major Trades Hired

Pre-Construction Services

Level of Common understanding

© William Lichtig 2010 Used with permission

Putting the Pieces Together

© Lean Construction Institute & Baker Concrete, 2010

The New Common Sense

CPM - Activities Transactional Command & Control

Lean - Flow Relational Collaborative

Operating System Commercial Terms Organization

Optimizing the Project, not the Parts

Sutter Medical Center Castro Valley

• 130 Bed Hospital

• 223,000 SF

• $320 M Budget

• 7 Stories including

Basement

• Demo and

replacement

Lean and Integrated Project Delivery (IPD)

• IPD – Designers and builders working closely together to deliver a complete design that provides the most value for the owner

• IFOA – Integrated Form of Agreement was utilized on this project

• A collection of behaviors

aligned for mutual benefit

• Team success tied to

project success

• Shared financial risk

and reward

• Early involvement of key

project stakeholders

• Value-based decision

making (Target Value

Design)

IPD the SMCCV WayAlignment / Integration / Collaboration

IPD – SMCCV Project Goals

•Build high quality healthcare facility

•Meet project program

•Deliver facility 30% faster

•Do NOT exceed $320 M Target Cost

Team Development Challenges & Evolution

•Co-location of team members (The Big Room)

•Use of collaboration technologies

•BIM integration

•Process planning / mapping

•Commitment tracking and execution

•Transparency of team goals

Target Value Design Step-by-Step

•Assemble IPD team

•Validate allowable cost

•Go / No Go decision

•Form TVD clusters

•Set Target Cost

•Design to Target Cost

•Construct at or below Target Cost

•Share savings

Target Value Design Clusters

•Cardinal Rule: “The target cost of a facility can never be exceeded.”

•Teams composed of A/Es and contractors

•Each designs to a target cost

•Targets adjusted up and down to maintain project allowable cost

Value Stream Mapping (VSM)

THE BIG ROOM

CLUSTER REPORTS

Communicating TVD Targets

BIM – In Support of IPD Team Goals

BIM – In Support of IPD Team Goals

• MEP Coordination

• Model Based Estimating

• Scheduling

• Review & Prefabrication

• Field Support

• Supply Chain Management

• Design Review

• Constructability Reviews

MEP Coordination

Prefabrication: Drywall and Backing

LEAN – During Construction

• The Last Planner System ™

• Planning using the Pull Method

• Daily check-ins

• Just-In-Time delivery using “Materials

Manager” based program

• Visual tools and more visual tools

IPD – Team Benefits in Design/Construction

• Goals aligned for all major team members

• Increased collaboration

• Flexible support of other team members

• Fewer design hours than traditional processes

• Constant push to do things better

• Accountability among team members

• We all succeed together (failure’s not an option)

IPD - Challenges

• Consensus of 10 parties

• Managing Budget

• Learning to operate in new structure

• No Drawings! (Most of the Time)

• Learning to Trust

• Integration of Non-IFOA team members

IPD – Lessons Learned

• Learning to break the old ways of design

• Communication is key

• Some rework as part of iterative solution is OK

• Plan, replan, and plan again

• No such thing as a small change

Sutter Medical Center Castro Valley

Current Progress in Castro Valley

• Precast installation 95% complete• Glazing complete on two faces• Metal panel complete on one face• Building on schedule to be watertight by March 2011

Sutter Medical Center Castro Valley

Sutter Medical Center Castro Valley

Lean Construction Institute

Linked in Groups

Lean Construction Institute

LCI Carolinas

www.leanconstruction.org

Lean Reading List

12/14/2010

1

Basic Lean Canon:• The Toyota Way – Jeffrey Liker• The Goal – Eliyahu Goldratt• The High Velocity Edge – Stephen Spear• Lean Thinking – Womack

Good/Recommended Readings:• The Nun and the Bureaucrat - Savary and Crawford-Mason• Learning to See – Rother/Shook• Getting the Right Things Done – Pascal Dennis• Managing to Learn – Shook• The Lean Manager – Balle/Balle• Drive: The Surprising Truth About What Motivates Us - Daniel H. Pink• The Checklist Manifesto - Atul Gawande• Our Iceberg is Melting - Kotter/Rathgeber

Innovative Thinking:• Blink – Malcom Gladwell• Tipping Point – Malcolm Gladwell• Outliers – Malcolm Gladwell• Predictably Irrational – Dan Ariely

Lean Websites and Links

12/14/2010

1

Some good Websites for Lean and Innovative Thinking :

• www.gemba.com – Gemba Research (Lean thinkers)

• www.lean.org – Lean Enterprise Institute

• www.ihi.org – Institute for Healthcare Improvement

• www.asq.org - The American Institute for Quality

• www.ted.com - Audio and Video of the Presentations from the TED Conference

Takeaways? Questions?

“You see things; and you say, 'Why?' But I dream things that never were; and I say, ‘Why not?’” - George Bernard

Shaw, "Back to Methuselah"

“Tell me and I forget. Teach me and I remember. Involve me and I learn.” – Ben Franklin.

DeltaPlus

Using Plus/Delta to Learn and Improve

Supplemental Information

12/14/20101