introduction to lean - lean construction institute construction institute provider number h561 intro...

Introduction to Lean

The Lean Construction Institute

Carolinas Community of Practice

Lean Construction Institute Provider Number H561

Intro to Lean & Target Value Design Workshop032615TVDHW

Dick Bayer, The ReAlignment GroupApril 27, 2015

7.5 Credit(s) earned on completion of this course will be reported to AIA CES for AIA members. Certificates of Completion for both AIA members and non‐AIA members are available upon request.

This course is registered with AIA CES

for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner ofhandling, using, distributing, or dealing in any material or product._______________________________________Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.

This presentation is protected by US and International Copyright laws. Reproduction, distribution, display and use of the presentation without written

permission of the speaker is prohibited.

© Lean Construction Institute 2015

Copyright Materials

An interactive Target Value Design Workshop, this hands‐on, day long program, takes a budget ($10,000,000), a piece of land (near USC in Los Angeles) and a concept (scholar’s residences) and ends up with a building for less than the budget at the end. The various stages of the simulation replicate real target value design: • Developing the value proposition • From values to program • From program to interactive design with real time estimating • From interactive design to selecting design options • From design options to TVD clusters • From clusters to systems and pricing • To fully developed package including safety and welfare designed into construction process. The program also features how to do 3 hour target value design for projects that are already underway. Although TVD is a hallmark of Integrated Project Delivery, you can do TVD regardless of contract model.

CourseDescription

LearningObjectives

1. Participants in this workshop will learn how to collaborate with trade and construction partners in design in order to enhance both building design and safe, quality construction.

2. Participants in this workshop will learn how to design and develop Target Value Design Sessions.

3. Participants in this workshop will learn how to interactively coordinate real time pricing with design that incorporates safety as a priority, and considers the welfare of both constructors and end users.

4. Participants in this workshop will learn how to fully participate in the design and delivery of projects at or below the target budget.

At the end of the this course, participants will be able to:

Introduction to Lean Construction and Design

Dick BayerLean Construction Institute

Carolinas Community of Practice

April 27, 2015

• Problem

solving

• Deliberation

• Continuous

Improvement

• Analysis

Agenda8 a.m. Introductions, Experience, What we

Love, What we Loathe8:30 Lean Construction

Lean Construction Introduction, Make a Card simulation

10:00 Break

10:15

Opportunities in Lean Construction• 3 Opportunities• 5 Big Ideas• Driving out Waste• Driving in Value

Noon Lunch

12:30 Target Value Design Workshop

2:45 Break

3:00 TVD continued

5:25 Plus/Delta

5:30 Adjournment

Lean Construction

• What we love?

• What we loathe?

Art Byrne, Wiremold

Lean Construction values and goals:Values:

• Visibility/ Transparency

• Collaboration

• Trust

• Commitment

• Achievement

• Knowledge

Goals:

• Make work better• Do work that releases work• Never have work waiting for

workers or workers waiting for work

• Make work safer: Go home in the condition you arrived

Lean: Values• Values are what get us out of bed in the morning

Lean: Values• We develop values as a team

World Class Research Facility: Build a world‐class research facility that enables great science and engineering, attracts the best talent in faculty, researchers, and students, and enhances the reputation and prestige of the School of Engineering.

Sustainability: Serve as a model of sustainability and best‐practice design in balance with institutional priorities and freedom of scientific inquiry.

value 1

Project Mission: Cultivate the exchange of ideas, foster the spirit of inquiry, and inspire and enable people to do great science and engineering at Brown for the next fifty years or more.

value 2

Lean: Values

Community Enhancement: Engage and enhance the community – in Engineering, the Sciences, and the broader University.

Identity: Give shape to a physical and symbolic identity for the School of Engineering that builds upon the best traditions of Brown’s rich and distinctive heritage of buildings and landscapes.

IPD Mission: Serve as a national exemplar in effective project delivery across both quantitative and qualitative performance criteria through Integrated Project Delivery.

value 3

value 4

Lean: Values

principle 1

Project Mission and Values Design Principles

principle 2

principle 3

principle 4

Create physical and communal connections among new and existing School of Engineering buildings through active program spaces

Create versatile, effective, and collaborative research communities that support the diverse and dynamic nature of engineering research for the lifetime of the building.

Enhance porosity in all directions throughout the site’s buildings and landscapes

Extend the circulation path from the historic campus in a landscape that both honors and evolves Brown’s open space traditions

Create an identifiable and engaging “front door” for the School of Engineering campus

Design new structures and landscapes to enable a holistic and integrated future School of Engineering campus

NEW ENGINEERING BUILDING DESIGN PRINCIPLES

principle 5

principle 6

Integrated Project Delivery

• What is it?• How does it help us?• What’s it require?

IPD Basics

Funds sufficient to build the Base Scope at the Expected Cost are pushed into the middle of the table and spent by the team.The parties commit to a Target Cost. Money remaining below the Target Cost is shared by the team in predetermined %s.

IPD Basics

Base Scope: Everything the Owner (customer) needs for the building to serve its purpose and generate the agreed upon value proposition.

IPD Basics

Expected Cost: What the Owner would expect to pay in the market place for a well‐executed project that meets its needs and its value proposition.

IPD Basics

Target Cost: The stretch goal below the Expected Cost at which the team believes it can deliver the project. It usually is comprised of the pre‐negotiated profit of all parties to the IPD contract.

Expected Cost

Target Cost

All Team Profit

Actual Cost

Shared Savings

Actual Cost

Reduced Profit

Actual Cost

Eats all Profit

Owner’s overruns

Expected Cost

Target Cost

All Team Profit

Profit at Risk

All Team Profit

IPD Basics: Basic Business Model

IPD Basics: What problem does it solve?

We’re used to working in silos

IPD Basics: What problem does it solve?

An integrated team works together, sharing the same pool of $.

Lean Construction Basics

The project delivery triangle.

Operating System

Seeing waste

Ruthlessly eliminating it

Understanding value

Relentlessly pursuing it

Lean Construction and Design processes are all about:

Lean in Other Contexts: Manufacturing They directly hire all the people They control the environment They go deep into the supply chain They know precisely what it will cost They know precisely how long it takes They have deep relationships in the supply chain They only bid fungible commodities They use robots

59

Lean in Other Contexts: Six Sigma Six Sigma is a business methodology of eliminating variation in a product. By eliminating variation, you eliminate defect, and every single product (be it a circuit board or car part) works perfectly, just like the one before it. But, eliminating variations is a long and involved process.

Goal is to reduce defects to less than 3.4 per million—lots of redundant systems

Lean Six Sigma borrows tools from lean manufacturing, a practice of eliminating waste, and generally produces results more quickly. Read more: http://www.ehow.com/about_7296799_difference‐six‐sigma‐six‐sigma.html#ixzz30w40IMDO

60

Lean in Other Contexts: Health Care Engage nursing and materials staff in Kaizen

Reduce waste and variation within a clinic to improve employee engagement, reduce no show rate from 12% to 5%, and maintain a 95th percentile satisfaction score. Improved revenue over $1M.

Reduce inventory and improve layout and efficiency within central sterile supply area resulting in over $ 1M savings.

Reduce waste and improve work flow within an inpatient pharmacy resulting in $300K annualized savings.

Engage employees within an operating room to reduce wastes, improve on time starts, reduce turnover time, and improve patient satisfaction. Improved revenue over $1M.

Improve patient flow within emergency department reducing boarding time by 30% and improving satisfaction score from 25th percentile to 85th percentile and 5S events to improve nursing satisfaction and charge capture of materials by 25%.

61

Similarities

“Although health care differs in many ways from manufacturing, there are also surprising similarities: Whether building a car or providing health care for a patient, workers must rely on multiple, complex processes to accomplish their tasks and provide value to the customer or patient. Waste — of money, time, supplies, or good will — decreases value.” Institute for Healthcare Improvement

62

Waste

What can we learn from manufacturing?

Value

Taichi Ohno

Ohno’s 7 Types of Waste

Value vs. Waste

65

• In Design• Design what’s valuable to the Owner

• Draw only for deliverables• Use Budget as a design criteria

• Develop real time costing with side by side estimating

• Pull plan information exchanges

1.Defects in production

© 2011 Lean Construction Institute

• Rework• Not designed to

budget• Constructability• Lack of design for

installation• Liability for means

and methods• Out of touch


2. Overproduction of goods not needed

• Design for Program• Design for Pricing• Schematic Design• Design Drawings• Construction

Drawings• RFIs


3. Inventories of goods awaiting processing or consumption

• Untimely information

• Waiting on directions and decisions

• Redesign/ rework


4. Unnecessary processing

• Submittals• Designing twice

• Shop Drawings (2 or 3 x)

• Redundant reporting


5. Unnecessary movement of information and heavy management

• Treasure hunt

• Movement without work

• Materials or equipment remote from work

• Waiting on the Genius


6. Unnecessary movement of paper

• Moving, then re‐moving material

• Paperwork on projects

• No loop closing


6. Unnecessary transport of information

• RFI process

Question Noted

Sent to Field Office

LoggedSent to Design Firm

Logged in

Sent to Designer

Clarifica‐tion: see plans

Response Logged

in

Sent to GC

Logged

Sent to Field

7. Waiting by employees for process equipment to finish work or for an upstream activity to complete.

• Equipment• Plans• RFIs• Predecessor

work• Unresolved

constraints


Work waiting for workers

Workers waiting for work


Additional Wastes

8. Underutilizing human talent

Additional Wastes

9. Information—too much, too little etc

Additional Wastes

10. Make do

Understand your process

STOPBOB

Design process from outcomes backwards

BOB

Develop and Share your Project Values

Make your planning processes visible

How do you gather/share information?

Lean Visibility: Work Place Tools

Use the workers to help define the work

Develop schedules, don’t impose schedules

Use the experience in the trailer

Known Unknown

What we assume/ what we predict

Manage Risk Collaboratively

Understanding the Work: Traditional Processes

Common

Understanding

CM/GC Hired

Major Trades Hired

Pre‐Construction Services

Architect Hired

Engineers Hired

≤100%

SD DD CD

Construction

Owner


Understanding the Work: LEAN IPD Project

Time

Common

Understanding

CM/GC Hired

Concept Design Implementation

Construction

Architect Hired

Engineers Hired

100%

Major Trades Hired

Pre‐Construction Services

Valid.

Owner


Known Unknown

What we assume/ what we predict


Known RiskInsurance

Core Group Risk

Managem

ent


Trust your people

Let your people trust you

Align your actions with your values

How do you promote people?

• Saviors• Heroes• Workaholics• Social relationships with superiors

• Cost cutting• Back biters

• Collaborators• Planners• Safe workers• Creativity• Curiosity• People empowered to ask Why?

Align your actions with your values

When things go wrong what do you do?

• Start demanding reports

• Demanding action• Imposing your iron will

• Scheduling meetings

• Trust your people to fix the problem

• Empower them to fix the problem

• Provide them with the resources they need to fix the problems

Are your people & your partners accountable?

Pull‐PlanningLast Planner®

103

Milestone Schedule

Percent Plan Complete

Lookahead Plan &Constraint AnalysisPull

Planning

Weekly Work Planning

0.00%

50.00%

100.00%

150.00%

5‐Au

g

12‐Aug

19‐Aug

26‐Aug

2‐Sep

9‐Sep

Tower PPC

PPC

Linear(PPC)


Collaborate;Really Collaborate

Networks ofCommitment

Tightly CoupleLearning w/ Action

OptimizeThe Whole

IncreaseRelatedness

Sutter’s 5 Big Ideas


Benefits of Predictable Work Flow

• Production System—increase flow

• Safety—watch what we’re all doing

• Quality—stop the line

• Removal of contingency and waste


© 2011 Lean Construction Institute

Project Objective

s

Master/ Phase

Schedules

SHOULD

WILL

DID

Work Structuring

Work Structuring

Look Ahead Planning

Look Ahead Planning

Make Ready Process

Make Ready Process CanCan

Last Planner process

Last Planner process

ProductionProduction

On Budget? On

Schedule?

On Budget? On

Schedule?

LearningLearning

Last Planner Basics

Pull Planning in Design

Phase Planning

Planning Commission‐ing 18 months before it starts

Weekly work plans

• What am I going to do?

• What needs to be done to allow me to do

it (preparation?)

• What could keep me from doing it

(surrounding work)?

• What does the superintendent need to

know?

Weekly work plans

• Are there safety or quality implications?

• Are there other decisions that need to be

made?

• Do I know the best way? Have I shared it

with others?

Reliable Work Flow

Underperforming

Continuing to Underperform

Paul Teicholzarticle

updated, March 14,

2013

Since 2004

Continued dramatic increases in productivity

Continued decreases in productivity

Continuing to Underperform

Parkland Hospital, Dallas, Texas

1.26

1.28

1.3

1.32

1.34

1.36

1.38

1.4

1.72

Parkland Hospital Manpower

$1.20 $1.25

TCU Stadium, Fort Worth, Texas

West Stands East Stands

Start 12‐5‐11 12‐5‐12

Scheduled 8‐15‐13 8‐15‐13

Finished 9‐3‐13 7‐25‐13

Planning tool P‐6 LastPlanner

Rework/Punch 300 items 4 items

Changes +$5M $0

Contract GMP GMP

Superintendent input

Traditional storming & stacking at the end

Collabora‐tive work increased productivity at least 20%

California Prison Healthcare Facility

• Used pull planning to increase work in place from $1M per day to $3M per day

• $839 million, 54‐building, 1.4 million‐square‐foot facility southeast of Stockton

• Completed from design to construction in 31 months

Visible processes, collaborative tools

Five Whys?Why didn’t we finish that activity?Material wasn’t deliveredWhy wasn’t material delivered?We were waiting on shop drawingsWhy were we waiting on shop drawings?Because the manufacturing detail had not been securedWhy not?We changed manufacturers three weeks ago


Target Value Design• Design to budget, not to scope• Drive value into the project with innovation

• Don’t value engineer• Design buildings that can be built• Eliminate the submittal process (design what you’re installing)

$4,400,000.00

$4,600,000.00

$4,800,000.00

$5,000,000.00

$5,200,000.00

$5,400,000.00

$5,600,000.00

Original Budget Designed Budget Budget after TVD

Target Value Design: Designed Buildings in Construction

TVD no chance TVD Medium chance TVD High chance

Current defined savings

Savings below original budget

Updated: November 6, 2013

Visible processes, collaborative toolsLessons Learned• At the end of projects:

• The owner has a facility• You hopefully have profit• But you always have . . .


Knowledge capture:• How do you capture it?• How do you use it?• How do you improve on it?

Doing the right things WELL

Doing the wrong things WELL

Doing the right things POORLY

Doing the wrong things POORLY

Lean Traction

CPR Project

A3 Reporting and Documentation

IPD: What to Expect

IPD: What’s Next?Target Value Design• Developing the value proposition• From values to program• From program to interactive design• From interactive design to selecting design options• From design options to TVD clusters• From clusters to systems and pricing• To fully developed package

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