Lean ConstructionTransforming current forms of Project Management

What do we want in our projects?

• Lower Costs

• Better Schedules

• Better Quality

• Improved Project Team Environment

Insanity: Doing the same thing over and over again and expecting different results - Albert Einstein

Why do we need a different approach?

• Construction industry has fallen behind other industries for productivity improvement

• Lean targets the Removal of behaviors and activities that contribute to Waste and loss of Productivity

• Lean Construction brings the needed methodologies and culture for improvement

Value added62%

Support Activity

12%

Waste26%

Manufacturing Value Stream Value added,

10%

Support Activity ,

33%

Waste, 57%

Construction "Supply Chain"

CII Data

Global Challenges

• Mass urbanization – by 2030 there are likely to be 41 mega-cities of 10m+ people

• Need 30% more water and 45% more energy

• Buildings generate 40% carbon foot print

Why in India?

Significant increase in construction volume

• As per 12th Five-year plan estimated spend on construction industry is $ 1 Trillion, which is double of 11th Five-year plan

• Share of private investment is about 50% in 12th Five-year plan compared to 30% in 11th Five-year plan

According to the World Bank report, India’s construction industry isexpected to face a labor shortage of 18-28% if the country grows at amedium rate and a shortage of nearly 55-60% if it sees high growth

If the current trends continue, India could suffer a GDP loss of $200 Billions in the fiscal year 2017 due to inefficiencies

- McKinsey 2009

The Real Estate Regulation and Development Act, 2016(RERA), that came in to force on May 1, 2016 (Central Act 16 of 2016)

What is Lean Construction?

• Definition of Lean

‒ A production approach that preserves Value with less Waste

‒ “To produce the right product at the right time in the right quantity for the customers

and to provide exactly what you need and nothing more”

Taiichi Ohno, Creator of Toyota Production System

• Lean Construction

‒ A design and execution methodology to minimize Waste of material and effort in order

to generate the maximum Value

Value defined by the customer

Value added activity ‒ Pouring concrete ‒ Bolting structural steel in place

Incidental support activity (Non-value added)‒ Drawings and standards developed ‒ Order and invoicing process ‒ Reports and presentation ‒ Setting concrete forms‒ Hoisting and positing of steel

Waste (Non-value added)‒ Waiting for information and decisions‒ Design and filed rework ‒ Ineffective and too many meetings‒ Storing and moving material

Digging deeper into waste

The seven types of waste plus one

‒ Defects/rework/Reconciliation; scrap and fixing errors

‒ Transport; unnecessary material movement

‒ Motion; unnecessary and awkward movement

‒ Waiting; delay for an upstream activity to complete

‒ Inventory; excessive work in process inventory

‒ Over production; making more just in case

‒ Over processing; beyond what customer wants

‒ Unused human capital; lost innovation opportunities

Waste is often difficult to see because…

• People appear to be busy

• We do not stop to look at the causes

• There is a comfort in legacy systems and old ways

Challenges for Lean ….

• We are not Toyota

• We are not manufacturing

• We are not hospitals

• We are not….

Lean attacks waste 3 angles

Project Delivery

Organization

Integrated Project Delivery

Project Delivery

OrganizationIntegrated Project Delivery (IPD)

Traditional flow of information

Architect

Owner

Contractor

Traditional flow of information

Architect

Owner

Contractor

Ele

Mech

M

E

V

V

VEnd user with a specific need

This contractor must meet the need

How do we Improve Information Flow?

RIGHT design, Less Rework, fewer RFIs and Change Orders

Early collaboration reduces the Project cost

Benefits of early team assembly ‒ Information is shared at the phase of

heights influence and low cost for making changes

‒ High attention is given to high impact activities that generate and exchange information

Core Group

Lean Construction Arrangement

Owner

ContractorArchitect

Structural Steel

Alignment / Integration / Collaboration

Structural Engineer

Landscape Architect

Civil Engineer

Mechanical Engineer

Electrical Engineer

PHE EngineerAV Consultant

Interior Joinery

Electrical

HVAC

Fire Protection

Plumbing

Concrete

Concrete

Lean teams are different..

Traditional Approach Lean Approach

Silos – Task is #1 Team Structure Integrated – Project is first

Getting my part done Focus Customer Value

Command & Control Leadership Collaborative

Transactional Oriented Commitments Relational Oriented

Status quo –Failures punished

Learning Innovation encouraged –Failures are lessons

Isolated mainly to individuals Outcomes Shared as team

Integrated Project Delivery is the foundation of Lean

Target Value Design, Pull Scheduling, BIM

Project Delivery

Organization

Lean Design focuses on Value

• The Target Value Design (TVD) Approach‒ Design to detailed estimate, not estimating to a detailed design

‒ The design team is organized in clusters (MEP, Structure etc.,)‒ Cost is element of design

‒ Each target cluster designs to a target cost

‒ The Cardinal rule: the Target cost can never be exceeded

• TVD benefits ‒ Reduces rework of redesign and value engineering

‒ Focuses team to make right decisions at the right time

Real value is not the low bid on a High cost design. It is the low True cost on the Right design

BIM Facilitates Collaborative Design

• The Building Information Modeling (BIM) approach‒ Build virtually in 4D (time)

‒ Real Time cost in 5D

• BIM Benefits ‒ Reduces conflicts, misunderstandings, and change orders

‒ Enables innovation, prefabrication, and modularization

‒ Facilitates planning and logistics

Pull Planning Optimizes the schedule

Critical Path Programs offer a great way for designers and constructors to test the feasibility of completing a program in a given time frame. That is where the utility stops. CPM is no way to manage a program.

Pull Planning Optimizes the schedule

• The Pull Planning & Last Planner® Approach‒ The objective is to create Reliable work flow

‒ Plans are made by those who execute the work

‒ Pull: plan and execute only what is needed for the next task

• The Benefits ‒ Effective work planning, scheduling and work sequencing

‒ Reliability allows Supt/Forman to plan instead of chasing down other trades work & commitments

‒ Collaboration among trades that leads to innovation

Last Planner® Approach

• Five Elements of Last Planner®‒ Master Scheduling (setting milestones and strategy; identification of long

lead items);

‒ Phase "Pull" planning (specify handoffs; identify operational conflicts);

‒ Make Work Ready Planning (look ahead planning to ensure that work is made ready for installation; re-planning as necessary);

‒ Weekly Work Planning (commitments to perform work in a certain manner and a certain sequence); and

‒ Learning (measuring percent of plan complete (PPC), deep dive into reasons for failure, developing and implementing lessons learned).

Last Planner® Approach – Flow Chart

Team Collaboration Leads to Optimization

Lean methods are different..

Traditional Approach Lean Approach

Estimate to the design (VE) Cost Design to a Target budget

Shop drawings after design Design Build virtually first (BIM)

Centralized push Scheduling Pull at work level

Chased down by Supervisors Commitments Reliability made by members

Monitoring Results Control Making things happen

Sub-optimized by parts Results Optimized a whole

Lean Contracts Codify the Culture

Project Delivery

Organization

Typical Construction Arrangement

A/E

Owner

Contract

This relationship has become increasingly

ambiguity

Parties act against each

other’s interest

Core Group

Lean Construction Arrangement

Owner

ContractorArchitect

Consultant & Sub-trades

Contracts Codifies the Culture

What about Risk?

OWNER SUPPLIER

Savings

Risk

Lump Sum

₹

Item Rate

₹

₹₹

SharedSavings

At Risk Savings Shared pool

Construction &

Fee

Contingency

SupplierOwner

Select the Right Partner

• Pre-qualification and selection criteria‒ The right personalities & attitude

‒ Lean experience and capability• Last Planner®

• Target Value Design

• BIM

• Use a procurement Strategy that maximizes Lean benefits‒ Early on-boarding

‒ Integrated team

‒ Shared savings

At Risk Savings Shared pool

Construction &

Fee

Contingency

SupplierOwner

Hire Trusted partner …. and trust them!

Lean methods are different..

Traditional Approach Lean Approach

Transactional Focus Relational

Commodities Suppliers Partners

Parochial Risk & Reward Shared

Rigid Finance Flexible

Adversarial Language Trust-Based

Low Bid Selection Best Value

We must be informed buyers of Lean supplier and be Lean in our internal behavior and process

The Core Lean Tools

• 5Ss (Sort, Straight/Set in Order, Sweep/Shine, Schedule/Standardize, Sustain)

• Teams (Kaizen – “Change for the good” – Continues Improvement)

• Standard Work

• Value Stream Maps (Helps identifying waste)

• A3 Team Problem Solving

• Error Proofing/Mistake Proofing (Do it first time right!)

• Office and Process Cell (De-departmentalize … by project, customer, product or value stream)

• Kanban (Inventory replenishment system)

Final Thought - The Commitment to change

"You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in wonderland, and I show you how deep the rabbit hole goes."

Courtesy of Warner Brothers Pictures

Reference

Presentation by Glenn Ballard to NCC in Gothenburg, Sweden in March 22, 2013Eric Ahlstrom – Webinar on “Why Lean Construction”Lean Construction Institute (LCI) – Website resources & training Material

Thank You!