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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• 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
Ohno’s 7 Types of Waste
2. Overproduction of goods not needed
• Design for Program• Design for Pricing• Schematic Design• Design Drawings• Construction
Drawings• RFIs
Ohno’s 7 Types of Waste
3. Inventories of goods awaiting processing or consumption
• Untimely information
• Waiting on directions and decisions
• Redesign/ rework
Ohno’s 7 Types of Waste
4. Unnecessary processing
• Submittals• Designing twice
• Shop Drawings (2 or 3 x)
• Redundant reporting
Ohno’s 7 Types of Waste
5. Unnecessary movement of information and heavy management
• Treasure hunt
• Movement without work
• Materials or equipment remote from work
• Waiting on the Genius
Ohno’s 7 Types of Waste
6. Unnecessary movement of paper
• Moving, then re‐moving material
• Paperwork on projects
• No loop closing
Ohno’s 7 Types of Waste
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
Ohno’s 7 Types of Waste
Work waiting for workers
Workers waiting for work
Ohno’s 7 Types of Waste
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?
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
Manage Risk Collaboratively
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
Manage Risk Collaboratively
Known Unknown
What we assume/ what we predict
Manage Risk Collaboratively
Known RiskInsurance
Core Group Risk
Managem
ent
Manage Risk Collaboratively
Manage Risk Collaboratively
Manage Risk Collaboratively
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)
Are your people & your partners accountable?
Collaborate;Really Collaborate
Networks ofCommitment
Tightly CoupleLearning w/ Action
OptimizeThe Whole
IncreaseRelatedness
Sutter’s 5 Big Ideas
Are your people & your partners accountable?
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
Are your people & your partners accountable?
© 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
Visible processes, collaborative tools
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 . . .
Visible processes, collaborative tools
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
A3 Reporting and Documentation
IPD: What to Expect
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