Originally posted Wednesday, 02 September 2015

Written by Dan Heinemeier

Interest in lean design and construction has grown by leaps and bounds in recent years, as reflected by enhanced national media coverage, major presentations at COAA conferences and other national meetings, and rapid growth in attendance at Lean workshops and events around the country. Clearly, a substantial and growing number of industry players—Owners and contractors alike— are seeking to learn more and beginning to implement Lean, Integrated Project Delivery, and related elements of more collaborative forms of project delivery. Here, we’ll provide a brief overview of what Lean is all about and discuss what’s in it for Owners and others in the supply chain.

Simply stated, Lean Design and Construction is all about increasing value (as defined by the customer) and identifying and eliminating waste on projects. Lean emphasizes respect for people, the promotion of true collaboration, and continuous learning and innovation to produce better outcomes in every phase of project delivery.

Lean’s focus on value is reflected in its goal of enhancing flow on projects. It aims to continuously structure work in order to maximize seamless handoffs among project participants and promote reliable and predictable outcomes in every phase. By optimizing team performance—even at the expense of individual elements within the team—Lean serves to transform teams from disparate sets of specialists, with separate and sometimes conflicting goals, into cohesive production partnerships that share the goal of promoting total project success at every turn. This is the goal and outcome of successfully implementing the Last Planner® system, a trademarked tool developed by the Lean Construction Institute (LCI).

Team-Based Planning

Unimpeded and predictable workflow starts with collaborative planning. We seek to involve every player on the project in “pull planning” each phase of the project, working backwards from a milestone or target identified in the master schedule. This is typically accomplished in a sizable workspace with a large wall area on which planners can organize project activities by phase, always working backwards from a specific milestone or deliverable. Tasks are labelled on sticky notes and posted right-to-left in reverse order of completion. Each specialty contractor or team responsible for individual work elements is expected to contribute its knowledge towards defining and sequencing tasks so as to create timely and effective handoffs to the next craft or set of players. The goal is to maximize value creation as we develop a plan that everyone understands and can support.

As this process unfolds, some remarkable behaviors begin to emerge. As their diverse skills and experience are brought to bear, people negotiate with each other over task sequencing. They share anticipated challenges and pitfalls, and begin to think through how to head them off before they occur. They start to see their set of individual tasks as more than solo work plans to be completed as quickly as possible, so they can move on. Instead, they see how their actions and traditional work modes impact—and often impede—others on the team. Traditional tasks and sequences that add little or no value can be restructured or abolished to enhance workflow rather than contribute to waste.

By empowering individual workers to manage commitment planning and control workflow, they assume responsibility for making reliable performance promises to other team members. This process continues as pull plans are implemented onsite, and weekly meetings (often augmented by brief daily huddles) ensure that all outcomes and handoffs— positive and negative—are surfaced and reviewed regularly. Weekly work plans help the team track its progress (more on this below), and six week “look-ahead” plans keep them focused on the relationship between current tasks and upcoming handoffs to others scheduled to arrive on site. Over time, flow continues to improve as personal pride in one’s work and peer pressure of the team encourages members to promise reliably and deliver consistently. This, in turn, builds trust and fosters true collaboration: the kind of team effort that sees individual failures not as opportunities for assigning blame, but as challenges to be overcome as a team. In other words, “We all fail when one fails.”

Presentation

Continuous Learning

If Lean only enhanced teamwork, that would be good, but even the best team can be made better by engaging in continuous learning and identifying and addressing the reasons for its recurring failure to meet specific goals and schedules. Each week’s completed tasks are reviewed, then divided by the number of tasks planned (based on the weekly work plans) to create a weekly Percentage Plan Completed (PPC) index (the industry average historically has been a lessthan- inspiring 55-percent). Lean teams may even start out substantially below average. However, by engaging in the Plan-Do-Check-Adjust (PDCA) cycle, based on the scientific method, teams begin to march up the learning curve, removing recurring constraints to their productivity. The “5 Whys” questioning technique is often utilized to fully understand where constraints are coming from and to develop plans as a team to remove them based on their root causes. Teams regularly begin to achieve PPC in the 80 to 90-percent range as project work continues. This is an optimal range of performance, as 100-percent PPC actually indicates a team that is not pushing itself to truly excel.

A substantial set of Lean tools have been developed to support and augment the PDCA cycle and other processes described above. In addition to the PPC and “5 Whys” concepts noted above, there are a few others: the so-called “A3” reporting format, which promotes effective decision-making/documentation on project alternatives through an established template providing information in one page on the team decision process; Value Stream Mapping, which helps teams analyze systems and processes and develop improvements; Target Value Design (TVD), a technique to promote designs that are informed with constructability considerations as well as detailed cost estimates (rather than the traditional process of estimating once detailed designs are available). While all of these tools exist, no tool or set of tools is right for every project or every organization. LCI encourages the use of what works best for your team, and the augmentation of those tools over time as the organization and personnel gain experience.

LESSONS LEARNED

1. Lean emphasizes respect for people, the promotion of true collaboration, and continuous learning and innovation to produce better outcomes in every phase of project delivery.

2. Each specialty contractor or team is expected to contribute its knowledge towards defining and sequencing tasks to create timely and effective handoffs to the next set of players.

3. No tool or set of tools for implementing Lean is right for every project or every organization. It’s about using what works best for your team and augmenting those tools as your team gains experience over time.

4. There are numerous examples of successful use of Lean in both the private sector and in complex, regulated public projects.

5. To effectively implement Lean requires true cultural change, which can only be accomplished through hard work, persistent followthrough, and a corporate-wide commitment to training and implementation.

The Benefits for Owners

So now that you know more about Lean, you may be wondering, “What’s in it for me?” Admittedly, documenting the benefits of Lean is a challenge because no two projects are exactly alike, and critics can point to the variables in questioning whether Lean techniques are really the root cause of success. However, we have a substantial body of analysis that suggests the success realized on Lean projects is real and replicable.

Few, if any, organizations have implemented Lean to the extent and depth of Universal Health Systems (UHS), which builds medical facilities around the country. In dozens of cases, many of which have very comparable characteristics in terms of project size, complexity, and other factors, the results have been dramatic. A snapshot of 50 UHS projects from $1M to $150M using Lean techniques and collaborative forms (albeit not pure-play Integrated Project Delivery) reveals 97-percent were completed under or on budget (the worst at 103 percent of budget). Over 20 percent cost reduction was realized on similar projects from 2009-2013, from $231k per bed to $175k per bed. In the process, the Owner gained enhanced safety, better value decisions, and greater predictability of outcomes. In a more recent example, the Temecula Hospital project in California, results were equally dramatic: delivery at 40-percent below market cost, 30-percent improvement in operational efficiency, and 200-percent labor efficiency. Participants even cited “fun” as a direct benefit of the process.

Another criticism often voiced about Lean is that even if it works in the commercial private sector, how can it possibly be used in highly regulated public-sector procurement environments? Yet, there are significant examples of successful use of Lean in complex, regulated public projects. Michigan State University used a true Lean IPD approach to transform its Shaw dining facility, a $12M project. As is the case with many Lean projects, the team invested significantly more than typically is done in design, including the use of TVD and saved significant cost throughout the construction phase as a result. The design firm estimated 28-percent savings on its construction administration work alone. The use of RFIs was cut over 90 percent—just 12 were issued compared to an estimated average of 144. Final costs per seat were cut roughly 15 percent, and operations commenced with minimal issues. The project was even LEED certified with a goal of Silver. Last but not least, the team experienced an unusual level of friendship and camaraderie throughout the course of the project. MSU had a good basis for comparison, since this was the fourth such dining hall renovation it has done in the last 10 years.

Another impressive example has been the remarkable track record of Lean project delivery at the University of California, San Francisco. In as complex a state regulatory environment as any other, UCSF has used Lean design and construction principles successfully for selected capital projects since 2007. This has included projects valued at more than $2 billion. The university selected project teams who could use Lean tools to improve the process and the built product and adapted its contracts to require that these tools be used during both design and construction. What have been the benefits compared to traditional capital project delivery methods? Improvements cited include consistent on-time delivery; complete avoidance of claims and costly adjudication; competitive, predictable costs; improved design and building performance; crisp and effective start-up and commissioning; and improved end-user satisfaction. For a complete look at UCSF’s experience by Michael Bade, associate vice chancellor and campus architect, visit www.leanconstruction.org/media/docs/415GFRLeanConstruction. pdf.

Cultural Change

We often hear that the Lean techniques espoused by LCI and other advocates are nothing new. “We’ve been doing that for years. We talk to our subcontractors and work collaboratively.” Well, maybe that’s true, but more than likely, it’s not. To effectively implement Lean requires true cultural change, and this is only accomplished through hard work, persistent follow-through, and a corporate-wide commitment to training and implementation that exceeds the norm. Discipline is required not just to embrace new tools, but to unlearn unproductive behaviors that previously served people well. This is not only hard to cultivate, it’s even harder to sustain. Done right, it requires a level of Owner involvement throughout the process that is new to many organizations.

Once you take part in a successful Lean project, however, it’s easy to see why increasing numbers of Owners and contractors are persevering in adopting the concept. When done right, Lean allows you to truly collaborate as a team; tightly couple learning with continuous improvement; optimize the whole, not the parts; and to see projects as networks of commitments in which people promise boldly and then deliver consistently. These are features of Lean that drive successful outcomes for Owners and competitive advantage for the supply chain. Not to mention hearing participants using a new F-word—FUN—in association with your projects. As the T.V. commercial says, that’s priceless.

Dan Heinemeier is the Executive Director of the Lean Construction Institute (LCI).