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Lean Construction: The Owner's Viewpoint
By:
Constance Nestor, FACHE
“Construction is the last of the archaic industries. We are way behind the times with respect to efficient, cost-effective delivery.” These were the words of one of my architecture school professors during the early 1980s. It occurs to me today that our industry continues to lag behind others that have embraced high-tech solutions and improved process delivery methods. Adopting the Lean approach to capital construction projects is helping to streamline our outcomes through the elimination of waste and inefficiencies, maximization of value, reduction in costs, efficiency in schedule and enhancement of safety — centered on the customer perspective. In light of the numerous costs that are beyond the control of owners, such as those for materials and labor, we must make an effort to control costs associated with our construction processes and operations. It will most likely be the owners who will drive the winds of change.
According to the “Sixth Annual Survey of Owners” conducted by the FMI and the Construction Management Association of America, the following were among the top concerns:
- Adequate project definition
- Coordination/ collaboration among team members
- Architectural/Engineering (A/E) knowledge of costs associated with their designs
- Project scope control and owner decision-making responsiveness
According to the survey, 40 to 50 percent of all construction phases run longer than planned.
There are five processes that must be addressed to implement successful Lean construction projects:
- Project management
- Service-line process redesign
- A/E design
- Timely owner decision-making
- Construction
Without attention to all five processes, favorable Lean outcomes will be compromised.
Lean Construction
There is a high degree of waste in the majority of construction processes. For instance, only 50 percent of a given week's scheduled tasks are typically completed. Examples of construction improvements that should be realized include increased weekly productivity; elimination of mistakes resulting in construction reworks; reduction in job site accidents; recycling of materials, such as crushed concrete from paving/facility demolition; just-in-time shipments for reductions in theft/damage and reordering costs/delays; and a good commissioning program to ensure that all work is performed according to design, contract, code and performance specifications. Such initiatives will result in significant cost savings.
Traditionally, it has been the responsibility of the general contractor to coordinate the subcontractors and deliver an integrated product. In reality, the work of the subs often occurs independently as distinct mini-projects. The Lean method focuses on the success of the overall project, not the individual trade efforts. It requires that every member of the project functions as part of a single unit — that everyone becomes accountable for the overall project outcome — in addition to individual roles. Everyone must rely on everyone else to get things done efficiently as the baton is passed from trade to trade. Similar to the Disney philosophy, once you identify a problem, you own it and are responsible for seeing that it gets fixed. The entire team, which includes all trades, assumes accountability for assisting other trades with advice or creative waste reduction ideas. Lean is the embodiment of partnering.
Teamwork, planning ahead and communication are the keys to success. Looking at least six weeks ahead, a proactive team approach should be taken to prevent potential problems. Cross-disciplinary, cross-firm weekly work planning meetings are recommended where project supervisors and foremen meet with subcontractors. Ultimately, every step in the building process must be examined in order to create reliable workflow, eliminating delays as work is handed off from one party to another. Team members must commit to a successful outcome and keep their promises, delivering quality work on time and on budget.
Preparation of owner agreements with general contractors and bid instructions should incorporate the Lean approach. Subcontractor understanding and buy-in on the concepts are critical to project success. Methods of project delivery that spread risk and reward will serve as an incentive to participants to be good stewards of owner resources. For instance, use of construction manager-at-risk contracts is a mechanism to reduce costs through shared risk.
Two of the many tools of the Lean trade include productivity reporting and just-in-time materials management. Productivity rates must be tracked and documented so that the progress of the previous week is clear. Digital collaborative project management tools and online documentation will enhance communication and effectiveness, increase quality and decrease project costs. Supplies and materials shipped to the site early may require relocation, be stolen or become damaged, resulting in lost time and funding. Delivery on the day prior to use is ideal. Lean construction best practices must be identified and implemented.
Accumulative computerized databases designed to track schedule, budget, productivity rates, issues and solutions are mandatory tools. Such reports should be shared with the owners on a regular basis. If tasks are not completed, the team undertakes root-cause assessments to understand the causal factors, followed by adoption of actions to eliminate such waste in the future.
Lean Ownership
A Lean project will begin with a comprehensive project proforma that drives the project go-live date, project budget and revenue targets for specific targeted years. Owner decision-makers must, first and foremost, avoid impeding the realization of their proforma. Failure to make timely decisions regarding service objectives, program components, lease negotiation positions, design configuration and adherence to schedule will become a formula for failure. White elephants — beautiful facilities that become costs instead of revenue streams — have no value. Lean decision-makers must give weight to life-cycle operational cost savings when considering facility solutions with higher first costs that promise return on investment later. Owners are striving for cost reductions, increased productivity, effective space utilization, economies of scale and, ultimately, quality services. Well-designed facilities can help achieve these goals.
Lean Project Management
Poor project management will inevitably lead to poor projects, delays and higher costs. First and foremost, a project manager (PM) must be committed to delivering a project that is on time, is on or under budget and that meets the goals, objectives and mission of the owner. Furthermore, a good PM will lead his or her team through inspiration, maintain excellent communications, excel in collaboration, possess industry expertise and build relationships via savvy people skills. The PM should define and enforce procedures for formal communication and collaboration by project team members or firms. As the quarterback of the team, the project manager must serve as the clearinghouse for all information.
Consider reducing subcontractor costs by introducing cost-plus-fee payment structures. Better training of new employees and managers is a must. Post-occupancy evaluations will enable the understanding of important lessons with practical applications to future projects.
Lean A/E Design
I have often observed design professionals assuring clients that one of three goals is typically compromised in a project: schedule, cost or quality, and then asking the client to prioritize. Lean design strategies challenge this premise. A Lean project will achieve all three goals.
Sometimes a perceived space problem may actually be the result of an operations glitch and not an actual space shortage. Clients will appreciate the ability of their consultants and planners to identify such operations issues when applicable, as opposed to building unnecessary, costly facilities. When construction is necessary, try to preserve as many of the existing conditions, such as rooms and systems, as possible in order to contain costs; gutting the entire area is not always necessary.
Also, a Lean planning and design process will include initial discussions surrounding operations: service delivery preferences, process improvement mechanisms, enhancement of functionality, flows, safety and efficiencies. Every facility planning or design process should begin with a service-line operations improvements assessment. The initial questions that a professional should want to ask of his or her customers are “How can I make your work-lives easier? What gets in the way of doing your job? What road blocks in your process slow you down, frustrate you and create stress? In your opinion, how can your processes, systems, flows, staffing patterns and protocols be improved? What will help improve project outcomes?”
Lean facilities are designed based on the most effective, tested and proven evidence-based solutions — not old obsolete ways of delivering services. Lean designs will be those that the owner can afford. Knowledge of current project costs is key.
Lean Service-line Process Redesign
Lean service-line processes will be best-practice and evidence-based. With respect to process improvement solutions, do not reinvent the wheel, just do your homework. Call your colleagues at sites that have implemented the latest concepts, to understand successes and failures; research on the Internet; or retain industry experts to provide the know-how.
Lean Lexicon
Value stream mapping (VSM) is a tool that aids in the following six ways:
- Understanding the current process
- Identifying opportunities for improvement
- Deriving an improved process
- Developing a work plan
- Gauging performance through measurables
- Analyzing benefits and cost savings
The 5S Plan, developed by Toyota , is a set of actions that are followed to maintain an organized workplace. Translated into the English language, these actions include sort, set in order, shine, standardize and sustain.
Visual triggers, or “kanban” in Japanese, are visible queues that serve as reminders. For instance, the utilization of site logistics maps, striping an area of the pavement for material placement or labeling trash containers appropriately are all visual signals.
The Last Planner System, developed by the Lean Construction Institute, is a method to ensure that team members keep their promises regarding project duties, timelines and other deliverables. The steps in the process include the following:
- Development of a work plan with critical path milestones
- Use of a six-week rolling schedule
- Constraint removal activity
- Weekly work planning
- Measuring percentage complete for scheduled work
- Root cause analysis for failures
Daily work crew huddles are also useful.
Lean Implementation Pitfalls
Construction project processes are not high-volume, repetitive processes like manufacturing Toyota vehicles. Lean concepts for design and construction will require ingenuity, creative thought and commitment.
Remember the old adage “Nothing good comes easy. No pain, no gain.” It will be easier to claim that your approach is already efficient and to take a pass on the Lean opportunity. While some operations may have more fat than others, there is always room for operational improvements. Much progress has been made already with the implementation of concepts such as sustainable design, human safety measures, process improvement programs and others, but we must not stop here. As the industry evolves, there will always be value in continuous process improvement based on constant evaluation of the results achieved.
Another challenge is that the owner is likely to pay a premium for the added planning, coordination and care taken. However, these costs should be neutralized by cost savings resultant from waste elimination overall.
Serious people are required. Slackers need not apply. Resourcefulness is key. How many times has your colleague volunteered that “he didn't make the phone call because he didn't have the number,” ignoring handy resources such as the information operator and online resources? How many times have you observed an e-mail go out, postponing the work of the sender, when a quick phone call may have resulted in instant answers . . . or you observed telephone tag ensuing for days, when an assistant could have scheduled a timely conference call . . . or you witnessed work delays because someone “was confused about the task”? Individuals who are not committed to the project objectives may buy time for themselves while compromising the end game. Wasteful practices are targets for positive change.
Do not be duped by consulting firms that are more interested in lining their pockets than delivering value-added professional services. It is not enough to retain consultants who possess a thorough command of Lean principles. They should also be experts in your core business operations, such as healthcare service-line operations expertise, to guide your organization through a successful process of positive change. There are tested and proven processes in place and the industry experts know what they are. There is no need for your employees to attempt to invent better processes, based on their limited experience, while teaching solutions to the consultants.
A Lean approach, as a business philosophy, requires a lifestyle change. There must be a true desire and commitment to eliminating the fat from our projects.
Conclusion
The essentials of Lean are maximization of value by minimizing waste. Lean eliminates the trade-off between time, cost and quality. Lean applications for construction projects are in their infancy now but are anticipated to revolutionize our industry.
Companies that are willing to adopt a Lean approach have a better chance of being profitable, gaining competitive edge and producing satisfied, repeat customers. Wasted effort, wasted time and wasted dollars can be trimmed from the construction process. In our new global economy, as resources become more costly and scarce, the time to become dedicated to the elimination of waste is now.
FC
Part II of Constructing Green Field Hospitals will be published in the September issue of FacilityCare.
For additional information or a reference list, contact Constance Nestor, FACHE, director of design and construction, Advocate Health Care, Park Ridge , Ill. ; (847) 384-3602; E-mail: constance.nestor@advocatehealth.com.
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