Lean Construction

Transforming 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?

Manufacturing Value Stream

Value Chain"
Construction "Supply
added,
10%

Waste
26%

Support
Activity
12%

Value
added
62%

Waste,
57%

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

Support
Activity ,
33%

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, Indias construction industry is

expected to face a labor shortage of 18-28% if the country grows at a
medium 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
Organization
Integrated Project Delivery (IPD)

Traditional flow of information

Owner

Architect

Contrac
tor

Traditional flow of information

V

End user with a

specific need

V
V

Owner

Ele

Architect

Contrac
tor

E
Mech

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

Lean Construction Arrangement

Landscape Architect
Concrete

Fire Protection

Civil Engineer
Owner

Interior Joinery

HVAC

Mechanical Engineer

Structural Engineer
Architect

Concrete

Contractor

PHE Engineer

AV Consultant
Plumbing

Electrical Engineer

Core Group

Electrical

Structural Steel

Alignment / Integration / Collaboration

Lean teams are different..

Traditional Approach
Silos Task is #1

Lean Approach
Team Structure

Getting my part done

Focus

Command & Control

Leadership

Transactional Oriented
Status quo
Failures punished
Isolated mainly to individuals

Commitments
Learning
Outcomes

Integrated Project is first

Customer Value
Collaborative

Relational Oriented
Innovation encouraged
Failures are lessons
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

Chased down by Supervisors

Scheduling
Commitments

Pull at work level

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

Owner

Parties act
against each
others
interest

A/E

Contract

This relationship has

become increasingly
ambiguity

Lean Construction Arrangement

Owner

Architect

Contractor

Core Group
Consultant & Sub-trades

Contracts Codifies the Culture

What about Risk?

Owner Supplier
At Risk Savings
Shared pool
Contingency

Savings
Shared
Savings

Construction
&
Fee

Item Rate

Lump Sum

OWNER

Risk

SUPPLIER

Select the Right Partner

Pre-qualification and selection criteria

Owner Supplier

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

Hire Trusted partner . and trust them!

At Risk Savings
Shared pool
Contingency

Construction
&
Fee

Lean methods are different..

Traditional Approach

Lean Approach

Transactional

Focus

Commodities

Suppliers

Partners

Risk & Reward

Shared

Finance

Flexible

Parochial

Rigid

Relational

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, 2013

Eric Ahlstrom Webinar on Why Lean Construction
Lean Construction Institute (LCI) Website resources & training Material

Thank You!