Innovative Project
Delivery
Glenn Ballard
Lean Construction Institute
Project Production Systems
Laboratory
September 9, 2008
Graphic courtesy
of Extemin
Focus on Process and Risk
• Design and construction of buildings and infrastructure is a risky activity
• Buildings have become ever more complex over time, engendering
greater and greater risks in design, construction, and operations
• Distinguish Insured Risk vs Managed Risk
• While insurance is an important subject, the big opportunity lies in how
we manage risk throughout the design and construction process
The Big Idea
• What if every member of the team shared completely the
responsibility for the entire project and set about correcting
deficiencies or problems wherever they popped up without regard
to who caused the problem or who is going to pay for it?
• What if all team members were friends looking out for the interest
of the Client and each other, applauding the successes of each
other and sharing the pain of each others failures?
• What if all of the design and construction entities on a project
could be organized in such a way that they all functioned as if they
truly were a single company with a single goal and with no
competition amongst themselves for profit or recognition?
Greg Howell
Glenn Ballard
Lean Construction Institute
Traditional Project Delivery
• Traditional Contracting limits cooperation and
innovation.
• Inability to fully coordinate the project.
• Good ideas are held back.
Owner
A/E Team Lawyers
Builder
Tools and Techniques
• New tools for design and coordination, and new techniques of
construction management, production planning, and scheduling
have made possible a new approach to organizing the project
delivery process
• These tools include:
– Building Information Modeling (BIM) for design and
coordination
– Lean Construction Management for improved
production planning and control
– Team structure for collaboration in project execution –
Integrated Project Delivery
Integrated Project Delivery
• A single contract binds the IPD team.
• Team shares risk and profit for total project
performance.
• Interests of all team members are aligned for
optimal project performance.
• Team members bring forward best ideas.
• Effective solutions can be devised with shared
responsibility for overall costs.
Incentivized
Design-Build
Owner
At the core of an integrated project are collaborative, integrated
and productive teams composed of key project participants.
Building upon early contributions of individual expertise, these
teams are guided by principles of trust, transparent processes,
effective collaboration, open information sharing, team success
tied to project success, shared risk and reward, value-based
decision making, and utilization of full technological capabilities
and support. The outcome is the opportunity to design, build,
and operate as efficiently as possible.
- Quoted from the AIA IPD Guide
A/E Team
Builder
Value Stream Mapping: Detailing of Reinforced Concrete Structures
Rebar Production Process & CONWIP Control
Pull
Engineering
Fabrication
& Assembly
2 Days
1 Days
ProjectFlow
Installation
2 Days
Results:
•First major UK civil project in last
40 years to be delivered on time
•$125 million cost savings in civils
phase; 10% of contract value
Toyota Production System (aka Lean)
•Started in the 1950’s
•Chief Architects
– Taichi Ohno & Shigeo Shingo
•Challenge:
– Limited Cash & Space
– Sophisticated Customers
•Goal:
– A custom product, delivered instantly, with
nothing in stores.
Source: The Machine that Changed the World by Womack, Jones & Roos
Courtesy of Strategic Project Solutions Inc. 2005
Waste
Consumes Resources without Providing Value
1. Overproduction
4. Movement
3. Inventory
2. Waiting
5. Effort
6. Rework of Errors
7. Processing
The Toyota Way
• Toyota Production System
• Toyota Product Development System
Respect for People
Continuous Improvement
Key Features of Lean in Project Production Systems
• The larger system is the focus of
management attention, not local
optimization
• Activities are performed at the last
responsible moment
• Stakeholder interests are aligned
through relational contracts
• The rule followed for release of
work between connected specialists
is: Flow where you can, Pull where
you can’t, Push where you must
• Downstream players are involved in
upstream work, and vice-versa
• Product and process are designed
together; indeed, all design criteria
are considered when generating and
selecting from design options
• All product life cycle stages are
considered in design
• Standards are the starting point for
improving how work is done
• Variation is attacked and reduced —
variation in work load, in process
durations, in product quality, in plan
reliability, …
• Inventory, capacity, schedule and
financial buffers are sized and
located to perform their function of
absorbing variability that cannot yet
be eliminated
• Necessity, the mother of invention,
is self-imposed to cause innovation
and learning
Piping from Detailed Engineering through Installation
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Weeks
55
50
45
40
35
30
25
20
15
10
5
% Planned ISOs Release
% Aactual ISOs Release
% Planned Fabrication
% Actual Fabrication
% Planned Installation
% Actual Installation
Wk
% of Total
100%
100
90
70
of All Pipe is Installed
% Pipe on Hand When 20%
80
60
50
40
30
20
10
0
0.5
Under
1
Over
Performance Against Budget
1.5
Key Features of Lean in Project Production Systems
• The larger system is the focus of
management attention, not local
optimization
• Activities are performed at the last
responsible moment
• Stakeholder interests are aligned
through relational contracts
• The rule followed for release of
work between connected specialists
is: Flow where you can, Pull where
you can’t, Push where you must
• Downstream players are involved in
upstream work, and vice-versa
• Product and process are designed
together; indeed, all design criteria
are considered when generating and
selecting from design options
• All product life cycle stages are
considered in design
• Standards are the starting point for
improving how work is done
• Variation is attacked and reduced —
variation in work load, in process
durations, in product quality, in plan
reliability, …
• Inventory, capacity, schedule and
financial buffers are sized and
located to perform their function of
absorbing variability that cannot yet
be eliminated
• Necessity, the mother of
invention, is self-imposed to
cause innovation and learning
Chief Engineer Suzuki’s YETs
YET
• Great high-speed
handling/stability
• Fast and smooth ride
• Super quiet
• Elegant styling
• Warm
• Great stability at high speed
From Jeffrey Liker’s The Toyota Way
• A pleasant ride
•
•
•
•
•
Low fuel consumption
Light weight
Great aerodynamics
Functional interior
Low aerodynamic friction
Shawano Clinic
• The target cost (construction budget) was set 3.6% below the
benchmark, the target cost was underrun by 8.4%, and the
benchmark was underrun by 11.7%.
• $717,696 in valued scope was added.
• •The project was completed 3.5 months ahead of schedule –70
additional days of clinic revenue translating into nearly $1 million in
the expanded imaging service line functions and additional revenue
in the 2006 year.
Reducing needed buffers to spur innovation
•
•
•
•
•
Remove traditional design solutions (inventory-information)
Set a target cost below allowable cost (money)
Shrink target durations (time)
Reduce laydown space (inventory-material)
Set a target productivity better than current best practice
(capacity)
Key Features of Lean in Project Production Systems
• The larger system is the focus of
management attention, not local
optimization
• Activities are performed at the last
responsible moment
• Stakeholder interests are aligned
through relational contracts
• The rule followed for release of
work between connected specialists
is: Flow where you can, Pull where
you can’t, Push where you must
• Downstream players are involved in
upstream work, and vice-versa
• Product and process are designed
together; indeed, all design criteria
are considered when generating and
selecting from design options
• All product life cycle stages are
considered in design
• Standards are the starting point for
improving how work is done
• Variation is attacked and reduced —
variation in work load, in process
durations, in product quality, in plan
reliability, …
• Inventory, capacity, schedule and
financial buffers are sized and
located to perform their function of
absorbing variability that cannot yet
be eliminated
• Necessity, the mother of invention,
is self-imposed to cause innovation
and learning
Thank you for your attention