CORNERCUBE. Lean Construction and Lean Project Delivery: Implications for Cost and Schedule CORNERCUBE. Optimizing Project Outcomes

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1 Optimizing Project Outcomes Lean Construction and Lean Project Delivery: Implications for Cost and Schedule

2 What s Happening On LPD Projects Cost Improvement Opportunity Cost LPD Time Improvement Opportunity Conv Time

3 What s Happening On LPD Projects Resources Improved Resource Utilization Opportunity Resources LPD Time Improvement Opportunity Conv Time

4 What s Happening On LPD Projects Value Value Delivered Improved Value Delivery Opportunity LPD Conv

5 Proven Benefits Case Objectives/ Challenges Results Approaches / Tools Oil & Gas No. 1 Address an independent benchmarking firm s report that assigned a very low probability of achieving schedule and budget Under cost budget 13% with construction being completed 10% faster than industry Improved labor productivity by 24% compared to similar projects (audited by independent benchmarking firm) Establish LPD Framework WEPC Synchronized work flow BIM for production Optimization of shared resources Congested area planning Work Packaging Synchronized material flow Oil & Gas No. 2 Hard environmental deadline Tight budget Engineering was about four months behind schedule, which severely compressed the construction window Met schedule and under budget by 20% after engineering delays and late construction start Construction metrics best amongst internal across all owned refineries Establish LPD Framework Work execution planning and controls Synchronized work flow Value stream mapping The three key towers delivery was very unpredictable and months late Heavy Civil - Transport First on-time delivery of a major UK civil project in over 40 years Retail investment strategy All milestone achieved per schedule after late start with savings of 8%-9% on $1.2 Billion Major productivity gains (up to 40%), lead times reduced drastically Establish LPD Framework WEPC Synchronized work flow Value stream mapping Synchronized logistics and delivery requirements Reengineered processes to reduce cycle times Concurrent engineering i Capacity and inventory buffers

6 Other documented improvements Project Results Before and After Lean Improved Performance % = percent reduction from prior % = percent improvement from previous best Other Examples Only 3 recordable injuries in over 3,000,000 manhours with no lost time accidents Overtime eliminated when previously always experienced in conventional process Achieves 99.5% success rate in planned tool turnovers Reduced estimated time of completion by 6 months by synchronizing engineering with construction Reduced delivery of critical piping installation from 28 months to 7 months 9 month project starts 5 weeks late finishes 5 weeks early with zero defects and without a lost time injury

7 A Little About Lean Project Delivery

8 LPD Key Concepts Value from the perspective of the Owner Views Projects as temporary production systems Uses an Operating Framework for managing project production Drives efforts to reduce variability and increase reliability Relentless pursuit of integration and synchronization Understands importance of flow (work, information, physical) Establishes collaborative & cross functional team structures Incorporates pull systems Constantly tl removes constraints t to make work ready

9 Obj Information Flow Req Inpt Inpt Inpt D/E Det F D Inst Site Supply Flow

10 Conventional Delivery Designers Hired Engineers Hired EPC/M Hired Major Contractors Hired Time Schematic D/E Dev Const Doc

11 LPD Approach Designers Hired Engineers Hired EPC/M Hired Major Contractors Hired Time Validation Concept Des / Eng Implementation

12 Work Execution Planning and Control Master Schedule / Conventional Project Controls Milestone Production Plan Project Management Phase Planning (Monthly) Production Management Lookahead Planning, & Constraint Identification (Weekly) Constraint Removal Support Process Standard Processes Commitment Planning & Learning (Daily / Weekly Work Plans) Execute Work

13 Milestone Production Planning Phase Production Planning Lookahead Production Planning Commitment Production Planning Special / Ad Hoc

14 Optimization / Continuous Improvement Collaborative team development Optimization Metrics / Analytics Standard Process Development

15 Interface Management (Interactive Area Production Plans) Meetings with appropriate teams to resolve interfaces, handoffs, issues, shared resources, etc.

16 The Difference In Approach OPTIMIZE THE WHOLE DISTRIBUTED PLANNING PROACTIVE APPROACH TO MANAGING WORKFLOW PRODUCTION PLANNING ENSURES AND OPTIMIZES WORKFLOW INVESTMENT PERSPECTIVE PLANNING IS AN INVESTMENT

17 Reliable Controls and Effective Collaboration Creating cross functional teams that drive better design, engineering, and construction solutions versus a collection of individual organizations focused on their contractual responsibilities Attaining optimal solutions by designing and engineering the facility simultaneously l with determining i the most efficient i and effective execution processes versus silos developing Establishing frameworks to ensure work is planned and executed to achieve desired outcomes versus push schedule and reacting to results Process controls and analytics that focus on improving reliability of work execution versus demanding performance to stated schedule no matter what

18 Opportunity Control how organizations better interface Control to a more distributed organization Oversight and monitor the project production system Control towards delivering value using leading KPIs Better risk management with reliable information

19 The Operating Framework

20 Implications Domain Conventional Lean Project Delivery Organization Command and Control Collaboration Commercial Terms Transactional Relational Operating System CPM Scheduling Lean (Flow Focus)

21 Project LPD Framework Governance Value management Delivery management

22 CCI LPD Framework for Production Optimization Governanc ce Value Man agement Delivery Manageme ent & Strategy, Governance Oversight Value Iden ntification, De efinition, Delivery Execution Delivery & Optimizatio on Delivery Strategy Governance & Oversight Production System Design Material and Supply Chain Synchronization / Optimization Lean Evolution/ Change Management / Strategy Strategic Communication Policies and Business Rules Requirements Formalization Team Structuring Value Translation Value Delivery Change Integration Commercial Models Work Execution Planning & Control Virtual Design & Construction Analytics, Monitoring, Improvement Stakeholder Management Project and Delivery Risk Identification Schedule Integration Work Site Optimization Program / Pro oject Managem ment, Controls s, & Tools Pre Design Design Con nstruction Commissioning & Start up

23 What it Does Align work efforts to Project value Brings reliable controls and effective collaboration into the delivery process Achieve integration, flow, synchronization of work effort Better identifies and addresses risk Increases visibility and accountability Provides for more effective project and production controls

24 Example Methodologies & Tools Production Planning and Control BIM Target Value Design

25 Programming, Engineering, & Design project objectives project management & controls Milestone Production Plan Conventional Approach process & production management Production Optimization Phased and shorter term Production Lookahead with Stakeholders process measurement process commitment (weekly w/ daily reviews)

26 Fabrication, Logistics, & Construction Project objectives Project management & controls Milestone Production Plan Conventional Approach Production planning and control Production Optimization Phased and shorter term Production Lookahead with Stakeholders Monitor progress & performance and determine corrective actions Daily Team production commitment planning and control based on information from lookaheads. Lookaheads are updated in real time based on results from daily plans

27 Virtual Design and Construction Building Information Modeling (BIM) is a virtual three dimensional representation of the physical build A production based BIM elevates the model into a virtual design and construction experience for the delivery team The information can include financial, schedule, planning, execution, and process information suitable for all levels of project control

28 Production Based BIM Pour W14 Pour W15 Pour W16 Pour W13 Pour W22 Pour W21 Pour W17 Pour W20 Pour W19 Pour W13

29 What is its value Assuring robust constructability, build it once virtually then build it once physically Increases communication through better visual understanding, people can understand it Better coordination of work and system integration Enables better oversight and controls through increased visibility and accountability Incorporates everyone s work not just one trade or discipline, facilitates collaboration Valuable facility tool for Operations

30 Initial Production Team Estimate Progress Points Contingency & Betterments Expected Target Time Desired

31 The Opportunity Adaptation (to best practice and technologies) Real Time Agility (dynamic and complex environment) System Design Governance, Policy, & Business Rules Monitoring & Oversight Measuring value and waste (develop leading KPIs) Modeling total throughput (optimize the whole) Value engineers (control to value) Prevent sub optimization

32 End