Lean Project Delivery Operating System

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1 Lean Project Delivery Operating System David MacNeel & Dan Passick, On Point Lean OCTOBER 16, 2017 LCI Education & Training

2 Lean Construction Institute Provider Number H561 LCI Learning Module: Introduction to Lean Project Delivery LCITB.ILPD17 Presenter Name date

3 5 LU Credit(s) earned on completion of this course will be reported to AIA CES for AIA members. Certificates of Completion for both AIA members and non-aia members are available upon request. This course is registered with AIA CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner of handling, using, distributing, or dealing in any material or product. Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation. 4

4 Course Description This course will introduce lean project delivery as an operating system relative to the design and construction industry. Participants will learn the key principles and wastes that are foundational to lean and ways to eliminate/reduce waste from processes, and collaborative tools and approaches. It includes a hands-on learning simulation. 5

5 Learning Objectives At the end of this presentation, participants will know the definition of Lean and the principles associated with a Lean operating system. At the end of this presentation, participants will be able to identify the principles and tools relevant to Lean Design and construction processes. At the end of this presentation, participants will be able to recognize various types of waste in design and construction and apply tools to reduce, minimize and/or eliminate waste. At the end of this presentation, participants will be able to increase collaboration and communication on projects through application of structured planning systems and processes. 6

6 Lean Journey Road to Mastery Mastery Competency Understanding Awareness Continuous Learning Loop Unaware 8

7 Lean: Culture of respect and continuous improvement aimed at creating more value for the customer while identifying and eliminating waste. Lean Project Delivery System: An organized implementation of Lean Principles and Tools combined to allow a team to operate in unison to create flow. 9

8 Background Based on the Toyota Production System. According to Greg Howell and Glen Ballard, 54% of assignments that were scheduled were completed by the end of the week. 10

9 The Opportunity MANUFACTURING DESIGN/ CONSTRUCTION Productive Waste 2004 study by the Construction Industry Institute 11

10 Construction productivity is declining. Construction costs are skyrocketing. Injuries are too high. Traditional planning systems are unable to produce predictable workflows. Workflow reliability directly affects speed and cost of projects. 12

11 The Problem With Traditional Construction Culture Risk is high. Teamwork is unreliable. 70% of projects are delivered late. Customers are not satisfied. 73% of projects are over budget. Profit margins are shrinking. Rework and waste is high. 13

12 Lean processes bring about improvements not only in cost and delivery but also in quality and safety. WORLD ECONOMIC FORUM S SHAPING THE FUTURE OF CONSTRUCTION: A BREAKTHROUGH IN MINDSET AND TECHNOLOGY (PG. 31). Source: LCI Transforming Design and Construction

13 Lean vs. Traditional TRADITIONAL LEAN DURATION 9 MONTHS 6 MONTHS LABOR HOURS 12% LESS OVER TIME 35% 17% PEAK MANPOWER COST $35M $30M Source: Baker Concrete (2012 LCI Congress) 15

14 Discussion Question What are your dissatisfactions with the way projects are currently designed and constructed? 10 minute discussion 16

15 Goals of Lean Design & Construction 1 Achieve reliable workflow 2 Maximize value to the customer 3 Minimize waste 4 Optimize the whole, not the parts 5 Develop a discipline of learning and continuous improvement. 17

16 Benefits of Lean 1 Safer Working Environment Fewer incidents and injuries Projects being completed more effectively Increased productivity 5 Satisfied stakeholders 18

17 A New and Coherent way to Manage Work in Projects Three Connected Opportunities Project Elements Impeccable Coordination ORGANIZATION Production System Design Collective Enterprise Operating System OPERATING SYSTEM COMMERCIAL TERMS 19

18 Six Tenets of Lean Construction Respect for people Optimize the Whole Generate Value Eliminate Waste Focus on Flow Continuous Improvement 20

19 Optimize the Whole Value stream optimization encourages projects to look beyond the local and individual efforts and study the overall outcome to determine where value is added or waste is included in each step. 21

20 Eight Types of Waste Overproduction Waiting Transportation Over Processing Inventory Motion Defects Underutilizing the creativity of project team members 22

21 Discussion Question List examples of waste you see in design and construction processes Small Group Discussion 15 minutes Report out: 10 minutes 23

22 Process and Flow CREATING FLOW INFORMATION PROMISE/ REQUEST PROMISE/ REQUEST PROMISE/ REQUEST PROMISE/ REQUEST PROMISE/ REQUEST PROMISE/ REQUEST PROMISE/ REQUEST PROMISE/ REQUEST PROMISE/ REQUEST PROMISE/ REQUEST WORK 24

23 If it is not something the client is willing to pay for, it is non-value added. Everything else is waste, and therefore should be eliminated, simplified or reduced. THE TOYOTA WAY BY J. LIKER 25

24 Continuous Improvement Lean thinking demands a mindset of continuous improvement. Leaders must create an environment where experimentation is encouraged and small manageable failure is acceptable if the goal is to improve continuously. 26

25 Project Conditions of Satisfaction (CoS) The project CoS define what success means for the project team. 27

26 Make a Card Game 28

27 INTRODUCTION TO LEAN PROJECT DELIVERY Begin with blank card 30

28 INTRODUCTION TO LEAN PROJECT DELIVERY Goal is to produce a card that looks like this 31

29 INTRODUCTION TO LEAN PROJECT DELIVERY? Station 1 Performs any necessary layout for installation 32

30 INTRODUCTION TO LEAN PROJECT DELIVERY Station 2 Responsible for assuring batch size Batches of 5 must be punched and secured with a paper clip 33

31 INTRODUCTION TO LEAN PROJECT DELIVERY Station 3 Responsible for installing the yellow dot 34

32 INTRODUCTION TO LEAN PROJECT DELIVERY Station 4 Responsible for installing the star or cross on yellow dot 35

33 INTRODUCTION TO LEAN PROJECT DELIVERY Station 5 Responsible for installing 3 red dots 36

34 INTRODUCTION TO LEAN PROJECT DELIVERY Station 6 Responsible for installing the green dot 37

35 INTRODUCTION TO LEAN PROJECT DELIVERY Station 7 Responsible for inspection to assure conformance to specs: batches are properly secured per rules no dots touch each other star or cross is within yellow dot 38

36 Phase 1 Logistics Workstations in work flow sequence Materials located at workstation Workstations 2-7 have an incoming queue space Completed Batches of 5 placed in queue space of next station Batches remain together until final inspection 39

37 Phase 1 Policies Workers perform only their assigned tasks - NO THINKING Maintain Batch integrity - BUILD IT IF YOU CAN and PASS IT ON IF YOU CAN T. QC Problems only detected by Inspector - NO FEEDBACK - NO TALKING All QC problems set aside by inspector as rework - TURN UPSIDE DOWN QC Inspector announces first good product. Assemblers are paid by the piece, period. 40

38 Performance Metrics PRODUCTION: the number of good cards produced in each 6 minute phase. TIME: the time it takes the first good card to get through the system. REWORK: the number of cards set aside to indicate defects in configuration or fit. WORK-IN-PROGRESS INVENTORY (WIP): the number of subassemblies on the table at the end of the 6 minute phase. GOOD: the number of cards complete that passed inspection 41

39 Your Hypothesis How many good cards will your team produce? How long will it take to produce the first good card? How much rework will you generate? How much WIP will you generate (subassemblies left on the table)? 42

40 INTRODUCTION TO LEAN PROJECT DELIVERY Go 43

41 How could this system be redesigned for better performance? 44

42 Phase 2 Logistics Workers may have only one assembly at their workstation Only 1 assembly allowed in queue space between stations (Batch size of 1) Assembly can only be placed in queue when it is empty (pull mechanism) Workstations in Work Flow Sequence Materials located at station Stations 2-7 have an incoming queue space 45

43 Phase 2 Policies QC Problems may be verbalized by any worker SOME THINKING and TALKING ALLOWED All QC problems set aside as rework at station discovered. TURN UPSIDE DOWN Everyone is paid hourly wages plus a bonus for team performance. Workers perform only their assigned tasks Workers cannot fix QC problems from upstream Inspector announces first good card 46

44 Your Hypothesis How many good cards will your team produce? How long will it take to produce the first good card? How much rework will you generate? How much WIP will you generate (subassemblies left on the table)? 47

45 Go 48

46 How could this system be redesigned for better performance? 49

47 Phase 3 Logistics Workload may be re-sequenced and/or rebalanced by the team Workers may have only one assembly at their workstation Only 1 assembly allowed in queue space between stations (Batch size of 1) Components can only be placed in queue when it is empty (pull mechanism). Workstations in Work Flow Sequence Materials located at station (maintain flow) Stations 2-7 have an incoming queue space 50

48 Phase 3 Policies Workers perform ANY step in the production process QC problems can be fixed by any worker - Fix it when you find it No restrictions on talking Everyone is paid hourly wages plus a bonus for team performance. Inspector announces first good card 51

49 Your Hypothesis How many good cards will your team produce? How long will it take to produce the first good card? How much rework will you generate? How much WIP will you generate (subassemblies left on the table)? 52

50 INTRODUCTION TO LEAN PROJECT DELIVERY Go 53

51 The Dot Game What did you learn? Key takeaways? How could this apply to Southland? What could we gain if we got to one piece flow? What processes could this apply to? 54

52 Fundamental Principles System Performance affected by: Batch Size Dependencies Variation Production System Design Optimizing throughput often requires some parts to slow down Incentives changes behavior (good and bad) 55

53 Tools & Processes that Drive Lean Integrated Project Delivery (IPD) Reliable Promises Last Planner System Target Value Delivery Choosing by Advantages A3 Thinking 56

54 Integrated Project Delivery (IPD) IPD is a project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the insights of all participants to reduce waste and optimize efficiency. 57

55 Project is a Promise A project is a very big promise delivered by people in an ever changing network of promises. 58

56 Basic Action Workflow Preparation CUSTOMER Declaration of Satisfaction Acceptance Credit: Dr. Fernando Flores Request or Offer Conditions of Satisfaction, Time Report of Completion Negotiation Acceptance (2 mutual promises) PERFORMER Performance 59

57 Last Planner System Milestone Planning Set milestones SHOULD Phase Pull Planning Specify handoffs 5 Connected Conversations CAN Look Ahead Planning Make work ready WILL Weekly Work Planning Make promises DID Learning/Improving PPC/Variance 60

58 Target Value Delivery (TVD) A collaborative team managed design process that is used throughout all stages of design and construction to ensure that projects are delivered within the allowable budget, that projects meet the operational needs and values of the users and that projects promote innovation to increase value and eliminate waste. 61

59 Target Value Delivery Approach Traditionally: Cost is an output of design Finish your work before I start mine mentality Early commitment to design solutions in silos Design then determine cost, then rework Target Value Delivery: Cost is an input to design Information is shared early and often Sets of solutions are carried and optimized based on the whole Continuous estimating and cost modeling based on concepts 62

60 Choosing by Advantages (CBA) A decision-making system developed by Jim Suhr for determining the best decision by looking at the advantages of each option. 63

61 Problem Solving A3 Process 6. Discuss with Affected Parties Problem Perceived 1. Grasp the Current Condition 2. Identify the Root Cause 3. Devise Countermeasures and Visualize the Future State 4. Create Implementation Plan 5. Create Follow-up Plan 7. Obtain Approval Yes 8. Execute the Implementation Plan 9. Execute the Follow-up Plan Are Targets Met? Yes Establish Process Standard No No Return to Step 1 Identify Next Problem In pursuit of building perfection* JEDUNN 64

62 Prototyping 2015 LCI & On Point Lean Prototyping is creating a demo of what is being designed or built. It is essential for clarifying required information. A prototype is generally a mock-up of what you intend to build. 65

63 Applying Lean Thinking Lean Project Delivery System Purposes Design Concepts Product Design Fabrication & Logistics Commissioning Alteration & Decommissioning Design Criteria Process Design Detailed Engineering Installation Operations & Maintenance Project Definition Lean Design Lean Supply Lean Assembly Use Production Control Work Structuring Learning Loops 66

64 67

65 Discussion Question How to Implement Lean? What new actions or ideas that you learned today can you take back to your project? 68

66 Lean Journey Road to Mastery Mastery Competency Understanding Awareness Continuous Learning Loop Unaware 69

67 Plus/Delta 70

68 This concludes The American Institute of Architects Continuing Education Systems Course Lean Construction Institute 71

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