California Communities of PracticeJune 14-15 2017Why Projects Excel?The Business Case for Lean ConstructionJohn PembertonLean Construction InstituteBevan Mace, Ph.D.National VP, Operations & Lean
Objectives for TodayIn order to generate better andmore reliable project outcomes1. Learn how best projects differentiate from typical2. Understand impact of project delivery choices3. Become a lean change agent Lean Construction Institute
Lean Construction InstituteProvider Number H561The Business Case for LeanLCILR2017BCLBevan MaceApril 13, 2017 Lean Construction Institute3
1 LU Credit(s) earned on completionof this course will be reported to AIACES for AIA members. Certificates ofCompletion for both AIA membersand non-AIA members are availableupon request.deemed or construed to be anapproval or endorsement by theAIA of any material of constructionor any method or manner ofhandling, using, distributing, ordealing in any material or product.Questions related to specific materials, methods, andservices will be addressed at the conclusion of thispresentation.This course is registered with AIACES for continuing professionaleducation. As such, it does notinclude content that may be Lean Construction Institute4
CourseDescriptionThe Lean Construction Institute recently commissioned twooriginal research efforts done by Dodge Data & Analytics andUniversity of Minnesota which examined 172 projects to find outwhat makes projects excel. The research uncovered a hierarchyof values and expectations for project delivery common amongOwners and five myths commonly associated with Lean andIntegrated Project Delivery (IPD). A surprising result was thediscovery of a ‘gap’ between the Owners’ expectations and thereality of typical project delivery. This research disproved thetheory that IPD contracts are too complicated and cannot dictateteam behaviors. In this course, the research results will bepresented along with a consideration of ways designers andconstructors might close this ‘gap’ and increase fact-driven Leanand IPD knowledge across the industry. Lean Construction Institute5
LearningObjectivesAt the end of the this course, participants will be able to:1. At the end of this presentation, participants will understand what owners value indesign and construction and will be able to analyze and discuss how designers andconstructors can close the gap between owner expectation and typical project delivery.2. At the end of this presentation, participants will be able to identify Lean processinnovations and tools that are flexible and positively change project team collaboration.3. At the end of this presentation, participants will understand how the adoption of Leanimpacts the architect's role in design and construction.4. At the end of this presentation, participants will know when to strike down Lean andIPD myths with empirical data when they hear myths in the field. Lean Construction Institute6
Does this sound familiar? Lean Construction Institute
The Business Case for LeanPROJECTS with HIGH LEAN INTENSITYare MORE LIKELY to completeAHEAD OF SCHEDULE & UNDER BUDGET3X2X Lean Construction Institute
Industry Efficiencyanalyticsstore.construction.comMost who neverheard of Lean thinkthe industry isEfficient Lean Construction Institute
Lean Construction Tenets Lean Construction Institute
Owner Satisfactionanalyticsstore.construction.com Lean Construction Institute
Sat·is·fac·tionFulfillment of one’s wishes, expectations, orneeds, or the pleasure derived from this.How satisfied are you with the delivery ofcapital projects?– Always– Frequently– Sometimes– Infrequently/ Never Lean Construction Institute
Research OverviewOwner Satisfaction &Project PerformanceIPD & LeanMotivation & MeansObjectives:1. Benchmark owner satisfaction &project performance2. What is the impact of lean?Objective:3. How and why does integratedlean succeed?Survey: 81 Owners/ 162 projectsCase Study: 10 Owners/ eveloper12% Lean Construction Institute
Satisfaction vs. ValuePerformance from Approval of Capital Project(% of Best/ Typical Projects)Completed Aheadof ScheduleCompletedUnder Budget46%24%10%6%-17%-21%CompletedBehind Schedule-49%-61%Best ProjectCompletedOver BudgetTypical Project Lean Construction InstituteTotal (n 81)
Schedule PerformanceVariance of Final Schedule vs. Allocated Capital Schedule56%37%Ahead of Schedule33%22%14%1%26% to35% ofscheduleBehind Schedule14%5%6%6%4%3%11% to 1% to 10%No1% to 10% 11% to25% of of schedule Variance of schedule 25% ofschedulescheduleTypicalBest Performing Lean Construction Institute26% to More Than35% of35% ofschedule schedule
Budget PerformanceVariance of Final Cost vs. Allocated Capital Budget41%37%Over BudgetUnder Budget20%20%14%3%4%6%7%4%Morethan20%1611% to20%10%7% to10%3%4%7%3%3% toLessNoLess3% to6%than 3% Variance than 3%6%TypicalBest Performing Lean Construction Institute3%7% to10%6%6%5%11% to20%Morethan20%
Satisfaction vs. ValueRated 3 or 4for QualityRated 3 or 4for Safety84%83%56%-16%-17%-44%Rated 1 or 2for Quality-31%Rated 1 or 2for SafetyBest Project1769%Typical Project Lean Construction Institute
Importance of Team Cohesion% Projects Reporting the Highest (4/4) Rating68%61%54%40%10%Perception of TeamChemistry11%9%Integration of ProjectTeam MembersCommitment of TeamMembers to SameProject GoalsTypical Project5%Timeliness of DecisionMaking Related to IssueResolutionBest Performing Project Lean Construction Institute
Build the TeamTiming of Key Stakeholder EngagementBest Projects:Typical Projects:42%42% don’t engage keystakeholders until designdevelopment or later76% engage keystakeholders before orduring conceptualizationTypical25%22%Best Business 0-15% design)During schematicdesign(15-30%)During designdevelopment(30-60%) Lean Construction Institute4%During construction End of constructiondocumentsdocuments or later(60-90%)(100% CD)
Key Stakeholders Selection ProcessTop 3 Selection Processes:Top 3 Selection Processes:Best Performing ProjectTypical Project24%35%Pre-Qualified open bidBest value(price proposal)Negotiated21%Best value(price proposal)17%Open bid12%Self-selectedteam16% Lean Construction Institute
Support the TeamTop Project Delivery Methods onTypical and Best Projects(20% or more usage on either)38%Top Contracting Types on Typicaland Best ction Design-bidManagementbuildat RiskIntegratedProjectDelivery1%Design-BuildTypical ProjectLump SumGuaranteedMaximumPrice (with orwithoutsharedsavings)CostReimbursableWith Targetand SharedRisk/RewardBest Performing Project Lean Construction Institute
Learn as a TeamMethods with Most Degree of Difference Between UsagePart-time co-lomore commonthan full timeLPS more commonin construction thanin designTypical Projects Lean Construction InstituteBest Performing ProjectsTotal (n 81)
Lean Intensity Scoring 5 S’s 5 Whys A3 Thinking BIM 3D Coordination BIM 4D & Site Logistics Planning BIM Design Authoring BIM Execution Plan BIM Model Based Estimating CBA Decision Making Co-Location Big Room Conceptual/Continuous Estimating CPM Scheduling Design to Budget Electronic Information Exchange23 Full-Team On-Boarding Kaizen Last Planner System OAC Report Out Meetings PDCA Prefab/Modularization Production System Modeling Root Cause Analysis Set Based Design Target Value Design Value Engineering Value Stream Mapping Visual ManagementEliminatedMethods DeemedStandardIndustry Practice Lean Construction InstituteGreater WeightGiven to MethodsDeemedParticularlyValuable
Succeed as a TeamCorrelation of lean intensity to outcomes(% likelihood on best projects)2X3XCompleted Ahead of ScheduleLow Lean IntensityCompleted Under BudgetHigh Lean Intensity Lean Construction Institute
Lean Construction Institute
Common Project Myths 1. Delivery matters less than choosing the right people –behaviors can’t be dictated by a contract2. IPD contracts are too complicated, Lean tools are too rigid3. IPD only works on large complex healthcare projects –Teams new to IPD and lean are at a disadvantage4. Owners aren’t getting best value – or – Owners are gettingvalue but the team is not making profit5. IPD and IPD-lite are essentially the same; financialincentives and release of liability are no big deal Lean Construction Institute
5 IPD & Lean Myths - Cheng Lean Construction Institute
Lean Usage & Proficiency Lean Construction Institute
Tactical Takeaways for Projects1. Set targets: Define owner’s business case & goals at c-suite2. Build the team: Contract (using best value) key stakeholders priorto/ during concept design to validate targets & unify the team3. Learn as a team: Provide training and coaching for the team toincrease adoption of Lean methods4. Support the team: Contracts should support (not thwart) a goodteam culture and adoption of Lean methods Lean Construction Institute
Summary Lean Construction Institute
Case Study Report Lean Construction Institute
Learn Morewww.leanconstruction.org/learning Order publications to assist you and your team on your LeanJourney: www.leanconstruction.org/publicationsConnect with your local LCI Community of s/Access tools: with-lean/ Lean Construction Institute
Questions?John Pemberton – jrpemby@outlook.comBevan Mace – bmace@balfourbeattyus.com
This concludes The American Institute of ArchitectsContinuing Education Systems CourseLean Construction Instituteinfo@leanconstruction.org Lean Construction Institute35
Jun 14, 2017 · 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 . discovery of a ‘gap’ between the Owners’ expectations and the reality
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