The document provides an overview of Lean Construction principles and techniques. It discusses how Lean aims to eliminate waste and optimize workflow. Specific Lean tools are explained, like 5S, visual controls, pull systems, and Last Planner System. Case studies show Lean reducing costs by 15-30% by improving coordination, reliability, and reducing waste. Customers now expect Lean approaches to manage risk and improve outcomes.

1. Overview of Lean Construction Lean Construction Institute Stan Chiu - RTKL Julie Dobyns - DPR Construction Dennis Sowards - LCI

3. How do we bid a job today? Estimate the Costs $$ Profit margin + = Bid Price The Lean way to bid a job: Market Price - Profit margin = Cost to do the Job Is this Possible? Why Lean?

4. Where Would You Cut? Direct costs Labor 60% Materials 25% Equipment 6% Sub Contractors 7% Indirect Costs 2% What would be the possibilities if you could reduce your Cost of Goods sold (Direct Operating Costs) by 15%? Why Lean?

6. Why Lean? Air Strut Assembly Process Before Event 1 Event 2 Event 3 Part Travel Distance (ft): 4300 2900 80 75 # of Tubs locations: 24 13 3 1 Dirt Shields Lead time 18 days 4 days 0.2 days 39 sec. Work in Progress - Dirt Shields 9,078 2,000 100 10 - # of Process Steps 42 33 15 14 # of Forklift moves 16 9 2 1 Inventory Floor space (sq.ft.) 288 80 20 0 IndustryWeek, Best Practices from American’s Best Plants , Chicago, IL, Oct. 26-28 1998.

7. FACT 1: Lean Works in Manufacturing

8. Studied 50 jobs all over $300,000 in labor average productivity ratio Jobs not using Last Planner 0.97 Jobs using the new approach 0.88 Lean construction techniques saved 17% of their Projects' labor budget - a savings of $1,511,544! Source: Jim Teston's master thesis at Clemson University: Evaluating the Benefits of Lean Construction on Productivity August 1998. TDIndustries Lean in Construction

9. A customer in the Southwest Region Pilot Project : Using LPS on Two tools (Nov. 1999 - March 2000) Results - The customer said: “ Durations have been reduced on major tools by 29%” Actual Usage: Wet Bench Tool Install – Beat the standard by 300 hours! Lean in Construction

10. Waste Reduction in a Design Office Reduced design time by 18 days Generated $1.3M annually to EBIT

11. FACT 2: Lean works in AEC Industry too!

14. Construction Users Roundtable (CURT) says: Education is key; There needs to be a shift in everyone’s way of thinking; LEAN targets the best workforce, forms solid relationships and builds trust; Owner’s must be the agents of change and must demand change; and LEAN must become the new culture of the industry. Issued June 2007

15. FACT 3: Customers are beginning to see the value of Lean Construction!

16. Toyota’s goal: “ Give customers what they want, deliver it instantly, with no waste.” What is Lean?

17. Lean History Henry Ford Toyota - Taiichi Ohno & Shigeo Shingo Kaizen - Masaaki Imai Lean Thinking - James Womack & Daniel Jones What is Lean?

18. Lean Thinking is a concept of Continuous Quality Improvement Lean Thinking is a shift in management's focus to differentiate between Value and Waste AKA: JIT & Toyota Production System (TPS) Lean Construction applies the principles and techniques of Lean Thinking to develop a better way to deliver the job. AKA: Lean Project Delivery System What is Lean?

20. What the customer is actually willing to PAY for (USEFULNESS/COST) Includes Functions, Features, Time & Price Relates to the whole product or service received Is the opposite of WASTE. What is Value?

23. Why Do We Need Change? Current Manufacturing Current Construction Compelling reason to change from Construction Industry Institute (CII) Value Added 10% Support Activity 33% Waste 57%

24. Value vs. Waste Pursue Perfection Pathway to Lean Flow Pull The Value Stream

25. Look at Value Added & Non-Value Added Time VALUE NON VALUE ADDED ADDED TOTAL TIME Typically Value added time is about 3% of the Total Time! (Yet we tend to focus our improvement efforts on the value added steps.) Value Stream Analysis

26. Flow Want to make Value Flow Batch and Queuing VS Flow Flow is Counterintuitive

27. Sign & date cards Flow Exercise Value of Flow: Faster + Improves Quality + Surfaces Problems - so can solve them!

28. Means no one upstream should produce a good or service until the customer downstream asks for it. Products and services are created only on demand. PULL Flow where you can - Pull if you must!

29. Pursue Perfection What if there were no WASTE at all? The paradox is that perfection can never be achieved, but must be pursued. Continuous Improvement

30. Operations vs. Processes Lean Principles Lean focuses on the space between the steps Managing the handoffs in critical to flow. Estimating creates the material take-off list Detailing Prepare & Submit Submittals Foremen reviews Plans, do constructability analysis Foreman fills out Material Req. (MR) Material installed Materials received at site Materials stored at site until needed Materials ordered by Purchasing

31. Lean Principles Lean focuses on maximizing the whole project NOT on maximizing individual performance.

32. PDCA & Experimentation Lean Principles Plan Do Act Check

35. S ORTING Sort out the necessary from the unnecessary , discard the unnecessary. The 5 S's

36. How to Sort? NECESSARY ITEMS USED OR LIKELY TO BE USED UNNECESSARY ITEMS (NOT USED OR NOT LIKELY TO BE USED) NO VALUE & EASY TO DISPOSE OF SOME VALUE NO VALUE BUT COSTLY TO DISPOSE DISPOSE OF IMMEDIATELY LOOK FOR BEST USER TO GIVE OR SELL FIND LEAST COSTLY WAY TO DISPOSE RARELY USED (1 - 2 times per year) FREQUENTLY USED (daily or weekly use) OCCASIONALLY USED (1 - 2 per month) RED TAG USE AUCTION

37. S IMPLIFYING Create and identify a place for everything based on how often we use it The 5 S's

39. Unfiltered Spec Job Specific Spec Size Set @ 2” 18 Choices 2 Choices CAD

40. The 5 S's S WEEPING Physical and visual control of the work area

41. Sweeping Actions Sweeping is done when regular sweeping processes occur and areas are clean, safe and neat. Actions: · Determine regular schedule for cleaning the yard, work & break areas. · Orient everyone including new employees with daily 5S’s activity responsibilities and expectations. · Post area cleaning guidelines and schedules. · Perform safety inspections on a regularly schedule.

42. The 5 S's S TANDARDIZING is creating standard ways to keep the work areas organized, clean and orderly and documenting agreements made during the 5S’s.

44. The 5 S's S ELF-DISCIPLINE Follow through with the 5Ss agreements

46. Self Discipline often includes an Self Audit/ Score Card Do 30 second test!

49. Another view of 5S’s

53. Parade of Trades Move 35 units of work through 7 trades. Work is completed at the end of the week and passed to next trade. Place materials on table as shown. Chips (the units of work) & Score Sheet Die Concrete Mason Facade Paint Electrical Plumber Carpenter © 2009 Lean Construction Institute

55. End of Week 1 © 2009 Lean Construction Institute Concrete rolls a 3 and moves 3 chips. Hands the die to the painter! Records the result.

56. Week 1 Concrete Pass the Die to the Left! Painter says, “ Beginning week 2” Die passes left to Mason.

57. Mason rolls 2, moves 2, leaving 1 in inventory. Hands the die to Concrete. Records the result. © 2009 Lean Construction Institute

58. Concrete rolls 2, passes 2, records. Hands die to painter. Painter says, “Beginning week 3.” Week 2 continued. Mason hands die to Concrete. © 2009 Lean Construction Institute End of week 2

59. Week 3: Facade rolls, passes & records. Hands die to Mason. Mason rolls, records and hands die to Concrete. And so it goes. © 2009 Lean Construction Institute

60. Moving one chip through one station requires 1 “crew” work unit costing $1000. How much will it cost to complete the project? (Hint: 35 Units of work are required at each station and there are 7 stations.) What would you bid – markup on labor? A die has an average production of 3.5 units per roll (week). How long will it take? Scheduling and Estimating

61. Concrete Carpenter Mason Facade Electrical Paint 35 Die Plumber Chips Keep passing the die to the left! © 2009 Lean Construction Institute Die

63. 20 Most Recent Red 233445 Black 123456 Blue 122556 333333 Duration Weeks 19 21 23 18 Total Capacity $ 294 332 361 252 Inventory Units 55 112 120 0

64. RESULTS # Weeks to Complete Average Worst Best As reduce workflow variability (more reliable)- Outcomes improve & risk goes down! 1.2.2.5.5.6 1.2.3.4.5.6 2.2.3.4.5.5 2.3.3.4.4.5 3.3.3.4.4.4 1.1.1.6.6.6 # Weeks to Complete

65. Question for Discussion What would be the specific advantages of improved work flow reliability on your projects? For 10 minutes, discuss at table. Select a spokesperson to report.

70. Two Ways to Manage Projects: Flexibility - throw resources at the project to overcome variation. (FPS) OR Lean - Manage variation through LPS and Shield crews from variation.

71. To get the construction to flow we must have reliability of the work performed. Reliable work is that work which is done as promised allowing the next work assignment to be started as planned. Control - A project is under control when we can do what we say we are going to do! Task 1 Task 2 Task 3

72. The Last Planner System * * ©Lean Construction Institute, 2001 Common Practice: Some Assignments Cannot be Completed CAN Will 60% 40% SHOULD

73. Should Do Look Ahead Plan Weekly Work Plan Review accomplishments & constraints (PPC) Action to prevent repetitive errors Can Do Will Do Shield The Last Planner System (LPS) * * ©Lean Construction Institute, 2001 Master Schedule Phase Plan Phase Schedule Perform Work & Daily Huddles

74. The Last Planner® System of Production Control 5 - Connected Conversations Set milestones Set strategy Identify long lead items Specify handoffs Identify operational conflicts Make ready & Launch replanning when needed Promise Measure PPC & Act on reasons for failure to keep promises SHOULD CAN WILL DID Weekly Work Planning Make Work Ready Planning Learning Master Scheduling Milestones Phase “Pull” Planning

76. Phase Schedule Common way we schedule work: My Schedule vs Your Schedule Reverse Scheduling: Our Schedule

77. Look Ahead Plan Can Do * ©Lean Construction Institute, 2001 Should Do The Last Planner System (LPS) * Master Schedule Phase Plan Phase Schedule

78. Sample Look Ahead Plan

79. Look Ahead Plan Weekly Work Plan Can Do Will Do * ©Lean Construction Institute, 2001 Should Do The Last Planner System (LPS) * Master Schedule Phase Plan Phase Schedule

80. Weekly Work Plan

81. Perform Work & Daily Huddles Look Ahead Plan Weekly Work Plan Can Do Will Do * ©Lean Construction Institute, 2001 Should Do The Last Planner System (LPS) * Master Schedule Phase Plan Phase Schedule

83. Perform Work & Daily Huddles Look Ahead Plan Weekly Work Plan Review accomplishments & constraints (PPC) Action to prevent repetitive errors Can Do Will Do * ©Lean Construction Institute, 2001 Should Do The Last Planner System (LPS) * Master Schedule Phase Plan Phase Schedule

84. The Last Planner System (LPS)* * ©Lean Construction Institute, 2001 Project Management is all about Communications! How does LPS do it? The Weekly Coordinating Meeting

85. PPC = Percent of Plan Completed = The planned assignments that are completed within the week (planning period) divided by the total planned assignments. If not completed each assigned task is tracked, recorded & reasons identified. LPS Measure of Effectiveness

86. Last Planner Variance Tracking ©Lean Construction Institute, 2001 CATEGORIES OF VARIANCE

87. Project performance improves with improved work flow. Work Flow improves with improved Reliability of the work Reliability comes from the Make Ready process The Look-ahead Plan and Weekly Coordinating Meetings make work assignments ready to be performed. ( Should Do’s become Can Do’s ) The Weekly Work Plan only commits to Can Do Assignments ( Will Do’s ) PPC and Constraint Analysis provides feedback for improvement Summary of LPS

90. PPC & Productivity Productivity Crews with PPC >50% Crews with PPC <50% 1.15 times budget 0.85 times budget ©Lean Construction Institute, 2001 Lean in Construction

91. It Works!!! 5 mo - $15M 14 mo - $17M 15 mo - $12.6M 12 mo - $4.6M 6 mo - $15M 5 mo - $15M 18 mo - $18M 14 mo - $17M 18 mo - $13M 15 mo - $12.6M 18 mo - $5M 12 mo - $4.6M

93. Percent Plan Complete (PPC) Chart Rasacaven: Electrical Power Distribution

95. Courtesy of Strategic Project Solutions COST CONTROL BP's APPROPRIATIONS BUDGET (SEE NOTES 1 & 2) FORECAST ACTUAL @ COMPLETION (SEE NOTES 1, 2 & 3) FORECAST SAVINGS @ COMPLETION (SEE NOTES 1,3 & 4) Direct Labor $20,000,000 $15,400,000 $4,600,000 23% Indirect Labor, Misc. Material & Supplies, Management & Support Staff Expense, Implementation Support $22,000,000 $21,140,000 $860,000 4% TOTAL COST $42,000,000 $36,540,000 $5,460,000 13% NOTES 1) Base Scope 2) Does NOT include Implementation Support Investment of $400,000 3) Includes actual Implementation Support Investment of ~ $400,000 4) at 85% Complete

101. Process Mapping/Analysis Basic Lean Tools & Techniques What you think your process looks like: What the real process looks like: What your Customer is willing to pay for (Value added)

102. Process Mapping/Value Analysis Map the steps for a core process. Include all steps including ‘wait’ times Do one product line at a time - rectangular straight/fittings Measure distance traveled & cycle time Categorize all steps into: 1) Value added 2) Non Value Added But Necessary 3) Non Value added & Not Necessary Eliminate all #3’s and look for ways to improve #2’s by making the product flow; reduce set-up time & do 5S’s.

103. New Process - start with only value added steps (9 out of 200) - Only add back real “needed but non value added steps. They reduced daily mobilization of trucks/vans in yard from 20 - 30 minutes to 5.

106. Use Rules of Release Release Order to Fabricate Kit/Fabricate/ Assemble Deliver Job To Site Rules of Release  Materials available - not necessarily on-hand but must be confident that will be on-hand when actually needed.  Latest spool drawing revision  Verified need date in drawing tracker  Scheduled - resource loaded/ available. (Shop Supt.)  Special equipment needs identified. (Shop Supt.) Rules of Release  Material assembled and packaged completed  Release from site (verified due date)  Shop Checklist (Shop Supt.)  All shipping information provided (Shop Supt.)  Packing Slip completed (driver) Basic Lean Tools & Techniques

107. Rules of Release for an Engineering Design Company Source: Peter Dumont, P. E. Application of lean Principles to Improve Engineering Performance , LCI Congress, Oct. 2008

108. Observations – look for waste Use a spaghetti chart Get Room order Get bagel Cut bagel Toast bagel Get butter & Cream Cheese Get juice cup Pour juice Get knife & napkins Check order Deliver To room

109. Storage Rack Spiral Duct machine Table Table Storage Rack Plasma Cutter Storage Rack Roller Spot Welder Swedge Beader Sealing & Painting Parts, odds & ends Rack Office & Files Lay Down area Lay Down area Lay Down area Lay Down area Assemble & Spot weld Lay Down area Finished Duct Lay Down area Spiral Fittings Flow Straight Spiral Flow Finished Duct Lay Down area D E L I V E R Y Loading to Trucks

110. Travel of People & things

112. Job Schedule Board & % OTD Plus Employee Skills Match

114. Basic A3 Flow on 11 x 17 Paper

115. A3 Example - Major Decision

117. Value vs. Waste Pursue Perfection Pathway to Lean The Value Stream FLOW PULL 5S’s Last Planner

119. Target Value Design Design is principally a social activity. -- Gregory Howell Dick Thompson Stan Chiu LCI Southern California May 18, 2009

125. Traditional Project Delivery Level of Common Understanding Common Understanding CM/GC Hired Major Trades Hired Pre-Construction Services Architect Hired Engineers Hired ≤ 100% Construction Source: Will Lichtig SD DD CD

126. Integrated Project Delivery Level of Common Understanding Time Common Understanding CM/GC Hired SD DD CD Construction Architect Hired Engineers Hired 100% Major Trades Hired Pre-Construction Services Source: Will Lichtig

127. California Prison Receivership

129. The TVD Process Kickoff Vision Methodology Teams Interviews Field Research Share Stories Factors Charettes Creative presentations Winnowing Design Build the hybrid Build Model Evaluation Vision Research Hybrid Extremes Recombine Design Build the hybrid Build Model Reliable Backup

130. What are the Work Products? Big Ideas Extreme Sets Balanced Hybrid Selected Design Kickoff Vision Methodology Teams Interviews Field Research Share Stories Factors Charettes Creative presentations Winnowing Design Build the hybrid Build Model Evaluation Vision Research Hybrid Extremes Recombine Design Build the hybrid Build Model Reliable Backup

131. Set-Based Design is not Point Based Design Point-Based Design Set-Based Design Figures from Ward et al. 1995

132. A Set Based Methodology The Integration Events

133. The Innovation / Risk Balance

134. The Innovation / Risk Balance

136. Conditions of Satisfaction Profoundly Impact “Big 4” factors Through Synergistic Innovation Yet Balance the FPS Core Values And Operational Principles

137. TVD Targets Goal: Reduce program cost by $1.5B (to $ 6B) without compromising delivery of care

138. Work Clusters

139. Realtime Metrics

140. Integration Events

141. Collocation

142. Big Ideas 8 Big Ideas 38 Rapid Response

143. The Three Sets The Whole Enchilada Safe Set Making 7 Work Target: $123M

144. Knowledge Capture

147. LAB Process 15 Waiting Area Process Q Patient Check out and Scheduling Process Q Phlebot Process Q Draw Station Process Patient Leaves Process Process Steps Wait time Time track Space equip require Staff required Process Design / Improvement Time VA Time Time VA Time Time VA Time Time VA Time Time VA Time Time VA Time

148. Process Design / Improvement

149. Day Before Patient gets Schedule Process Patient Leaves Housing Unit Process Q Travel Time Process Q Patient Arrives Check In Process Q Travel Process Main Patient Exam Room Process Electronic Check in Patient goes to Room and wait Electronic Board / Wayfinding Desk Time VA Time Time VA Time Time VA Time Time VA Time Time VA Time Time VA Time Services to Patient Menthal Patient Process Time VA Time Waiting for Clinic Staff Time VA Time Q TX , Imaging – CT Special Clinic Follow up Process Real Time Epoe in Room Time VA Time Q Patient Check Out and Scheduling Process Electronic Schedule Appt . Time VA Time Q Patient Leaves Process Medication to Mall Time VA Time Universal Design Exam room Speciality Carts Process Design / Improvement

150. Alternatives

151. Continuous Improvement

153. Results: 3/3/2009

154. Design to Budget / Schedule Site Bldg Fit-out Bldg Envelope Mechanical Electrical Sustainability BIM Leader : Architecture Team: Structure Music Acoustic Mechanical Electrical Leader : Architecture Team: Music Acoustic Mechanical Electrical Leader : Music Team: ArchitectureMechanical Electrical Acoustic Leader : Mechnanical Team: Architecture Structural Acoustic Music Electrical Leader : Electrical Team: Mechanical Architecture Structural Acoustic Music

156. Sutter Prototype Hospital Increase Throughput by 50% Reduce FTE’s by 40% Reduce Square Feet by 30% Reduce Time to Build by 50% Reduce Natural Resource Use by 25% 52 42 35 53 28

158. Target Value Design Process Design Knowledge Based Design Visionary Leader Expert Workforce Responsibility Base Planning & Control Standardization A3’s CBA Site Visit / S.M.E Last Planner PDCA Set Based Design 5 Whys

159. Putting the pieces together Organization Commercial Terms Operating System Lean IPD

160. Revamp Project Governance Owner Stakeholder CM/GC PM Architect PM Owner’s Rep Senior Mgt . Senior Mgt. Senior Mgt . Senior Mgt . Core Group/Senior Mgt.

162. Sharing Project’s Innovation Incentive Pool = Metrics Owner = Target Cost Expected Cost Savings $$

163. Sharing Project’s Production Success Estimated Max Price Actual Cost Incentive Pool = Metrics IPD Contingency Savings Cost of Work Savings Owner = Savings $$

177. Various Tools Systematic use of tools & training Lean in culture, people & enterprise Levels of Lean Implementation Companies ultimately progress or stall at these levels. To get people to change: What + Why + Believe

178. Change Management 20 - 60 - 20 Rule Are you in the boat? C ritical A gainst V irtually E verything

179. People Equation Involvement + Communications= Engaged Employees

180. Toyota’s goal: “ Give customers what they want, deliver it instantly, with no waste.” What do you want to do? Every successful Lean transformation began with a passionate leader - Are you that Leader?