A Primer on LEAN Construction Delivery Methods

While LEAN principles, as defined for production systems,  originated from the Japanese manufacturing industry, LEAN construction delivery methods have evolved to meet the requirements of real property owners and the AEC sector.

Collaborative “LEAN” collaborative construction delivery methods actually predate the term LEAN!

The term LEAN, is was first used by John Krafcik a 1988 article, “Triumph of the Lean Production System.”   Job Order Contracting, JOC, a collaborative “LEAN” construction delivery method was in place prior to 1988.   In fact, JOC was actively being used by 1988, especially by the Department of Defense, and has evolved greatly since that time. Similarly, Integrated Project Delivery, IPD, is also over two decades old.   TPS, the Toyota Production System, which shares some, if not many, aspects with LEAN, evolved initially from 1948 through 1975.

While many view LEAN as a set of tools that assist in the identification and mitigation of waste, its actually a CULTURE, PHILOSOPHY, and COLLABORATIVE BUSINESS PROCESS.  L

LEAN construction delivery is a collaborative business process with ongoing iterative improvement and depends upon the efficient involvement and use of multiple competencies and participants.

LEAN  Construction Delivery Methods share the following characteristics:

1. Early and ongoing collaboration of participants
2. Focus upon outcomes
3. Transparency – financial, planning and technical
4. Value-based procurement
5. Continuous monitoring – use of key performance indicators, KPIs
6. Shared risk/reward
7. Common terms, definitions, and data architectures
8. On-demand, On-time, On-budget performance
9. Meeting establish quality levels
10. Continuous education, training, and improvement
11. Long-term relationships of participants and service providers
12. Waste reduction
13. Flexibility without excessive management and control
14. Processes supported by, and embedded within “open” technology

Despite the relatively early beginning and clear value of LEAN Construction Delivery Methods, usage is limited to less than 5% of renovation, repair, and new construction.  The principle reason is lack of competency and leadership of Real Property Owners and general cultural barriers across the AEC industry.  While LEAN Construction Delivery can virtually assure over 90% of projects are delivered on-time, on-budget, and to the satisfaction of all participants and stakeholders, the AEC industry remains mired in wasteful ‘ad-hoc’ practices.

 

Another key aspect of LEAN construction delivery is gathering the right team.  Team members must be capable of planning and executing the right things, at right time,  while maximizing return on investment and minimizing risk.

Flexibility is also important, as it  allows construction related efforts to adapt to changing conditions/influences.   It is the shared competency and expertise of all players, and the standardized information accessible by all, that enables superior outcomes.

All concepts associated with LEAN Construction Delivery must be understood, appreciated, and embraced by all participants…oversight groups, management, service providers, and building users in order to achieve associated value.

The cultural, change management aspects of LEAN are equally important to the processes, tools, and technologies.

The discipline required to implement LEAN Construction Delivery is so counter-cultural to the AEC sector and real property owners, that  successful implementation of lean remains major challenge.

A weak understanding of LEAN Collaborative Construction Delivery Methods will lead to implementations without value and/or sustained benefit.   In fact, some organizations or even some consultants attempt to use and implement LEAN methods such as Integrated Project Delivery (for major new construction) and Job Order Contracting (for renovation, repair, and minor new construction) as a means to simply bypass traditional procurement procedure, as noted by several independent audits of Job Order Contracts over the past several years.

LEAN construction delivery methods and associated processes should be simple to understand, manage, and execute.  An written operation or execution manual, specific to the contract associated with the LEAN construction method (i.e. a Job Order Contract), should clearly specify roles, responsibilities, deliverables, timing, and outcomes.

Owner/service provider communications must be direct, and there must clearly structured methods to prepare and send requests for work, as well as receive responses.

The project pathway, from concept through warranty period  must be simple and direct.

Lean construction delivery methods enable all parties to learn from their experiences.

Fundamental processes associated with Collaborative LEAN Construction Delivery Methods 

• Senior leadership is in concert with vision and provides authority to appropriate managers and teams.
• Pilot programs are the first stage in adoption.
• Objectives are clearly communicated to all participants (internal and external to the organization)
• Preparation and planning – remove work can be avoided proactively by design.
• Mitigation of  fluctuation at the scheduling and operations level – clearly follow and/or stay within quality and output levels.
• Learn from the outcomes of the processes and improve problem areas (transport, inventory, motion, waiting, defects/rework/change orders.
• Maximized use of skills, competencies, and capabilities through ongoing communication and understanding what needs to be learned.
• Mutual respect for every stakeholder’s role, problems, and objectives.
• Team-centric problem solving – developing and engaging people through contribution to team performance.
• Assured adequate training levels
• Focus upon outcomes and value-add work
• Understanding that the role of tools and technology is one of support only.
• Shared leadership across all operational levels, especially operational team leaders

 

 

The goals of LEAN Collaborative Construction delivery include several possible, if not probable outcomes….

• Improved quality: Better understanding of client/customer wants, needs, processes, expectations and requirements.
• Mitigation of waste: Reducing activities that consumes time, resources, or space but do not add any value.
• Short project delivery times;  Reducing the time it takes to move a project from concept through close out.
• Reducing total costs: Build exactly what is required, and share cost information throughout the project life-cycle.

 

LEAN – Lessons Learned

• Keep it simple…
  • Remember that best value outcomes are the goal.
  • Incremental improvements over time.
• Remember there is always room for improvement.
• Trust but measure
  • Performance metrics are REQUIRED
  • LEAN construction delivery can not be  successfully implemented without sufficient aptitude at measuring the processes and outcomes. To improve future results requires and understanding of what is happening now.
• Focus upon communicating and building the CULTURE of LEAN, without undue focus upon tools.  In fact, be wary of elevating tools beyond their designed use.
• Understand  problems before deciding upon a solution.
• Decisive leadership is REQUIRED for LEAN implementation
  • The team makes recommendations, leadership determines what recommendations are implemented.

 

AEC – Best Value & Operational Excellence

AEC  – Best Value & Operational Excellence

 

As an Owner, Architect, Engineer, Contractor, Building User, or Oversight Group, you can strive for BEST VALUE, OPERATIONAL EXCELLENCE, and TRANSPARENCY or maintain ‘status quo’, it’s your choice.

Presuming you want to improve productivity and provide the best possible return on resource expenditure, the first step is to improve your awareness, knowledge, and competency relative to physical asset life-cycle management.

Stop attempting to address problems with TECHNOLOGY, as all you will do is compound existing problems.  Focus upon improving physical asset management competencies, especially the deployment COLLABORATIVE CONSTRUCTION DELIVERY METHODS.

The single most important consideration when attempting to improve quality, delivery times, and lowering expenditures is the CONSTRUCTION DELIVERY METHOD.

It is the CONSTRUCTION DELIVERY METHOD that sets defines roles, responsibilities, levels of risk, business processes and workflows, information standards, timelines, transparency, and collaboration.

It is the CONSTRUCTION DELIVERY METHOD that sets the overall tone for renovation, repair, maintenance, or new construction projects and determines ultimate success or failure more so than any other single element.

Collaborative construction delivery methods have been implemented for decades are a proven to delivery in excess of 90% of projects on-time, on-budget, and to the satisfaction of all participants.  The most notable processes are Integrated Project Delivery, IPD, for major new construction, and Job Order Contracting, JOC for renovation, repair, and minor new construction.

Real property owners must become more knowledgeable in these areas and require collaborative construction delivery methods.   As note, technology, such as 3D BIM, will not solve the woes of the AEC and Facilities Management sectors.  The solution is change-management and improving competency.

Characteristics of LEAN Collaborative Construction Delivery Methods

• Best Value Procurement
• Early and Ongoing Collaboration
• Shared Risk/Reward
• Common Terms, Definitions, and Data Architectures
• Financial Transparency
• Mutual Trust and Respects
• Focus Upon Outcomes
• Continuous Improvement, Education, and Training
• Key Performance Indicators (KPIs)

 

BIM, LEAN CONSTRUCTION, & COLLABORATIVE CONSTRUCTION DELIVERY

BIM & LEAN / COLLABORATIVE CONSTRUCTION DELIVERY – If only we could get there!

BEYOND DESIGN, BIM BEGINS WITH 10 STEPS…

1. Owner competency & leadership
2. Life-cycle asset management philosophy
3. Best value procurement
4. Collaborative construction delivery methods (IPD, JOC, …)
5. Mutual trust & respect
6. Common terms, definitions, and data architectures….all in plain English
7. Shared risk/reward
8. Monitoring via key performance indicators (KPIs)
9. Ongoing education, training, & awareness buildling
10. Continuous improvement

 

 

 

 

 

Building Information Modelling (BIM) is the integration of disparate competencies, business processes, and technologies to accomplish the efficient life-cycle management of the built environment.

Per the above definition, BIM has not moved from theory to reality to any significant extent. Improving facility and infrastructure construction, management, operations, and sustainability is indeed possible, if Owners provide competent leadership.  

Owners must also recognize the value of collaboration, LEAN management methods, and information-based decision-making.   

The fundamental way in which Owners, Architects, Engineers, Contractors, Building Users, and Oversight Groups interact must change.   The issue is not, nor has ever been, shortcomings in technology.  The vacuum is one of lack of change management skills and lack of overall asset life-cycle management competency.

Asset life-cycle management, as demonstrated in the figure below, requires an integration of business areas and competencies.

The primary driver is actually the construction delivery method.  It is the construction delivery method that contractually defines roles, responsibilities, timelines, deliverables, relationships, and sets the tone for a project from day one.   The construction delivery method can actually REQUIRE COLLABORATION of all participants, right down to the terms, definitions, and information used.

Thus a collaborative construction delivery CONTRACT and its associated OPERATIONS or EXECUTION MANUAL are the detailed road map to completed a significantly higher percentage (90%+) of quality  renovation, repair, and construction projects on-time and on-budget, and to the satisfaction of ALL participants.

Collaborative construction delivery methods such as Integrated Project Delivery, IPD for major new construction, and Job Order Contracting, JOC, for renovation, repair, maintenance, and minor new construction aren’t new.  The both have proven track records spanning decades.

So, why isn’t everyone using collaborative construction delivery methods, and why aren’t 90% of projects delivered on-time and on-budget?   The answer has already been noted… owners are providing the necessary competent leadership, and many players are satisfied with the status quo.

 

 

 

It’s not simply a a learning curve issues,  it’s a culture change.  The multi-party nature, required financial transparency, and sharing of risk and reward is a definite hurdle for many.   Some current owners, contractors, and AE’s, quite simply, won’t be able to make the required transition.

Would it not be nice to stop focusing upon pretty 3D pictures, dated IWMS systems, and other technologies that dictate process and/or embed antagonistic workflows?  As stated previously, technology isn’t the solution, it can however be a crutch, and a problem… if it prevents us from asking the right questions… and dealing with positive change.

 

 

 

 

 

 

Asset Competency Model & Efficient Facility Management #101

Until Owners understand and are capable of organizational wide deployment of ASSET COMPETENCY MODELS, productivity across the AEC and Facility Management sector will remain poor.

What is an ASSET COMPETENCY MODEL?  An asset competency model is a formalized, detailed description and documentation of the role-specific knowledge domains required to optimize and continuously improve physical infrastructure life-cycle management.  It includes people, processes, and technologies, throughout all phases from conceptualization/planning, construction project delivery, renovation/repair/maintenance, to deconstruction/recycling.

There are three (3) core goals of an ASSET COMPETENCY MODEL:

1. Driving Positive OUTCOMES
2. Developing and Managing PEOPLE
3. Building RELATIONSHIPS

You will note that TECHNOLOGY is not a core goal.  Technology is an enabler and used to support established processes and workflows.  Technology is certainly an important consideration, but nonetheless a secondary consideration.  A primary focus upon technology will generally not provide positive outcomes.

Driving Positive OUTCOMES

Critical thinking and problem solving, information-driven decision making, planning and consistent execution, and continuous learning are all prerequisites to achieving a higher percentage of positive outcomes.    LEAN best management practices are applicable in achievement of this and all primary goals.

Developing and Managing PEOPLE

Team leadership, without excessive management and control is the primary mission of any real property owner.  Real property owners are ultimately the stewards of the build environment, and therefore must be capable of leadership.  Historically, lack of owner leadership has likely been the major causal factor for low productivity throughout the AEC and Facilities Management sectors.  Owners must set the tone, provide direction,  and develop talent.  They must COLLABORATE with the building users, services providers (ie. architects, engineers, contractors, building product manufacturers…).  They must develop and operate within an atmosphere of mutual trust and respect, as well as full transparency.  That said, “trust but measure” is an operational element, not to be forgotten.  Key performance metrics (KPIs) must be developed and continuously monitored.   Accurate and timely information is needed in order to drive continuous improvement.

Building RELATIONSHIPS

Stakeholder development and management is an equally important area.   Stakeholder includes senior management and oversight groups, and the ability to communicate the importance of physical infrastructure stewardship in order to obtain proper resources.   This is also an area where many facility management professionals have traditionally fallen short.   Communicating the positive and negative ramifications of proper and improperly resource physical infrastructure to funding authorities… in a simple language that they understand… is the primary responsibility of any facility management professional.  Every other activity, action, and result is dependent upon having the appropriate resource to execute upon any facility / infrastructure management strategy.  Internal and external relationships are also developed through the employment LEAN management practices.   Focus should also be upon best value procurement, mutual trust/respect, shared risk/reward, full transparency and mandated collaboration, ongoing training and education, continuous improvement, and monitoring of key performance indicators, KPIs.

 

The Responsibility of Real Property Owners

Driving positive outcomes is responsibility of any real property owner.  It means Owners must take responsibility for behavior, mistakes, and results.  Also, owners must learns from successes and failures, and teach other collaborative service partners to do the same.

Information-based decision making and associated improvements are only possible if owners collect current and accurate STANDARDIZED data, using common terms, definitions, and information architectures (UNIFORMAT, MASTERFORMAT, OMNICLASS, IFC…). Owner must use timely information to accurately assess areas for improvement and encourage service partners also do so.

Owners must engage in calculated risk taking and encourage other to do the same.  This includes valuing and encouraging creative and innovative ideas from any source, but especially their service providers.

Owner must continuously and proactively seek opportunities for personal and organizational improvement.   They must rely upon and accept the EXPERTISE and COMPETENCIES of their service providers.

Finally, all of the above requires that owners not only participate in but encourage and MANDATE TRANSPARENCY and SHARING.  Owner have the ultimate responsibility for promoting and contributing to a culture of sharing effective practices within their organization and across their business partner network.   While not all services providers may not be up to task of engaging in collaborative LEAN business practices, is up to Owners to select and support their teams appropriately.

Lastly, the best way for Owners to learn about and to begin to apply ASSET COMPETENCY MODELS is to adopt collaborative construction delivery methods such as INTEGRATED PROJECT DELIVERY (IPD) (for major new construction) and JOB ORDER CONTRACTING (JOC) (for renovation, repair, and maintenance.  Both IPD and JOC embed and leverage LEAN best management practices and are proven to increase the percentage of quality on-time and on-budget construction projects, thereby improving an Owner’s ability to become more efficient in infrastructure life-cycle and total-cost-of-ownership management.

 

 

 

 

 

Major Risks Facing Public Real Property Owners

I regularly see articles about how great real property owners are, or how the facility management staff performs well, but may be misunderstood.  Unfortunately, I am reminded of the story about the emperor with no clothes.   Do real property owners and facility managers actually think they are doing a good job?

Improperly designed or managed renovation, repair, maintenance, and new construction
projects create inherent risks during the procurement and execution processes.

Ultimately the outcome is lack of stewardship on the part of public sector real property owners, and continue decay and waster associated with built structures, including facilities and infrastructure (roads, bridges, dams, airports, mass transit, utilities, etc.).

Public sector real proper owners and facility management professional are thus faced with …

• Lack of public support and confidence, transparency, and trust.
• Design, selection, and management processes that are inefficient and/or unfair.
• Non-compliance with state or federal laws, policies, and procedures .
• Lack of timely and cost effective/best value services.
• Concerns and litigation surrounding construction and facility management practices are the norm versus the exception.

 

The only solution in sight is a total redo… including formal education focused upon collaborate LEAN business practices and life-cycle asset management, as well as, required annual professional training in these areas.

Collaborative construction delivery methods have proven to delivery significantly higher percentages of project on-time and on-budget, with equally higher levels of satisfaction and quality.  We just need Owners and Facility Managers capable of LEADERSHIP.

LEAN Construction Delivery Process

LEAN CONSTRUCTION DELIVERY

If you consider BIM to be the solution to low construction productivity, think again.

3D visualization and technology will do little to solve construction project delivery woes.

The root of the decades long decline in construction productivity and associated poor facility management practices is cultural.

Construction is like any other relatively complex manufacturing process.  It requires a focus upon best management practices, education and training, key performance indicators, and continuous improvement, in short, LEAN business process application.

Reducing end product variability, cycle-times, waste, and cost is not rocket science.  There are multiple proven LEAN construction delivery methods and life-cycle / total cost-of-ownership models available.  Owners must drive their accelerated adoption.
The most widely used and successful LEAN construction delivery methods are Integrated Project Delivery, IPD, for major new construction, and Job Order Contracting, JOC, for renovation, repair, maintenance, sustainability, and minor new construction.  When deployed and managed properly by Owners, on-time, on-budget, quality construction is the norm versus the exception.

Characteristics of LEAN Construction Delivery

• Collaboration
• Mutual Respect & Trust
• Financial Transparency
• Owner Leadership without excessive management & control
• Shared Risk/Reward
• Best Value Procurement
• Common Standard Terms, Definitions, & Data Architectures (UNIFORMAT, MASTERFORMAT, OMNICLASS)
• Continuous Education, Training, & Improvement
• Key Performance Indicators (KPIs) / Audits
• Written Execution / Operations Manuals (Roles, Responsibilities, Deliverables, Workflows / Standardized Work Processes, Reporting Requirements…)

WWW.JOBORDERCONTRACTING.ORG

U.K. BIM has the same Issues as the U.S.

The resistance to culture change within U.K.’s AEC sector is impeding BIM (efficient life-cycle management of the built environment), just as it has in the U.S.

“inertia resulting from the comfort of familiar commercial and contractual structures which do not encourage teamworking or collaboration”.

 

“As the demand for construction and infrastructure services increases, procurers and suppliers are looking at delivery structures which will provide not only sustainable, long-term value to the procurers, but also more consistent, better margins for contractors, supply chain members and professional teams,”

“As BIM and data management technology drives new approaches to the design and construction process, the need to replace traditional competitive procurement and tendering processes with more collaborative structures and arrangements becomes ever more acute. This report strikes at the heart of the complex dynamics surrounding these issues and points the way towards a more collaborative future,”

(Source – Out-law.com, 2016)

Until collaborative LEAN construction delivery methods become mainstream, the AEC sectors dismal performance will continue unabated in the U.S. and the U.K.

Examples of LEAN collaborative construction delivery include Integrated Project Delivery, IPD and Job Order Contracting, JOC.  These and other alternative construction delivery methods resolve the fundamental flaws associated with design-bid-build, lowest bidder, and even design-build.

5S for LEAN Construction / Job Order Contracting / IPD

5S

1. Stewardship – Practice best value life-cycle management of the built environment.
2. Share – Enable transparent and open communications among all stakeholders, beginning with initial concept and continuing thru end-of-life.
3. Standardize – Use common terms, definitions, & data architectures.
4. Sustain – Practice environmentally sound strategies
5. Secure – Maintain and monitor life/safety issues

BEST VALUE

OUTCOME-BASED STRATEGIES

CLEARLY DEFINE & DOCUMENT DESIRED OUTCOMES

PRACTICE TEAMWORK & LEADERSHIP

 

Evaluate necessary tasks and items with regard to maximizing VALUE.

Eliminate unnecessary processes, tasks, and or control… eliminate obstacles.

Remove excessive command and control.

Remove and properly store all parts or tools that are not in use.

Segregate unwanted / unneeded material from the work site.

Maximize use of skilled personnel.

Seek continuous improvement.

Reward ideas.

Require collaboration.

Practice mutual trust & respect.

Prevent loss and waste of time by planning and staging work to assure availablity of materials, equipment, and labor.

Provide on-demand services.

Regularly monitor progress and employ key performance metrics.’

Keep the work site safe.

Require ongoing training.

Standardize and share best practices and processes.

Support creativity and effort.

Perform regular audits

http://www.jobordercontracting.org

The Myth of Facility Management Outsourcing

While outsourcing Facility Management (FM)  and/or portions of FM certainly has its place in real property operations, in general, outsourcing is not a BEST VALUE business practice.

Sure, its true that many owners lack the education, skills, and capability to consistently execute efficient life-cycle management across their building portfolio, many service providers are in the same position.

Facility management is not a commodity.  It requires the integration of multiple competencies/knowledge domains and technologies, as well as collaborative LEAN best management practices.

The traditional outsourcing model of purchasing “commoditized services at the lowest cost”, is simply not appropriate for strategic facility management.

The objects of efficient life-cycle management of the built environment can be achieved by the adoption and true acceptance of BEST VALUE and LEAN methods.   Collaborative construction delivery methods such as Job Order Contracting (JOC) and Integrated Project Delivery (IPD) have proven to deliver multiple benefits in this regard…

• Higher Quality
• 90%+ Project On-time & On-Budget
• Shorter Project Delivery Times
• Lower Procurement Costs
• Lower Overall Project Costs
• Significantly Fewer Change Orders
• Greater Financial Transparency
• Higher Overall Satisfaction
• Longer Term, Mutually Beneficial Relationship Among All Participants
• Virtual Elimination of Legal Disputes

Germany Joins the Political BIM Bandwagon

Apparently Germany’s Federal Minister of Transport and Digital Infrastructure has issued a statement that the country ” fully embrace BIM, stating it must become standard for construction projects.”

BIM, as we now know it, is not the solution that will enable efficient life-cycle management of the built environment.  Rather, BIM is one tool among many.    The key to improving the dismal economic and environmental track record of the architecture, engineering, and construction sector is a focus upon education, building awareness, and the consistent implementation LEAN Collaborative Construction Delivery Methods.

Real property Owners have not assumed their roles as stewards of the built environment due to lack of awareness, education, and/or capability.  Multiple studies have demonstrated that Owners,  their selection of construction delivery methods, and their execution of management and control dictate the overall success of physical infrastructure renovation, repair, maintenance, sustainability, and new construction.

LEAN construction delivery methods such as Integrated Project Delivery – IPD (for major new construction projects) and Job Order Contracting – JOC (for renovation, repair, and minor new construction projects) deliver approximately 90% of project on-time, on-budget, and at higher quality levels.   When compared the current global averages of 40%-60% waste, rampant legal disputes, and 80% of projects not completed on-time, one must question the focus upon BIM, versus simply requiring Owners to do their jobs.