LEAN Construction Guide

AECOO solution

LEAN METHODOLOGY     White Paper: LEAN Facilities O & M Planning:
Strategy, Objectives, & Methods – 2023 and Beyond (Download)

 

The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.”

Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:

– Set an example

– Be a good listener, but will not compromise

– Continually teach other people

– Help people to pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past. – Deming

Core LEAN principles were first introduced to contemporary markets by Henry Ford (focus on the outcome, leverage the experience and knowledge of those doing the work, continuous improvement), and later associated with Toyota (the Toyota Production System, TPS), and subsequently adopted many manufacturing and service sectors. 

A Brief History of Lean

Although there are instances of rigorous process thinking in manufacturing all the way back to the Arsenal in Venice in the 1450s, the first person to truly integrate an entire production process was Henry Ford. (lean.org) Learn more about the origins of LEAN.

In construction, foundation elements now defined a LEAN date back even further to the master builders.  

An understanding of LEAN fundamentals and their application to Facilities Management, Architecture, Engineering, and Construction is critical to improving associated planning, procurement, and project delivery outcomes for any repair, renovation, maintenance of new build outcome. 

Cost reductions of 30%-40% are possible as well as improved delivery times, quality, and overall satisfaction levels.  Cost reductions result from a more detailed and better communicated scope of work, integrated planning, procurement, and project delivery among internal and external teams on an early and ongoing basis, and a common data environment (CDE) including a common glossary of terms and definitions and a locally researched, current, granular unit price book (UPB), organized by a standard data architecture (for example, CSI expanded MasterFormat).

LEAN methodology involves the consistent application of business processes and workflows in support of the following:

  • Early and ongoing collaboration among all participants and stakeholders
  • Integration of internal and external planning, procurement, and project delivery teams
  • Relationship-based best value procurement
  • Focus upon client requirements and best value outcomes
  • Clearly defined and documented roles, responsibilities, workflows
  • Shared, performance-based risk/reward
  • Decision support based upon current and actionable information (i.e. locally researched granular information versus contractor or subcontractor lump sum quotes)
  • Common terms, definitions, & data formats — Common data environment (CDE)
  • Mutual trust and respect among participants
  • Continuous improvement 
  • Mandatory initial and ongoing training
  • Owner leadership and support
  • Quantitative metrics

LEAN practices provide a framework to integrate and maximize the capabilities of available people, processes, information, and technology to address ongoing new and facilities requirements.

Promoting awareness and education of LEAN facilities management and sustainment best management practices leads to improved outcomes.  LEAN equally applies to new construction, repair, renovation, operations, and maintenance.

 

Figure 3. LEAN Practices for Optimized Facilities O&M Overview

 

 
 

Figure 4. LEAN Practices Asset Competency Model

LEAN Practices Asset Competency Model

 
 

Figure 5. LEAN Considerations

LEAN Considerations

 

MULTIPLE COMPETENCIES, BUSINESS PROCESSES, AND ACTIVITIES

Facilities management spans multiple competencies (core skills), business processes (asset management practices/industries), and activities, such as the following:

Activities

  • Strategic planning
  • Cost estimating
  • Procurement/bidding
  • Construction
  • Space planning
  • Operations
  • Maintenance
  • Programming

Business Processes

  • Capital planning and management
  • Construction project delivery methodology
  • Space management
  • Operations & Maintenance
  • Inventory and maintenance disposition management
 

Figure 6. Life-cycle Management

Life-cycle Management

 

NOTE: The term “Big Data” describes the multiple sources, formats, and uses of data that can be leveraged to monitor and improve organizational performance. The Construction Operations Building information exchange (COBie) has become one of the most widely known data formats. COBie is an information exchange specification for the life-cycle capture and delivery of information needed by facility managers. It can be viewed in design, construction, and maintenance software as well as in simple spreadsheets. Equally important data formats include MasterFormat, Uniformat, and Omniclass.

SUPPORTING TECHNOLOGY AND TOOLS

Technology and tools used to lower the cost of implementing and managing LEAN O&M best management practices (BPMs) include the following:

Technologies

  • Application Software
  • Building Automation Systems (BAS)
  • Building Information Modeling (BIM) (Model & Management Systems) Capital Planning and Management Systems (CPMS)
  • Computer-aided Facilities Management Systems (CAFM)
  • Computerized Maintenance Management Systems (CMMS)
  • Cost Estimating, Procurement, & Construction Project Delivery and Management Systems
  • Geographical Information Systems (GIS)
  • Integrated Workplace Management Systems (IWMS)

Tools

  • Construction code databases
  • Construction cost databases
  • Industry specific glossaries
  • Industry Standards (ISO, NIST)
  • O&M Plan
  • O&M Manuals
  • Standardized data architectures (Cobie, Masterformat, Uniformat, Omniclass)
  • Technical construction specifications

EDUCATION, TRAINING, AND SUPPORT SERVICES

Building the capabilities of internal and external O&M teams involves an ongoing commitment to education and training. From an educational standpoint, both traditional educational institutions and ongoing professional education are increasing their focus upon life-cycle management and the role of O&M.

Robust methods that integrate planning, procurement, and project delivery leveraging LEAN principles include LEAN Job Order Contracting and Integrated Project Delivery.

Both require a multi-party contract and associated Operations Manual/Execution Guide.  The need for and level of training requirements, including training aids and manuals, should be clearly defined.  The type of training (introductory, advanced, certification), format (online/virtual, classroom, self-taught), and frequency is dependent upon each organization’s requirements, types of systems and equipment, and amount of work performed by in-house staff versus that to be outsourced.

Support services may include outsourcing certain requirements, independent and/or peer-based audits of practices, and various consulting services.

METRICS/KEY PERFORMANCE INDICATORS (KPIS)

Ongoing performance measurement supports informed, information-based, decision making and helps to maximize the use of available resources.

From a generic perspective, an effective measurement system includes the following:

  • Clearly defined, actionable, and measurable goals
  • Key performance indicators that monitor the overall administration of the program, as well as individual projects / task orders, and all associated workflows, deliverables, and outcomes
  • Established baselines enabling measurement of historical and current progress
  • A basis of timely, accurate, repeatable, and verifiable information based upon standardized terms, definitions, and data architectures
  • Applicable reporting and feedback systems to support continuous improvement of processes, practices, and outcomes
  • Leading Indicators (forecast future trends inside and outside the organization) as well as lagging indicators
  • Objective and unbiased information (not subject to manipulation) that is normalized (can be benchmarked against other organizations, departments, locations)
  • Statistically reliable
  • Unobtrusive (not disruptive of work or trust)
  • Appropriate (measures the right things)
  • Quantifiable
  • Verifiable/auditable

The importance of performance measurement cannot be understated. It is a fundamental element of any successful  program.

Performance indicators include the following:

  • Annualized Total Cost of Ownership (TCO) per building per gross area = Rate per square foot
  • Annualized TCO per building/Current replacement value = Percent of Current Replacement Value (CRV)
  • Annualized TCO per building/Net assignable square feet = Cost rate per net assignable square feet per building
  • Annualized TCO per building/Non-assignable square feet = Cost rate per non-assignable square feet per building
  • Annualized TCO per building/Building Interior square feet = Cost rate per interior square foot per building
  • Churn Rate
  • Utilization Rate
  • AI (Adaptation Index) or PI (Programmatic Index) = PR (Program Requirements)/CRV (Current Replacement Value)
  • Uptime or Downtime = Defined in percent, as amount of time asset is suitable for the program(s) served
  • Facility Operating Gross Square Foot (GSF) Index (SAM Performance Indicator: APPA 2003)
  • Custodial Costs per square foot
  • Grounds Keeping Costs per square foot
  • Energy Usage is expressed as a ratio of British Thermal Units (BTUs) for each Gross Square Foot (GSF) of facility, group of facilities, site or portfolio = BTUs / Gross Area GSF
  • Utility Costs per square foot
  • Waste Removal Costs per square foot
  • Facility Operating Current Replacement Value (CRV) Index = Facility Operating CRV Index = Annual Facility Maintenance Operating Expenditures ($)/Current Replacement Value ($) (SAM Performance Indicator: APPA 2003)
  • Facility Operating GSF Index = Annual Facility Maintenance Operating Expenditures ($)/Gross Area (GSF)
  • Planned/Preventive Maintenance Costs per square foot
  • Emergency Maintenance Costs as a percentage of Annual Operations Expenditures
  • Unscheduled/Unplanned Maintenance Costs as a percentage of Annual Operations Expenditures
  • Repair costs (man hours and materials) as a percentage of Annual Operations Expenditures
  • FCI (Facility Condition Index) = DM (Deferred Maintenance) + CR (Capital Renewal)/CRV (Current Replacement Value)
  • Recapitalization Rate, Reinvestment Rate
  • Deferred Maintenance Backlog
  • Facilities Deterioration Rate
  • AI (Adaptive Index) or PI (Programmatic Index) = PR (Program Requirements)/CRV (Current Replacement Value)
  • FQI (Facility Quality Index) or Quality Index or Index = FCI (Facility Condition Index)+ AI (Adaptive Index)
  • Capital Renewal Index = Annual Capital Renewal and Renovation/Modernization Expenditure ($)/Current Replacement Value ($)EMERGING ISSUES

CHALLENGES AND OBSTACLES

While obtaining adequate facilities funding for efficient life-cycle management remains an elusive goal for many, the most significant challenge is change management and consistent, competent owner leadership.

Facilities span the careers of individuals, and facilities management transcends generations. As a result, known future impacts may be postponed until “someone else’s watch.”

Further, the impact of new strategies and processes can take years to show measurable improvements. Within a society that seeks instant gratification and financial payback periods sometimes measure in months versus years, the need for leadership and commitment of property owner management is paramount.

Additionally, the importance of facilities in the minds of senior management may not be fully appreciated, thus creating the need to better inform them of associated risks and benefits of various FM strategies.  A somewhat pervasive focus upon first-costs versus lifecycle costs must be addressed and altered. Communicating the fact that an emergency repair will have ten times (10x) the cost of an appropriate maintenance operation is an ongoing need, as well as providing cost multi-year cost impacts of alternative strategies.

Historically, sharing information has also been somewhat problematic for a variety of reasons, especially in areas involving costs and or techniques.  In reality there is no “secret sauce” and everyone should share information.  AEC is relatively simple.  Yet the largely cultural obstacles to information sharing, endemic to the AECOO sector, result in higher costs and marginalized capabilities.

The level of collaboration and transparency required is a change in the way most organizations currently operate on a day-to-day business.  We can only hope the obstacle is not insurmountable. 

Guide to LEAN Construction – This Simple Guide to Lean Construction introduces a proven path to best value facilities repair, renovation, maintenance, and new construction outcomes through the integration of People, Process, Information, and Technology.

  • Business and operating models need to change to transform from a legacy of waste to the consistent delivery of best value outcomes.

LEAN is a philosophy dating back as far as Henry Ford. At it’s core, LEAN is quite simple. LEAN is a way of thinking that bases decisions on long-term objectives rather than short-term wins, builds leaders and teams that thoroughly understand the work and share information and learnings to everyone involved, and “walk the talk”.

Coming together is a beginning, staying together is progress, and working together is success.”  – Henry Ford

Simple Guide to LEAN Construction

 

Lean Construction Guide Note: “construction” is used to encompass repair, renovation, maintenance, and new builds) is a philosophy and a process that spans planning, procurement, and project delivery.

Simple Guide to LEAN Construction

Tools and services are readily available to more consistently deliver BEST VALUE outcomes for all “construction” program/project participants and stakeholders.

Value management, however, requires a detailed, well communicated scope of work inclusive of final desired outcomes and associated task/labor, material, schedule, quality, and cost information.  Without the definition and documentation of requirements at this level of granularity, best value attainment is compromised.

Value, like any construction related activity is dynamic and must be constantly optimized.  While actionable, detailed information can establish parameters, it is critical to recognize that the on-site team must be given authority for day to day implementation. It is their knowledge and real-time decision-making that will deliver value… or not.

To address economic and environmental imperatives, organizations must execute on strategic enterprise-wide programs that generate value and desired  outcomes. 

LEAN construction solutions – Value creation

LEAN construction solutions aid in consistent achievement of best value repair, renovation, and new construction outcomes by integrating People, Process, Information, and Technology.

Main features and characteristics include…

  • Focus of all participants upon mutually beneficial best value outcomes
  • Multi-year, Multi-party Collaborative Contracts and associated Operations Manuals/Execution Guides
  • Shared risk/reward
  • Mandatory early and ongoing information sharing
  • Common data environment including locally researched unit price cost data
  • Key performance indicators
  • Regular third-party audit
  • Enabling technology

What is LEAN Construction?

LEAN construction is people working together on multidisciplinary projects and multiple, but integrated teams. It includes construction planning, procurement, and project delivery.

Simple Introduction to LEAN Construction

Tools and technology are readily available to help any organization work in an integrated and mutually beneficial way with others and drive best value outcomes.

LEAN Construction Guide

Lean Construction Guide – Kaizen – Solution

LEAN Construction Guide

Traditional planning, procurement, and project delivery methods are incompatible with best value outcomes and remain the primary cause for AECOO waste and dysfunction. Until organizations, especially real property owners understand this fundamental fact, technology offers little respite.

90-Day-Job-Order-Contract-Implemenation-Guide 

These accumulated best practices guideline is intended to provide public owners and contractors information on overall methods and processes in procuring, awarding and managing a typical Job Order Contract (JOC)

While the AECOO Community (Architecture, Engineering, Construction, Operations, and Owner) has traditionally been mired in low productivity and waste,  the solution, LEAN Construction Procurement and Delivery, has been available for over thirty years.

Today,… integrated tools, information sets, and services enable any real property owner and their AEC service providers to consistently deliver quality repair, renovation, maintenance, sustainability, and new construction projects on-time and on-budget and to everyone’s satisfaction.  All that is needed is owner leadership and competency.

Integral Aspect of LEAN Job Order Contracting & Integrated Project Delivery

“Lookahead planning involves bringing all stakeholders together, creating sub-tasks
from the milestone schedule, identifying and assigning responsibility to constraints and
commitment from workers in removing these constraints.” (Ballard 2000).

Simple Guide to LEAN Construction

There is an alphabet soup of terms associated with LEAN or LEAN construction….  “blackbelt, kaizen, last planner”, pull strategy,  value engineering, value stream, six sigma, and the list goes on.  Learning about these terms certainly has value.  In reality, however, LEAN construction comes down to the below core elements.  

Basic Elements of LEAN Construction

LEAN construction reduces waste by assuring a full understanding and sharing of roles, responsibilities, needs, requirements, values, documentation, communication formats…thereby reducing variation and associated negative consequences (stressing people/equipment/systems, change orders, delays…).

Lean is a fundamental business philosophy—one that is most effective when shared throughout the value stream. “Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals” and “Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others” – ROADMAP FOR LEAN IMPLEMENTATION AT THE PROJECT LEVEL, 2007, Ballard et al

Basic Elements of LEAN Construction

  • Focus upon outcomes
  • Early and ongoing participation of all stakeholders and service providers
  • Mutual trust and respect
  • Engaging and leverage the expertise of participants actually doing the work
  • Financial and task level transparency via locally researched detailed line item unit price book
  • Required collaboration
  • Shared risk/reward
  • Metrics/key performance indicators
  • Continuous improvement
  • Mandatory initial and ongoing multi-level/multi-format training

While successful implementation typically requires a fundamental change in how you and your internal and external teams conduct your day-to-day activities and share information, there is nothing highly complex involved.  All that is needed is a minimum threshold of competency and leadership on the part the  real property owner and the appropriate selection of construction procurement and delivery method and service associated service providers.

What you can do today.

Become a LEAN leader and leverage existing LEAN construction procurement and project delivery methods such as Integrated Project Delivery, IPD, for major new construction, and Job Order Contracting, JOC, for repair, renovation, sustainability, maintenance and minor new construction (Remember however that even here, all implementation are not the same… do your homework!).   Properly designed, implemented, and managed LEAN construction procurement and delivery methods identify, model, embed, and encourage/require LEAN behaviors, thereby driving measurably improved outcomes.

Continually challenge the status quo!

It all starts with you.  LEAN leadership requires listening, listening, and listening…until you  truly understand what your “customer” wants, needs, and values.  Also, you must be an problem solving evangelist.   Engage all participants, especially those performing the work, to assure appropriate problem definition, cause, and resolution.   When resolving problems…go to the actual source/place… observe the actual product, process or service and gather actual facts!  Many, if not most problems are process-based, so seek associated improvement to mitigate future improvement.   Continually challenge the status quo!

The Importance of a Locally Researched Detailed Unit Price Book

Any repair, renovation, or construction project and value stream includes specific activities/tasks, materials, people, labor, equipment, and information that must integrate together to provide your customer the value they want, when they want it and how they want it.

Defining an optimal definition of, and path meeting these requirements is virtually impossible without detailed line items and associated task definitions… inclusive of labor, crew, material, and equipment descriptions and associated costs.

Hundreds of books, white papers, and presentations talk about creating a “value-stream map”.   Think about it, in construction, what is a value stream map, other than a clear, detailed description of construction requirements, activities, labor and material requirements, costs, and associated timeline interrelationships? (Flow efficiency versus resource efficiency)

Using a locally researched unit price book, based upon a CSI standardized data architecture, you can add significant detail to your map of requirements and processes upfront, before finalization, and better identify issues, miscommunications, errors, and omissions.

Are you ready to become a LEAN construction leader?

Simple Guide to LEAN Construction

 

Simple Guide to LEAN Construction

All the tools are ready… are you?

Frameworks such as the LEAN OpenJOC Solution consider people and technical needs.  While workflows are well defined it is recognized that planning and execution are dynamic processes. Local team members must be provided with the ability to make appropriate changes/corrections. The combined knowledge of those performing the work as well as technical “experts” and management needs to be leveraged. It is precisely the degree of planning and preparation, teamed with on the job decision-making that drives overall project performance. Conversely, failure to invest in appropriate planning, preparation, and team building commonly results in project failure.

Sharing information and driving toward outcomes that benefit all parties significantly improves the likelihood of overall project success. Participants are much more likely to deliver on commitments. Communication and collaboration between all parties…owners, builders, AEs, building users… is enhanced and teams share information in a manner to best coordinate resources.

Fundamentals of LEAN Planning, Procurement, and Project Delivery

 

What? The principles, processes, functions, tools, and methods consistent with LEAN construction planning, procurement, and project delivery.
Why? The Fundamentals of Efficient Public Sector Construction LEAN Planning, Procurement, and Project Delivery are important to professionals hoping to improve their stewardship of taxpayer funds, and better meet fiduciary responsibilities to taxpayers. The importance of this information is non-trivial. If the information is understood and applied property, the consistent delivery of quality repair, renovation, maintenance, sustainability, and new construction projects on-time and on-budget becomes the norm versus the exception.
How? The concept of collaborative transparency simply involved the early and ongoing sharing of information throughout a project life-cycle. This is achieved when detailed plans at every level of construction task breakdown, inclusive of labor, material, and equipment descriptions and costs, are shared by all participants and stakeholders. The most common and proven tools for this is a detailed, locally researched unit price book. The tasks should be organized using a common data architecture such as CSI Masterformat in order to maximize efficient use and reuse of information. Collaborative transparency can only occur when all parties have agreed to a multi-party agreement and associated operations manual/ execution guides that drives toward mutually beneficial outcomes. Look ahead planning and continuous improvement are virtually impossible without collaborative transparency and associated systems/frameworks that embedded the process. Collaborative transparency is just one of several fundamentals serving a building blocks for Efficient Public Sector Construction Planning, Procurement, and Project Delivery. As this is simply and introduction to the concept, further insight into Collaborative Transparency will be reserved for other communications.


LEAN PRINCIPLES

Lean principles are separate from, but related to, LEAN methodologies or LEAN solutions. Here is a listing of Lean principles from literature.

Koskela (1992)

Reduce the share of non value-adding activities
Increase output value through consideration of customer requirements
Reduce variability and cycle time
Simplify by minimizing the number of steps, parts and linkages
Increase output flexibility and process transparency
Focus control on the complete process
Build continuous improvement into the process and benchmark
Balance flow improvement with conversion improvement

Melles (1997)

Multifunctional task groups and co-maker ship
Simultaneous engineering
Kaizen/ Continuous improvement
Customer orientation
Information, communication and process structure

Koskela & Leikas (1997)

Process oriented, team based, flat organization
Reduction of variability
Process charting for identification of non value adding activities
Simplification and increased flexibility
Focus on whole processes

Miles (1997)

Multi-tasking, multi-discipline, self-managing working groups
Mutual respect and team performance incentives
Risks are fairly allocated

Egan (1998)

Continuous improvement and annual target
Reduce waste and increase value

Howell (1999)

Focus on the complete process
Aligned stakeholder interests
Concentrate on the whole product life cycle
Combining project design with process design
Downstream players are involved in upstream work
Innovative and lean environment
Reduction of variability
Eliminate buffer and pull production

Salem & Zimmer (2005)

Customer focus
Culture and people
Workplace organization and standardization
Elimination of waste
Continuous improvement and built-in quality

Pinch (2005)

Establishing integrated team
Combining project design with process design
Quality assurance
Decentralizing decision-making
Requiring a simple, direct handoff between tasks in the work stream

Diekmann, et al (2005)

Customer focus
Culture/people
Work place organization/ standardisation
Waste elimination
Continuous improvement with built-in quality

Lichtig (2005)

Collaborate, improve networks of commitments
Optimise the project, not the pieces
Tightly couple learning with action
Increase relatedness

Johansen & Walter (2007)

Information transparency and work flow management
Initiating improvement strategies and benchmarking
Reduction of variability and uncertainty
Long term contractual agreements
Concurrent design
Early involvement of downstream players in the upstream process
Participation and dedication culture
Supply chain integration

Senaratne et al. (2008)

Elimination of non value adding activities
Making conversion activities more efficient

Chua & Shen (2008)

Manage hidden flows and reduce waste
Smooth pace of production


Terms commonly associated with LEAN construction delivery:

• best value • best value procurement • best value outcomes • best value focus • benchmarking • benchmarking client focus • change management • common data environment, CDE • collaborative working environments • construction culture • construction performance measures • construction process benchmarking • cultural barriers • customer focus • owner requirements management • customer needs analysis • construction cost data • construction cost management • cost information • cost management • cost performance • cost reduction • cost visibility • best value • detailed line item construction cost data • education • execution guide • independent audits • internal quality audits information-based decision-making • integrated project delivery, IPD • job order contracting, JOC • locally researched cost data • organization development • organizational change • organizational culture • organizational learning • lean design • leadership • lean procurement • lean planning • lean construction • lean leadership behavior • motivation • mutual trust/respect • mutually beneficial outcomes • project financial management • return on investment • target cost • strategies of implementation • transaction cost • job order contracting • key performance indicators, KPIs • • lean construction delivery methods • operations manual • performance measurements • performance metrics • performance tracking • production control • production improvement • production planning • production planning and control • production/operations management • project production • project production system project management • project and planning control • project control • project controls • project organization • project planning quality • quality assignment • quality assurance • quality control • quality management • quality management systems • total quality management • coordination • cross-functional teams • distributed scheduling • multi-disciplinary team • multi-skilled workers • • multi-tasking • planning • planning and control • planning system • schedule planning • supply chain management • construction supply chain management • construction supply chains • logistics planning • supply chain • supply chain analysis • supply chain integration • supply chain management in construction • supply chain mapping • supply chain strategies • supply chains • total supply chain value • total cost of ownership • customer value • value based management • value chain • value chain management • value creation • value generation • value loss • value management • value parameters • value stream • value stream analysis • value stream mapping • value stream maps • value-added time • value-based management • value-stream mapping waste • materials waste • time waste • waste causes • waste control

• Early Involvement of Key Participants • Shared Risk and Reward • Multi-Party Contract • Collaborative Decision Making and Control • Jointly Developed and Validated Project Goals • Mutual Respect and Trust Among Participants • Collaborative Innovation • Intensified Early Planning • Open Communication within the Project Team • Technology Leveraged as a Collaboration Tool and Used by All Parties • Lean Principles of Design, Procurement, Project Delivery, Construction, and Operations • Co-Location of Teams Physically and Virtually • Transparent Financials (Locally researched detailed Unit Price Book)


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