Construction Project Management introduces you to Project Initiation and Planning. Industry experts join Columbia University professor, Ibrahim Odeh, to give an overview of the construction industry. Professor Odeh teaches the fundamentals of the Project Development Cycle while guest lecturers discuss Lean Project Delivery method and Lean Design Behaviors. Technological advances, such as Building Information Modeling, will be introduced with real world examples of the uses of BIM during the Lifecycle of the Project. The course concludes with Professor Odeh discussing the importance of project planning and scheduling and an opportunity to develop a Work Breakdown Structure.
Lean Design and Delivery
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Construction Project Management
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Lean Project Delivery
Architect Sam Spada, discusses the Lean Project Delivery method and Lean Design Behaviors. Lean project delivery is a project management process that strips away unnecessary effort, time and cost in the planning, design and construction of capital projects to deliver what the Owner values.
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Ibrahim Odeh, Ph.D., MBAInstructor, Department of Civil Engineering and Engineering Mechanics, Columbia University
Director of Research and Founder, Global Leaders in Construction Management
All right, welcome to part two.
We're gonna talk about lean project delivery.
Since I'm an architect, we'll talk a little bit about lean design,
independent study, and finally, a lean tool that we use called the plus delta.
I mentioned earlier in adjust and total quality management, and
that is certainly the source for a lean project delivery as it exists today.
Here's how it's evolved,
total quality management became the Toyota production system.
Toyota made better products at a better price,
became the world's largest manufacturing organization.
They at some point in the nearly 2000,
they might have hit a billion dollars in profit for the year.
Well that got noticed by a lot of people.
In the 1990s, Glenn Howell and Glen Ballard the cofounders of
the Lean Construction Institute developed what they call the Theory of Lean.
Look into the practice of the Toyota production system and
said, what are the theoretical Foundings, why is this working?
So things like Just-In-Time delivery, for
example, was related to mathematical constructs such as queuing theory.
They developed a theory of lean.
And that placed the Lean Construction Institute into a point where,
in the mid-2000s when construction caused escalation in central California for
healthcare projects was approaching 1% per week.
But they were able to respond to the call from Sutter Health System
to find a better way to do projects.
Because Sutter Health simply could not deliver projects by accounting for
60% annual cost escalation.
This is too much.
The outgrowth of their conversations around 2005 was IPD,
Integrated Project Delivery, which actually is a trademarked name that was
developed by, I believe, Owen Matthews in Florida who was a design builder.
He’s given the name to Lean Construction Institute, and
they really have not enforced the patent, but strictly speaking that is
a copyrighted term, Integrated Project Delivery, but we are all using it today.
What’s happening now, is that people are realizing we need to
come back to the lean bit, that the integration that,
of project delivery is not as strong without that lean.
So now we are seeing conversations about lean, project delivery systems, and
that's where we're going.
When we look at lean project delivery, one way to break it down,
this is a mind map that I've done just to help myself understand it,
at the top we see there's a traditional contract.
And on a traditional contract you can actually overlay, if you will,
lean behaviors like the five S's that we'll come to later a technique for
the construction site.
But to really implement a theory and
to get the benefit, to be able to do as I said early, to mutualize private
interest when people sit down at the table they have those three things in mind,
to get that aligned you really need a better theoretical alignment, so
that the behaviors can really be richly realized, and that's where an integrative
form of agreement we're finding is perhaps the richest way to achieve lean.
But you can de-lean with different forms of contract agreement.
I will talk about behaviors and
I will talk a little bit about contracts but I made a point earlier.
And this is a point that has been made by at least one attorney at
the Lean Construction Institute's Fourteenth Congress
that lean is the best way to manage uninsurable risks.
It is an outstanding tool for risk management, because it aligns
those three questions in everybody's heads for mutualization of private interest.
Here's why we needed a form of agreement to doing integrated project delivery well.
If we look at it's simplest, we have three key parties.
An owner who funds the entire project, who will get the benefit after it's completed.
The designer,
who works with the owner to understand the programmatic requirements and develops
a solution that can work in the real world now using building information modeling.
And if you will in Silico Construction,
but prebuilding inside of a computer model.
And of course, the constructor.
The organizer of the logistics, the trade, the materials and
labor that comes together to actually deliver a project.
Client begins with an objective.
They've got that end, right?
Means to a means to an end?
When you look at the designer side, well we've got direct personal expense in our
overhead, which we stay within our budget, we make a profit.
Important to make a profit to hire the best people and
hire the better technology.
The constructor as well has labor materials he need to pay for
the general conditions to run a site, and then there is a fee left over profit.
Now if we want more value for money that would be a way of increasing the project
objective for less cost of construction.
Well sometimes we find that it's necessary for
let's say the design side to spend more time and DPE.
Let's say for a very fussy detailing of an interior design, let's say.
That the project architect, the project interior designer,
if that person were on site full time, she could answer questions effectively, and
the job will get done faster, saves the owner money.
So they're getting more project objective for the amount of money they're spending.
So that's great for the owner.
The design team has now increased their DPE
spend than what happened to their profit.
In traditional contracts, there are ways to deal with this, but
they become cumbersome.
An example such as this where by spending more design time
we reduce construction time and construction cost.
We would have to have on a lump sum bid, we would have to have some back charges
from the owner to the CM, possibly down to the tres and the sub-subs.
The architect and engineers have to put together their
additional service proposals, work that through.
It gets cumbersome.
It's not easy to make money flow across the boundaries
in a traditional project delivery.
And that also includes flowing not just from constructor to designer and back and
forth, but also up to the owner if there's stuff that the owner Or to be providing,
because they can do it at a lower cost.
This is the fundamental reason why integrated project delivery and
the integrated form of agreement was necessary.
Because traditional project delivery and
forms of agreement do not make it easy for money to flow.
With Integrated Project Delivery, which is a key component of lean, but
not necessarily essential.
With Integrated Project Delivery, we are able for
the three key components, owner Instructor,
designer, to agree as a team what's the best way to spend the project budget?
Not just the construction budget, but the hard and soft costs, and
the monies can flow where they can do the most good so the owner gets the biggest
amount of project objective for the lowest amount of construction and total cost.
So lean project delivery is a project management project,
it's strictly unnecessary time, effort and cost and planning and
design of construction of capital projects to deliver what the owner values.
The end of the day, although it's a mutualization of interest,
it's essential that what the owner values in my definition of lean project
delivery is what gets delivered.
Cuz remember those stepping curves, the owners have expectations,
if we're gonna help that owner achieve those expectations,
they've got to get what they value.
So with apologies to Maslow, I do believe there's a hierarchy of needs in lean
project delivery, a way of organizing essential tools and behavior.
And based on my years of practice, it does begin with a culture, a culture of lean.
And then a way of scheduling, a way of budgeting, a way to create,
I am speaking from an architect's perspective And finally a way of deciding,
cuz at the pinnacle of effective projects are decisions that get made and
decisions which stick.
It's incredibly important, because for
major capital projects there's always extensive over sight.
Which is a nice way of say second guessing, and
monday morning quarterbacking, as we say.
And it's important for a project to be able to withstand reasonable scrutiny,
why did you make that decision?
So the apex of a project that's achieved momentum, are decisions that are getting
made efficiently, effectively, and they're sticking.
And you can do that better in my opinion with lean project delivery.
So that decision apex is a tool called choosing my advantages.
It's supported by set paced design, which in turn is supported by a technology or
technique, I should say for estimating of target value design.
And finally, scheduling,
which is the way that we pull together all the parts, design and construction,
owner decision making, using the last planner a form of pull planning.
So on the theory side, there are ten features of lean project delivery, and
I'm not gonna go through each of these ten.
I'm gonna hit high points and focus on tools that you can use,
just about any project, but particularly on a lien project.
Set based design is probably the more complex of the tools that are out there.
And the best way to begin your understanding of it
is to compare it to the way we typically design, which is point based.
We might begin with a range of concepts, diamond, circle, and triangle.
And at a point in time early in the process, pick one and
say we need the circle, only to find at the end of the process that what we really
needed was some diamond with a little bit of coloration from the triangle.
Now with set based design, we try to put off that decision for
selection till the last responsible moment, so
that we take the best of each set, we don't advance it to quite the level of
detail that we do early with this with the point base, but
we bring it far enough along that we can make a decision at the last responsible
moment that encaptures all the best parts that solve the client's problem.
We're seeing this being used, for example, by developers on projects for energy
conservation measures, where clients, the United States Government, in particular,
general services administration, has gone out to the developement community and
said, we have a building that in terms of its energy usage is obsolete.
It's energy usage index is too high.
We need to be more efficient.
Come to us with your price, and
your recommendations for energy conservation measures.
And we're finding development teams working closely with their engineers and
their architects developing sets of solutions for things such as, how do we
bring a brand new cooling system into an existing building with limited access and
making decisions at the last responsible moment.
It's happening right now.
And the way we capture design decisions and
capture improvements to our system is using a technique called the a three.
Now a three is nothing more than a paper size that's common in Asia and Europe,
it's comparable to in the states that we call tabloid or 11 by 17.
On a single piece of paper, working counterclockwise if you will,
we begin with a problem statement and work our way to a solution.
And in this we can capture a better way of doing things, so
that any three begins with a theme.
It states the background.
What's the current condition?
It does a root cause analysis and identifies a target.
Okay, this will make us better, and then the implementation plan and the followup.
So, for example, a very well known design firm here in the States active in health
care wanted to reduce the amount of rework they did on projects.
Now rework itself is a very broad term.
So they said what's something that is a recurring problem for us, and
they said well, it's hardware.
In a hospital environment, we're dealing with very expensive doors,
a lot of stainless steel, a lot of electronic hardware for security.
And if we get it wrong, it's a big change order, nobody's happy with that.
So they developed a series of A3's looking at that theme, did a root cause analysis,
they knew what the target was.
And they developed a plan that said, maybe information should exist
in only one place, let's use our billing information model as a place to include
all the information specifications, the details for hardware, get it in one
place it's completely real time coordinated with the rest of the design.
And what they found with their implementation plan,
in doing that, is that they are significantly reducing the amount of
rework in an area that has always been a problem, a bugaboo for health care,
which is hardware and your specifications and what happens out in the field.
So the A3 is a great way to take an improvement and
make a decision at that last responsible moment and more importantly,
to capture that improvement on a single sheet of paper, or
a single Powerpoint slide, or a single Word document, or
a single spreadsheet document, whatever electronic media you like.
And you can retrieve it much more easily.
So this way, two or three years from now, when a designer or
constructor is saying, how did we solve that problem?
Rather than going through an entire file to try to find information, they know well
we create A3's for ever problem we solve, and the A3's are living documents,
they keep them, they use them on the next project, that's what manufacturers do.
You just go to your A3 file and say okay, I'm looking for
this theme, here's how we solve it then, can we get any smarter?
Can we get any better?
Now Last Planner is a form of pole planning.
We can spend a day talking about this.
I'm going to give you an overview.
Last Planner begins like many good scheduling exercises,
with the end in mind.
Let's say that star is the milestone at the end of the project.
People would sit down, work around a table, put durations up on a board,
work back to a start day and confirm yes, if we start now we can finish then.
And last plan that we go a little bit more deeper, we really ask ourselves, each
other I should say, what I really need from you, and when do I really need it?
That's an important question, because typically what we will find is people will
ask for a delivery on Wednesday, because they actually need it on Friday,
but don't trust the system or
the individuals to get it there on Friday, so they come deliver it early.
And what you happen in a complex situation like a major capital project is
you got hedges built on hedges built on hedges.
In a last planner, in pool planning,
you really ask the question, what can our system provide?
When can it be reliably delivered?
Because the goal here is to flow work based on promises kept, and
we actually measure promises, and I’ll talk about that in a moment, we pull,
in other words, we authorize work based on our system status, and as a last resort
we'll push schedule, we'll push people to get things done based on demand.
To illustrate that let's compare push to pull.
In a traditional push, in this example, in the field the electrical trade and stools
conduit, junction boxes on the slab, and at some point in the future the concrete
trade will come in they'll pour, and they'll finish their concrete slab.
There's a gap in time there, and that's a waste.
The works in the way of other trades, people could trip, work can get damaged.
In pull, We start with when the concrete trade needs to begin it's work,
and the electrical trade finishes just in time.
So the key difference is where is the milestone?
Is the milestone when I finish my work as it is in push or is the milestone
when I enable the next step in the value chain chain to do their work?
Work and pull, it's the latter.
The mouse down is when we enable the next step to effectively begin it's work.
That's a fundamental change in thinking about how things get done both for
design as well as construction.
But you have to measure it.
One of the phrases that we use in Lean Project Delivery or
Lean Design is to tightly couple learning with action.
So if we do a pull plan, we have to learn from it.
And the way that we learn is that the people typically in construction
in the field every two weeks will meet foreman will meet, and
they'll measure how many promises were kept, how many promises were made.
And it becomes a ratio, and that ratio can return into a simple percentage.
And we're finding that If people on a project in construction are keeping 80% or
more of their promises, their project's getting done on time,
it's getting done on budget, and it's getting done more safely,
more effectively, and it's eliminating a lot of the causes of pain in a project.
On that site, an important way of keeping the site safe and
keeping that flow happening is to be able to do your work.
So the five S's were invented in Toyota.
They actually come from Japanese words that begin with a letter S.
So in English, we are also using an English word.
We're using words that begin with the letter s I should say.
You sort, you set in order, you shine, standardize and sustain.
That is equally applicable to an electrician's toolbox
on the construction site as it is to how medicines are kept
near a nursing station in a patient care facility.
That's an important thing to keep in mind.
Lean has a huge operational impact and tools like 5S have their direct analogs
in just about every we do that if we look at our processes, and we look at our value
chain, we can find ways to be better organized, so we have efficient flow,
so when we measure those promises kept, we have a high percentage.
Target value design is exciting.
There are some real time stories here, projects that were dead.
Dead in the water,
because they could not meet budget, such as a hospital out in Indianapolis.
But with target value design applied, we're able to come back to life and
not only meet budget, but to come way underneath budget and
to create a shared savings for owner, constructor and designer.
So when we target owner design,
we ask ourselves what is the market value of this project?
What should it cost let's say in terms of dollars per square foot?
What's a fair market value, if you went out to bid?
That's construction cost.
We then ask ourselves, what should the target value be, and
we typically like to come in at least 15% less than market value.
So over time, the curve of cost tends to look like this.
We start at the beginning and work with users and occupants, and
you have a grand ideas of well wouldn't it be nice if we did this in the project,
and then we look at program and we say, wow this is really not up to budget,
what can we start doing?
And as a team starts working, all part the team, owner, designer,
constructor, this happens as a group.
That's why it's done a lot in integrated project delivery,
because you want to have all three stakeholders there.
As we start applying structures to our decision making that are cost influenced,
we find that once we start finding ways to make decisions that have a cost benefit,
it's inextricable, you over-shoot, and you come in below the market value.
This is the market value, you come in below that,
you come in below the target value, and you create a savings pool
that then becomes the incentive that everyone shares in.
This is working now.
There are case studies of this project like the hospital in Indianapolis.
I'm an architect and over the last 25 years I've mostly
functioned in an executive role, the Principle in Charge of Project Executive.
So for me, the most exciting thing is digging in, finding out what a client
really needs to solve their problem, and then helping them make good decisions.
And choosing by advantage is a technique that I've been using ever since I
learned it, perhaps five years ago, and it's based on this really key insight.
The decisions must be based on the importance of advantages.
I'll give an illustration, and
you've probably already been doing this in your own personal life.
So In the example I'm gonna show you, which is a real example from my work,
in choosing via advantages there are five key components or alternatives.
If you don't have any options, well you're not making a choice so
we need alternatives.
Every alternative has it's attributes, a characteristic quality.
When we look at these attributes they are, they are fitting into a factor,
something that's important to us, and that factor we know we've met it or not,
because there is an objective criterium.
When we've looked at the criteria that we use against the factors that
are important, and discover attributes that are unique to an alternative, we
find that there's a beneficial difference or not, which we call and advantage.
Here's the real life example.
So, I lead a team of engineers in an architectural and
engineering practice who completed the design of a private charter school.
Very expensive school in Manhattan, on the west side near the Highline Park.
And an independent reviewer was brought in who looked at the systems and
said you're using a two pipe fun cool unit, and
everyone knows four pipe thin cool units are better.
This was distressing news from my engineers.
Of course more pipes, it has to be better.
It's more complicated, more valves, there's more stuff.
You do more things with four pipes.
So they were really nervous, and I said let's just take a step back.
We have alternatives, two pipe, four pipe.
What are the factors?
Turn out there were three factors that mattered.
First was delivery time, the second was this summer and
winter performance, and the third was their spring and full performance.
Cuz in a temperate zone like New York City in the spring or fall, you can have,
in the same day, or in different sides of the building at the same time,
a heating demand or a cooling demand simultaneous.
Whereas, in winter or
summer it's either/or, you're either heating or cooling.
So what are the attributes?
Well, for
two types simple systems can get delivered in 16 weeks as opposed to 24 weeks.
That's an easy criterion, time on housing.
For summer and winter we looked at the ashray cycometric chart for
uniform demand, and we found that well each system in either winter or
summer can meet the demand every day.
They're identical, no advantage.
For spring and fall, using a psychometric chart for swing season demand,
well if it's two part, you're either heating or cooling, you gotta choose.
But for the four part, you can add heating and cooling.
So, where are the advantages?
Well there's none for summer and or winter.
There is an advantage for two pipe in terms of lead time, and
there's an advantage for the four pipe in terms of five added comfort days.
So how do this play out in the decision making process?
Well here were the areas where there was advantage, eight weeks sooner,
five added comfort days.
And you can see there are some numbers on the side.
The numbers can be arbitrate scale of 1 to 10, 0 to a 100.
We use a 100 over here.
And that's where the emotional content of a decision comes into play.
Very important, it's like many others you believe as I do that natural selection
has chosen us to have the advantage of emotions,
because emotions help us make good decisions.
Then we must have decision making tools that allow us to put an emotional impact.
That's what the numbers are for.
And the gut feel, if you will, is saying well here's a real hard thing,
eight weeks sooner.
It's really not that important, scale 10.
Five comfort days scale 25, but meeting the demand
every day even though there was no advantage was the most important thing.
So when we look at the difference of the advantages not just from a hard
criteria, but also from the emotional content we said, okay,
it really is coming down to those five comfort days.
That's more important than eight weeks sooner.
And only at that point did we ask the question, what is it worth?
You'll note that we did not discuss the cost until the very end.
And at that point it became a very simple question to the owner.
And our recommendation to the owner was you're getting five added comfort days,
it will cost you $1 million in up front added construction costs,
you can use that money to capitalize many other investments, and by the way on those
five days where it's perhaps uncomfortable in a classroom you have alternatives.
The kids can go to the library.
They can go outside to the park on the high line.
You can open the windows.
And the owner said, you're right.
Don't change a thing.
Keep the two pipe system.
Choosing by advantages, my favorite lean tool.
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