Project Team 191: Lean Principles in Construction

Lean Principles in Construction Project Team Josh BalonickUniversity of Colorado Brian BarkerGUB-MK Constructors / Parsons E&C Brian BeckerGeneral Motors Tony BuzzeoPraxair Jim DiekmannUniversity of Colorado Eric DeLaneyBMW Constructors Sant HaritWashington Group International Mark KrewedlUniversity of Colorado Dan KummButler Construction Mag RiskJohnson Controls Bob SchulzDow Chemical Lou TroendleWashington Group International David TweedieFru-Con Construction Corp., Chair Craig WrightBlack & Veatch

Project Team 191 Mission To examine the potential for the use of Lean Principles that were developed in the manufacturing industry for adaptation and use in the engineer-procure- construct (EPC) industry.

The Power of Lean “Catch up with America in three years. Otherwise the automobile industry of Japan will not survive.” ― Kiichiro Toyoda Founder, Toyota Motor Co

Lean in Manufacturing Five Principles of Lean Manufacturing: 1.Precisely specify value by specific product. 2.Identify the value stream for each product. 3.Make value flow without interruptions. 4.Let the customer pull value from the producer. 5.Pursue perfection. ― James P. Womack Founder, Lean Enterprise Institute

Opportunity for Improvement in Construction Today Current Manufacturing Value Added 62%SupportActivity 12% 12% Waste26% Current Construction Value Added 10%SupportActivity33% Waste57%

Lean Construction Defined eliminating waste. eliminating waste. meeting or exceeding all customer requirements. meeting or exceeding all customer requirements. focusing on entire value stream. focusing on entire value stream. pursuing perfection in execution of constructed project. pursuing perfection in execution of constructed project. The Continuous Process of:

Drivers of Lean Manufacturing Mass production practices Mass production practices Limited space Limited space Reduced inventory Reduced inventory Limited natural resources Limited natural resources Lower demand Lower demand Quality improvement Quality improvement

Drivers of Lean Construction Waste Waste Non-standardized workplace Non-standardized workplace Individual contract structure Individual contract structure Fragmented relationships Fragmented relationships Supply chain integration Supply chain integration Available work force Available work force Produce one-off projects Produce one-off projects

Use of lean manufacturing principles resulted in better optimization of resources. Use of lean manufacturing principles resulted in better optimization of resources. Value Added Work Improvements Hours/Vehicle 0% 20% 40% 60% 80% 100% 120% Progress with Lean Manufacturing

Accomplishments of Lean Manufacturing Half the human effort in the factory Half the human effort in the factory Half the manufacturing space needed Half the manufacturing space needed Half the investment in tools Half the investment in tools Half the engineering hours to develop a new product in half the time Half the engineering hours to develop a new product in half the time Less than half the needed inventory on site Less than half the needed inventory on site Fewer defects Fewer defects Produces greater and ever growing variety of products Produces greater and ever growing variety of products

Lean Construction Principles Eliminate waste Eliminate waste Customer focus Customer focus Workplace standardization Workplace standardization Culture/people Culture/people Continuous improvement, built-in quality Continuous improvement, built-in quality

Waste in Construction Processes Excessive material handling Excessive material handling Rework Rework Design errors Design errors Conflicts between trades Conflicts between trades Conflicts between other contractors Conflicts between other contractors Ineffective supply chains Ineffective supply chains

Rewards to “GO LEAN” Reduce waste / improve efficiency Reduce waste / improve efficiency Improve safety Improve safety Lower cost Lower cost Reliable Schedules Reliable Schedules Fewer defects / less rework Fewer defects / less rework You have the opportunity to be the construction industry leader. construction industry leader.

Current Manufacturing Value Added 62% SupportActivity 12% 12% Waste26% Current Construction Value Added 10% SupportActivity33% Waste57% Waste Reduction = Sustainability

The Journey to Lean Lean Works!! Literature research Literature research Global interviews with early adopters Global interviews with early adopters Meetings with prominent lean researchers Meetings with prominent lean researchers Activity case studies Activity case studies Questionnaires Questionnaires Literature research Literature research Global interviews with early adopters Global interviews with early adopters Meetings with prominent lean researchers Meetings with prominent lean researchers Activity case studies Activity case studies Questionnaires Questionnaires

Introduction – Lou Troendle, Washington Group Int. Change of culture Change of culture Path forward Path forward Self-assessment tool Self-assessment toolPanelists Jack Hallman, GM: Owner’s Perspective Jack Hallman, GM: Owner’s Perspective Mike Haller, Walbridge Aldinger: Visual Management Mike Haller, Walbridge Aldinger: Visual Management Paul Reiser, Boldt: Production Planning/Culture Change Paul Reiser, Boldt: Production Planning/Culture Change Dan Kumm, Butler: Eliminate Waste Dan Kumm, Butler: Eliminate Waste Jim Diekmann, CU Boulder: Principal Investigator Jim Diekmann, CU Boulder: Principal InvestigatorQ&A Implementation Session

Georgia A Wednesday: 4:30-5:30 pm Thursday: 9:15-10:15 am Implementation Session