Lean cannot be considered as just a set of tools. Dave Kievet, Group President – Western Operations at The Boldt Company in the United States, discusses how the organisation’s focus on project management tools shifted in response to the big challenge of building a hospital’s exterior in 45% less time and without additional costs.
In the early to mid-1990s, The Boldt Company took up the initiative of looking for ways to increase productivity. At that time, a large percentage of our work was self-performed. Our goal was to find ways that we could improve productivity in an effort to reduce schedules and lower costs without sacrificing quality.
We embarked on an extensive labour productivity challenge believing that if we were to break the work down into specific increments and assign aggressive targets for the completion of those increments, our workforce would gradually begin increasing their production and we would achieve the breakthrough results that we were looking for.
We began tracking everything, from square feet of surface area of concrete formwork to tons of reinforcing steel placed, to lineal feet of steel studs. Through all of our efforts, we achieved improvement but not at the levels we had hoped. We kept our eyes open for new and innovative developments that might offer the solution to our challenge.
In 1998, we began to investigate how Toyota’s lean model could be used in the construction industry. We also became aware that an organisation by the name of the Lean Construction Institute was on this same track.
In 1999, The Bold Company became one of the early members of the Lean Construction Institute. With their help, we launched an initiative to implement the Last Planner® System and Pull Planning. We selected five projects to target for implementation.
The results we achieved were nothing short of amazing: in our previous attempts to improve productivity, we achieved somewhere between a 3% to 5% improvement in schedule and budget performance. On our first attempt of implementing lean tools we were seeing the potential for a 10 to 15% increase without any additional resources.
During these early years, our lean efforts were focused primarily on the implementation of the tools.
At the time we really didn’t understand why the tools worked for us but it was through them that we slowly began to see the impact that such things as constraint removal and the reliability of commitments had on the outcome of our projects.
In retrospect, our use of the tools started to change the way that we looked at the construction process. For the first time we were able to view it from the perspective of overall project performance improvement and optimisation, as opposed to a more myopic view of merely improving and optimising individual parts.
By 2000 we had implemented the Last Planner and Pull Planning on 20 projects, all of which ended up performing well above our expectations.
That same year we were presented with an opportunity to expand the use of the newly discovered planning tools to the design process in addition to the construction process. Coincidentally, we had just started approaching target costing, a process used by lean companies to eliminate waste and innovate value in product development.
We negotiated a contract with a private university in rural Minnesota for the design and construction of a 114,000-square-foot athletic facility. That previous year another private college located in the same town had just completed the construction of a similar 85,400-square-foot facility. They did it in 24 months using a conventional design/bid/build model, for a cost of $13.5 million.
We discussed our lean delivery concept with our design partner and decided to give it a try: we completed the project in 2002 and it was a complete success, by all measures. We designed and constructed our facility in 14 months for a total cost of $11.7 million.
That was a 35% reduction in cost on a price-per-square-foot basis and a 42% reduction in schedule as compared to the other facility.
The results confirmed that the path we were on with lean was the right one. With that project we recommitted our effort and began exploring and experimenting with new techniques.
We rapidly moved from the implementation in five projects in 1999 to more than 40 by 2001. In addition to Last Planner and Pull Planning, we began implementing and developing new tools such as target costing, project financial management, workflow, production management, lean business process and collaborative project delivery.
Each time we implemented a new process it changed the way we saw what we were doing. For the first time we began to see problems that we never knew existed through conventional eyes.
Over time our focus began to shift, and seeing problems became easier. We began to look for, or in some cases to develop, our own tools to solve the problem we saw, rather than using the tools to see the problem.
Our journey has developed over the course of 15 years. The current paradigm within the construction industry states that there is a dynamic balance between project cost, schedule and quality. It is believed that you are only able to have an impact on two of these factors at any one time. If you wish to maintain the level of quality on a project, the only way that you are able to increase the speed of delivery would be to increase cost.
This point was proven on another Boldt project. We were constructing a 446,000-square-foot, 9-story hospital in Sacramento, California.
We asked our field team to put together a schedule that reflected what they believed it would take to install the exterior skin of the building. This was a critical aspect for the project since we needed to enclose the building before we could begin any of the interior framing.
After several weeks of planning, the project team delivered a schedule that indicated it would take 11 months (240 working days) to complete the task.
Their reasoning was sound. However, in order to deliver the project as promised, we would need to complete the task in just six months (130 working days). We asked the project team to go back and look at their schedule and tell us what it would take to complete the project in that time frame.
They concluded that the work could in fact be done in that time, but that it would result in a substantial cost increase.
Their plan was to attack the problem by adding additional shifts and stacking the trades.
The increased cost was due to shift differential pay and inefficiencies in the execution of the work. We challenged the project team, but they were convinced that their plan was the only way to succeed.
The traditional approach would have been to accept the team’s recommended schedule – after all, this was an exceptionally experienced team with years of successful projects behind them.
What we were asking the team to do defied all conventional thinking: we wanted to maintain the level of quality, reduce the schedule, AND maintain the price.
From our experience we understood that if we were able to achieve our goal of six months we were going to have to help the team see the work from a different perspective. To help with the challenge, the team turned to line of balance or takt time planning. They used the following steps:
- Define work sectors – The team broke the work to be done into areas of approximately equal amounts of work;
- Trade sequence – The team identified all of the necessary trades that needed to pass through a sector to complete the work;
- Durations – Each trade sequence was analysed to identify the crew size and duration;
- Balance workflow – All durations and crew size were analysed and then sized appropriately to ensure that the work in each sector flowed without interruption. There would be no work waiting on workers and no workers waiting on work;
- Production plan – The final step was to sequence the workflow into a production plan.
To ensure that quality was also maintained, the team established a Built-In Quality work plan. This helped the team to ensure that not only was the work to be completed on time but that it would be completed correctly and with the expected level of quality the first time.
The results of the effort stunned the planning team.
The original schedule using conventional techniques indicated that it would take 11 months to enclose the building. The results of the revised planning effort showed that the work could be completed in six months, 45% faster than originally thought without any increase in cost.
HARD TO BELIEVE
The team’s initial reaction was that there must have been an error in their logic. To figure out where they had made a mistake, the team went back and re-examined their work. They mocked up a section of the wall in a first-run study to ensure that they had all of the sequences correct. After extensive review, they convinced themselves that their plan was in fact valid.
On September 1, 2011 the enclosure team started work. By February 1, 2012 the team had the building substantially enclosed. By March 1, a full six months sooner than they had originally planned, the work was complete. No additional overtime was spent on the work and the improvement in schedule resulted in zero cost increases.
Our lean journey has taken many twists and turns over the course of the past 15 years. When we first started out, we viewed our efforts of implementing the Last Planner System as a learning curve that we had to overcome to achieve the results we were looking for.
What we discovered when we reached the top of that learning curve is that we were exposed to even greater challenges that we never knew existed. Sort of like entering the foothills of a mountain range, the view of the mountain range is hidden from view by the apex of each rise. It is only when we reach the pinnacle of each one that we are exposed to what truly lies ahead.
We view lean and our efforts to apply Toyota-based approach to the design and construction environments as an exciting and strategic undertaking. We have much more to learn than we have already learned but we are committed to this direction for our customers and for Boldt.