lean contracting practices
TRANSCRIPT
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Lean Construction Practices
Presented by:Dennis Sowards,Quality Support Services, Inc.
Research funded by the New Horizons Foundation
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The New Horizons Foundation study, “Comparison of Operation Cost Factors: Union Versus Nonunion HVAC and Sheet Metal Contractors,”…
Union contractors do have a higher cost structure, however that is offset in part because of our productivity.
…it is incumbent upon us—union HVAC and sheet metal contractors—to become “best in class” in both field and management productivity.
We need to be on the forefront with lean manufacturing, Building Information Management Systems and other practices that can give us a competitive advantage.Sincerely,Richard J. Cramer Sr.SMACNA PresidentSMACNEWS June 6, 2007
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Workshop Objectives
At the end of this session you will be able to explain:4 Reasons for doing Lean7 Wastes to Attack5 Basic Lean Tools - You can useOne choice - to Think Lean or Not!
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Reason #1 Lean Works
in Other Industries
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Lean works in ManufacturingManufacturing Lead Time - less than 1 day
Delivered Quality – 3 PPM
Delivery Performance – 99+%
Inventory Turns – Greater than 50 turnsper year
Manufacturing space - reduced 35 to 50%
Source: Lean Transformation by Bruce A.Henderson and Jeorge L Larco, 1999.
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Lean Works in GovernmentUS Army:Red River Repair Facility in Texarkana, AR -They repair Humvees
2004 - Averaged 3 vehicles per week2006 (Applying Lean) - 32 vehicles per day!
South Korea - a maintenance unit using Lean quick changeover techniques reduced the time to overhaul an M-1 tank from 195 to 30 days.
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Lean Works in HospitalsHospital acquired infections down from 10 per 1,000 days patients are on ventilators to 2 per 1,000. (Robert Wood Johnson University Hospital Hamilton)
5S event in hospital medical supplies -made supplies more available with 17% reduction is storage space.
Source: “Change Healthcare Organizations From Good to Great,” Quality Progress, Nov. 2005
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Reason # 2:Lean works
in Construction!
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Boldt LPS Success
0 2 4 6 8 10 12 14 16 18 20
Health Care
Institutional
Correctional
Industrial
Months
Actual Planned
6 mo - $15M
5 mo - $15M
18 mo - $18M
14 mo - $17M
18 mo - $13M
15 mo - $12.6M
18 mo - $5M
12 mo - $4.6M
Lean works in Construction
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It Works at TDIndustriesStudied 50 jobs all over $300,000 in labor
average productivity ratio
Jobs not using Lean Tool 0.97Jobs using the new approach 0.88
Lean construction techniques saved 17% of their Projects' labor budget - a savings of $1,511,544!
Source: Jim Teston's master thesis at Clemson University: Evaluating the Benefits of Lean Construction on Productivity August 1998.
Lean works in Construction
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Reason #3:Customers are beginning towant Lean
Construction!
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Customer ExpectationsGeneral Motors is challenging the industry to
develop, embrace and implement Lean Principles:
• Expect construction firms to be proactive in applying Lean Concepts
• Expect near-term results from bid through implementation at the site
SMWIA/ SMACNA - 2006 Partners in Progress Conference
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Sutter Health Capital Program
The Executive Challenge–Successfully execute the design and construction of resultant $5.5B program usingLean Project Delivery Methods
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Construction Users Roundtable (CURT) says:
Education is key;
There needs to be a shift in everyone’s way of thinking;
Owner’s must be the agents of change and must demand change; and
LEAN must become the new culture of the industry.
Issued June 2007
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Reason 4:There is so much waste in our Industry that there is a great profit opportunity to those who go Lean!
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Waste Opportunities
Current Manufacturing
Current Construction
Value Added10%
SupportActivity
33%
WasteWaste57%57%
Research findings from the Construction Industry Institute (CII):
ValueAdded62%Support
Activity 12%
WasteWaste26%26%
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Lean Thinking is a shift in management's focus to differentiate between Value and WasteAKA: JIT & Toyota Production System (TPS)
Lean Construction applies the principles and techniques of Lean Thinking to develop a better way to deliver the job.AKA: Lean Project Delivery System
What is Lean?
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What the customer is actually willing to PAY for (USEFULNESS/COST)
Includes Functions, Features, Time & Price
Relates to the whole product or service received
Is the opposite of WASTE.
Value
What would be Value-Added to your customer?
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7 Types of Waste (Muda) to AttackDefects in products: Rework, Field orders & Punch ListsOverproduction: Fabricating material or ordering it too soon, JIC thinkingInventory: Material stored at site or yard, work in process, unused tools & parts, forms and stashesUnnecessary processing: Double & triple estimates from suppliers, redundant or unnecessary reporting, multi signatures on forms, material requisitions or time sheets, any non-value added stepsUnnecessary movement of people: Treasure hunts, looking for files, poor layout of work area (ergonomics)Transport of goods: moving material, tools or parts, handing off work between crewsWaiting: Crews waiting for equipment, plans, RFI’s, field orders, or material, payroll waiting for time sheets, equipment waiting to fabricate material
What wastes have you seen this week?
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Waste
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Waste!
Sheet Metal waiting to be processed
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Finished Duct waiting for the next process
Waste!
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Value vs.Waste
Pursue Perfection
Pathway to Lean
Flow
Pull
TheValueStream
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Look at Value Added & Non-Value Added Time
VALUENON VALUE ADDED ADDED
TOTAL TIME
Typically Value added time is about 3%of the Total Time! (Yet we tend to focus our improvement efforts on the value added steps.)
Value Stream Analysis
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Flow
Want to make Value Flow
Batch and Queuing VS Flow
Flow is Counterintuitive
What is Lean?
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Sign & date cards
Flow Exercise
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Means no one upstream should produce a good or service until the customer downstream asks for it. Products and services are created only on demand.
PULL
What is Lean?
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Pursue Perfection
What if there were no WASTE at all?
The paradox is that perfection can never be achieved, but must be pursued.
Continuous Improvement
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Operations vs. Processes
Cut Stiffen Form Corners
FormEdges
AssembleInsulate?
Insulate
Yes
No
Lean Principles
Lean focuses on the space between the steps
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PDCA & Experimentation
Lean ThinkingPlan Do
Act Check
Plan Do
Act Check
Plan Do
Act Check
Plan Do
Act Check
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Basic Lean Tools & TechniquesFive S’sMuda Walk - “Chalk Watch”Process Mapping/Value AnalysisSpaghetti ChartVisual Controls
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SortingSimplifyingSweepingStandardizingSelf-discipline
The 5 S's
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SORTINGSort out the necessary from the
unnecessary, discard the unnecessary.
The 5 S's
If you don’t use it - get it it out of the way!
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How to Sort?
NECESSARY ITEMS USED OR LIKELY TO BE USED
UNNECESSARY ITEMS (NOT USED OR NOT LIKELY TO BE USED)
NO VALUE & EASY TO DISPOSE OF
SOME VALUE
NO VALUE BUT COSTLY TO DISPOSE
DISPOSE OF IMMEDIATELY
LOOK FOR BEST USER TO GIVE OR SELL
FIND LEAST COSTLY WAY TO DISPOSE
RARELY USED (1 - 2 times per year)
FREQUENTLY USED (daily or weekly use)
OCCASIONALLY USED (1 - 2 per month)
REDTAG
USEAUCTION
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Opportunity to Sort
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Opportunities to Sort
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Opportunities to Sort
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SIMPLIFYINGCreate and identify a place for
everything based on how often we use it
The 5 S's
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Simplifying Steps:1. Put tools & material used most often closest to the work area, those used less often, further away.
2. Develop a way to label or show where everything goes. Consider:· Shadow board· Marking the item and the location· Color-coding· Labels on drawers with list of contents inside
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Simplifying Steps:
3. Develop ways to daily replace usable items· Establish lead times for replacement of daily usage supplies· Determine minimum and maximum supply levels and mark them. Two Bin system
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Examples of Simplifying
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Simplifying
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Simplifying
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Inside a Service truck
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The 5 S's
SWEEPINGPhysical and Visual Control of
the work area
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The 5 S's
STANDARDIZINGis creating standard ways to keep the work areas organized, clean and orderly and documenting agreements made during the 5S’s.
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How to Standardize?Standardize:• Gang Boxes• Tools & equipment• Shadow boards & color codes• Yard lay-down areas
• Have clear instructions for people who deliver goods or materials to the site.
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The 5 S's
SELF-DISCIPLINEFollow through with the 5Ss
agreements
Do 30 Second Test
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Contractors doing 5S’s report:Freed up a space on both sides of the shop
Returned $5,000 in materials
Saved 90 field man-hours on one job by reducing crew time getting ready for job
An accounting department got rid of 18,000 duplicate copies of shop invoices
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Supply Room - Before
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Supply Shop After 5 S’s
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The 5 S'sGarage – 5 years ago
Garage 5 Years ago
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Garage – 6 months after 5-S Began
Garage 6 months after starting 5S’s
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Garage Now
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UMEC Tool Crib Before 5S’s
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UMEC Tool Crib After 5S’s
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Laydown Yards
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Basic Lean Tools & TechniquesFive S’sMuda Walk - “Chalk Watch”Process Mapping/Value AnalysisSpaghetti ChartVisual Controls
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Do a Muda (Waste) Walk
Go to Gemba & do “Chalk Watch”
FlowTreasure HuntsWasteStandards/systems/methods
(can’t improve if no standard way exists)
Equipment maintenance & utilizationAsk Why? (5 times)
Assume -the best way we do it today is the worst way tomorrow!Find a better way to do it.- CEO of Toyota
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Sample Idea from a Muda Walk
Our shop manager and PM's had to walk -app. 90 steps every time they wanted to retrieve a fax, or info from their "in basket" >>Bought a new machine that will fax, scan, and copy and put it back in their department just a few steps from their desks.
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Sample Idea from a Muda Walk
We were scanning to many large fittings at one time on the water jet & to many uncompleted fitting’s waiting to be insulated. >>Send large fittings to finish cutting liner for 1 fitting at a time. This will eliminate a 2nd sorting of pieces and steps.
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Take the Muda Walk Challenge
Go to Gemba
Look for waste
2 Improvement Ideas a month
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Five S’sMuda Walk - “Chalk Watch”Process Mapping/Value AnalysisSpaghetti ChartVisual Controls
Basic Lean Tools & Techniques
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Process Mapping/Value AnalysisWhat you think your process looks like:
What the real process looks like:
What your Customer is willing to pay for (Value added)
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Process Mapping/Value Analysis
Map the steps from install duct back to sheet metal (coil) delivered to shop. Include all steps & ‘wait’ times
Do one product line at a time - rectangularstraight/fittings
Measure distance traveled & cycle time
Categorize all steps into:
1) Value added
2) Non Value Added But Necessary
3) Non Value added & Not Necessary
Eliminate all #3’s and look for ways to improve #2’s by making the product flow; reduce set-up time & do 5S’s
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Five S’sMuda Walk - “Chalk Watch”Process Mapping/Value AnalysisSpaghetti ChartVisual Controls
Basic Lean Tools & Techniques
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Observations – look for waste Use a spaghetti chart
GetRoomorder
Getbagel
Cutbagel
Toastbagel
Get butter &Cream Cheese
Get juicecup
Pourjuice
Get knife& napkins
Checkorder
DeliverTo room
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StorageRack
SpiralDuct
machine
Table
Table
StorageRack
PlasmaCutter
StorageRack
Roller
SpotWelder
Swedge
Beader
Sealing &
Painting
Parts, odds & endsRack
Office & Files
Lay
Down
area
Lay
Down
area
Lay
Down
area
Lay
Down
area
Assemble & Spot weld
Lay
Down
area
Finished Duct Lay Down area
Spiral Fittings FlowStraight Spiral Flow
Finished Duct Lay Down area
D
E
L
I
V
E
R
Y
Loading to Trucks
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Five S’sMuda Walk - “Chalk Watch”Process Mapping/Value AnalysisSpaghetti ChartVisual Controls
Basic Lean Tools & Techniques
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Visual ControlsPurpose: To put in plain view all tools, parts, plans, schedules and performance indicators so everyone can see at a glance what is happening.
Colored hard hats
Posted daily/weekly schedules & progress
(Board Meeting)
Flow chart for how to run payroll
Mark pipe/duct - one straight line
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Five S’sMuda Walk - “Chalk Watch”Process Mapping/Value AnalysisSpaghetti ChartVisual Controls
Which tools might work for your company?
Basic Lean Tools & Techniques
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Basic Rules to improve Construction
Focus - 1. Keep the Crew Installing2. Reduce Inventory3. Reduce Costs
Where to start?
Define a Key Process - Value StreamSteps - value added/non value added
- Who Touches- Requirements- Process Owner
Define/verify VALUE as seen by the customer> Improve Quality - Eliminate Defects- DON’T GET IT > DON’T MAKE IT > DON’T SEND IT> Do Root Cause Analysis
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Does Value Flow - so one step leads immediately to the next with no batches?> Look at handoffs
Eliminate Treasure Hunts - Organize the Workplace > Use 5S’s, Spaghetti Chart
Try something
Where to start?
Plan Do
Act Check
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No Muda - 2 implemented ideas per month!
> Use the ‘chalk watch’
Standardize gang boxes, tools & equipment
Where to start?
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Change Management Challenge
20 - 60 - 20 Rule
Are you in the boat?
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Where to get help?Not many “Lean” consultants in the industry
Some Suppliers & Customers can help
SMACNA - Sheet Metal Made Lean and Clean (5S’s) By David Skinner
Lean Construction Institute
Some Industry Magazines
Lean Thinking: Tools for decreasing Cost and increasing Profit - New Horizons Foundation
Free monthly e-newsletter on Lean & 5S’s in Construction
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Final Thought:Profit = Elimination of Waste + Loyal Customers
To do Lean is not the question but the Answer!
> It Increases Value to the customer
and
> Drives out Waste
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What’s your choice?
>>Think Lean!