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Lean Project Delivery

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Title: Lean Project Delivery


1
Lean Project Delivery
  • Glenn Ballard
  • Project Production Systems Laboratory
  • Engineering and Project Management
  • University of California at Berkeley

2
Workshop Objectives
  • Understand Lean Project Delivery
  • Where did it come from?
  • What is it? How is it different?
  • Prepare for the pre-construction phase of your
    projects
  • Coordination and control through reliable
    promising
  • Set based design strategy
  • Maximizing value for money through target costing
  • Collaborative design process
  • Launch project planning
  • Business case, stakeholder map, stakeholder
    values
  • Constraints financial, location, regulatory
  • Organizational and contractual structure project
    governance
  • What will we start doing? What will we stop
    doing?

3
Glenn Ballard a brief CV
  • Experience
  • Pipefitter, Foreman, Construction Engineer,
    Productivity Quality Specialist, Internal
    Management Consultant for Brown Root and
    Bechtel
  • Independent Management Consultant for Petroleos
    de Venezuela, U.S. Dept. of Energy, Pacific Gas
    Electric, Koch Refining, BAA (Heathrow Terminal
    5), Channel Tunnel Rail Link (St. Pancras
    Station)
  • Current Position
  • Professor in the Engineering Project Management
    Program, Dept. of Civil Environmental
    Engineering, UC Berkeley
  • Director, Project Production Systems Laboratory,
    UC Berkeley
  • Education
  • B.A. in Mathematics
  • M.B.A.
  • PhD in Civil Engineering

4
The Airplane GameAn exercise in production
system design
  • Engineering and Project Management
  • University of California at Berkeley

5
Phase 1-3 Assembly Layout
Incoming Queues
6
Phase 1-3 Assembly Layout
WS1
WS2
WS3
WS5 (QC)
WS6
WS4
Incoming Queues
7
Performance Metrics
  • Planes the number of good planes produced in
    each 6 minute phase.
  • Time the time it takes the first good plane to
    get through the system.
  • Rework the number of planes turned upside to
    indicate defects in configuration or fit.
  • Work-in-Progress Inventory (WIP) the number of
    subassemblies on the table at the end of the 6
    minute phase.

8
Phase 1 Logistics
  • Workstations in work flow sequence
  • Materials located at workstation
  • Workstations 2-5 have an incoming queue space
  • Completed Batches of 5 placed in queue space of
    next station
  • Batches remain together until final inspection

9
Phase 1 Policies
  • Workers perform only their assigned tasks - NO
    THINKING
  • Maintain Batch integrity - BUILD IT IF YOU CAN
    and PASS IT ON IF YOU CANT.
  • QC Problems only detected by Inspector - NO
    FEEDBACK - NO TALKING
  • All QC problems set aside as rework - TURN UPSIDE
    DOWN
  • QC Inspector announces first good plane.
  • Assemblers are paid by the piece.

10
Your Hypotheses
  • How many good planes will your team produce in
    Phase I?
  • How long will it take for you to produce the
    first good plane?
  • How much rework will you generate (planes turned
    upside down)?
  • How much WIP will you generate (subassemblies
    left on the table)?

11
How could this system be redesigned for better
performance?
12
Phase 2 Logistics
  • Workers may have only one assembly at their
    workstation
  • Only 1 assembly allowed in queue space between
    stations (Batch size of 1)
  • Assembly can only be placed in queue when it is
    empty (pull mechanism).
  • Workstations in Work Flow Sequence
  • Materials located at station
  • Stations 2-5 have an incoming queue space

13
Phase 2 Policies
  • QC Problems may be verbalized by any worker
  • SOME THINKING and TALKING ALLOWED
  • All QC problems set aside as rework at station
    discovered.
  • TURN UPSIDE DOWN
  • Everyone is paid hourly wages plus a bonus for
    team performance.
  • Workers perform only their assigned tasks
  • Workers cannot fix QC problems from upstream
  • Inspector announces first good plane.

14
Your Hypotheses
  • How many good planes will your team produce in
    Phase II?
  • How long will it take for you to produce the
    first good plane?
  • How much rework will you generate (planes turned
    upside down)?
  • How much WIP will you generate (subassemblies
    left on the table)?

15
Your Hypotheses
  • How many good planes will your team produce in
    Phase II?
  • How long will it take for you to produce the
    first good plane?
  • How much rework will you generate (planes turned
    upside down)?
  • How much WIP will you generate (subassemblies
    left on the table)?

16
Phase 3 Logistics
  • Use phase 3 Instruction Sheets.
  • Workers may have only one assembly at their
    workstation
  • Only 1 assembly allowed in queue space between
    stations (Batch size of 1)
  • Components can only be placed in queue when it is
    empty (pull mechanism).
  • Workstations in Work Flow Sequence
  • Materials located at station
  • Stations 2-5 have an incoming queue space

17
Phase 3 Policies
  • Workers perform ANY step in the production
    process.
  • QC problems can be fixed by any worker - Fix it
    when you find it.
  • No restrictions on talking.
  • Everyone is paid hourly wages plus a bonus for
    team performance.
  • Inspector announces first good plane.

18
Your Hypotheses
  • How many good planes will your team produce in
    Phase III?
  • How long will it take for you to produce the
    first good plane?
  • How much rework will you generate (planes turned
    upside down)?
  • How much WIP will you generate (subassemblies
    left on the table)?

19
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20
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21
Lean Production Techniques in the Airplane Game
  • Minimize the movement of materials and workers by
    sequencing and positioning of workstations
    (layout) and by maintaining materials at the
    workstations.
  • Release work (materials or information) from one
    workstation (specialist) to the next by pull
    versus push
  • Minimize batch sizes to reduce cycle time.
  • Make everyone responsible for product quality
  • Balance the workload at connected workstations
  • Encourage and enable specialists to help one
    another as needed to maintain steady work flow
    (multiskilling)

22
More Lean Production Techniques
  • 1. Stop the line rather than release bad product
    to your customer.
  • 2. Minimize changeover (setup) time to allow
    one piece flow.
  • 3. Make the process transparent so the state of
    the system can be seen by anyone from anywhere.

23
The Airplane Game
  • What are the key points or lessons for you?
  • How might these apply to designing and making
    buildings? How could you use what you have
    learned on your projects?

24
Lean Project Delivery What is it? Where did it
come from? Where is it going?

Graphic courtesy of Extemin
25
What is this thing called LEAN?
What has changed Manufacturing, and sharply
pushed up productivity, are new concepts.
Information and automation are less important
than new theories of manufacturing, which are an
advance comparable to the arrival of mass
production 80 years ago. Peter Drucker, The
Economist, pg 12, November 3, 2001

26
Craft Production
  • One Off, Custom Products
  • Flexible, Simple Tools
  • Highly Skilled Workforce
  • Integrated Product Development
  • Quality by tinkering and rework
  • Build to Order
  • High Cost - Low Volume

Source The Machine that Changed the World by
Womack, Jones Roos
Courtesy of Strategic Project Solutions Inc. 2005
27
Mass Production (Ford)
  • High speed, automated tools
  • Large batches and inventories
  • Good enough quality
  • Departmental organizations
  • Lengthy product development
  • Low innovation rate

Source The Machine that Changed the World by
Womack, Jones Roos
Courtesy of Strategic Project Solutions Inc. 2005
28
Toyota Production System (aka Lean)
  • Started in the 1950s
  • Chief Architects
  • Taichi Ohno Shigeo Shingo
  • Challenge
  • Limited Cash Space
  • Sophisticated Customers
  • Goal
  • A custom product, delivered instantly, with
    nothing in stores.

Source The Machine that Changed the World by
Womack, Jones Roos
Courtesy of Strategic Project Solutions Inc. 2005
29
Lean Compared to Mass 1980s
Source The Machine that Changed the World by
Womack, Jones Roos
30
Design Performance
Japan
USA
  • Avg. Engineering Hours (millions) 1.7 3.1
  • Avg. Development Time (months) 46.2 60.4
  • Employees in Project Team 485 903
  • of Body Types per New Car 2.3 1.7
  • Supplier Share of Engineering 51 14
  • Ratio of Delayed Products 1 in 6 1 in 2
  • Prototype Lead Time (months) 6.2 12.4
  • Prod. Start to First Sale (months) 1 4
  • Return to Normal Quality (months) 1.4 11

Source The Machine that Changed the World by
Womack, Jones Roos
Source The Machine that Changed the World by
James P.Womack and Daniel T. Jones
31
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32
Lean Project Delivery System
Purposes
Design Concepts
Product Design
Fabrication Logistics
Commissioning
Alteration Decommissioning
Constraints
Process Design
Operations Maintenance
Detailed Engineering
Installation
Project Definition
Lean Design
Lean Supply
Lean Assembly
Use
Production Control
Work Structuring
Learning Loops
33
Traditional versus Lean
  • Decisions are made sequentially by specialists
    and thrown over the wall
  • Product design is completed, then process design
    begins
  • Not all product life cycle stages are considered
    in design
  • Activities are performed as soon as possible
  • Downstream players are involved in upstream
    decisions, and vice-versa
  • Product and process are designed together
  • All product life cycle stages are considered in
    design
  • Activities are performed at the last responsible
    moment

34
Traditional versus Lean
  • Separate organizations link together through the
    market, and take what the market offers
  • Participants build up large inventories to
    protect their own interests
  • Stakeholder interests are not aligned
  • Learning occurs sporadically
  • Systematic efforts are made to optimize supply
    chains
  • Buffers are sized and located to perform their
    function of absorbing system variability
  • Stakeholder interests are aligned
  • Learning is incorporated into project, firm, and
    supply chain management

35
Profitability Increase
36
Waste reduction in a design office
37
Moving from lean projects to lean enterprises
the Toyota Way
  • Base management decisions on long-term philosophy
    even at the expense of short-term financial goals
  • Create continuous process flow to bring problems
    to the surface
  • Use pull systems to avoid overproduction
  • Level out the workload (heijunka) work like the
    tortoise, not the hare
  • Build culture of stopping to fix problems to get
    quality right the first time
  • Standardized tasks are the foundation for
    continuous improvement and employee empowerment
  • Use visual control so no problems are hidden
  • Use only reliable, thoroughly tested technology
    that serves people and processes
  • Grow leaders who thoroughly understand the work,
    live the philosophy, and teach it to others
  • Develop exceptional people and teams who follow
    your companys philosophy
  • Respect your extended network of partners and
    suppliers by challenging them and helping them
    improve
  • Go and see for yourself to thoroughly understand
    the situation (genchi genbutsu)
  • Make decisions slowly by consensus, thoroughly
    considering all options implement rapidly
  • Become a learning organization through relentless
    reflection (hansei) and continuous improvement
    (kaizen)

38
Summary
  • What is Lean Project Delivery?
  • A third form of production system design, neither
    craft nor mass, adapted for capital projects.
  • The lean ideal Give customers what they want,
    deliver it instantly, without waste.
  • Where did it come from?
  • Lean production was invented by Toyota, then
    adapted for construction by researchers and
    practitioners associated with the International
    Group for Lean Construction.
  • Where is it going?
  • From manufacturing to all industries,
    including those in which production systems take
    the form of projects construction, product
    development, research, software engineering, air
    and sea shipbuilding, custom fabrication, work
    order systems, health care delivery, oil field
    development.

39
Workshop Objectives
  • Understand Lean Project Delivery
  • Where did it come from?
  • What is it? How is it different?
  • Prepare for the pre-construction phase of your
    projects
  • Coordination and control through reliable
    promising
  • Set based design strategy
  • Maximizing value for money through target costing
  • Collaborative design process
  • Launch project planning
  • Business case, stakeholder map, stakeholder
    values
  • Constraints financial, location, regulatory
  • Organizational and contractual structure project
    governance
  • What will we start doing? What will we stop
    doing?

40
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41
Traditional Management Increases Variability
Plan Reliability Data
  • Company 1 33
  • Company 2 52
  • Company 3 61
  • Company 4 70
  • Company 5 64
  • Company 6 57
  • Company 7 45
  • Average 54

42
The Physics of Coordination
43
The Last Planner System of Production Control
44
Master Schedule
45
Functions of Master Schedules
  • Demonstrate the feasibility of completing the
    work within the available time.
  • Develop and display execution strategies.
  • Determine when long lead items will be needed.
  • Identify milestones important to client or
    stakeholders.

46
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47
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48
Reverse Phase (Pull) Scheduling
  • Produce the best possible plan by involving all
    with relevant expertise and by planning near
    action.
  • Assure that everyone in a phase understands and
    supports the plan by developing the schedule as a
    team.
  • Assure the selection of value adding tasks that
    release other work by working backwards from the
    target completion date to produce a pull
    schedule.
  • Publicly determine the amount of time available
    for contingency and decide as a group how to
    spend it.

49
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50
Functions of the Lookahead Process
  • Make work ready by identifying and removing
    constraints
  • Shape work flow sequence and rate
  • Match work flow and capacity
  • Maintain a backlog of ready work
  • Develop detailed plans for how work is to be done

51
Constraints Analysis Design
Project Mega Bldg Report Date 3 Nov
C o n s t r a
i n t s ______________________________
_________________________________________________
52
The Last Planner System of Production Control
53
Quality Characteristics of Weekly Work Plans
  • Definition
  • Soundness
  • Sequence
  • Size
  • Learning

54
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55
Reasons for Non-Completion
56
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57
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58
Summary Recommendations for Production Control
  • Limit master schedules to milestones and long
    lead items.
  • Produce phase schedules with the team that will
    do the work, using a backward pass, and making
    slack explicit.
  • Drop activities from the phase schedule into a 3
    week lookahead, screen for constraints, and
    advance only if constraints can be removed in
    time.
  • Learn to make reliable promises.
  • Track PPC and act on reasons for failure to keep
    promises.

59
Plan Failure 1
  • Failed to transmit site plan package to the
    general contractor as promised. Reason provided
    conflicting demandsI was overwhelmed during
    this period. 5 whys revealed that the required
    time was underestimated for collecting the
    information needed because the Citys
    requirements for traffic analysis were different
    and greater than had been assumed.

60
Can Last Planner be Applied to Design?
61
PPC on a Design-Build Project
62
Case Study - Theater Project
  • PPC for the various project teams
  • Site/Civil 78
  • Structural 35
  • Enclosure/Architectural 62
  • Mechanical / Electrical 55
  • Theatrical / Interiors 52
  • Project Support 85
  • Total Average PPC 61.6

63
Plan Failure Analysis 1
64
Plan Failure Analysis 2
65
Plan Failure Analysis 3
66
Plan Failure Analysis
  • Failures were generally the result of not
    understanding something critically important-as
    opposed to mistakes in calculation or otherwise
    within the design act.
  • The fundamental causes of non-completion were
    failure to apply quality criteria to assignments
    and failure to learn from plan failures through
    analysis and action on reasons.

67
Nature of the Design Process Implications for
Design Production Control
  • PPC of design processes is not very high.
  • Some type of task explosion or decomposition is
    needed in order to identify what needs to be done
    to make assignments ready to be performed.
  • Given the nature of the design process, such
    explosion must occur near task execution.

68
The Physics of Design
  • Design is essentially a value generating process.
  • Design generates value within constraints and
    competing purposes.
  • Design is the domain of wicked problems.
  • The flow of work in design is iterative and
    generative.
  • Design criteria are the critical issue in design
    work flow control.

69
Questions or Comments?
70
Workshop Objectives
  • Understand Lean Project Delivery
  • Where did it come from?
  • What is it? How is it different?
  • Prepare for the pre-construction phase of your
    projects
  • Collaborative design process
  • Coordination and control through reliable
    promising
  • Set based design strategy
  • Maximizing value for money through target costing
  • Launch project planning
  • Business case, stakeholder map, stakeholder
    values
  • Constraints financial, location, regulatory
  • Organizational and contractual structure project
    governance
  • What will we start doing? What will we stop
    doing?

71
Lean Design An Overview
72
Needless (Negative) Iterations
From Lottaz, et al. Constraint-Based Support for
Collaboration in Design and Const. Jrnl of
Computing in Civ.Eng., 1/99
73
Set Based Design
  • Set-based engineering has been used to name
    Toyotas application of a least commitment
    strategy in its product development projects.
    That strategy could not be more at odds with
    current practice, which seeks to rapidly narrow
    alternatives to a single point solution, but at
    the risk of enormous rework and wasted effort.
  • It is not far wrong to say that standard design
    practice currently is for each design discipline
    to start as soon as possible and coordinate only
    when collisions occur. This has become even more
    common with increasing time pressure on projects,
    which would be better handled by sharing
    incomplete information and working within
    understood sets of alternatives or values at each
    level of design decision making e.g., design
    concepts, facility systems, facility subsystems,
    components, parts.

74
Set-Based Design
  • Preventing engineers from making premature
    design decisions is a big part of my job.
    (Toyotas Manager of Product Engineering)

75
Set Based Design
  • Toyotas product development process is
    structured and managed quite differently even
    than other Japanese automobile manufacturers.
    Toyotas product development
  • Develops multiple design alternatives.
  • Produces 5 or more times the number of physical
    prototypes than their competitors.
  • Puts new products on the market faster than their
    competitors and at less cost.

76
Negative vs Positive Iteration
  • We suspect that Toyotas superior performance is
    a result of reducing negative iteration, and that
    the reduction is more than sufficient to offset
    time wasted on unused alternatives. Negative
    iteration occurs as a result of each design
    discipline rushing to a point solution, then
    handing off that solution to downstream
    disciplines in a sequential processing mode.

77
Making Decisions at the Last Responsible Moment
  • Whether or not one has the time to carry
    alternatives forward, would seem to be a function
    of understanding when decisions must be made lest
    we lose the opportunity to select a given
    alternative. We need to know how long it takes to
    actually create or realize an alternative.
    Understanding the variability of the delivery
    process, we can add safety-time to that lead-time
    in order to determine the last responsible
    moment. Choosing to carry forward multiple
    alternatives gives more time for analysis and
    thus can contribute to better design decisions.

78
Advantages of Set-Based Design
  • 1. Enables reliable, efficient communication.
  • Vs point-based design, in which each change may
    invalidate all previous decisions.
  • 2. Waste little time on detailed designs that
    cant be built.
  • 3. Reduces the number and length of meetings.
  • 4. Bases the most critical, early decisions on
    data.
  • 5. Promotes institutional learning.
  • 6. Helps delay decisions on variable values until
    they become essential for completion of the
    project.
  • 7. Artificial conflicts and needless iterations
    of negotiations are avoided.
  • 8. The initiator of a change retains
    responsibility for maintaining consistency.

79
A Set Based Design Strategy
  • Identify and sequence key design decisions
  • For each decision, generate alternatives and the
    criteria for evaluating them
  • Determine the last responsible moment for
    decision making
  • Evaluate and choose from alternatives
  • Document each key design decision alternatives,
    criteria, evaluation selection

80
Workshop Objectives
  • Understand Lean Project Delivery
  • Where did it come from?
  • What is it? How is it different?
  • Prepare for the pre-construction phase of your
    projects
  • Collaborative design process
  • Set based design strategy
  • Coordination and control through reliable
    promising
  • Maximizing value for money through target costing
  • Launch project planning
  • Business case, stakeholder map, stakeholder
    values
  • Constraints financial, location, regulatory
  • Organizational and contractual structure project
    governance
  • What will we start doing? What will we stop
    doing?

81
Making a Virtue of Necessity
  • Lower the river to reveal the rocks
  • Systematically stress the production system to
    identify needed improvements
  • Buffer the production system so experiments can
    be performed without risk of violating commercial
    agreements
  • Price Profit Cost
  • Artificially manipulate constraints to drive
    innovation

82
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83
How to lower the river on capital facility
projects
  • 1) reduce the amount of money made available for
    design and construction of facilities with
    pre-specified functionalities, capacities and
    properties
  • 2) increase the minimum acceptable ROI, or
  • 3) increase the valued facility attributes
    required beyond what current best practice can
    deliver for a given cost.

84
St. Olafs College Field House
85
Comparing Projects
86
Setting the Target Cost
  • Assess the business case (demand, revenues),
    taking into account the cost to own and use the
    facility (business operations, facility
    operations, facility maintenance, adaptability,
    durability) as well as the cost to acquire it.
  • Determine minimum acceptable ROI or maximum
    available funds.
  • Answer the question If we had a facility with
    which we could achieve our specific purposes, and
    if we could have that facility within our
    constraints of cost, location and time, would we
    do it?
  • If the answer is positive, and if project
    delivery is not considered risky, fund the
    project. If the answer is positive and project
    delivery is considered risky, fund a feasibility
    study to answer the question Can we have the
    facility we have in mind, will it enable us to
    achieve our purposes, and can we acquire it
    within our constraints?
  • Start a feasibility study by selecting key
    members of the team that will deliver the project
    if judged feasible.
  • Determine and rank stakeholder values.

87
Setting the Target Cost
  • Explore how the facility will perform in use
    through process modeling and simulation.
  • Scope the facility that will deliver the values.
  • Determine the expected cost if the facility were
    provided at current best practice.
  • If expected cost exceeds available funds or
    violates ROI, attack the gap with innovations in
    product/process design, restructure commercial
    relationships, etc.
  • If expected cost still exceeds available funds or
    violates ROI, adjust scope by sacrificing lesser
    ranking values.
  • If the scope and values that support the business
    case can be provided within financial
    constraints, fund the project. Otherwise, kill
    the project.

88
Project Definition Process
89
Designing to the Target Cost
  • Allocate the target cost to systems, subsystems,
    components,
  • Form teams by facility system substructure,
    superstructure, envelope, HVAC, lighting, etc.
  • Establish a personal relationship between
    designers and cost modellers/construction experts
    in each system team.
  • Have cost modellers/construction experts provide
    cost guidelines to designers up front, before
    design begins.
  • Require designers to consult cost modellers on
    the cost implications of design alternatives
    before they are developed.

90
Designing to the Target Cost
  • Incorporate value engineering/value management
    tools and techniques into the design process.
  • Periodically convene all teams together to make
    sure they are not sacrificing project-level value
    to local optimization.
  • When previously agreed, by meeting or beating the
    target cost, release funds for adding back lower
    ranking values or other scope additions valuable
    to the client.
  • Schedule cost reviews and client signoffs, but
    develop design and cost concurrently.
  • Use computer models to automate costing to the
    extent feasible.

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92
Tools
  • Feasibility Study With Detailed Budget (Target)
  • Engage all parties at earliest possible time
  • Scheduling (At SRMC the end users were divided
    into clear groups for SDs and beyond)
  • Use a room data sheet
  • Full engagement from the Affiliate
  • Estimating at the design table
  • Empowerment to declare a breakdown
  • Clear conditions of satisfaction to teams
  • Willingness to say no (need to have or want to
    have)
  • Target team matrix (Organize Teams)
  • Adopt a Budget Realignment Approach and Tool

93
Workshop Objectives
  • Understand Lean Project Delivery
  • Where did it come from?
  • What is it? How is it different?
  • Prepare for the pre-construction phase of your
    projects
  • Coordination and control through reliable
    promising
  • Set based design strategy
  • Maximizing value for money through target costing
  • Collaborative design process
  • Launch project planning
  • Business case, stakeholder map, stakeholder
    values
  • Constraints financial, location, regulatory
  • Organizational and contractual structure project
    governance
  • What will we start doing? What will we stop
    doing?

94
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95
Workshop Objectives
  • Understand Lean Project Delivery
  • Where did it come from?
  • What is it? How is it different?
  • Prepare for the pre-construction phase of your
    projects
  • Coordination and control through reliable
    promising
  • Set based design strategy
  • Maximizing value for money through target costing
  • Collaborative design process
  • Launch project planning
  • Business case, stakeholder map, stakeholder
    values
  • Constraints financial, location, regulatory
  • Organizational and contractual structure project
    governance
  • What will we start doing? What will we stop
    doing?
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