Intro to Lean Perceptions of What Lean is • “Lean is about eliminating Waste” Yes, and… • “Lean is about doing More with Less” Yes, and… • “Lean is about standardizing process” Yes, and… •“Lean is about adding Value” Yes, and… What is Lean Project Delivery?

Lean Project Delivery is a way of Thinking and Behaving that focuses on the Customer or Client, the Flow of the Process and how to Add Value and Eliminate Waste.

It is best executed with Incremental, Value Waste Sustainable Improvements. TPS vs. LPD

TPS (Lean Manufacturing):

• Manufacturing is a Repetitive Process with a Defined Sequence Accomplished in a Controlled Environment at the Same Location. • Accomplished by the Same Workforce each Time Repeating the Same Task with Limited Personal Variability • Applying Detailed Instructions Utilizing many Preassembled Components

Analogy: The "Scientific Method“

LPD (Lean Project Delivery):

•Construction is a Repetitive Process with Variable Sequence overall Accomplished in a mostly Uncontrolled Environment at Different Locations • Accomplished by a Different Workforce each Time Doing Multiple Tasks with Personal Variability • Applying Variable Personal Knowledge Utilizing Limited Preassemble Components.

Analogy: Ordered Chaos Road to Mastery

Mastery

“Hmm?” Competence “Aha!”

Understand “Ah!”

Awareness Unaware “Huh!”

“Huh?” Courtesy Will Lichtig LCI 3 Domains of Project Delivery

Operating System

Adapted from G. Howell, LCI 3 Domains of Project Delivery Operating System Commercial

Hierarchical CPM Lump Sum Siloed Specialist Individual Command and Parts Low Price Control Collaborative Lean Entrepreneurial Fla t StiblSustainable ClltiCollective Consensus BIM Best Value

Adapted from G. Howell, LCI 5 Big Ideas

Collaborate; Really Collaborate

Increase Optimize ItiInnovation CtitiCompetitive Relatedness The Whole

Build Continuous Trust Improvement

Projects as Reliability Networks of Tightly Couple Commitment Learning w/ Action

Adapted from G. Howell, LCI 3 Connected Opportunities

Impeccable Coordination

Production System Design

Collective Enterprise

Adapted from G. Howell & Will Lichtig , LCI Three M’s of Lean

Muda Waste

Mura Muri Unevenness Overburden (Flow)

from The Toyota Way Waste in Project Delivery

• Overproduction – Resolving conflicts between trades, or other contractors. Performing work ahead of schedule, causing interferences with other planned work. Additional material ordered due to inability of suppliers to provide quality • Waiting – People waiting for equipment, plans, or instructions on how to proceed. Waiting for material because of ineffective supply chains. Waiting on funding or release of purchase orders. • Movement – Moving materials from one staging to another, handing off work between crews or designers. • Overppgrocessing – Redundant or unnecessaryyp reportin g, ex peditin g material orders or excessive coordination between suppliers. Providing too much information. • Excess inventory –Material staged on site too far in advance of when needed. Contingency – Like inventory hides poor processing, procurement, estimating, design, and coordination error. • Unnecessary movement – Construction teams returning back to “office” to pick up plans, tools or materials not available at the site. Poor coordination of design or construction activies. • Defects – Rework, re-doing some tasks because of errors in the design process discovered after work was started. Failing to provide all necessary information to complete task. Punch lists. Not defining Done. • Unused employee creativity – losing ideas, time, skills, or improvements by not engaging all employees.

• Unevenness – Mura – Flow, Over/Under promising, failing to meet commitments • Overburdon – Muri – Capability, overstressing people or equipment beyond natural limits Adapted from The Toyota Way Three M’s of Lean

Muda Waste

Mura Muri Unevenness Overburden (Flow)

from The Toyota Way Flow ( Manufacturing) Traditional Mass Production Lean Production Thinking Thinking MPS • Economics of Scale • Built in Quality • Apparent Flexibility in • Creates Real Flexibility scheduling • Creates Higher Productivity • Batch processing • Frees up Floor Space • Work in ppgrogress • Improves Safety • Improves Morale • Reduces cost of Inventory • One Piece Flow • Work in progress Reduced Flow vs. Commitment Reliability • What is the impact on Flow on Project Delivery? •Whyyp() is Flow as important (or more) as Waste? • Fact: typical commitment reliability is ~55%

Typical Project Commitment Reliability

Work Incomplete Completed Work as 45% Promised 55%

from G. Howell and G. Ballard research Flow (Construction)

• Pull plan Master Schedule to ensure effort achievable. • Plan work ahead of scheduling/execution (Design, Materials, Manpower, JSA, Permits, Notifications) • Deliver agreed to Services/ Activities when expected. – Closest person to actual work is making the commitment (Last Planner) – Appropriately sized so completion can be measured (weekly) – Avoid Under Promising (too much schedule contingency) – Avoid Over Promising (missing commitments) – All phases/disciplines should participate appropriately – Look to eliminate Root Cause of missed commitments P D Thorough • Level Resources so commitments can be made to Conceptualization match need.

Reflective Careful • Completion is strict Yes/No to avoid rework. Correction Execution • Periodically check progress vs. master schedule Compare to Expected A C Flow (Construction)

Last Planner TM Design at the Pull of Construction

Owner wants an operating asset. • Focus on the building of the asset (how/when) • Keep in mind how and when it will be purchased. Its not always the same. • Design is not the end product and by itself has little value. • Design should frame choices (scope and $) first, narrow the choices, then provide detail and constructability. • Some details are more important than others. Know when to lock them in. • Design should facilitate communication of details. Think about who is the right group to define the detail.

Cost Information/ Plan Design

Manpower MtMater ilial Why SAT’s

Lean Delivery

Action Focused

Current Practice Learning Focused Courtesy Will Lichtig LCI 14 Toyota Way Principles Long Term Philosophy 1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.

The Right Process Will Produce the Right Results 2. Create continuous process flow to bring problems to surface. 3. Use “pull” system to avoid overproduction. 4. Level out the workload. (heijunka) 5. Bu ild a cu lture o f st oppi ng t o fi x pro blems, to ge t qua lity r ig ht the first time. 6. Standardized tasks are the foundation for continuous improvement and employee empowerment. 7. Use visual control so no problems are hidden. 8. Use only reliable, thoroughly tested technology that serves your people and processes. 14 Toyota Way Principles Add Value to the Organization by developing your people and partners 9. Grow leaders who thoroughly understand and work, live the philosoph y, and t each it t o oth ers. 10. Develop exceptional people and teams who follow your company’s philosophy. 11. Respect your extended network of partners and suppliers by challenging them and helping them improve.

Continuously Solving Root Problems Drives Organizational Learning 12. Go and see for yourself to thoroughly understand the situation. (genchi genbutsu) 13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly. 14. Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). 4P Model

• Continual orgggganizational Learning Through Kaizen Problem • Go see for yourself to thoroughly understand the Solving situation (Genchi Genbutsu) • Make decisions slowly by consensus, thoroughly (Continuous considering all options; implement rapidly Improvement and Learning)

• Grow Leaders who live the philosophy People and Partners • Respect, develop, and challenge your people and teams (Respect, Challenge and • Respect, challenge and help your suppliers Grow Them) • Create process “flow” to surface problems • Use pull systems to avoid overproduction Process • Level out the workload (Heijunka) (Eliminating Waste) • Stop when there is a quality problem (Jidoka) • Standardize the tasks for continuous improvement • Use visual controls so no problems are hidden • Use onlyygygy reliable, thoroughly test technology

Philosophy • Base management decisions on a long- (Long-Term Thinking) term philosophy, even at the expense of short-term financial goals

from The Toyota Way Drivers of Motivation (Behavior) • Money • Mastery • Autonomy • Purpose

Motivation MAP Mastery • Know and Develop People – Identif y an d Tr ain Y our R epl acem ent – Push Idea down to contractors • Continuous Improvement/Continuous Feedback – PDCA ( Plan/Do/Check/Act) • Skills Development – ThilCllTechnical Colleges – Job Training Autonomy • Collaboration – Value everyone’s contribution – Team • Consensus – Where possible • Last Planner – You tell me how/when vs. I tell you when – Reliably of commitments – Trust is essential • Encourage/Allow Flexibility of Work time – Work/Life Balance Purpose • Engage Partners with Purpose of Project and Mission of Merck – Work Today ➙ Life Saved Tomorrow – How do the medicines we make improve lives • Tie Efforts to Priorities – Compliance (Quality/Safety/Environment) – Supply (Deliver meds to people cost effectively) • Align Goa ls o f Pro jec t w ith – Goals of each Company – GlGoals of each hIdiidl Individual Lean Safety

Safety Incident

EiEquipmen t Slips or Laps Mis tak e ViltiViolation Failure • Training • Training • Training • Planning • Proper Use • Awareness • Skill • Planning • Planning • Planning • Policing • Capability • Collaboration • Execution • Operability • Execution •1st Run Study • Right Tool for Job • Coordination • Practice •Inspection/ • Fool ppgroofing • Fool ppgroofing Maintenance • Standardization • Standardization Muri (Over burden)

Proper Use Attention, Awareness, Recognition Lean and Safety

Lean and Safety are foundational principles. VS If they are treated as bolt on or plug in programs then both are limited in the results they can achieve. Lean and Safety

Knowledge, Skill, Barriers/ Awareness, Plan, etc. Preventive Actions

Mishap Action Result Lean and Safety

Knowledge, Skill, Barriers/ Awareness, Plan, etc. Preventive Actions

Mishap Action Result

Lean: Increases prior Planning, simplifies and standardizes procedure , Increases awareness of surrounding, helps people recognize pitfalls The Road to Understanding Lean Project Delivery

Ready Project as a Collective Enterprise 4 Production System & IFOA Work Structuring 3 Network of Target Value Design Commitments 2 Dependence & Variability Last Planner System 1 Study Action Awakening New Possibilities Team

Here Adapted from G. Howell Lean Tools Examples • Last Planner • Building Information Modeling (BIM) – 3D, 4D, 5D, BIM • TtVlDiTarget Value Design • Relational Contracting • Modularization/Prefabrication • Set Based Design • A3 Thinking (PDCA, 5 Why’s, Root Cause Analysis) • Choosing By Advantages (CBA) (QFD) • Value Stream Mapping • 5S (Job Box, Connex, Job Site, 5S audit) / Kitting • Just in Time Delivery •Design at the Pull of Construction • Andon / Visual Queuing • Visual Boards / Dash Boards •1st Run Studies / Quality Manuals • Location Based Scheduling What is Being Achieved What is Being Achieved What is Being Achieved What is Being Achieved What is Being Achieved