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4th Edition   

The topics for this edition are:
  • Lean Integrated Project Delivery - The Tools of the Trade - Part II
  • "Costed" Value Stream Mapping - Combining Focussed Lean Improvements with Target Value Design (TVD) 

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Lean Integrated Project Delivery (LIPD)

The Tools of the Trade - Part II

Lean Integrated Project Delivery contains a series of Lean Construction tools designed to "Lean" the project out from bid to completion 

by Mike Schopp

Lean Integrated Project Delivery methods strive to remove costs and activities that do not add perceived value to owners and final users from project delivery processes. Previous articles have covered Relational Contracting, Building Information Modeling (BIM), Co-location, Novel Scheduling Methods, and Prefabrication. This month's topics are Target Value Design and Choosing by Advantages.

 

Target Value Design (TVD): 

Once again, Lean methods turn current practices upside-down. Rather than tabulating costs for a given design, TVD challenges the project team to achieve necessary requirements at a given cost. This forces design teams and construction contractors to work collaboratively. Preliminary cost estimates are developed for alternatives project approaches. Owners must be involved in group discussions that evaluate the alternatives. 

This provides the owner the opportunity to more precisely discern what is truly valuable.  Additional alternatives result from these exercises. Ultimately decisions must be made, but they are made with more valuable and timely information. 

  

Target Value Design, when coupled with the Lean Tool of Value Stream Mapping (VSM), can be a powerful combination of tools to achieve a desired cost in a structured fashion.

 

In this combination, a variant of the VSM process, called a "Costed" Value Stream Map (described in the article below) is created. This "map" not only identifies non-value added steps in a process which can be eliminated as a cost savings, but it focuses its brainstorming activities on improvements and alternatives to the value added steps.       

 

Implementation plans must remain flexible. Creative people will constantly discover new ways to make the design and construction process more efficient and/or increase owner satisfaction. An effective management of the change process must be in-place to remain focused on the project's core objectives.

 

Choosing by Advantages (CBA):

In the book "The Choosing by Advantages Decisionmaking System, author Jim Suhr presents a decision making process that focuses on advantage differences among alternatives. As noted in the book, the basic rule of sound decisionmaking is: Decisions must be based on the importance of advantages. Once a list of alternatives is created, the decisionmaking process consists of four steps:

  1. Summarizing the attributes (characteristics) of each alternative
  2. Deciding the advantages of each alternative
  3. Deciding the importance (on a numerical scale) of each alternative
  4. Assuming the costs are equal, choose the alternative with the greatest total importance of advantages

CBA avoids double counting the advantages of one alternative as a disadvantage of another. In addition to clearly identifying the differences among the alternatives, decision makers must decide the relative importance of each difference. Skills beyond arbitrarily assigning weighted averages are required. CBA is becoming a useful tool to aid the Target Value Design method. 

 

See http://www.decisioninnovations.com/ for further information.

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"Costed" Value Stream Mapping - Combining Focussed Lean Improvements with Target Value Design (TVD)

Lean is NOT a cost reduction activity. Costs are reduced as an outcome of doing Lean activities. However, when combined with TVD, using this Value Stream Mapping hybrid has powerful potential in the short term - as the longer term outcome of Lean activities begin to flow into reduced costs and bids.


by Ted Angelo and Larry Rubrich 

Taiichi Ohno, one of the developers of the Toyota Production System, once said, "Eliminating waste is not the problem, identifying it is." The role of Value Stream Mapping (VSM) in the Lean Toolbox is to make invisible waste ... visible. Particularly valuable in identifying waste (delays) that can extend project lead times, VSMs are:

  • A method of creating a "one page picture" of all processes from the time a customer releases a project until the project is completed.
  • A visual representation of the flow of information and materials/services across all of the processes - both value adding and non-value adding.

While VSMs have many applications in the administrative areas of construction organizations, the application we are discussing is its value when combined with the construction process called Target Value Design (TVD). 

 

Although Lean is not a cost reduction program as previously noted, for construction projects, the project will not move forward if the "bid" is above the owners "allowable cost." At this point a TVD team is developed and a target cost is defined. This is where a Costed VSM is a powerfully structured tool for identifying cost reduction targets.  

 

The Costed VSM follows the normal VSM with several exceptions that will be pointed out. It starts with the regular four steps to VSM as shown below.

          VSM Steps - Construction     

TVD requires that that the TVD team design to a specific target cost. Therefore, the goal of the Costed VSM in construction is to meet this cost.

 

Using a Costed VSM with TVD begins with having a thorough understanding of the owner's requirements. For large construction projects, it will be necessary to create several levels of maps to limit the size of the maps and to provide details for brainstorming improvements at each level. A large project map breakdown might look like:

  1. High level map of the flow of work by architectural, civil, structural, mechanical, electrical, and other specialty contractors, etc.
  2. Systems level map 
  3. Detail by trade

The map is created in the standard VSM format except that we now add "costs" for each of the steps, processes or process boxes as shown below.    

 

Note that during the creation of the Current State Value Stream Map (CSVSM), all participants are asked to write down cost improvement ideas as they think of them on the "starburst/clouds" sticky notes that were handed out when the session started. When the CSVSM is completed, all participants post their notes on the map while explaining their ideas to everyone else. This is the start of the "advanced 2-step" brainstorming process. This posting of the notes is shown below (manufacturing Costed VSM shown).

     VSM Starbursts     

 

The next stage in the Costed VSM varies from the standard VSM process. Just as in Change-Over/Setup Reduction, where we concentrate on the longest time setup elements because they have the largest opportunity to improve, the Costed VSM concentrates on the highest cost steps, components, processes, or process boxes because they present the largest opportunity for savings.

 

So that we can focus the second stage of brainstorming on these items, we separate these high cost items on a separate sheet as shown below.

      VSM Costed Step 1

 

The next step in the advanced 2-step brainstorming process is to write down all the ideas on flip charts (the standard brainstorming process most organizations use) as shown below. It is important to encourage participants to make sure that all starburst/cloud ideas are included on the flip charts. There is normally some "idea fallout" of the starburst/cloud ideas as the participants elevate the value of their own ideas as a result of hearing ideas during the flip chart brainstorming step.

 

     VSM Brainstom Lists 

After the flip chart ideas are affinitized (grouped by like idea), the Costed VSM adds another extra stage. The remaining eligible ideas (for voting), and there might be 50-100, are then evaluated by the participants from a cost savings and implementation risk standpoint. This allows the participants to more easily identify the best ideas by adding the ratings together. The scale looks like this:

 

Cost Savings

1 = Low

3 = Medium

5 = High

 

Risk to Achieving Idea Implementation

1 = High

3 = Medium

5 = Low

 

An additional tool that could be of value at this point is Choosing By Advantages (CBA) as discussed in the above article. 

 

The next step in the brainstorming process is to complete a secret ballot vote for the best ideas by the participants (typically the participants/teams are given between 5-10 votes depending on the number of eligible ideas).

 

After the votes are posted, the top ten ideas (by votes) are listed. At this point in a normal VSM process, the team creates the Future State Value Stream Map (FSVSM). For a Costed VSM, the participants do a process/reality check: If all ten ideas are implemented, will the cost/price goal be achieved?

 

If the answer is yes, the team creates the FSVSM.

 

If the answer is no, the team goes further down on the "voted for" list or rebrainstorms for more ideas, and then does the reality check again. This activity continues until the goals are met.

 

For three-day VSM Events, the next step is to choose a team leader and then develop the Kaizen Newspaper with the "actions items" required to turn the FSVSM into the CSVSM, followed by a standard Kaizen Event management report out.

      Kaizen Newspaper

 

For five-day events, the team breaks into sub-teams on day three and begins the "voted for idea" implementations. The team leader selection and Kaizen Newspaper is then accomplished at the end of day five, followed by the management report out.

This Lean newsletter is the result of the collaboration of three organizations:
 
Grunau Company
Ted Angelo, Executive Vice President

Creative Project Services LLC
Mike Schopp, Project Management

WCM Associates LLC
Larry Rubrich, President

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