July 25, 2007

New breed of manager has emerged

By Korky Koroluk

correspondent

A new breed of construction professional has been developing for a decade as people are gradually exposed to the concept of “lean construction.”

It’s an idea that can be difficult to grasp since it turns the process of project delivery on its head with its emphasis on bringing people like specialty contractors into the picture so early that they are involved in the project’s schematic design.

Project managers have remained largely skeptical, but the new breed —the lean project managers — can point to significant savings in both time and money when lean concepts are employed.

Leading the charge is Greg Howell, one of the leading proponents of lean construction in North America. He was one of the founders of the non-profit Lean Construction Institute in the United States. And, through Lean Project Consulting Inc., of California, he is bringing lean to one of the largest health-care providers in the northern part of the state — Sutter Health.

Sutter plans to use lean construction throughout its capital building program, estimated to be worth $6 billion (U.S.) over the next eight years. It feels that if it can save even 10 per cent by using lean, that will amount to $600 million.

David Pixley, Sutter’s director for facility planning and development, says that’s enough to finance “a couple of significant hospitals.”

Sutter’s move means that all its general contractors and their subs must also adopt the lean approach, and Howell has already spent a lot of time with the team that will build a cancer-treatment facility in Concord, Calif.

To help explain lean, Howell outlined what he calls the “five big ideas” that provide lean with its underpinning:

— Collaborate. Really collaborate;

— Improve relationships among participants;

— Realize that a project is a network of commitments.;

— Optimize the project, not the parts of the project;

— Couple learning with action.

That sounds so simple that many project managers, owners and contractors will say it’s what they already do. But Howell notes that “design” in a lean project means that the “product and the process are designed together.”

In traditional projects, “the product design is completed, then the process design begins.”

Because designing the process is conventionally done as a separate step, Howell maintains, participants often lose sight of the overall objective, which is, or should be optimizing the entire project, not just its individual parts.

“Every effort in the industry ... has been to get every piece (of a project) as efficiently as possible, so we’re proposing something different here.”

That difference can result in important savings through improved scheduling, more timely material delivery and a lot fewer change orders.

Those savings, say lean adherents, can reduce project costs by anywhere from 10 to 40 per cent, and have actually done so on projects in Europe.

Howell said part of his work consulting with Sutter involves explaining that lean schedules are not devised by starting at the beginning and working forward, but by starting at the end and working back. He used forming a foundation as an example.

If the objective is to arrive at the “foundations complete” stage, “I have to install the anchor bolts.”

“But for me to do that, you have to set the templates. Before you can do that, someone else has to do the forming. But first they need someone to set the rebar.”

And so it goes all the way back to digging the hole.

The payoff is that potential problems are discovered early, which means fewer changes, less lost time, even less money tied up in inventory sitting idle because it was delivered too early in the process.

A small, but growing number of construction industry companies in the U.S. have adopted lean principles, because there is a slowly growing number of projects being built the lean way. Most of these early adopters report greatly increased productivity — sometimes as much as 20 per cent.

Some large generals, sensing that lean might be most appropriate for large, complex projects, are training staff in the concepts. Among them is DPR Construction Inc., a large national contractor in the U.S., which will do a $150-million medical office development for Sutter Health. Another is San Francisco-based Pankow Building, which has expressed keen interest in obtaining some of Sutter’s future work.

Internationally, lean is used in the United Kingdom, Finland, Denmark, Singapore, Korea, Australia, Brazil, Chile, Peru, Ecuador and Venezuela.

Lean is slowly being incorporated into university courses in construction and project management, including those taught at the University of California at Berkeley. It is also being taught at universities in Chile and Brazil.

In the U.S., Howell and his long-time associate, Glenn Ballard, have been the prime movers and shakers promoting lean. Ballard is on the engineering faculty at UC-Berkely and at Stanford. Howell is a former Stanford professor.

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