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1 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
November 12, 2013 3DEXPERIENCE Customer FORUM
SmartMarket Report Focusing
on Industry Innovation through
Lean Construction
McGraw Hill Construction Confidential.
All information presented © McGraw Hill Construction, 2013
All rights reserved.
Harvey M. Bernstein, F.ASCE, LEED AP Vice President, Industry Insights and Alliances
McGraw Hill Construction
2 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Lean Construction Builds on Industry Best Practices &
Latest Trends
All these industry trends are important
aspects of a Lean Construction approach
3 McGraw Hill Construction Confidential.
Dassault Market Research Study Launched to
Understand Benefits and Drivers in Lean from the
Insight of Practitioners
► Participating contractors drawn from two
samples:
• MHC Industry-Representative
Contractor Panel (120 respondents)
• Members of the Lean Construction
Institute (73 respondents)
► Lean Practitioners defined as firms using
at least one of the following practices:
• Lean Construction
• Pull Planning
• Last Planner System
• Just-In-Time
• Toyota Way
• Six Sigma
Definition of
Lean
Construction:
Elimination of
waste from
construction
processes
4 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Agenda
Understanding Lean: A Gap
Benefits and Drivers of Lean Construction
Collaboration and the Tools that Support Lean
Key Recommendations for Future Actions
5 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Understanding Lean: A Gap
6 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Familiarity with Lean Construction and Specific
Practices
Not Familiar With Familiar With Implemented
58%
66%
54%
73%
70%
48%
38%
24%
31%
18%
15%
29%
4%
10%
15%
9%
15%
23%
Six Sigma
Toyota Way
Just-In-Time
Last Planner System
Pull Planning
Lean Construction
Over one third are not familiar with any of these specific practices
7 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Perspective of Contractors About the Efficiency of
Construction Processes
14%
26% 55%
Not Familiar with Lean Practices
Inefficient/Very
Inefficient
Neutral
Efficient/Very
Efficient
8 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Top Challenges to Lean Adoption or Implementation
39% 33% 32%
49%
Lack of Industry
Support/
Understanding of Lean
Belief That Lean
Takes Too Much Time
Lack of
Knowledge
Lack of
Knowledge
Non- Practitioners
Lean Practitioners 43% 40%
Lack of Sufficient
Support Across the
Project Team
Employee Resistance/
Belief Lean is Too
Complex
9 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Lean Experts Find Culture Change Within Their
Organization One of Their Greatest Challenges
“Our superintendents
need to be the ones
driving it. If not, you
can forget it.”
Employee sign-off
is essential.
Engagement is
important.
“People get more engaged
in their work. They get
excited about coming in and
doing things everyday. That
turns into higher quality,
better safety and the things
that are tough to quantify.”
10 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Prefabrication: Engaging Workers in Coordination
and Planning to Improve Efficiencies
We have these foremen in the room, and we need
their buy-in because if we don’t have it, they are not
going to do it anyway.
CASE STUDY
Project: St. Elizabeth Hospital
Contractor: Boldt Construction
► Worked with the field to evaluate use
of prefabrication based on supply
chain, schedule, safety, cost and
quality
► Engaged workers in creating more
efficient processes for installation,
including specially designed cart
► Early planning and employee buy-in
allowed them to calculate savings Bathrooms: Onsite man hours
reduced from 9.5 to 3
Headwalls: Total man hours
reduced from 24 to 7 per headwall
Benefits:
11 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Benefits and Drivers of Lean Construction
12 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Top Benefits of Using Lean Practices
According to Lean Practitioners
71%
74%
77%
77%
80%
84%
Better Risk Management
Reduced Project Schedule
Greater Productivity
Improved Safety
Greater Customer Satisfaction
Higher Quality Construction
13 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Quantifiable Benefits from Lean
Reported by Lean Experts
“Our margins have
improved to expectation,
we’re taking the job at
four or five percent,
and we’re making four
or five percent.”
Consistent
Margins:
Reliability of
Outcome:
Reduced Project
Schedule:
Supervisory Staff
Can Focus on
Managing Workers:
“Reliability of
outcome has
changed from
about 20% to
about 80%-85%”
“The first project I
worked on…We did
it in 4.5 months
[instead of 6 months]
without any
overtime.”
“We have probably
found a 60%
increase in their
ability to directly
manage the labor
force”
4 to5 %
14 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Lean Practitioners Report That Savings from Lean
Make Projects More Profitable
72%
24%
4%
Savings from Lean Contribute Directly to Bottom Line/Project Profitability (According to Firms With Reduced Costs/Increased Profits)
Disagree
Neutral
Agree
64% of Lean practitioners see reduced costs/increased profits due to Lean
15 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Lean Experts Report that the Ability to Compete in a
Challenging Market Is a Key Lean Benefit
I can point to projects we’ve won because
of our experience with Lean. We’ve gotten
work with repeat clients…where they were
absolutely thrilled with the results and they
just handed us work.
16 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Benefits of Conducting Value Stream Mapping
[Value stream mapping] deepens the knowledge of the
installation process and really improves communication
between the field and management because you are
collaborating together on this solution.
CASE STUDY
Project:
Installation of Light Fixtures at UCSF
Cardiovascular Research Building
Contractor:
Rosendin Electric
► Engaged field workers in study,
gathering their feedback
throughout the process
► Recorded every activity (value-
added and non-value added)
► Created a process map to identify
potential time savings
Benefits:
Process cost approximately
$2,000 in man hours to conduct
$$
Saved 15 minutes per fixture on
2,000 fixtures, roughly $50,000
17 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Factors Most Influential for Non-Practitioners to
Consider Adopting Lean Practices
70%
70%
81%
83%
Higher Quality Construction
Greater Customer Satisfaction
Greater Productivity
Greater Profitability/ReducedCosts
Consistent with Benefits
Achieved by Lean Practitioners
18 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Owners Are Increasingly Important Drivers for Lean
86%
11%
3%
Firms Use Lean Practices to Stay Competitive Because Owners Increasingly Expect Shorter
Schedules Lean Experts:
• Owners are showing
more familiarity and
expectation of Lean
today than 5 years ago
• Owners need to mandate
Lean to encourage wider
industry adoption
Disagree
Neutral
Agree
74% of Lean practitioners see reduced project schedules due to Lean
19 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Collaboration and the Tools That Support Lean
20 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Improving the Flow of Data Supports a Firm’s Ability to
Collaborate
33%
31%
77%
70%
35%
42%
62%
81%
Reduced Risk
Less Reliance on Blueprints/Specifications
Better Productivity
Better Collaboration AmongTeam Members
Source: McGraw Hill Construction, Information Mobility SmartMarket Report, 2013
Top Benefits Reported by Contractors of Improvements to
Information Mobility in the Last Two Years
General Contractors
Trade Contractors
21 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Lean Experts Find Collaboration Critical to Improving
Efficiency and Implementing Lean
“For our pipe fitter to be
more efficient, we have
to be in-sync with how
the sheet rock
contractor is doing their
work because they can
ruin our efficiencies in a
heartbeat.”
Key to Achieving
Benefits:
Creates
Efficiencies:
Need Contractual
Support to Succeed:
“We think that our best
results [from Lean] usually
come in the form of
collaborative environments
where everybody wins and we
deliver a greater value when
things are done in the best
interest of all instead of the
best interest of one or two.”
“Absent the appropriate
contractual agreement….these
efforts were little more than
scheduling and did not involve
the collaborative and coordinated
involvement of all stakeholders,
so these projects quickly fall back
to traditional results and the
impact of the plan is never
realized.”
22 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Prefabrication: Collaboration
The collaboration is a benefit in itself. It
brings the team closer from both a cost and
construction standpoint.
CASE STUDY
Project: Exempla Saint Joseph
Replacement Hospital
Contractor: Mortenson Construction
► Collaboration in early stages of project
allowed Mortenson to conduct intensive
prefabrication/ modularization:
► 25 foot long multi-trade corridor racks
► 15 standardized modular pods replacing
75 different bathroom configurations
► Designers and contractors worked
together in “Prefabrication Charrettes”
in schematics
► Use of Prefab enabled fast-track
schedule
Benefits:
Project currently running 6
months ahead of a traditional
project schedule
6 m o.a hea d
23 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Tools to Support Collaboration:
Use of an Enterprise Resource Planning (ERP) System
Uses an ERP:
• Lean Practitioners: 51%
• Non-Lean Practitioners: 17%
ERP: Coordinates business management and project management data.
Firms with an ERP are More Likely to
Engage in Collaborative or Data-
Dependent Efficiency Practices:
•Offsite Prefabrication
•Using Studies of Worker Ergonomics/
Activities to Create Efficiencies
•Weekly/Daily Meetings with Workers
65%
23%
7% 5%
Degree of Support for Efficiency Efforts Provided by an ERP
Somewhat/Poorly Supported
Supported
Well/Very Well Supported
Not Sure
24 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Better Tools to Support Internal and External
Collaboration Required
Of all tools used by highly
collaborative GC’s
interviewed, Custom
Database Systems were the
most effective in supporting
internal collaboration.
None reported a viable off-
the-shelf option.
Functions in Custom
Database Systems that
Effectively Support
Collaboration on Projects:
Seamless
sharing of
information
Ability to make
systems available
to project partners
Linking data
from past
projects to
new projects
Generating real-
time project
performance
reports
Leveraging
data from
BIM models
25 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Research Supporting Lean and Key Recommendations for Future Action
26 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Lean Construction Research Results on Safety Supported
by Results from Earlier Safety SMR Research
Source: McGraw Hill Construction, Safety in Construction SmartMarket Report, 2013
77% of Lean Practitioners Benefit from Improved Safety
Due to Lean Practices
Use of Prefabrication (an Important Lean Strategy)
Improves Construction Site Safety
63% report
improves
safety
27 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Lean Construction Research Results on Risk Supported by
Results from Earlier Risk Management SMR Research
Source: McGraw Hill Construction, Mitigation of Risk SmartMarket Report, 2011
Integrated Teams (a Key Lean
Practice) Lowers Project Risk
71% of Lean Practitioners Benefit from Better Risk
Management Due to Lean Practices
77% report
decreased
risk due to
use of
integrated
teams
28 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Intensive Prefabrication on Lean Projects Leads to Improved
Project Schedule and Budget—Supported by Lean Case Studies
Source: McGraw Hill Construction, Safety in Construction SmartMarket Report, 2013
Use of Prefabrication (an Important Lean
Strategy) Improves Schedule and Cost
63% report
improves
safety
65% report
lower
budgets
66% report
reduced
schedule
Top Sectors
for Prefabrication
1. Healthcare
2. Higher Education
3. Manufacturing
4. Low-Rise Office
29 McGraw Hill Construction Confidential. All information presented © McGraw Hill Construction, 2013. All rights reserved.
Key Recommendations for Future Action
Spread the word about the benefits of Lean
Top Benefit According to Nearly All Lean Practitioners:
Greater Competitiveness
Top Drivers for Lean Also Widely Reported as Achieved Benefits:
Improved Productivity (77%) and Lowered Costs (64%)
Engage employees in Lean efforts
Create better tools that support collaboration
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