Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Target Value Design and Integrated Project Delivery
Glenn Ballard
Loughborough 01/27/2010
Topics
• Review: – SuHer Health hospital projects – Target Value Design – Integrated Project Delivery
• Update – Progress on the SuHer Health hospital projects – What’s been learned? – A new challenge to be faced in complePng design
• Whole Life Target Value Design
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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2005 CURRENT Proposed Building Area: 1,298,500 BGSF 914,757 BGSF
Number of Stories (incl. below grade Parking and CUP):
21 18
Total No. of Beds: 620 555 Total No. of LDRs: 24 24 Total No. of ORs: 19 19 Total No. of ER Treatment Rms:
34 34
Loading Dock Location: Access off Post St. Access off Franklin St. Ambulance Location: Access off Franklin
St. Access off Post St.
Total No. of Parking Spaces: 620 555 2005 Design was $400 M over budget.
Current Design on budget moving towards surplus.
90% of the program in 70% of the space.
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Project Phases and Target CosPng
The ValidaGon Study
Establishing a Shared Understanding,
Basis of Design, Budget and Schedule.
The Star)ng Point for Target Value Design
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Target CosGng
• Integrated team validates facility can be built within the allowable cost • Sets target cost at or below allowable cost • Owner, architect and contractors work within market constraints
FEEDBACK LOOP
© Glenn Ballard, 2008
SeJng the target cost and project schedule
Target set 14% ‘below’ marketplace
Nine-‐project marketplace average
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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IPD Target Value Design Clusters
M/E/P
Cluster Leaders
Structure
Landscape
Material Handling
VerPcal Transp.
Site Improvements
Interior/ Finishes
Building Envelope
Cluster Targets
Mechanical, Electrical, Structural, Enclosure, Interiors, Gen. CondiPons, Equipment, Furnishings, Technology
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Steel Structure
• ValidaPon ~ 22psf • Current Design ~ 20psf • Industry Standard ~ 30psf
Viscous Wall Dampers
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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From Construc,on Industry Ins,tute research by Victor Sanvido
"Projects are built by people. Research into successful projects has shown that there are several criPcal keys to success. A knowledgeable, trustworthy, and decisive facility owner/developer.
A team with relevant experience and chemistry assembled as early as possible, but certainly before 25% of the project design is complete.
The contract encourages and rewards organizaPons for behaving as a team."
The 5 Big Ideas
Collaborate; Really Collaborate
Networks of Commitment
Tightly Couple Learning w/ AcGon
OpGmize The Whole
Increase Relatedness
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Our “Big Room”
Colloca)on An environment
of collabora)on, trust, and innova)on
Integrated Project Delivery
• 3 party contract between owner, architect and construcPon manager/general contractor.
• A relaPonal as opposed to a transacPonal contract.
• Engages downstream players in upstream processes and vice-‐versa.
• Three Musketeer arrangements: one for all, all for one – Shared risks and rewards – Money can move across organizaPonal boundaries in search of the best investments for the project
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Structure
• One Agreement signed by O-‐A-‐C
• “Joined” by jointly selected team members • Provides for formaPon of:
– Core Group – Integrated Project Delivery Team – Senior Management Group
Integrated Team Concepts
Owner Stakeholder
CM/GC’s PM Architect’s PM
Owner’s Rep
Core Group
Civil
Structural
Mechanical
Electrical
Plumbing
Site
Steel
Mechanical
Electrical
Plumbing
Framing
Landscape
Landscape
Other Other
Integrated Project Delivery Team
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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ExecuPve Involvement
Owner Stakeholder
CM/GC PM Architect PM
Owner’s Rep
Senior Mgt.
Senior Mgt. Senior Mgt.
Senior Mgt.
Core Group/Senior Mgt.
SuHer Health’s IFOA requires
• Last Planner • Target Value Design • 5S Plan
– Site logisPcs using sort, set in order, shine, standardize, sustain
• Zero RFI Goal – conversaPon first, pursue reliable promise for resoluPon
– RFI to confirm soluPon (not to iniPate inquiry)
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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SuHer Health’s IFOA requires
• Built-‐In Quality Plan – CII study suggests that up to 10% of construcPon cost is “rework”
– “InspecPons” omen fail to improve quality at hand-‐off from trade to trade
– Plan seeks to directly aHack root causes of quality failures – P2SL is assisPng in developing BiQ for establishing standard work, tracking & improving
SuHer Health’s IFOA requires
• Payments within 10 days
• Problem ResoluPon-‐-‐escalaPon – ParPes negoPate – Core Group – Senior ExecuPves – Independent Expert – MediaPon
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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The Role of TVD in IPD
TVD is a process for: • Defining the project in terms of value to owner and stakeholders.
• Seong targets for what is to be delivered (scope, level of quality), and the constraints within which it is to be delivered (cost, Pme, locaPon).
• Determining the feasibility of the project: can what’s wanted be delivered within constraints?
• Steering design and construcPon to targets.
Topics
• Review: – SuHer Health hospital projects – Target Value Design – Integrated Project Delivery
• Update – Progress on the Su^er Health hospital projects – What’s been learned? – A new challenge to be faced in compleGng design
• Whole Life Target Value Design
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Target Cost & Weekly EsPmate Updates
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Choosing By Advantages Study of: Heating Hot Water SystemAlternative 1 Alternative 2
Central Plant Heating Hot Water System
Distributed Heating Hot Water
Factor: Square feet of Mechanical Space Required
Criteria: Attribute 3200 square feet5100 sq ft required/17
roomsAdvantage 1300 Sq Ft. 2
Factor: Access for MaintenanceCriteria: Attribute Outside secure perimeter Inside secure perimeter
Advantage Outside rather than in 4
Factor: Quantity of Boilers & StandbyCriteria: Attribute 3 duty plus 1 standby 20 duty +7 Standby
Advantage Less total boilers 5
Factor: Ability to do Boiler Stack Heat Recovery
Criteria: Attribute10% increase in boiler
efficeincy Not requiredAdvantage Reduction X therms 8
Factor: Pumping Energy
Criteria: AttributeMore required due to long distribution runs
Less required due to shorter piping runs
Advantage 500,000 KwH per year 10
Factor: Construction Schedule
Criteria: AttributeLonger due to site
distributionShorter - no site distribution
requiredAdvantage 2 weeks 1
Total Importance 19 11Capital Cos t
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Quality & Safety
VSM Trade Flow
???
Bid/Scope Allocation
Job-Site Environment
Construct’n Engineering
Estimate
Owner’s Reqrmnts.
AHJ
F.R.S.
Design Standards
VSM Design Info. Flow
BIM Standards
Budget
Work Packaging
Construction Standards
Materials & Suppliers Sequencing/
Scheduling
Quality Assurance
Supply-Chain Database
Lean Site Logistics
Strategic Sourcing
ConstrucPon Process Improvement Value Stream Mapping
3. Production Planning
• Electrical: Light Fixture Install • Ductwork: Complete Duct Install Process • Fire ProtecPon: Sprinkler Install • Plumbing: Toilet Install
Current State Future State
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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BEFORE AFTER
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Eliminate Waste
ConPnuous
Improvement and Learning
Respect Challenge and Grow Them
Long-‐Term Thinking
Problem
Solving
People and Partners
Process
Philosophy
The Challenge: Crea,ng a Lean Culture in a Project Environment
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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What has been learned? • Building the culture is criPcal. One key is to change supervisory
behavior. Another is to redefine everyone’s role. Both are works in progress, but cultural shim in aotudes and behaviors has definitely been made.
• Design can always be improved, but must be steered to the delivery of value within project constraints. In other words, you must know when to stop; the last responsible moment. Structuring design work could have been done beHer. Now experiencing refinements in design that seem trivial from the perspecPve of design intent but maHer a great deal to those who will use the design for purchasing, fabricaPon, installaPon, inspecPon, and commissioning.
• The expected cost keeps falling. Process design may offer as much or more potenPal for savings than product design.
• Choosing by Advantages is a powerful method for achieving consensus among stakeholders with different values.
• It really is vital to design facility use before designing the facility.
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Lean in Healthcare OperaPons
Thedacare and Virginia Mason first applied lean to healthcare delivery, then later to the design and construcPon of healthcare faciliPes.
The opposite has happened at SuHer Health. The result: a challenge for Cathedral Hill as they prepare for construcPon—how to handle the inevitable demand for changes in building design to facilitate a lean approach to faciliPes management and healthcare delivery?
Topics
• Review: – SuHer Health hospital projects – Target Value Design – Integrated Project Delivery
• Update – Progress on the SuHer Health hospital projects – What’s been learned? – A new challenge to be faced in complePng design
• Whole Life Target Value Design
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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If It Were To Be Budgeted TradiPonally
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Overview of Target Value Design • Values are developed from purposes and design criteria from
values • Design begins with how the facility will be used before
designing the facility • Key members of the project team are engaged to help
validate and improve project business plans • Clients tell the project team what they are able and willing
to spend to get what they want-‐their allowable cost • Targets are set as stretch goals to spur innovaGon • Design is steered toward targets using a set based approach
in which alternaGves are evaluated against values and decisions are made at the last responsible moment
Two outcomes of TVD that look to be repeatable (at least within the healthcare and educaPon
sectors)
1. Projects are completed below market cost—so far as much as 19% below.
2. Expected cost falls as design develops.
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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For those who only buy and do not produce (design or make), cost is driven by market pricing.
Target Value Design treats cost as an outcome of producPon system design, operaPon and improvement.
Why?
Why?
• ProacPve value engineering; e.g., viscous wall dampers
• Scope control – Scope grounded in business purpose – Steering design to targets
• Scope refinement – involvement of specialists in designing improves buildability and reduces conPngency
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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Whole Life Target Value Design
Why Change a Winning Game? • To enable beHer investment of cost savings—to deliver greater value to owner and stakeholders.
RelaPve Costs
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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What Changes?
• Give the design team a tool to calculate the impact of design alternaPves on facility whole life costs and benefits.
• Keep the budget alive during design, recalculaPng the allowable and target cost based on the anPcipated impact of design alternaPves on whole life costs and benefits.
Challenges 1. Persuade clients to develop an operaPons cost model
and use it to calculate their return on investment, and hence what they are willing to invest to get that return.
2. Persuade clients to give the operaPons cost model to the design team.
3. Learn how to link the product and operaPons models so changes in the former are reflected in the laHer.
4. Persuade financiers to allow a floaPng budget during design.
5. Learn how to design to a moving target.
Target Value Design & Integrated Project Delivery Dr Glenn Ballard at Loughborough University 27 January 2010
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What limits customer value?
• The extent to which design and construcPon enables realizaPon of purpose. Forecast the impact of design alterna,ves on whole life costs and benefits.
• Ability to fund the investment required in design and construcPon. Adjust allowable and target costs to forecast benefits.
• The extent to which the facility’s potenPal is realized in use. Consider a project complete only when the facility is opera,ng to target performance.
Comments? QuesGons?
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