Boldt-VM Redefining CM at Risk

7/30/2019 Boldt-VM Redefining CM at Risk

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Value ManagementValue ManagementRedefining CM At RiskRedefining CM At Risk


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State of the IndustryState of the Industry

Increases in productivity lag far behindIncreases in productivity lag far behind

other industriesother industries Strained/ Limited ResourcesStrained/ Limited Resources

Traditional Lack of CommonTraditional Lack of CommonUnderstanding of the ProjectUnderstanding of the Project

Misalignment of Objectives among theMisalignment of Objectives among theProject Team membersProject Team members

Unsafe Construction EnvironmentsUnsafe Construction Environments


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NonNon--productive Time On J ob Sitesproductive Time On J ob Sites

Productive

Time

42%

Non-

Productive

Time

58%

UnnecessaryTravel & Movement

13%

UnnecessaryMaterial Handling

12%

Rework

8%

Waiting

25%

{ Information{ Prerequisite Work{ Materials{ Equipment & Tools

{ Low reliability

{ Big batch thinking

{ Individual interests notaligned with projectsuccess

{ Lack of formalproduction process


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State of the IndustryState of the Industry

Value managementValue management -- primary battlefront for yearsprimary battlefront for years--hashasrealized significant improvement in procedures andrealized significant improvement in procedures and

processesprocesses Improvements in Technology and CommunicationImprovements in Technology and Communication

Greater RiskGreater Risk Real and PerceivedReal and Perceived

Owners are smarter today and are demanding andOwners are smarter today and are demanding andrewarding better delivery methods that result in lowerrewarding better delivery methods that result in lowercosts, more predictable schedules, and safer projectscosts, more predictable schedules, and safer projects

Three new trends are emerging that will enhance ValueThree new trends are emerging that will enhance ValueManagement and improve productivity significantlyManagement and improve productivity significantly


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Traditional CM at RiskTraditional CM at Risk

Qualifications/Fee based CM SelectionQualifications/Fee based CM Selection

Separate agreement between Owner and AE andSeparate agreement between Owner and AE andOwner and CMOwner and CM CM provides budgeting, scheduling,CM provides budgeting, scheduling,

constructability studies, VE at design intervalsconstructability studies, VE at design intervals

Design to budget instead of budgeting a designDesign to budget instead of budgeting a design Partnering Sessions improve communication andPartnering Sessions improve communication and

collaborationcollaboration

Subs may or may not be on board duringSubs may or may not be on board during preconpreconphasephase

Better job of risk sharing than Design Bid BuildBetter job of risk sharing than Design Bid Build


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Major Industry TrendsMajor Industry Trends

Building Information Modeling (BIM)Building Information Modeling (BIM)

Better Visualization, Clash DetectionBetter Visualization, Clash Detection

LeanLean

Improves Value, Reduces WasteImproves Value, Reduces Waste Integrated Project DeliveryIntegrated Project Delivery

Risk and Reward Sharing, Better CollaborationRisk and Reward Sharing, Better Collaboration


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BIMBIM


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BIM During DesignBIM During Design

More than 3More than 3 -- DD

Imbedded with specs and dataImbedded with specs and data 33--D = DesignD = Design

44--D = Design + ScheduleD = Design + Schedule

55--D = Design + Schedule + CostD = Design + Schedule + Cost Better VisualizationBetter Visualization

Excellent Tool to Test conceptsExcellent Tool to Test concepts Clash DetectionClash Detection

Staging and LayoutStaging and Layout


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BIM During ConstructionBIM During Construction

Better visualization increases productivityBetter visualization increases productivity Clash detection for changes producesClash detection for changes produces

more accurate pricing and increasesmore accurate pricing and increasesproductivityproductivity

Excellent tool to develop project stagingExcellent tool to develop project stagingplansplans


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BIM for Building ManagementBIM for Building Management

AsAs--builtsbuilts MaintenanceMaintenance

Parts and repairParts and repair


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{ Detecting constraints and clashes

{ Designing operations{ Optimizing preassembly

{ Pulling value to the jobsite

Better Visualization


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{ Detecting constraints and clashes

{ Designing operations{ Optimizing preassembly

{ Pulling value to the jobsite

Staging


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Clash Detection/Layout


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LeanLean


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Lean isLean is

A systematic approach and commitment toA systematic approach and commitment to

customer value that identifies andcustomer value that identifies andeliminates waste by making work floweliminates waste by making work flow

across the entire value stream, at the pullacross the entire value stream, at the pull

of the customer, with an unwaveringof the customer, with an unwavering

commitment to the continuous pursuit ofcommitment to the continuous pursuit of

perfectionperfection


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Lean Project DeliveryLean Project Delivery

Toyota transformed manufacturing withToyota transformed manufacturing with

Lean philosophy and principlesLean philosophy and principles Lean is a cultural change, not a set ofLean is a cultural change, not a set of

toolstoolsApplication to the design and constructionApplication to the design and construction

industry is in itindustry is in its infancy, although hass infancy, although has

produced exciting resultsproduced exciting results


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What are the BenefitsWhat are the Benefits

Creates stability/predictability on ourCreates stability/predictability on our

projectsprojects Removes waste in current design andRemoves waste in current design and

construction practice thus improvingconstruction practice thus improving

productivity and reducing cost and time toproductivity and reducing cost and time tobuildbuild

Results in safer projectsResults in safer projects Makes the building process fun againMakes the building process fun again


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Lean ToolsLean Tools

Target Value DesignTarget Value Design

Value Stream MappingValue Stream Mapping Lean Construction Planning & SchedulingLean Construction Planning & Scheduling


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Th C di lTh C di l


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The CardinalThe Cardinal

Rule ofRule ofTarget ValueTarget Value

DesignDesign

The target cost of a projectThe target cost of a project

can never be exceeded.can never be exceeded.



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GoalGoal

Deliver the project at or below the target cost, and withDeliver the project at or below the target cost, and withincreased value to the customer.increased value to the customer.

ObjectiveObjective

Weekly estimate trends that represent savings by design andWeekly estimate trends that represent savings by design andinnovation.innovation.

Uncompromised value & quality in functional program &Uncompromised value & quality in functional program &

facility design.facility design.TasksTasks

Daily sharing of design and budget information.Daily sharing of design and budget information.

Set based design practice.Set based design practice.Weekly Target Cost status updates.Weekly Target Cost status updates.

Weekly or daily update of cluster group progress reports.Weekly or daily update of cluster group progress reports.


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Creating Target Cost Teams andCreating Target Cost Teams and

Systems AllocationSystems Allocation


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Starts with better definition of project objectivesStarts with better definition of project objectives creates Common Understanding of the Projectcreates Common Understanding of the Project

Early creation of Project TeamEarly creation of Project Team

Definition of Roles/AccountabilitiesDefinition of Roles/Accountabilities

Highly Collaborative, Open and TrustHighly Collaborative, Open and Trust--BasedBasedProcessProcess

Utilization of Relational Contract that supportsUtilization of Relational Contract that supports

this approach. Integrated Form of Agreementthis approach. Integrated Form of Agreement Better Understanding and Balance of Risk andBetter Understanding and Balance of Risk and

RewardReward

CoCo--located owner, designer, and contractorlocated owner, designer, and contractorteamsteams


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TheThe Big RoomBig Room

OO Bi RBi R


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OurOur Big RoomBig Room CoCo--location of cross functional team memberslocation of cross functional team members

DesignersDesigners

ProgrammersProgrammers

EstimatorsEstimators

ConstructorsConstructors

SuppliersSuppliers

Target Costing / Target Value DesignTarget Costing / Target Value Design

CoCo--location in Cluster Groupslocation in Cluster Groups

Combination of Small Group and Large GroupCombination of Small Group and Large GroupMeetingsMeetings

Sharing Incomplete Information OftenSharing Incomplete Information Often

Set Based DesignSet Based Design


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Set Based Concurrent Design

Create a broadrange ofpossibilities fromthe outset

Evaluate conceptsagainst risk.Resolve conflictsutilizing customercriteria.

Combine piecesfrom differentconcepts andconverge upon afinal solution.

The final conceptis frozen muchlater in theprocess butemerges almostrisk free andrequires fewchanges.

Concept Selected

i l k lVi l W k l


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DesignDesign EstimateEstimate

ScheduleSchedule Last Planner including PPC andLast Planner including PPC and

Reasons for VarianceReasons for Variance A3 ReportsA3 Reports

Innovation InformationInnovation Information Multiple LocationsMultiple Locations

Updated weekly, sometimes dailyUpdated weekly, sometimes daily

Visual WorkplaceVisual Workplace


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Visual WorkplaceVisual Workplace


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Set Based DesignSet Based Design

An iterative process of developing sets of solutions that satisfAn iterative process of developing sets of solutions that satisfy cost,y cost,

function and quality.function and quality. Sets of solutions are advanced until the last responsible momentSets of solutions are advanced until the last responsible moment

Sharing Incomplete Information OftenSharing Incomplete Information Often

Willingness of team members to continuously share incomplete infWillingness of team members to continuously share incomplete information.ormation.

Daily or at least weekly sharing of design and budget informatioDaily or at least weekly sharing of design and budget information.n. Design and budget evolve simultaneouslyDesign and budget evolve simultaneously

Simultaneous design of Product and ProcessSimultaneous design of Product and Process

Product and process design decisions are made simultaneously.Product and process design decisions are made simultaneously.

3D Design / Modeling, and Digital Prototyping3D Design / Modeling, and Digital Prototyping

Use digital prototyping to integrate design and cost characterisUse digital prototyping to integrate design and cost characteristics.tics.

An integrated product and process design including real time budAn integrated product and process design including real time budgetget

updates as design changes.updates as design changes. Provide widespread access to the design model as it evolves.Provide widespread access to the design model as it evolves.

Lean Design PrinciplesLean Design Principles



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Detailed design by specialty contractors and vendorsDetailed design by specialty contractors and vendors

Designers and engineers produce only thoseDesigners and engineers produce only those

deliverables needed for permitting and needed bydeliverables needed for permitting and needed by

specialty contractors or other suppliers for detailing.specialty contractors or other suppliers for detailing.

Production Planning and ManagementProduction Planning and Management

Production Planning and Management is applied duringProduction Planning and Management is applied during

the Design phase using Constraints Analysis, andthe Design phase using Constraints Analysis, and

Weekly Work Plans.Weekly Work Plans.

Design and budget production is planned and managedDesign and budget production is planned and managed

to emulate a continuous flow process.to emulate a continuous flow process.

Project Based Production Management is formallyProject Based Production Management is formally

applied using standard Lean Processes and Principlesapplied using standard Lean Processes and Principles


L D i P i i lL D i P i i l


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Multidisciplinary Design Teams workMultidisciplinary Design Teams worktogether early in Design totogether early in Design to

simultaneously develop the design andsimultaneously develop the design andbudget.budget. Major specialty contractors and suppliers are contractedMajor specialty contractors and suppliers are contracted

earlyearly Value based proposal process.Value based proposal process.

Multidisciplinary teams meet at least weekly.Multidisciplinary teams meet at least weekly.



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Target Costing Systems, Components, andTarget Costing Systems, Components, andSubcomponentsSubcomponents Distribute the project target cost.Distribute the project target cost. Form Target Cost TeamsForm Target Cost Teams

Use Value Engineering to assist with evaluation of solutions.Use Value Engineering to assist with evaluation of solutions.

Design to budgetDesign to budget The budget as an influence on design andThe budget as an influence on design anddecisiondecision--making, rather than an outcome.making, rather than an outcome.

Negotiate cost/value trade off occurs to ensure the ProjectNegotiate cost/value trade off occurs to ensure the ProjectTarget Cost .Target Cost .

Value EngineeringValue Engineering Structured methodology.Structured methodology. Function AnalysisFunction Analysis

Life Cycle CostingLife Cycle Costing


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Implementation



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Continuous Tracking &Continuous Tracking &

ReportingReporting

The Weekly Target Value Design CycleThe Weekly Target Value Design Cycle


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The Weekly Target Value Design CycleThe Weekly Target Value Design Cycle WednesdayWednesday

AMAM Target Cost Team MeetingsTarget Cost Team Meetings Designing & BudgetingDesigning & Budgeting PMPM Core Team MeetingCore Team Meeting

ThursdayThursday

Design and ongoing communicationDesign and ongoing communication

FridayFriday


MondayMonday

Design and ongoing communicationDesign and ongoing communication End of DayEnd of Day Design Updates DistributedDesign Updates Distributed

TuesdayTuesday

Pricing/Cost ModelingPricing/Cost Modeling


WednesdayWednesday

AMAM Target Cost Team MeetingsTarget Cost Team Meetings Designing & BudgetingDesigning & Budgeting

PMPM Core Team MeetingCore Team Meeting

Features and Benefits of TargetFeatures and Benefits of Target


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gg

CostingCosting

Scope of Work Document based on Quantity, Quality, and CostScope of Work Document based on Quantity, Quality, and Cost

Commitment from the entire project team to design and buildCommitment from the entire project team to design and buildaccording to the scope and budgetaccording to the scope and budget

Committed Target Cost for design and constructionCommitted Target Cost for design and construction

Clear translation of the Voice of the Customer into technicalClear translation of the Voice of the Customer into technical

design, and ultimatelydesign, and ultimately to product deliveryto product delivery

The basis of Financial Management and Investment DecisionThe basis of Financial Management and Investment DecisionMaking throughout the projectMaking throughout the project

The assurance of Lowest Product Cost and HighestThe assurance of Lowest Product Cost and Highest

Customer ValueCustomer Value

What Target Value Design AvoidsWhat Target Value Design Avoids


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What Target Value Design AvoidsWhat Target Value Design Avoids

Waiting for the bids to come in to know theWaiting for the bids to come in to know the

cost of the projectcost of the project

VE options arriving late disrupting designVE options arriving late disrupting design

Waiting for design batchesWaiting for design batches

Waiting for budget batchesWaiting for budget batches

Design schedule defined by arbitraryDesign schedule defined by arbitrarymilestonesmilestones

SurprisesSurprises


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Pull SchedulingPull Scheduling


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P ll S h d li O iP ll S h d li O i


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Pull Scheduling OverviewPull Scheduling Overview

Work tasks, information flow, andWork tasks, information flow, and

material deliveries are planned basedmaterial deliveries are planned based

on the request (oron the request (orpullpull) of) ofdownstream customers.downstream customers.

Pull scheduling will often expose thePull scheduling will often expose the

need for smaller batches, just in timeneed for smaller batches, just in timedelivery, improved leveling ofdelivery, improved leveling of

resources, and reduced lead times.resources, and reduced lead times.

Workflow becomes more reliable andWorkflow becomes more reliable andefficient as the waste of waiting,efficient as the waste of waiting,

redundancy, and overredundancy, and over--processing areprocessing are

eliminated.eliminated.

P ll S h d li StP ll S h d li St


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1.1. Define the phasing of the work.Define the phasing of the work.

2.2. Determine completion dates for the phases.Determine completion dates for the phases.

3.3. Using team scheduling andUsing team scheduling and stickiesstickies on a wall,on a wall,develop the network of activities required todevelop the network of activities required to

complete the phase working backward fromcomplete the phase working backward from

the completion date.the completion date.4.4. Apply durations to each activity with noApply durations to each activity with no

contingency or float in the estimates.contingency or float in the estimates.

5.5. ReRe--examine logic to try to shorten theexamine logic to try to shorten theduration.duration.

6.6. Determine the earliest practical start date.Determine the earliest practical start date.

Pull Scheduling StepsPull Scheduling Steps

P ll S h d li StP ll S h d li St


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7.7. Decide what activities to buffer or pad withDecide what activities to buffer or pad with

time contingency.time contingency.

Which activity durations are most fragile?Which activity durations are most fragile? Rank order by degree of uncertainty.Rank order by degree of uncertainty.

Allocate available time to the fragileAllocate available time to the fragile

activities in rank order.activities in rank order.

8.8. Is the team comfortable that the availableIs the team comfortable that the available

buffers are sufficient to assure completionbuffers are sufficient to assure completion

within the milestone? If not, either rewithin the milestone? If not, either re--planplanor shift milestone as needed and possible.or shift milestone as needed and possible.

Pull Scheduling StepsPull Scheduling Steps

Pull SchedulingPull Scheduling Setting a World Record in


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Pull SchedulingPull Scheduling gPaper Machine Rebuilds

Safety

Speed of Delivery

Cost


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Last PlannerLast Planner



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Foreman/Superintendents are the closest to the workForeman/Superintendents are the closest to the work

and are the Last Plannersand are the Last Planners

WeeklyWeeklyStand and DeliverStand and Deliverplanning sessions buildplanning sessions buildaccountability and reliabilityaccountability and reliability

Commitments orCommitments orReliable PromisesReliable Promisesare made duringare made during

the Last Planner Sessionsthe Last Planner Sessions

Weekly Work Plans and Six Week Look Ahead schedulesWeekly Work Plans and Six Week Look Ahead schedules

are prepared and inserted into master scheduleare prepared and inserted into master schedule

Extremely effective in improving productivityExtremely effective in improving productivity

The difference betweenThe difference between WeWe


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already do thisalready do this and makingand makingthe Lean transformationthe Lean transformation..

The industry is trying to work betterThe industry is trying to work betterwithin an existing environmentwithin an existing environment

and set of rules.and set of rules.Lean gives us the opportunity toLean gives us the opportunity to

significantly changesignificantly change

how wehow we

deliver value.deliver value.


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SuccessesSuccesses



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153155148

180

202

251

280

100

120

140

160

180

200

220

240

260

280

300

Shawano Clinic &

Surgery Center

75,362 s.f. with

Med Gas &

Imaging -Actual

Utilizing Lean

Project Delivery

Process

Shawano Clinic &

Surgery Center

BENCHMARK with

Med Gas &

Imaging -

Projected Based

on Traditional Past

Projects

Medical Clinic

Wood Frame

18,182 s.f. (No

Med Gas, No

Imaging)

Traditional Project

Delivery Process

Medical Clinic,

Architectural

Enhancements,

12,177 s.f. (No

Med Gas, No

Imaging)

Traditional Project

Delivery Process

Heart Institute,

45,645 s.f.

Traditional Project

Delivery Process

Surgical Center

13,000 s.f.

Traditional Project

Delivery Process

Oncology Center

12,178 s.f.

Traditional Project

Delivery Process

$/S.F.

Benchmark


Ongoing Implementation, Development & SuccessOngoing Implementation, Development & Success

Benchmarking

Results of Lean Design, Target Costing, and

Production Management


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Lean ProjectLean Project Non LeanNon LeanProjectProject

Completion DateCompletion Date August 2002August 2002

Project DurationProject Duration 14 months14 months

Gross Square FeetGross Square Feet 114,000114,000

Total Cost (incl. A/ETotal Cost (incl. A/E

& CM fees)& CM fees) $11,716,836$11,716,836

Cost per squareCost per square

footfoot$102.79$102.79

g

April 2000April 2000

24 months24 months

85,41485,414

$13,533,179$13,533,179

$158.44$158.44



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3.5 months ahead of schedule3.5 months ahead of schedule

70 additional days of clinic revenue translating70 additional days of clinic revenue translatinginto nearly $1 mil. in the expanded imaginginto nearly $1 mil. in the expanded imagingservice line functions and additional revenue inservice line functions and additional revenue in

the first year.the first year. Under the Target CostUnder the Target Cost

in spite of additional equipment costs and addedin spite of additional equipment costs and added

service lineservice line


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Measuring ProductivityMeasuring Productivity

0

0.5

1

1.5

2

2.5

3

3.5

4

Productivity(HRS/C

Y)

Lean Projects Non-Lean)Projects

Hours per cubic yardHours per cubic yard


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IntegratedIntegratedForm ofForm of

AgreementAgreement

IFOAIFOA


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IFOAIFOA

Integrated Form of Agreement created byIntegrated Form of Agreement created bySutter Health Counsel WillSutter Health Counsel Will LichtigLichtig & Sutter& SutterDirector of Project Management DaveDirector of Project Management DavePixleyPixley

AGC TriAGC Tri--Party Collaborative AgreementParty Collaborative AgreementConsensusDocsConsensusDocs

Integrated Project DeliveryIntegrated Project DeliveryA WorkingA WorkingDefinition AIADefinition AIA

Fundamental Change in Business ModelFundamental Change in Business Model

IFOAIFOA


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IFOAIFOA

Relational ContractingRelational Contracting

Sets Performance and ResultsSets Performance and ResultsExpectationsExpectations

Creates a Collaborative EnvironmentCreates a Collaborative Environment Creates an Integrated TeamCreates an Integrated Team

Optimizes the ProjectOptimizes the Project

Superior Risk ManagementSuperior Risk Management

Integrated AgreementsIntegrated Agreements


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Integrated AgreementsIntegrated Agreements

Sutter Fairfield MOB $22 millionSutter Fairfield MOB $22 million

Sutter Cathedral Hill Hospital $920 millionSutter Cathedral Hill Hospital $920 million California Prison Healthcare $4.5 billionCalifornia Prison Healthcare $4.5 billion

IFOAIFOA


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OwnerOwners Business Plan as the basic designs Business Plan as the basic designcriteriacriteria

Incorporates Lean Project DeliveryIncorporates Lean Project Delivery

Incorporates language of Reliable Promising/Incorporates language of Reliable Promising/CommitmentsCommitments

Establishes a Collaborative Governance StructureEstablishes a Collaborative Governance Structure

IFOA StructureIFOA Structure


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IFOA StructureIFOA Structure

One Agreement signed by OwnerOne Agreement signed by Owner--ArchitectArchitect--

CM/GCCM/GC

Joined byJoined byjointlyjointly selected Team Membersselected Team Members

Integrates General ConditionsIntegrates General Conditions

Provides for formation of:Provides for formation of: Core GroupCore Group

Senior Management GroupSenior Management Group

Integrated Project Delivery TeamIntegrated Project Delivery Team

Project Team OrganizationProject Team Organization


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Project Team OrganizationProject Team Organization

Owner Rep

CM/GC PMArch. PM

User Rep

Core Group

Civil

Structural

Mechanical

Electrical

Plumbing

Site

Steel

Mechanical

Electrical

Plumbing

Framing

Landscape

Landscape

OtherOther

Integrated Project Delivery

Team

Core Group DeliverablesCore Group Deliverables


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Core Group DeliverablesCore Group Deliverables

Communication ProtocolsCommunication Protocols

BIM StrategyBIM Strategy

Commitment Management ProcessCommitment Management Process Validated Budget (Basis for Target Value Design)Validated Budget (Basis for Target Value Design)

Target Value Design PlanTarget Value Design Plan

JointJoint Site Investigation PlanSite Investigation Plan Incentive Sharing PlanIncentive Sharing Plan

BuiltBuilt--In Quality PlanIn Quality Plan

Create CollaborativeCreate Collaborative


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Design EnvironmentDesign Environment CM/GC and Trade Contractors have a seat at designCM/GC and Trade Contractors have a seat at design

tabletable IPD Team has a Common Understanding of ProjectIPD Team has a Common Understanding of Project

Parameters, Objectives and ConstraintsParameters, Objectives and Constraints

Constant sharing of intermediate, incompleteConstant sharing of intermediate, incompletedesign documentsdesign documents

Collaboratively createCollaboratively createInstallInstall--LevelLevel3D Model3D Model

Value analysis throughout design process, not atValue analysis throughout design process, not at

the end!the end! DesignDesign--toto--budget: Design and Cost stay in balancebudget: Design and Cost stay in balance

Real TimeReal Time

New Financial ProvisionsNew Financial Provisions


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New Financial Provisions

A/E Compensation/RiskA/E Compensation/Risk

Fees developed from Resource Loaded WorkFees developed from Resource Loaded WorkPlan (fees to support quality effort)Plan (fees to support quality effort)

Identify andIdentify andfixfixprofit componentprofit component

ShiftShiftWorking DrawingWorking Drawingproduction toproduction toconstruction partnersconstruction partners

Some A/E fees will be GMP rather than fixed feeSome A/E fees will be GMP rather than fixed fee(e.g.: CA Phase)(e.g.: CA Phase)

NegotiatedNegotiatedstandard of qualitystandard of qualityrather thanrather thannegligencenegligence



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e a c a o s o s

CM/GC Risk MitigationCM/GC Risk Mitigation

CM/GC/ participating trades on Cost Plus with Fixed Fee,CM/GC/ participating trades on Cost Plus with Fixed Fee,with or without GMPwith or without GMP

Risk reduced by IPD Contingency during ConstructionRisk reduced by IPD Contingency during ConstructionPhasePhase -- access based upon recoverableaccess based upon recoverableextra costextra costforfor

which change order not available (e.g. buywhich change order not available (e.g. buy--out gap,out gap,missed coordination)missed coordination)



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CM/GC Cash Flow risk mitigations:CM/GC Cash Flow risk mitigations:

Pencil DrawPencil Drawprocessprocess review by Core Groupreview by Core Group BiBi--weekly or 36 hour turnaroundweekly or 36 hour turnaround

Lower retainage and/or early releaseLower retainage and/or early release



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Reward:Reward:

Incentive Sharing Pool funded by ContingencyIncentive Sharing Pool funded by Contingencypreservation and Costpreservation and Cost--ofof--Work savingsWork savings

IPD Team collectively participates in Pool withIPD Team collectively participates in Pool with

Owner (typically 50/50)Owner (typically 50/50) IPD Team determines participationIPD Team determines participation



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PartyParty--controlled dispute resolution (hierarchy)controlled dispute resolution (hierarchy)

Parties negotiateParties negotiate Core GroupCore Group

Senior Management GroupSenior Management Group

Independent Expert appointmentIndependent Expert appointment

DRBDRBss

MediationMediation

New Construction ProvisionsNew Construction Provisions


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Requires the Implementation of LeanRequires the Implementation of Lean

5S Plan5S Plan Site logistics using sort, set in order, shine,Site logistics using sort, set in order, shine,

standardize, sustainstandardize, sustain

Zero RFI GoalZero RFI Goal conversation first, pursue reliable promise forconversation first, pursue reliable promise for

resolutionresolution

RFI toRFI to confirmconfirm solution (not to initiate inquiry)solution (not to initiate inquiry)

New Construction ProvisionsNew Construction Provisions


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BuiltBuilt--In Quality PlanIn Quality Plan

CII study suggests that up to 10% of constructionCII study suggests that up to 10% of construction

cost iscost isreworkrework

InspectionsInspectionsoften fail to improve quality at handoften fail to improve quality at hand--offoff

from trade to tradefrom trade to trade

Plan seeks to directly attack root causes of qualityPlan seeks to directly attack root causes of quality

failuresfailures

Capture experience for tracking & improvementCapture experience for tracking & improvement

Benefits: Anticipated andBenefits: Anticipated and


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ObservedObserved Reduce Waste! Measured by CII at 57%!Reduce Waste! Measured by CII at 57%!

Lower cost, higher value projectsLower cost, higher value projects

Higher profitability for our design andHigher profitability for our design andconstruction partnersconstruction partners

Safer projectsSafer projects Higher productivity in design and constructionHigher productivity in design and construction

less negative iterationless negative iteration

Less tension = more fun!Less tension = more fun!

What will challengeWhat will challenge


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success?success? Gravitational Pull of TraditionalGravitational Pull of Traditional

PracticePractice Lack of Lean LeadershipLack of Lean Leadership

Lack of Lean Knowledge and SkillsLack of Lean Knowledge and Skills Organizational Systems andOrganizational Systems and

ProcessesProcesses

In ConclusionIn Conclusion


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BIM is here to stayBIM is here to stay

Lean improves productivity, shortens schedules, and weLean improves productivity, shortens schedules, and we

see no end to our journey.see no end to our journey.

IFOA More testing in the market place will be requiredIFOA More testing in the market place will be requiredto prove it as a successful delivery method. It will taketo prove it as a successful delivery method. It will takecourageous owners willing to shoulder some of the riskcourageous owners willing to shoulder some of the riskand financial burden to help drive innovation andand financial burden to help drive innovation andincrease value in our industry.increase value in our industry.

Contact InformationContact Information


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Jay HarrisJay Harris

[email protected]@boldt.com916916--583583--56005600

Lean Principles in ConstructionLean Principles in Construction

http://http://www.leanconstruction.orgwww.leanconstruction.org//
mailto:[email protected]:[email protected]:[email protected]

Documents

Boldt-VM Redefining CM at Risk