Description of the Framework

In the construction industry, the production planning and control process oft en plays the role of designing, at least partially, the production system. Th is is because the production system in construction is usually implicit or taken for granted [Ballard et al. 2001]. More recently, some studies have proposed ways of comprehensively and explicitly designing production systems, before the beginning of the production stage [see, for instance, Tsao et al. 2004; Schramm, Costa, and Formoso 2004; Schramm, Rodrigues, and Formoso 2006].

Table 3.1 presents an overview of the proposed production planning and control framework, which is divided into three hierarchical levels. It shows the main categories of decisions involved and the main participants in the production of plans, as well as typical planning horizons and control cycle time. Some of the decisions included in this framework should be fi rst established at the level of production system design, such as overall installation sequence (initial breakdown of the work into subtasks), rhythm of key processes, site layout, and resource capacity [Schramm, Costa, and Formoso 2004]. Th e role of long-term planning should be to refi ne or adjust those decisions, establish- ing a production environment capable of meeting the production system’s overall goals [Hopp and Spearman 1996].

Th e number of hierarchical planning levels may vary, depending on the organizational structure available and also on the size and complexity of the project. For instance, Ballard and Howell (2003) proposed an additional planning level between master planning and look-ahead planning named phase scheduling, which is mostly concerned with the defi nition of the overall installation sequence. However, most of the companies involved in the case studies carried out at NORIE-UFRGS adopted the three planning levels presented in Table 3.1.

3.4.2.1 Long-term Planning

Long-term (or master) plans establish the general goals to be achieved during the execu- tion of the project. For that reason, they should not be revised frequently. In many com- panies, changes in the master plan are typically event-related. It means that a new plan is not drawn up at regular intervals but only in case of an important event [Fleischmann, Meyr, and Wagner 2000].

Th e master plan horizon is normally the total duration of the production stage of the project. It strongly depends on project fi nance: the duration of the project as well as the timing of some of its milestones are generally determined by the project cash fl ow.

Long-term planning plays an important role in project SCM since it should synchro- nize key on-site production processes and also off -site production, such as the produc- tion of prefabricated components, based on a takt time4 _{defi ned according to project} milestones. As a result of synchronization, it is possible to reduce inventory and work 4 Takt is a German word for rhythm or meter. In the Toyota Production System, it is the rate at which the

customer is buying products. It is used to set the pace of production and alert workers whenever they are getting ahead or behind [Liker 2004]. Diff erently from the car industry, the demand is dependent in construction. For that reason, the takt time may be established according to project milestones, rather than directly from customer demand [Bulhões, Picchi, and Granja, 2005].

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in progress levels. It is necessary to establish an adequate use of capacity for the supply chain members involved in order to synchronize material fl ows eff ectively [Rohde and Wagner 2000].

Based on the master plan, long lead time resources are procured—these have been named in the proposed framework as Class 1 resources. Th ese are usually pur- chased in one batch, and their delivery time might last several months (e.g., building elevators).

Several diff erent techniques may be used for producing and controlling the master plan, such as bar charts, lines of balance, and CPM networks. Due to the large number

TABLE 3.1 Overview of the Production Planning and Control Framework

Hierarchical

Level Main Output

Main Decision Categories Typical Planning Horizon Typical Control

Cycle Time Main Participants Long term Master plan – Production milestones

based on cash fl ow forecast

– Overall installation sequence

– Overall site layout – Rhythm (takt time) of

key processes – Capacity planning – Scheduling long lead

time (Class 1) resources

Production phase Event based – Production director – Project manager – Design manager – Site engineer Medium term Look-ahead plan

– Breaking down work packages

– Constraint identifi cation and removal – Releasing work

packages for short-term planning – Scheduling resources (Class 2) – Pulling design information – Design of critical processes

– Site layout revision and preparation of work spaces

5–13 weeks 2–4 weeks – Project manager – Site engineer – Key subcontractors – Foreman – Purchasing department representative – Safety specialist – Quality manager – Design manager

Short term Commitment plan

– Refi ning work packages – Assigning tasks to crews – Pulling short lead time

resources (Class 3)

1 week 1 week – Site engineer – Foreman – All subcontractors – Safety specialist – Representatives of crews 47450_C003.indd 14 47450_C003.indd 14 8/8/08 7:46:09 AM8/8/08 7:46:09 AM

Production Planning and Control and the Coordination 3-15

of activities involved and the need to control project duration, a soft ware tool is oft en used. Many companies fi nd it useful to have a version of the master plan that is easy for everyone to understand, containing some key information such as the rhythm of key processes, milestones, and work fl ows. In repetitive projects the line of balance can play this role (see example of Figure 3.3).

In general, middle- and higher-level managers should be involved in the generation of the master plan. If necessary, some supporting staff may participate in this process, such as a planning engineer. In case there is overlapping between the design and production stages, the participation of the design manager or representatives of the design team is necessary in order to synchronize the delivery of design drawings and production activities.

Considering the overall installation sequence and the site layout, the facility to be built should be divided into work zones (e.g., fl oors, apartments, rooms, etc.), which are important for defi ning production batch sizes and hand-off s between crews. For instance, Figure 3.4 shows a plan from one of the projects investigated at NORIE-UFRGS indicating the division of a facility into work zones, which was used as a reference for planning the fl ows of four diff erent crews.

3.4.2.2 Medium-term Planning

Medium-term planning establishes a link between the long-term plan and the opera- tional plans, which are the ones that eff ectively guide execution on site. At this level, the long-term plan work packages are divided into smaller packages, based on the work zones previously established. In this readjustment of work packages, the milestones and

the takt time established at the master plan must be considered.

Th e medium-term planning has a rolling horizon, typically from 5 to 13 weeks. Th e control cycle time usually varies from one to four weeks, which means that the same week needs to be replanned a few times before execution. Th e planning hori- zon and control cycle time depend on the speed and on the degree of complexity and uncertainty involved—the faster, the higher the uncertainty, and the more complex the project, the shorter the medium-term planning horizon and its control cycle tend to be. In the case studies carried out at NORIE-UFRGS, for instance, fast refurbish- ment industrial building projects normally had 5–9-week look-ahead plans that were updated weekly. By contrast, slower and less complex projects, such as new residential building, typically had a three-month medium-term planning horizon, and an update cycle of one month.

In the Last PlannerTM _{System, the main role of look-ahead plans is the identifi cation} and removal of constraints in the production environment, such as procuring materials and lining up subcontractors [Ballard 2000]. Once constraints are identifi ed, the neces- sary actions to make work ready must be carried out, such as producing design details, ordering materials, or hiring labor. All work packages from the look-ahead plan must be systematically screened and the ones that have no constraints may be released to the short-term plan. Th is was named by Tommelein and Ballard (1997) as the screening and pulling mechanism: those resources and information are pulled from the look-ahead plan, rather than pushed by long-term plans.

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3-16 Construction Supply Chain Management Handbook FI GU R E 3 .3 E x am ple of a l ine of b a la nc e t h at m a k es s o me k ey d ec is ion s t ra n sp ar en t t o e ve ryone .

Line of balance - building

W

eek 01

5 4 3 2 1 5 4 3 2 1

Stories Façades

Foundation work Brick walls/electrical (phase 1) Prefab slabs Roofing

Electrical (phase 2)

Internal painting

T

iles and ceramic floors

Windows installation

External covering (layer 1) External covering (layer 2) Doors installation External painting

Internal clearing Floor finishing Bathroom units Electrical (phase 3) Roof Foundations W eek 02 W eek 03 W eek 04 W eek 05 W eek 06 W eek 07 W eek 08 W eek 09 W eek 10 W eek 1 1 W eek 12 W eek 13 W eek 14 W eek 15 W eek 16 W eek 17 W eek 18 W eek 19 W eek 20 W eek 21 W eek 22 W eek 23 W eek 01 W eek 02 W eek 03 W eek 04 W eek 05 W eek 06 W eek 07 W eek 08 W eek 09 W eek 10 W eek 1 1 W eek 12 W eek 13 W eek 14 W eek 15 W eek 16 W eek 17 W eek 18 W eek 19 W eek 20 W eek 21 W eek 22 W eek 23 W eek 01 W eek 02 W eek 03 W eek 04 W eek 05 W eek 06 W eek 07 W eek 08 W eek 09 W eek 10 W eek 1 1 W eek 12 W eek 13 W eek 14 W eek 15 W eek 16 W eek 17 W eek 18 W eek 19 W eek 20 W eek 21 W eek 22 W eek 23 47450_C003.indd 16 47450_C003.indd 16 8/8/08 7:46:10 AM8/8/08 7:46:10 AM

Production Planning and Control and the Coordination 3-17

Th e resources that are procured at the look-ahead planning level are classifi ed in the proposed framework as Class 2. Th ese generally have a lead time shorter than the medium-term planning horizon, usually less than 30 days, and are oft en delivered in more than one batch. Of course, the classifi cation of resources in Class 1 or Class 2 depends on the procurement practices of each company and also on the planning hori- zons that are adopted in each project.

In some projects, preparing a look-ahead plan may be time consuming due to the large number of activities and constraints involved, sometimes lasting for more than three hours. Several people should participate in the look-ahead planning meeting, includ- ing production managers, a representative of the purchasing department, the design manager, the safety specialist, and representatives of key subcontractors, among others. Th eir participation is usually important, since they are all capable of contributing in terms of identifying and, sometimes, removing constraints. In one of the case studies carried out at NORIE-UFRGS, even a representative of the client was invited to take part in those meetings, because during a certain stage of the project the client organization had a major role in removing constraints. A common mistake made by site managers is to prepare look-ahead plans by themselves: such plans are generally ineff ective because very rarely is one single person capable of identifying all look-ahead constraints in a construction project.

Another important role of the medium-term planning level is to revise the site lay- out and the preparation of work spaces, such as inventory spaces, installation of safety safeguards, and temporary access for equipment. Th is type of action should be based on the look-ahead plan because, on the one hand, it needs reliable information that is not available from the master plan and, on the other hand, it requires some time to

Crew 3 Crew 1 Crew 2 Crew 4 Crew 1 - 3 people Crew 2 - 3 people Crew 3 - 4 people Crew 4 - 4 people

FIGURE 3.4 Example of plan showing the division of a facility into work zones.

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be implemented. If they are left to the short-term planning level, this may cause some delays. Explicitly planning and controlling the physical fl ows in construction sites is an important step to reduce the share of non-value-adding activities [Alves and Formoso 2000]. If necessary, the sequencing and pace of work must be adjusted, in order to reduce the congestion of people and materials.

3.4.2.3 Short-term Planning

Th e main role of short-term (or operational) planning is to control production directly. Th e work packages that have had all constraints removed are fi ltered and may be assigned to diff erent gangs. If the necessary resources are not available, a work package must be rescheduled for a later date [Ballard 2000]. Th is is another key element of the Last PlannerTM _{system: production is shielded from workfl ow uncertainty, increasing} the reliability of short-term planning, and enabling production units to improve their own productivity [Ballard and Howell 1997].

Th e operational plan is produced in a meeting in which representatives of diff erent gangs, including the subcontracted ones, agree upon the production short-term goals. Th e aim is to obtain a conscious and reliable commitment of labor resources by the leaders of the work teams involved, rather than simply delivering preprepared plans to them, as is oft en done in traditional planning. For that reason this level of planning is called commitment planning [Ballard and Howell 1997]. Th is meeting is an opportunity to solve confl icts and negotiate common goals between diff erent gangs, since a large number of dependences in construction are reciprocal. A common mistake made by site managers is to prepare the weekly plan by undertaking separate meetings with diff erent subcontractors: this oft en results in poor management of the linkages among distinct subcontractors.5

Th e planning horizon at this level is typically one week. For that reason, this level of planning is also called weekly planning. Very rarely, it might be necessary to reduce the planning cycle to one day—this happens in projects that are too fast and have a very high level of uncertainty.

Ballard and Howell (1997) proposed a set of quality criteria that must be considered in the defi nition of each work package:

(a) Defi nition: Work packages must be specifi c enough in terms of type and quantity of materials to be used. It must be possible to clearly identify at the end of the week whether the assignment has been completed.

(b) Soundness: Th e necessary resources must be available whenever they are asked for.

(c) Sequence: Work packages must be selected considering the sequence that is demanded by the clients and the constructability of the production process. (d) Size: Th e size of a work package must correspond to the productive capacity of

each production team.

5 _{See more about the use of the Last Planner}TM _{system for managing subcontractors in Chapter 7.}

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Production Planning and Control and the Coordination 3-19

(e) Learning: Th e work packages that were not completed within the week must be tracked and the real causes for their delay must be analyzed, in order to defi ne corrective actions and to identify the packages that are likely to be aff ected. During the production of the short-term plan, a workable backlog might be established. Th is backlog consists of a set of activities that fulfi ll the short-term plan quality requirements, but have not been identifi ed as priorities in the long-term plan [Ballard 2000]. It works as a contingency plan that might be carried out to guarantee the continuity of the work of the production teams in case a problem occurs [Ballard and Howell 1997].

At the end of the short-term planning cycle, an analysis of planning eff ectiveness is carried out, by using an indicator named PPC (Percent Plan Complete), proposed by Ballard and Howell (1997). Th is indicator is the rate between the number of assign- ments concluded and the total number of scheduled work packages. Th e root reasons for noncompletion of work packages must be identifi ed, so that corrective measures can be implemented.

At the short-term level, Class 3 resources may be pulled directly from site manage- ment, based on inventory control. Th ese are typically made-to-stock low-cost items, and have a very short lead time.6

3.5 Discussion

As was mentioned before, from the point of view of the main contractor, outsourcing oft en results in some level of blindness regarding the tasks that are transferred to suppli- ers. Since it is no longer possible to directly control the execution of tasks, management progressively shift s from monitoring based on the observation of actions towards the alignment of actors’ objectives [Grandori 1997].

Th is shift brings fairly subtle but important changes. Firstly, the analytical approach to processing control, based on observation of action and its comparison with expected standards, becomes ineff ective since economic boundaries will now hide the details of process execution. Secondly, the importance of achieving coopera- tion of the parties involved increases with the increment of their autonomy in process execution. Finally, in order to coordinate several actors simultaneously, it is of critical importance to well defi ne the project objectives for each project supply chain member as well as the sequence in which each of those actors will intervene in production in order to guide their individual actions towards a common direction. Th at seems to be one of the roles played by production planning and control in the coordina- tion of construction project supply chains. Th is happens especially at the long-term level, in which some project goals are defi ned, such as milestones, overall installation sequence, and takt time.

Another important role of production planning and control is the management of commitments, pointed out by Macomber and Howell (2003) as one of the core practices of the Last PlannerTM _system.

6 _{See Chapter 8 for some good practices on the management of this type of resource.}

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Each of the hierarchical planning and control levels plays a distinct role in terms of the management of the commitments. Look-ahead planning addresses mainly the commitments regarding the procurement or scheduling of resources and information delivery, occasionally including the negotiation among subcontractors or diff erent crews about shareable and nonconsumable resources, such as, for example, the use of space, in order to avoid interferences among diff erent workstations or confl icts concerned with storage space needs for distinct supplies.

Nonetheless, most of the ability of the Last PlannerTM _{system in managing commit-} ments eff ectively along the supply chain and also across the hierarchical levels of the planning and control system relies on the short-term planning level. Th is includes a clear statement by the project manager on the work packages that are required to be executed in the following period, a good defi nition of work packages in terms of their soundness, a fair negotiation with the crews and subcontractors in order to get realis- tic assignments, and their explicit commitment to the accomplishment of these assign- ments. It is also important that the crew leaders and subcontractors are aware of the need to get their teams committed to the assignments that were agreed.

At the end of each short-term planning cycle, subcontractors and crew leaders will be asked if they have concluded their assignments, and the production (or site) manager will state whether he/she is satisfi ed, by accepting or refusing each of those deliveries.