Measuring Lean Construction Performance
As in any process improvement endeavor, measurement is all important. In the words of one quality guru “you cannot improve what you cannot measure.” Research studies have indicated that approximately 54% of project commitments are completed in the typical weekly schedule, using traditional project delivery. Lean project delivery can raise the reliability of work plans to 85% or more.
Work accomplishment is recorded as a graphical plot of percent plans complete (PPC);
it shows the percentage of the assigned plans; that is, commitments that were completed (fractional completion is not considered). Some lean construction practitioners refer to PPC as commitment reliability. In The Last Planner® System, teams commit to completing des-ignated tasks in a given week; failure to complete all of those tasks represents less than 100% reliability. It must be noted that a PPC value does not give a true indication of how efficiently assignments have been carried out (Mohammed and Abdelhamid 2005). It does not measure the level of utilization of a work crew. Instead, it measures production plan-ning effectiveness and workflow reliability.
Observations on Commitment Reliability
Figure 5.1 relates to an EPC project that is described in Chapter 7 (Case C). The figure shows a highly fluctuating level of commitment reliability (as represented by the PPC values). The mean value of reliability ranges between 44 and 48%, indicating that, on the average, fewer than half of the planned assignments are completed in a given week.
This value is at or near zero on three occasions and between 80 and 82% on two other occasions in a 6-week period. In the context of lean construction, the desired outcome is to have minimal variability in the hand offs of assignments to downstream crews.
Wide fluctuations in the completion of tasks upstream subjects downstream crews to the risk of scheduling labor and materials for tasks that are not in a full state of readiness.
Having crews available for delayed assignments represents time consuming and costly waste.
In this case, the reasons for high variability were studied through a review of reasons for noncompletion (RNC). The most frequently occurring RNCs were found to be short-comings in commitment/planning and inadequate prerequisite work. By addressing these issues, significant improvements were made, variability was reduced, and PPC/reliability was increased from the 45% range to over 80%. These changes accelerated the project from being significantly delayed to being on time with virtually the same resources.
Use of Statistical Process Control
Statistical process control (SPC) and PPC values:
SPC involves the use of control charts to track the performance of a process and diag-nose the nature of the variation it exhibits. The control chart is an important statistical tool in Six Sigma management that enables process owners to minimize the variation in processes, and the resulting defects. The chart distinguishes between the common causes of variation and the special causes. In lean-based construction projects, The Last Planner® System requires the tracking of PPC in order to calibrate the reliability of actors in the con-struction supply chain. PPC charts are essentially “Run Charts” that simply reflect basic job accomplishment.
The SPC concept takes the run chart to another level; it introduces control limits that reflect the range of normal behavior for the process. Typically, the limits are placed three standard deviations above and below the process mean. A process that is stable and operating
100 90 80 70 60 50 40 30 20 10
020 D ec 06
20 Dec 06 09 Ja
n 0610 Jan 0610 Ja n 0612 Ja
n 0612 Ja n 0613 Ja
n 0616 Jan 0617 Ja n 0618 Jan 0619 Ja
n 0620 Ja n 0623 Ja
n 0624 Jan 0625 Jan 0626 Jan 0630 Jan 0630 Ja n 0631 Ja
n 0601 Feb 06 02 Feb 06
Figure 5.1
Commitment reliability. (From Gwynn, P., ULSD Lean Production Management (LPM), Lean Implementation Services, Schereville, IN, self-published, 2008. With permission.)
Lean Process Measurement and Lean Tools/Techniques 111
normally will experience a degree of fluctuation around that mean, but will keep its values inside the control limits.
Types of variation: Gitlow and Levine (2006) describe two types of variation. Chance or common causes of variation create fluctuations or patterns in data that are due to the sys-tem itself; examples are hiring, training and supervisory policies and practices. Common cause variation explains fluctuations within the control limits. They are the responsibility of management, who establish policies and procedures.
Special or assignable causes of variation create fluctuations or patterns in data that are not inherent in the process, and are detected when control limits are breached. They occur because of abnormal events that are often avoidable, for example, a missed concrete pour could be caused by a late order from a site office resulting from an oversight.
Companies that have successfully run lean-based projects may investigate refining PPC tracking with the application of SPC; the technique is practical only with established, sta-ble processes. Because of the relatively small number of assignments in construction, as compared with manufacturing, a variables chart (X–
, R) would be more appropriate than an attribute chart such as a “p”chart which works best with large sample sizes. (Several texts are available on the subject of SPC).
Learning: Reasons Analysis and Action
At each weekly meeting, time is devoted to learning why certain tasks were not accom-plished in the previous week before creating a weekly plan for the work to be executed in the following week. Incomplete plans are studied to determine the root causes (reasons for noncompletion) and why they were not completed in order to improve the effectiveness of future work plans. A Pareto chart reflects the most frequently occurring reasons. Typically, bad planning and poor coordination are frequently occurring causes.
This exercise serves as an all-important learning tool. Without learning, crews are likely to simply repeat the mistakes of the past.
1. Percent plan complete (PPC) measures the degree to which work is completed as planned. It indicates the likelihood of future work accomplishment; however, the value changes as teams learn from past performance and improve future work plans. A CII-sponsored study by Ballard and Kim (2007) of pipe fitters on a major project, identified a positive correlation between PPC and productivity at the 95%
confidence level. PPC is calculated by determining how many individual work tasks were initially planned, then computing a ratio of completed plans to planned tasks. There is no credit for plans that are incomplete. This measurement is also used for commitment reliability.
2. Reasons for noncompletion: These reasons are tabulated by studying incomplete plans to determine the root causes for lack of completion. These causes should be categorized in meaningful groups to facilitate identifying system-related causes.
A Pareto chart is a convenient tool for ranking the reasons for noncompletion. The knowledge from the root-cause analysis enables crews to avoid obstacles in future work cycles.
Comments on the rNC
Tracking of RNC points to specific problem categories that are observed to prevent timely completion of scheduled assignments (Figure 5.2). In the example provided, commitment planning and prerequisite work were the most frequently occurring reasons for noncom-pletion. These categories were subjected to improved methods in the actual project with positive results. The RNC can be further investigated with five-Why analysis.
Five-Why analysis
The five-Why analysis procedure is a simple, yet effective procedure for finding the root cause of a problem. It is a part of the Toyota problem-solving process, and focuses on involved processes rather than on people. The steps in the process are:
Ask why a particular process deviates from expectations.
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Ask why the answer is as stated.
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Repeat the questions: asking why until a root cause is found. (If needed, this may
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extend beyond five questions.)
Other quality tools such as a Pareto analysis and Fishbone diagrams may be used
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instead.
example:
1. Why wasn’t the drywall installed in room 302 last week as scheduled?
a. Answer: The conduit work for electrical and communications was not complete.
2. Why wasn’t the conduit work completed?
a. The electrical subcontractor did not have the material to complete the work.
Summary reasons 350
300
250
150
Number of occurrences 100
50
0Commitment
/planning Prerequisite work
Weather Material Resource Equipment Safety 16 2
34 20 67
94 297
200
Figure 5.2
Tracking of RNC (reasons for noncompletion).
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3. Why wasn’t the material available?
a. The materials were ordered late.
4. Why was the material ordered late?
a. There was a discrepancy between the plans and specs with regard to the configuration.
There was an open request for information (RFI).
5. Why did this RFI remain open?
a. The communications specialist did not spot the discrepancy until the middle of the week.
The root cause of this problem should prompt the electrical foreman and general foreman to improve the constraints analysis process. Shop drawings should be prepared on a timely basis, and approved through the project manager and designer to avoid last minute surprises. Reliable, sound commitments can only be made when all constraints have been removed.
rolled PPC
Rolled PPC is analogous to rolled throughput yield (YRT). Mohammed and Abdelhamid (2005) have proposed using rolled PPC to expose the “hidden factory” in a construction operation. This is the rework to correct defects that are caused in subprocesses. It is said to be a more realistic performance measurement tool that reveals the deficiencies in the planning process. The weekly rolled PPC is a value obtained by multiplying the daily PPCs for the week (Table 5.1). It gives an accurate value for measuring the performance of the process without hiding the rework because of incomplete tasks on the previous day(s).
Rolled PPC PPCi i i n
=
=
∑
= 1Where PPC is the PPC for day i (calculated as assignments completed/assignments made).
The product of the PPCs is 0.084 = 8.4% (rolling PPC).
In general, measured or collected data can be analyzed statistically in various ways to determine areas of improvement. This is necessary for management to identify tasks that need immediate attention and assign priority levels that need to improve the overall pro-duction planning process and thus improve crew performance and crew-to-crew hand offs (workflow). Determination of high-priority actions can be achieved by performing statistical analysis on the data.
Table 5.1
Tabulation of Rolled PPC Values
Day March 1 March 2 March 3 March 4 March 5
Cumulative Product
Tasks planned 3 4 4 3 4
Tasks completed 2 2 2 2 3
PPC 0.67 0.5 0.5 0.67 0.75 8.4%
Plus-Delta analysis
Plus-delta analysis is an important component of the learning process. What produced value? Items in this category are listed in the “Plus” column. What might produce more value? This points to items in the delta column (i.e., those that could be improved).
Plus-Delta analysis can be used for a wide range of topics, including construction meet-ings related to The Last Planner® System, such as the Weekly Work Plan meeting. Plus-Delta enables continuous improvement with the way the meetings are conducted by having meeting participants ask and answer the foregoing questions.
Jim Shug, a consultant, cites the extensive use of Plus/Deltas in the military after tacti-cal/training/combat operations as after action reviews (AAR) and lessons learned meet-ings. He expresses the opinion that feedback is a gift and great leaders want to know what others think and how to improve. Their intentions may be great, but the perceptions of their actions are reality to those around them.
Shug views Plus/Deltas as a significant step toward developing a learning organiza-tion. He recommends that there should be not only be a discussion, but some concrete facts as well to show “reality”. “In military training events, they could play back radio transmissions from the battle and snapshots of vehicle/squad positions. This really becomes a wake up call to leaders on the ground and takes shape in a similar way for projects.”
With regard to the construction process, Plus-Delta may be applied to perfor-mance measures such as those listed in Chapter 2. Ed Anderson, a consultant, empha-sizes the BIG FIVE: cost, schedule, quality (scope/spec), safety, and reliability. He states that there can be many subsets of these, but lean advocates simplicity (KISS) first, then when and where needed, to add more detail. Anderson cautions that while mea-surement is important, proactive lean behavior involves having systems in place that concentrate on eliminating non-conformances, as opposed to measuring and tracking everything.
Some possible measures are listed here for convenience:
Schedule variance
Schedule variance: Percentage difference (positive or negative)
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Work in process: The number of work packages in process
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Number of planned versus unplanned work packages in process
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Yield: Hours worked on planned work/available hours
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Available hours
• = total shift hours minus breaks and travel time Performance factor (PF): measures productivity
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Earned labor hours/actual labor hours expended
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The labor utilization factor for each trade
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The field rating
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Efficiency
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Designer performance, valuable measures are:
Number of design errors
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Processing time for shop drawings
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Number of RFIs submitted
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Response time for RFIs
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Customer satisfaction ratings
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Contractor performance, during construction:
Accidents, days without an accident
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Number of punch list items
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Number of failed inspections
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Estimated cost versus actual cost—by trade
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After turnover:
Number of warranty calls
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Customer satisfaction ratings
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These measures are based on observation of the work force. They indicate the portion of available labor hours that are productively utilized. By the same token they provide an approximation of the amount of waste incurred.
Lean Performance Measures
The following factors are appropriate for establishing performance measures for lean pro-cesses (the value of these measures varies, depending on the maturity of the respective organization in implementing lean):
Cycle time: Time it takes from start to finish to complete a task, create a product,
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or provide a service.
Value creating time: Process time spent to transform raw materials, parts or
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components, and information into a usable product or service desired by a customer.
Lead time: Time taken to move one transaction through the entire process—before
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another transaction can begin.
Takt time: Represents the rate at which a customer wants/consumes a product.
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Ideally, the process should be based on Takt time in order to produce or be in step with (downstream) customer demand. Takt time = available working time per day/customer demand per day.
Production efficiency: Units produced/Takt time.
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Lean Tools and Techniques
Additional lean approaches provide a means of augmenting The Last Planner® System.
Some of these approaches are:
First Run Studies Trying New Construction Ideas on a Pilot Basis Value stream mapping: (VSM) The documentation of specific actions to create finished
products materials to meet customer demand.
Kaizen: Continuous improvement philosophy
5S: It is a system for workplace organization—it promotes lean
thinking and application.
Visual management, visual controls The placement in plain view of all indicators and activities allowing all to understand the status of the system at a glance.
Kanban: Pull system central to the Just-In-Time (JIT) philosophy.
Poka-yoke: Error proofing
Preventive and predictive
maintenance Keeping all equipment functional and maintained so it can operate reliably.
How Do lean Tools/Techniques Work?
First-Run Studies
This involves trying new construction ideas on a pilot basis and applying the PDCA (Plan-Do-Check-Act) methodology. To determine its success and identify the best means, methods, and sequencing for a specific activity. These studies are carried out a few weeks in advance of their actual use in a project, with enough time to obtain needed materials.
A study documented by Salem et al. (2006), reviewed the installation of bumper walls and construction joint installation. Selection occurred in the “PLAN” phase. The test installation was observed carefully in the “DO” phase and videotaped In the “CHECK”
phase. The finished work was examined carefully by the project manager, foreman, and crew to identify possible improvements. In the “ACT” phase various recommendations were tested, resulting in a 38% reduction in the cost of bumper walls, and 73% reduction in the cost of construction joints.
Value Stream Mapping
A value stream is all the actions (both value added and nonvalue added) currently required to bring a product through the main flows essential to every product: (1) the production flow from raw material into the arms of the customer, and (2) the design flow from concept to launch. Value stream mapping (VSM) is specific actions to create finished products from raw materials to meet customer demand. VSM focuses on information management and transformation tasks. The VSM process generates (1) a current-state map, (2) a future-state map, and (3) an implementation plan (Rother and Shook 2003). It distinguishes between value-adding and non-value-adding activities. It sets the vision for a what can be accom-plished in the future with needed changes.
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At Toyota, value stream mapping is referred to as “Material and Information Flow Mapping.” In the Toyota production system, mapping is used to develop implementa-tion plans for lean systems; it focuses on establishing flow, eliminating waste, and adding value.
Womack and Jones (1996) recommend that processes be transformed through the fol-lowing approach:
1. Find a change agent
2. Find a sensei (a teacher whose learning curve can be borrowed) 3. Seize (or create) a crisis to motivate corrective action
4. Map the value stream for all product families
5. Pick something important and get started removing waste quickly
They point out that overzealous people who seek change often bypass mapping the value stream and go directly to step 5 with self-defeating results. Instead, they recommend that Kaizen efforts are most effective when integrated with efforts to create a lean value stream. In the construction environment VSM would be used to examine the process of delivering construction or design services in order to reduce or eliminate non-value-adding steps.
The current-state map represents the existing process. It requires studying operations very carefully in order to fully understand the flow of materials, information, and labor. It is recommended to work backwards from the delivery of the completed product or process to visualize what actually occurs from start to finish. Important statistics are collected and represented on the map, such as: work hours, work time, lead times, unproductive time, value creation time, setup time, and defect rates.
An evaluation of the current-state map shows opportunities for simplifying processes and eliminating or reducing unnecessary steps. This information is used to draw a future-state map with desired process improvements. For example, in a chocolate manufacturing operation the process was found to have 25% scrap rate. Value stream mapping revealed that the rejects were primarily due to improper wrapping. A process redesign led to a reduction in rejects from 25 to 0.05%. Significant reductions were made with in-process inspections, rework, lost time, overtime, and so on. Staffing reductions also yielded saving in direct and indirect costs.
Value Stream Mapping at Tweet/Garot Mechanical Inc.
Tweet/Garot Mechanical, Inc. has used the Kaizen approach in conjunction with value stream mapping to improve their fabrication processes. The attached value stream maps VSM#1 (Figure 5.3) and VSM#2 reflect improvements made to the fabrication of Tee Dampers for a primary customer. Note: On the map, the process is shown in two rows. Activities are labeled as follows: VA = value-added activity and NVA = non-value-added activity. Numerical val-ues are shown on the symbols; they represent the minutes elapsed in carrying out an activity.
The symbols are also labeled to indicate if the time elapsed is value added or not. Figure 5.3
The symbols are also labeled to indicate if the time elapsed is value added or not. Figure 5.3