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Lean Construction

– A New Path for the Construction Industry –

Lean Construction

– A New Path for the Construction Industry –

Peter Meijnen Porsche Consulting GmbH Peter Meijnen Porsche Consulting GmbH Oslo, 20 May 2015 Oslo, 20 May 2015

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Porsche Consulting - 20 years experience in consulting business

Porsche Consulting * FY 2014

Source: Porsche Consulting

Parent company: Dr. Ing. h.c. F. Porsche AG

Foundation: 1994

Revenue*: €90,2 million

Employees: 372 (December 2014)

Revenue: 70% outside of

Volkswagen Group

Consulting focus: Operational Excellence

Locations:  Bietigheim-Bissingen (Germany)

 Hamburg (Germany)  Milan (Italy)

 São Paulo (Brazil)  Atlanta (USA)  Shanghai (China)

(3)

Porsche Consulting operates in many sectors

Source: Porsche Consulting

Extract Automotive industry and suppliers Automotive industry and suppliers Aerospace Aerospace Services Services Industrial equipment Industrial equipment Consumer goods and trade Consumer goods and trade Construction industry Construction industry

(4)

* Reference: Cost framework ECB, against estimate from 2005

Source: Porsche Consulting, www.wikipedia.de, www.ecb.europa.eu, Der Spiegel (Issue 44/2013)

The greatest challenge in the building industry is meeting cost and deadline targets

1950s

Cost increase: 167%

Construction time extension: > 1 year

Cost increase: 53%*

Construction time extension: > 2 years

(5)

Reasons for not achieving targets on construction sites are quickly identified

Source: Porsche Consulting; Photo: Istockphoto

Decisions are not made in a timely manner

Decisions are not made in a timely manner

Project partners do not function properly

Project partners do not function properly

The weather is poor The weather is poor

Each project is unique, problems always arise Each project is unique, problems always arise

(6)

Today the construction industry faces challenges similar to those of the automotive industry in the early 1990s

Source: Porsche Consulting; Photo: Porsche AG, MOffice High demand for rapid time-to-market/ increased number of customer requests

High demand for rapid time-to-market/ increased number of customer requests

High product variance, high part variance High product variance,

high part variance Low process orientation, orientation by department Low process orientation, orientation by department

"Presumed market power" means that there is no search for root causes in companies "Presumed market power" means that there

is no search for root causes in companies

Frequent order changes, planning during construction with adjustments

Frequent order changes, planning during construction with adjustments

High flexibility and choice of realization options

High flexibility and choice of realization options

Low process orientation, orientation by function Low process orientation,

orientation by function

"Presumed contracting power" leads to risk transfer

"Presumed contracting power" leads to risk transfer

(7)

Adaptation instead of copying – Porsche’s production system serves as an

inspiration when optimizing processes in other industries, including construction Lean Construction System

“Understand“

“Adapt“

“Implement“

4 principles

Flow Takt Pull Zer

o

defect

copying not possible

Source: Porsche Consulting; Photo: Porsche AG, Fotolia

Methods & principles

(8)

Lean – work smarter, not harder

Source: Porsche Consulting, Photo: Panthermedia

Value-adding Not value-adding with obvious waste Not value-adding with hidden waste

Optimization through

waste reduction

(9)

In the construction industry, the different types of waste can be found at nearly every construction site

Source: Porsche Consulting

Space

Defects

Movement time Waiting time

Deviation from plan

(10)

We have experience along the complete construction value stream

Source: Porsche Consulting; Photo: Fotolia, Porsche AG

Development/

Planning

Construction

Facility

Management/

Revitalization

Design

(11)

Lean Construction ensures stability, transparency and improvement in the dimensions quality, delivery reliability and costs

Will be described in more detail below Source: Porsche Consulting

Quality

Costs Delivery

reliability

Stability and transparency

Project execution process Project execution process

Synchronized execution and quality management Synchronized execution and quality management

Construction logistics Construction logistics

Partner management Partner management

Assembly-friendly product design (modular system) Assembly-friendly product design (modular system)

1

5 4 3 2

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Our strategy: From project to process management

1 2 3

Project

Process level

* JIT = Just-in-time

** CIP = Continuous improvement process Source: Porsche Consulting

1 2 3 4

Process design

according to general JIT* principles

Process control

through defined standard activities and capacity deployment

Process improvement and stabilization through CIP** Qualitative representation Ability to influence costs Time 100% 50% 0% Traditional approach Cost Lean approach: "Frontloading" 1.1 1.1.1 1.1.n 1.n 1 Visible Waste Value added Hidden V V W W W V V

(13)

The project execution process provides transparency and synchronizes

processes and progress measurements throughout the lifecycle of a project

Source: Porsche Consulting

Project organization

Dynamic control

Ensures communication at the project interfaces

Ensures continuous progress measurement and control

Key performance indicators Process map

Show the overall project status and shorten decision-making paths

Establishes synchronization and

transparency D D Q Q C C D Q C Lean project execution process 1

(14)

Synchronized execution and quality management provides one overall plan for the whole construction project to be adhered to by all parties involved

Source: Porsche Consulting

2

Takt: „train of activities“ Detailed schedule Takt control

*

Coupled, realigned and harmonized processes

Synchronized and visualized detailed schedule

Daily control of progress and quality

Pull/Flow

Takt

Zero Defects

Activity Takt area

(15)

Construction time reduced by 30% - project return increased by 1.4 percentage points

"Precision workforce planning for subcontractors is already possible before construction" General Manager

Richard Ditting GmbH

Source: Porsche Consulting

Project example: Building construction

"We finally have a method to efficiently manage our

subcontractors" Project Manager Richard Ditting GmbH

Optimization approach

Result

 Reduction in construction time by 30%

 Increase in project return by 1.4 percentage points

 Takt planning  Takt control

(16)

Project example: Pipeline construction

Increase in productivity by 28% - reduction in large equipment costs by 43%

Success factors

 Takt planning  Takt control

Results

 Increase in productivity by 28%  Reduction in costs for large

equipment by 43%

(17)

Construction time reduced by 40% - increase in productivity by 52%

Project example: Highway construction site

Success factors

 Synchronized construction logistics

Results

 Increase in hourly paving performance by 66%

 Increase in crew performance by 52%  65% less truck waiting time

 Reduction in construction time by 40%

(18)

Project Example: Completion of public spaces at the ship yard

25% less throughput time – 30 % less man hours

Success factors

 Lean order fulfillment process  Dynamic takt planning and control  Standardized and short-term quality

control

Results

 25% reduction of throughput times  30% reduction in required man hours

(19)

Success Story: Monorail construction, Sao Paulo

Source: Porsche Consulting; Photo: Porsche Consulting

Significant improvements in quality, delivery reliability and cost control

Result

Adriana Terumi Yoshida,

Construction Manager Andrade Gutierrez (Sao Paulo, Brazil)

„Traffic is one of the biggest problems in Sao Paulo. The Monorail will increase the citizens’ quality of life. Porsche Consulting is supporting us stabilizing our construction processes, improving delivery time and quality as well as cost control.“

(20)

Success Story: „Rail City“ Heidelberg

Source: Porsche Consulting; Photo: Porsche Consulting

Result

Matthias Ryzlewicz,

Managing Director Weisenburger Bau (Heidelberg, Germany)

„You can positively hear the fizz of value being added. Lean construction

strengthens our competitiveness, thanks to which we can offer our customers affordable work at the highest quality.“

Reducing construction time of the largest passive-energy construction project in the world

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Lean Construction – Summary

* Gemba = Japanese for ‘place of work’ Source: Porsche Consulting

Waste reduction

By eliminating/reducing waste, the time available for

value-added activities is increased

Construction site focus

The focus of all activities in a construction project must be on smooth construction execution (Gemba*)

Process thinking

Synchronized processes and frontloading provide stability

and transparency - transfer from the automotive industry to

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Our objective

… more projects… … more projects…

… on time and within budget! … on time and within budget!

Source: Porsche Consulting; Photo: Istockphoto

Stability and transparency ensure… Stability and transparency ensure…

References

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