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
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)
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
* 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
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
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
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
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
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
We have experience along the complete construction value stream
Source: Porsche Consulting; Photo: Fotolia, Porsche AG
Development/
Planning
Construction
Facility
Management/
Revitalization
Design
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
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
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
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
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
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%
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%
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
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.“
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
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
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…