Lean Principles Minimize Four Categories of Construction Waste

Healthcare Facilities Lead the Way Finding Savings in Short-Term Capital and Long-Term Operating Costs
  • People Resources

    Lean construction practices attempt to reduce waste in areas such as people resources. This chart shows how a majority of those involved in a project come on when the project is more than halfway finished, but their input is more valuable at the beginning of a project.

    Courtesy of Victor Sanvido

Getting the planning team on board with Lean project delivery from the outset of a project can net huge savings in both capital expenditures and long-term operating costs. A California hospital, for example, saved $700,000 and 550 sf per bed, and the project was completed 25 percent ahead of schedule, a level of efficiency that can be achieved in other industries, as well.

Using Lean principles, that hospital spent $1.1 million per bed versus the customary $1.8 million, says Victor Sanvido, senior vice president of Southland Industries and a leader in the application of Lean processes. The project also achieved the objective of 1,250 sf per bed versus 1,800 sf, to increase efficiency and reduce the distance a nurse walks per day. After construction started, there was further cost reduction, outcomes were more predictable, and there weren’t any disputes.

“You cannot do that if the team is not selected before you start the programming exercise,” he says.

Lean construction has taken off in the healthcare industry because of pressure to deliver healthcare more efficiently, notes Sanvido.

“Now we see other types of owners starting to embrace this concept, especially those with pressure to make facilities more efficient,” he adds.

Defining Lean and Eliminating Waste

The Lean philosophy is three-pronged:

  • The customer defines value.
  • Identify and remove waste.
  • Innovate and perfect.

Value should be defined by the building owner, not what the planning and construction team believe are valuable to the customer, says Sanvido. One building owner who wanted to undertake a retrofit indicated up front that the building was worth only $20 million to him, so a conventional structural solution of $80 million was not feasible. Using Lean principles, the team achieved a $1 million structural solution and was able to invest $19 million in facility upgrades.

“Value is not cost. Just because it costs a lot of money doesn’t mean it is value,” notes Sanvido. “A lot of times, the best solutions actually cost less than the good solution. Sometimes, the owners want code minimum. Sometimes they want lowest cost. Sometimes they want the best.”

To increase value, more than one solution should be provided, he adds, so the owner can choose the combination of options that suit his or her needs. If value is defined by the owner, then the “value stream” is the set of activities required to provide value, and everything else is waste.

“Lean is about getting rid of that waste,” says Sanvido. “Then we have to innovate and perfect, by continually improving every single day.”

In construction, waste occurs in four arenas:

  • Process
  • Product
  • Resources
  • People

Process waste is most prevalent in procurement and then design. Procurement often takes anywhere from three months to more than nine months, but there is no reason it has to take that long, says Sanvido, even for public projects which require competitive bidding.

“All that’s required in public projects is competition; that doesn’t mean you have to have an extensive number of activities. You can select a winner in a one-week competition or a six-month competition. With some of our procurement processes, 85-90 percent of the work put into them is waste. I don’t think public code says you need to waste 80 percent of what you do.”

On the private side, contractors can be interviewed and selected in a short time. Doing a full design competition and having three to five companies submit proposals is not necessary, nor is requiring a full design, he adds; a conceptual design or even less may be sufficient.

“Sometimes the competition doesn’t advance the state of the project. It holds it back. You have to find the right balance.”

Clash detection is purportedly a value-added process, but Sanvido believes we need to view excessive clashes as waste. The process involves taking the proposed models of the different building systems, designed by different specialists, and putting them together to see if there are clashes between systems.

“If you designed it right, using Lean principles, you wouldn’t have any clashes. The higher value is to have conversations at the beginning, and design systems so you don’t clash.”

Product waste comes from failure to define value, thereby putting in too many bells and whistles to cover all the bases. Oversizing systems is also wasteful, but is a routine practice, says Sanvido.

“The thinking is, ‘I’ve only got enough money to do it once, so I will oversize so I don’t have to come back and do anything a second time.’ We design for the worst possible subcontractor, and add in something for all those times we’ve been questioned after design is completed. Systems are many times oversized 20-40 percent, unnecessarily.”

Resource waste refers mainly to inefficient business operations. To cut such waste, design the building for its intended use, says Sanvido. For example, the design of a hospital can affect how long a nurse takes to complete his or her rounds.

“You need to lay out the building for the most efficient operations inside the building, not just pursue the cheapest way to build it.”

“People waste” means not making the best use of knowledge and expertise at the appropriate point in the planning and construction processes. Typically, more people—operations people, maintenance staff, and constructors—become involved in a project when it’s 50 percent complete, or later.

“We typically hire them at the end so we get the cheapest price. But if you have the wrong building, was it really a savings? If you don’t bring those people in early, it’s difficult to have their perspectives represented. By not using people, you’re wasting their brains.”

Implementing Lean Concepts

To create a Lean culture, it is important to put together a planning team devoted to these concepts early on, says Sanvido, at the latest when schematic is 50 percent done. Everyone on the team should have a similar proportion of risk and reward.

“Be careful how you pick your team, and incentivize them equally so they all have similar skin in the game until the end of the project. People who work for a fee and get paid whether the job is successful or not can be the biggest inhibitors to Lean projects.”

Establish a “big room” where the Lean planning team meets. This is, literally, one large room where everyone involved conducts business. There can be no subcomponents, says Sanvido, so all the people in that room see all the information.

“If you create one space and put everyone in that space from the beginning of the design through construction, you develop a culture. We don’t care about efficiency. We care about single piece flow.”

Make reliable promises and track them, and develop the business case as a team to accomplish Lean success, adds Sanvido. The team concept helps people understand the owner’s intent, and the result is a higher standard of care.

It is generally the owner’s responsibility to assure Lean is followed, but sometimes the owner is unaware of Lean principles. Others, like architects, general contractors, or subcontractors, can take the lead to differentiate themselves.

“We find more and more subcontractors bringing Lean concepts to the table because they are the ones who do the work.”

By Taitia Shelow

This report is based on a presentation Sanvido made at Tradeline’s 2013 Lean Facilities Lifecycle conference.

 

Project Data
Completion Date: 
August, 2013
Location: 
Published 8-28-2013