Lean, Sustainability & Projects
Modern projects of all kinds face innumerable challenges due to increasing scale, complexity, and stakeholder numbers. Failure rates, particularly for industrial and construction projects, have been on the order of 50-70% [1] due to missed milestones, cost overruns, poor quality and dissatisfied customers or high-influencing stakeholders.
If we are a little more proactive, with early engagement with stakeholders, application of Lean processes, and the integration of Sustainability aspects, we can avoid many of these issues.
What is Lean?
Lean thinking started with Toyota as a response to the challenges of rebuilding after World War 2, refining and honing their production line in Japan. The processes and methods resulted in fast assembly times, low material waste and volume outputs to suit the changing market requirements. The core idea of Lean thinking is to maximize customer value while minimizing waste.
Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional systems.
In general, the essence of Lean is captured in five concepts:
Specify value in the eyes of the customer
Identify the value stream and eliminate waste
Make value flow at the pull of the customer
Involve and empower employees
Continuously improve in the pursuit of perfection
Lean Project Delivery is the term used to define the application of Lean thinking principles to the construction and projects environment.
As there is 57% waste in the building industry, as opposed to 26% in manufacturing [2], there is huge opportunity to deliver projects in less time, at less cost, with better quality, higher performance, and higher profit margins for all involved.
Lean project delivery methods such as Last Planner® System and Target Value Design have allowed projects to be delivered, on average, up to 19% under market cost and under budget (client's allowable cost) [3]. Masters of the LPD process, like Sutter Health and Universal Health have been able to achieve 200% improvements in productivity, and deliver projects at 40% less cost with 30% less operating costs [4].
What is Sustainability?
Sustainability is based upon the premise of designing to concurrently optimize three aspects: economics, environment, and social. Sustainable design requires considering the product’s entire lifecycle, from concept, to planning and managing design and construction, to operating and closure of those facilities, or the end of a product’s life.
We must ensure that what we produce will not negatively impact the environment, and that society will benefit in some way from its creation, while remaining financially sustainable over the long term. An organization must understand the real value it delivers to its customers and do so in the most effective way:
making best use of world resources and its people, and
making good profit margins,
all while contributing to improving social infrastructure
by protecting the environment and respecting the health, safety and concerns of all people.
To do so, we need to include those stakeholders that are particularly near the development/project, to address their needs and concerns within scope.
How Lean & Sustainability come together in Projects
Lean Project Delivery is a process built on open engagement with stakeholders - developing trust, alignment, shared risks and commitments, and collaboration. Sustainability requires the same. Both work to reduce wastes of various types while optimizing value delivery, with Lean focusing primarily on optimizing systems flow, and Sustainability focusing on optimizing resources.
By starting with the collaborative bases of LPD, we can appropriately determine what all of the goals and objectives of the project should be. From project conception, we define the owner or customer desires, and expand and engage our stakeholder pool to collectively establish all of the necessary requirements for the project.
Using Lean’s collaborative Target Value Design process brings a focus on optimal solutions during analysis and design. Through diversity of knowledge, experience and thought, stakeholders are brought together, at the right times, to have rounded input and healthy debate, so that the right solutions are proposed to meet the challenges at hand, addressing all of the risks and requirements associated, right from the start.
Increasing visibility of ongoing work, and communications in a common forum, use of the Last Planner® System during planning and execution removes risks and resolves challenges and complexities at both a planning and working level. It allows work to commence earlier on the things we clearly know, and flexibility to shift and adapt as is required, as relevant and updated information arises. This approach avoids going blindly down one path, only to find later that it won’t address something we otherwise may have missed earlier.
In examples of the gains to be made through LPD processes and tools, the following 2 projects are highlighted:
The Saskatchewan Forest Center [5] project demonstrated that LPD can be implemented post tender to fix a "Broken Budget" [6]. This project was successful in delivering an $8.2M project with a low contingency of $100K by implementing Target Value Design, Collaborative Planning, Relational Contracting, Integrated Design, Green Building Certification and Design Commissioning.
The Mosaic Centre project in Edmonton demonstrates that LPD can be used to achieve triple bottom line economics and deliver Living Building Challenge/Net Zero projects at the same or less cost than a traditional project [7]. This project implemented Last Planner System, Target Value Design, Building Information Modelling, 5S, Integrated Design, Green Building Certification, Multi-Party Agreements and Lean Commissioning.
Applied together, Lean and Sustainability have significant potential to improve not only the performance of your projects’ schedules and costs, but also the performance and quality of the products you deliver. It starts the project off on the right foot, with everyone pulling in the same direction, bringing value not only to your client, but also to society, and with minimized impacts to our precious environment.
Where can I apply this?
Lean and sustainability philosophies can be applied to any type of project, but together they are very effective in the industrial world – infrastructure construction, mining, processing, and manufacturing.
If you think about it, the Lean thinking that came out of improving process flow and value in the manufacturing sector can be applied to the process of development of anything. But rather than focus on improving the production and quality of one particular product, as in manufacturing, we are merely applying the same philosophies and techniques to improve the process of project delivery and construction.
Mining is simply a project involving an extended manufacturing process, starting directly from extraction of the raw resource out of the ground, to delivery of a refined ore product to the customer – the next user. The primary differences are that:
we only extract the resource once (hence, a unique “project”),
there can be a lot of unknowns and variability associated with nature and the geology of the raw resource itself, and
the processes of extracting the materials from the ground and in the mill need to be flexible in order to deal with the variabilities that arise throughout the mine life.
But if we apply Lean and sustainability philosophies in the design phase, and we apply particular Lean methodologies to planning and managing all of the associated tasks, involving all of the relevant stakeholders at the right times to do so, we can deliver the “project” most effectively, having designed it with the least amount of impacts to environment and society.
Similarly, construction of infrastructure are also unique projects, but still remain a process of manufacturing a new product. The fact that the product is different each time a new product is designed and constructed does not prevent us from applying these philosophies and methodologies to improve how we design and deliver said product.
And once you learn more about Lean and Sustainability strategies, it quickly becomes “just the way you do things” – because they both make perfect sense.
Where can you find out more?
Working across Canada, Shift2Lean provides foundational training for Lean Project Delivery, where several of the principals have significant experience in applying Lean and sustainability to industrial, mining, institutional and commercial construction projects.
Enviro Integration Strategies is in the business of improving the outcomes of mining developments, in particular - such that they have been responsibly designed, proactively pre-empting environmental and social risks, throughout the full development lifecycle. Applying Lean and Sustainability philosophies at early design timeframes, and involving all the necessary stakeholders at this time, help to reduce risks and create opportunities to generate much more value for all stakeholders involved.
About Karen Chovan, Principal of Enviro Integration Strategies, and Shift2Lean…
I’m on a mission to alter the way industrial developments and projects are planned, designed and operated - I want to help others identify new options, make better decisions, and generate or recognize value where others see only cost, all in a streamlined and effective method of delivery.
[1] Ernst & Young, 2014, “Business Risks Facing Mining and Metals 2014-2015”; Ernst & Young, 2015, “Spotlight on Oil and Gas Megaprojects”
[2] Barry B. Lepatner, "Broken Buildings, Busted Budgets"
[3] Glenn Ballard, 2011, "Target Value Design Current Benchmark" http://www.leanconstruction.org/media/library/id58/Target_Value_Design_Current_Benchmark.pdf
[4] Universal Services Lean Project Delivery Guide, http://leanipd.com/wp-content/uploads/2016/09/UHSLeanGuide.pdf
[5] http://aodbt.com/project/the-saskatchewan-forest-centre/
[6] https://www.leanlab.ca/single-post/2016/10/19/How-to-Fix-a-Broken-Budget
[7] https://www.leanlab.ca/single-post/2016/03/01/Lean-to-be-NetZero-Mosaic-Centr