Lean (Integrated) Project Delivery

Destin, FloridaJune 6, 2008

Presentation Overview

What Is Wrong With The Current Project Delivery System?

How Can Lean Concepts Be Applied To Project Delivery?

Integrated Project Delivery (IPD) – What Is It?

Building Information Modeling - BIM

IPD Team Concepts and Guiding Principles

What Are The Major Challenges In Implementation Of IPD?

Who Is Utilizing IPD In Healthcare?

Six Phases of a Project

Symptoms of a Broken System

• Cost Surprises – Spiraling Project Costs

• Loss of Scope, To Stay “Within Budget”

• Unmet And Unrealistic Expectations

• Poorly Functioning Designs Resulting In Re-Design

• Changing Cast Of Players

• Schedule Delays Impacting ROI And Productivity

• No Fun – Worse Case: Lawsuits

• Wasted Time and Effort

Foundations of Project Success“Projects Are Built By People”

Research Has Shown That The Following Are Critical Keys To Success:

• A Knowledgeable, Trustworthy, And Decisive Owner

• A Team With Relevant Experience And Chemistry Assembled Early In The Planning Process

• Contracts That Encourage And Reward Organizations For Behaving Like a Team

• Trust Of and Trust By All Team Members

• Implementation of Lean Principles and Integrated Project Delivery Into Projects

What Is “Lean”?

LEAN - A Set of Operational Philosophies And Methods That Help Create Maximum Value For The Customer By Eliminating Waste and Errors In Processes Impacting Facility Development

LEAN - (based on Toyota Production System) Currently Being Utilized In Healthcare In The Areas of Clinical Operational Process Redesign, Facility Design and Construction

LEAN - Encourages Continuous Improvement Throughout the Project Delivery Process Through Communication and Collaborative Efforts

IPD - One Enabler to Incorporate Lean Concepts on a Project

What is Integrated Project Delivery?Integrated Project Delivery (IPD):

• Project Delivery Approach That Integrates People, Systems, Business Structures and Practices (Relational)

• Creates a Larger Talent Pool During Critical Coordination Stage of Project And Harnesses Insights of All Participants (Collaborative)

• Reduces Waste And Optimizes Efficiency Through All Phases of Planning, Design, Fabrication, Construction and Occupancy (Lean)

Integrates New Project Delivery Concepts: Lean Principles & BIM

Key Question You Must Answer: Are You Willing to Trust Your CM, AE and/or PM?

Building Information Modeling

Building Information Modeling (BIM):

• Presentation of Three Dimensional Information Which Allows All Members of the IPD to Visualize the Many Components of a Project and How They Work Together

• Identifies Conflicts and Reduce Change Orders by Users and/or Contractors

• Can Also Incorporate Scheduling and Costing into the BIM Model for What is Termed as…. “5 D”

• Facilitates More Communication and Collaboration Earlier in the Project Delivery Process

• Provides Owners with Computerized Maintenance Documents

Building Information Modeling

Building Information Modeling

Source: Walter P. Moore

Building Information Modeling

Source: Walter P. Moore

Integrated Project Delivery

While BIM is Changing the Game in the Way Teams Communicate, Integrated Project Delivery is Changing the Game in the Way Project Teams Truly Relate and Collaborate…...

Traditional Project Delivery Team Organization

A/E Design Team

Hospital OwnerFACILITIES PLANNING COMMITTEE (FPC)

Specialty Consultants

• Medical Equipment • Medical Technology • Food Service • Cost Consultant• Zoning & CON• Materials Management• Security

Hospital OwnerProject Leader

Project ManagerKLMK Group, LLC

• Interior Design• Landscape• Signage/Graphics• Elevator• Vibration/Wind• LEED

• Civil• Structural• Mechanical• Electrical• Plumbing• Commissioning

Engineering Consultants

Design Consultants

Construction Manager (CM)

• Subcontractors• Suppliers

Preconstruction Team

Construction Team

• Prime Subcontractors

IPD Team Concepts

Source: Will Lichtig, McDonough Holland & Allen PC

IPD Team Concepts

Source: Will Lichtig, McDonough Holland & Allen PC

IPD Guiding Principles

• Mutual Respect - TRUST

• Mutual Benefit

• Early Goal Definition

• Enhanced Communication

• Clearly Defined Open Standards

• Appropriate Technology

• High Performance

• Leadership

IPD Guiding Business Models

IPD Projects Are Best Suited To Business Models That:

• Promote Early Involvement of Key Participants

• Equitably Balanced Risk And Reward

• Have Compensation Structures That Reward “Best For Project” Behavior, Such as “Open Book” or Incentives Tied to Achievement of Project Goals

• Clearly Defined Responsibilities Without Chilling Open Communication and Risk Taking

• Implement Management And Control Structures Built Around Team Decision Making With Facilitation, As Appropriate

Foundation of IPD – Relational Contract

• An IFOA is Signed By All Major Stakeholders – Owner, Project Manager, Architect and Construction Manager

• Contract Combines All Contingencies Into One IPD Team Performance Contingency

• Contract Eliminates Traditional “Negligence” Standard As Core Group Negotiate a Deductible As a Percentage of Construction Costs for “Errors and Omissions”

• Contract Allows Core Group to Adopt an Incentive Sharing Plan to Encourage Superior Performance Based on Agreed Upon Performance Goals

IPD Relational Contract

Source: Will Lichtig, McDonough Holland & Allen PC

IPD Relational Contract

Source: Will Lichtig, McDonough Holland & Allen PC

What Are The Major Challenges?

• Method Utilized to Form Integrated Teams

• Building of Trust Among Architectural and Construction Industry

• Accepted Vehicle for Implementing IPD (SPE – Legal Entity)

• Bringing The Insurance Industry On Board With IPD (Team Insurance Product vs. Individual Entity Product)

• Speed At Which Design And Construction Industry Adopts Lean and BIM Tools As Standards of Practice

• Education To Promote Wide Spread Understanding of the Value Proposition of IPD

Who Is Utilizing IPD?

• Sutter Health in California Began Using IPD in 2004 to Manage $2.5B System Wide Expansion Program – The Leader in Healthcare

• Ascension Health The Nations Largest Catholic System is Using IPD on One Project and Investigating System Wide Adoption

• Linbeck- Houston, Bolt Construction, Walbridge, McCarthy – Leaders in CM Industry on Lean And IPD

• KLMK Has Two Current Clients That Have Made Decision to go With IPD – Started a SAT with LCI for One Client In DC

• AIA Has Developed Integrated Project Delivery: A Guide

In Conclusion…

• This is Only the Beginning – The Way Projects are Being Delivered is Changing

• Lean Application into Project Delivery is Evolving and will Require Us to Change and Adapt in Order to Eliminate or Reduce Waste in our Current Processes.

• Collaboration will be one of the Key Ways Projects are Delivered in the Future - IPD

• Technology will Play a Greater Role in Collaboration Among Team Members - BIM

• It is a VERY Exciting Time to be Involved in the Delivery of Healthcare Projects!

Suggested Reading

• “The Toyota Way” By Jeffery K. Liker

• “Improving Healthcare Using Toyota Lean Production Methods: 46 Steps for Improvement “ By Robert Chalice

• “The Speed of Trust” By Stephen M.R. Covey

• “Integrated Project Delivery: A Guide” by AIA Published in 2007

KLMK Group, LLCWilliam R. McMahon

2090 Columbiana RoadSuite 3500

Birmingham, ALPhone: (205) 259 -1940www.klmkgroup.com

We Welcome Your Questions