Revista Ingeniería de Construcción

Lean in the Public Sector.

Luis F. Alarcón — Fri, 30 Aug 2024 00:00:00 +0000

The Architectural, Engineering, and Construction Industry (AEC) is a critical socio-economic activity that is responsible for 8% of the GDP in the world, in parallel, it also is responsible for the generation of 100 million jobs worldwide. In this context, the generation of value is driven by the execution of capital projects. Nonetheless, despite its importance, the sector´s productivity historically is behind other industries, and poor performance of projects is often the norm rather than the exception. The running of projects in the Public Sector is not immune to these issues. An effective strategy to address this condition is the use of the Lean approach.

Thus, this special issue of the Revista de Ingeniería de Construcción is focused on providing insight into the application of Lean in the Public Sector (LIPS). Articles evidencing the results of LIPS in the United States, UK, Finland, and Chile are presented as part of this effort. Following this premise, the authors who contribute to this special issue have provided an inspiring insight into the use of LIPS around the world evidencing the potential of its outcomes. Despite the progress and the encouraging results, much work is still required to widespread the benefits of this approach.

A brief history of lean in the public sector

Glenn Ballard — Fri, 30 Aug 2024 00:00:00 +0000

The development of Lean principles within the public sector began in 2003 following Lean Construction Institute´s developing efforts on relational contracting. Later, challenges and opportunities for implementing Lean were identified in Californian construction law. Collaborations with entities like the California Department of Transportation and the University of California San Francisco showcased Lean's benefits, leading to legislative changes allowing broader implementation across the University of California system. Healthcare also saw streamlined processes through collaborations, in this case, between the P2SL, the Office of Statewide Health Planning and Development, and major healthcare companies, reducing project durations significantly. International expansion in 2009 led to successful Lean pilot projects in Germany and Finland. Inspired by Washington State's Lean governance practices, Lean in Public Sector Construction (LIPS) expanded its focus beyond construction. LIPS has conducted impactful global conferences, highlighting Lean's transformative role in reshaping diverse public sector operations and governance worldwide.

Lean Project Delivery in the United States Public Sector – History and Current State

David Umstot — Fri, 30 Aug 2024 00:00:00 +0000

Since the late 2000s, public agencies in the United States have been developing alternatives to traditional capital project delivery models in pursuit of better project outcomes. Most public agencies have legal authority to deliver projects through a design-build contract and have been using this contracting method to foster greater collaboration and to integrate the target value design process into a Lean project delivery model. The approaches and practices of four public agencies - San Diego Community College District, University of California San Francisco, the University of Washington, and the California State University System - that have been utilizing this approach are highlighted in this paper. Specific requirements identified to foster the desired collaborative environment, integration of Lean principles and practices, value creation, budget and cost performance, and schedule performance are shared. Metrics from selected projects give evidence that this approach is delivering greater value for these institutions, the design and construction community, taxpayers, and most importantly the internal customers that are using the constructed assets. Knowledge transfer of the resources developed to procure these types of projects and to create and sustain the environment necessary for project success has greatly benefited these institutions and serves as a potential portal for other public agencies to follow.

Key lessons learned from adopting relational principles in the public sector: a case study in california.

Patricia Tillmann, Ken Humphrey — Fri, 30 Aug 2024 00:00:00 +0000

Alternative project delivery methods that support collaboration are gaining significant attention in the public sector in the U.S., with increasing examples of owners that transform their traditional delivery methods into ones that reflect relational contracting principles. These approaches are new and despite their proven benefits, their widespread is hindered by the novelty and unfamiliarity nature. The aim of this paper was to contribute to bridge this gap. The key elements associated with relational principles were drawn from the literature and discussed in the light of an empirical case in California. This successful case study provides evidence that these elements can work, even with the limitations commonly observed in the public sector. The paper discusses observed best practices and reveals some practical insights from a project team that was implementing relational elements in the public sector for the first time. The findings of this study will hopefully contribute to the widespread of these practices, and inspire academics and practitioners to initiate or continue their journey towards more collaborative project delivery methods in the construction industry.

Lean/IPD in action – MSU business college pavilion case study

Amr Abdel-Azim — Fri, 30 Aug 2024 00:00:00 +0000

Michigan State University (MSU) is an educational institution that owns one of the largest on-campus housing systems in the US. As part of its operation, MSU is interested in improving the performance of its capital projects. To do so, it has adopted the integrated project delivery (IDP) approach. This article describes some of the key features used by MSU to implement an IPD agreement for building its new MSU Business College Pavilion.
As a result, MSU delivered a successful project, both on cost and on time, an outcome that involved the use of several tools, such as an IPD multi-party agreement, the Lean Execution Plan, Target Cost, and A3, among others. The use of IPD maximizes value, leadership, and innovation while using agreements for sharing risks and rewards. This case´s learned lessons for future projects involve the foster of aspects such as value alignment, collaboration, waste reduction, and periodic review of the effectiveness.

Developing a new procurement model, using behavioural economics, to enable continuous improvement of productivity and better value in large UK infrastructure projects.

Martin Perks — Fri, 30 Aug 2024 00:00:00 +0000

Global construction has been blighted by productivity inertia caused by behavioural bias for decades. While other industry sector productivity has grown more than fifteen-fold since 1960, construction has stagnated with no more than a seven to ten percent overall growth. McKinsey Global Institute’s report Reinventing Construction: A Route to Higher Productivity, reported infrastructure construction amongst a small group of outperforming market sub-sectors at 15 to 20 percent. This paper, which charts the development of a unique procurement model designed for high productivity, builds on that performance using behavioural insights to counter damaging and habitual biases. The new model changes trading relationships using a nudged ‘opt-out’ contract structure creating a different responsibility dynamic between client and supplier. A recognisable but different infrastructure construction procurement model to improve productivity using recognised behavioural economics and construction economics. Highways England was set up to run England’s strategic road network in 2015. The procurement model that resulted, Regional Delivery Partnerships can be refined for any infrastructure sector construction environment and sets up a key step forward in contracting based on integrated project delivery. Using a combination of counter bias strategies built from loss aversion and nudge theory this new construction procurement model uses ‘opt-out’ from lean construction to drive higher productivity. By setting up an integrator, to create an integrated project team, Regional Delivery Partnerships uses loss aversion as the motivational key to better innovation. It empowers the integrator to counter uniqueness bias and find and eradicate waste (process time and money) to enhance productivity. Reward is aligned to both optimised efficient design and high productivity working. As 100% of budget underspend can be kept rewarding the integrator, the potential of not achieving this triggers loss aversion and motivates change using the principles of escalation of commitment in favour of the client. Performance data is also used to motivate using reduced acquisition costs from secondary competition, long held as an inefficient market overhead.Using recognised pragmatic academic techniques, and constructionism; choice architectures were remodelled into a new outcome and value focused procurement model. Using applied research, the team used processes and techniques to develop, build, test, and deploy the model in open market competition. It can be used by any infrastructure sector construction client to replicate a sector specific version of Regional Delivery Partnerships that changes trading choice architecture towards higher productivity.

Lean in the public sector in Finland.

Pekka Petäjäniemi — Fri, 30 Aug 2024 00:00:00 +0000

Finland is undergoing an immense change in the execution of real estate development and construction projects. Since 2011 nearly 100 projects have already been launched in the country with the Integrated Project Delivery (IPD) principle. The total value of the projects is close to 7.3 billion euros. The principles of integration are currently applied especially to project management contracts, but also to other traditional contract models with fixed content or fixed price. Implementation of the IPD models has triggered a change in work culture and practices across the whole construction field. Focus within the traditionally somewhat quarrelsome and fragmented industry has now shifted towards cooperation and continuous improvement – both important Lean principles. Experience from the integration of contracting authorities and service providers has shown the advantages to be achieved. The contracting authority can utilize the know-how of different parties from the start of the project, as designers and builders are planning ways of execution together. A joint development phase leads to better planning and more accurate budgeting as well as better commitment of different parties. The use of IPD models has also served as a significant basis for introducing Lean principles and tools in Finland. Without IPD models, especially the customers' awareness of the benefits of Lean methods would have remained low. Furthermore, the sharing of risks and benefits encourages the execution of projects with stricter adherence to budget and schedule. So far, all completed IPD projects have achieved the target schedule and budget. Despite minor shifts in the cost targets of the projects, all contracting parties have been satisfied with the achieved results.

The lean journey of the finnish real estate.

Lauri Merikallio — Fri, 30 Aug 2024 00:00:00 +0000

Nothing teaches us more than our experiences. That was the main reason why the Finnish construction industry has not only studied Lean and IPD but also launched several pilot projects by public owners to learn, adapt Lean principles in practice, and develop an IPD model suitable for the Finnish construction industry.

The IPD model demands teamwork and adapting Lean and IPD industrywide is also teamwork. In Finland, several owners and service providers have been working together since 2010 sharing their learnings in workshops, seminars, and conferences.

Over 100 IPD projects have also been a platform for several academic papers. The Finnish Universities have published tens of master’s and doctoral theses during the past 10 years on Lean construction, IPD, and alliance models.

The Finnish construction industry has gained major benefits and made important progress on its Lean journey. Lean philosophy and tools have delivered tangible cost savings in projects and services and improved cost estimates, schedule adherence, quality, integration, and collaboration in construction projects.

Finland has succeeded in creating smooth and practical discussion and development forums that have shaped the whole industry. The key drivers contributing to this progress are collaboration and integration, confidence-building between the partners as well a deeper understanding and application of the Lean principles in construction. As a result, Lean and integrated project execution are already reflected in the strategies adopted by many companies and client organizations.

Lean Methodologies and Productivity in Mining Development – A Case in a Public Company.

Luis F. Alarcón, Cristóbal Baladrón, Patricio Gahona, David Long — Fri, 30 Aug 2024 00:00:00 +0000

Codelco is a Chilean public company that is the largest copper producer in the world and it has developed multiple initiatives to implement Lean Management in its operations. This article evaluates the impacts of the implementation of Lean production methods on an underground mining development project. The effects of Lean methods, such as The Last Planner® System (LPS), on an appropriate case study and the analysis of these results produced statistical research findings and qualitative observations that suggest a broader implementation of Lean in the mining industry. Among these observations are: a) improvement of the mean for all indicators studied; b) reduction in the variance of some indicators, suggesting more stable processes; c) correlation between the percent plan complete (PPC) from the LPS and its coefficient of variation (CV); d) reduction in the time wasted in delays; and, e) improvement in key organizational attributes. Additionally, all variables associated with positive performance improved during the research, suggesting that the implementation of Lean methodologies improved overall performance throughout the organization.

How to implement lean in a public company in chile Without failing in the attemp.

Juan Rojas — Fri, 30 Aug 2024 00:00:00 +0000

Chile is the largest producer of copper worldwide, where CODELCO, a state-owned enterprise, generates 10% of the global production of this metal. In 2015, the copper mining industry faced significant challenges due to price fluctuations, reaching a minimum of US$ 2.49 per pound. As a result, the cost of operations began to gain greater importance and was highlighted as an important factor to consider.

Not oblivious to the, CODELCO faces the uncertainties of time while seeking to maintain its position in the global market. This article reports how the copper company decided to embark on a different and sustainable path over time: it developed a management system based on Lean methodology to enhance continuous improvement. The outcome is a system called C+ consisting of a set of disciplines, practices, and tools that have improved the company's management.

After years of effort and implementation, the state-owned company managed to establish a new way of doing things, leading it to be recognized in May 2023 by the Shingo Institute at the University of Utah (United States). This recognition made it the world's first mining company to receive this award for excellence in organizational culture. It is an achievement that fuels the ongoing effort for continuous improvement.