With a 116-year history, The Boldt Company is no stranger to change. This fourth-generation, family-owned firm has evolved from its roots in general contracting into a diversified organization providing project planning and development, construction management and technical services (design and design/build), in addition to self-performed construction operations. It now has 10 regional offices throughout the country. Its expanded operations have propelled the company to roughly 12% annual growth, with nearly $600 million in work volume anticipated in 2005.
A portion of the company's success can be attributed to a willingness to embrace new concepts. Lean construction is a prime example. This process strives to apply many of the principles used in lean manufacturing to construction operations.
Rather than shy away from what some might consider an"experimental" process, Boldt actually sought out just such a system in an initiative to improve project performance. The result has been as much as a 10% to 20% improvement on projects using lean construction.
The search for a strategic initiative
In 1998, Paul Reiser, corporate vice president, productivity and quality, was given the task of identifying a way to enhance the "point speed of production." The goal was to improve project delivery time and ultimately provide higher value to customers."
"What we were looking for at that time was a way to improve how fast we pour concrete, how fast we erect structural steel - fixing focused areas of work," says Reiser."We realized if we could improve self-performed work by 5%, it would drive a lot to our bottom line."
During his research, Reiser came across information on lean construction through the recently formed Lean Construction Institute. Though skeptical at first, he began to recognize it as a possible solution to streamlining operations and developing a reliable production management system.
"In the fall of 1999, we decided to try it on five projects over 12 months, and see at the end of that time how it works. At the end of the 12 months, 20 projects were applying it. The next year, we had 40 projects on line," says Reiser.
Nearly 300 of the company's projects have incorporated principles of lean construction management. "At any given time, we probably have 40 or 50 projects using some form of lean construction," says Reiser.
Principles of lean
According to studies, on a typical construction project, only 54% of tasks outlined at the start of the week are completed at the end of the week. The objective of lean construction is to ensure reliable planning and execution of work flow in order to get as close to 100% task completion as possible.
Lean construction requires collaborative planning from the earliest stages of a project. "The old model for construction management was centralized command and control. The project manager created the plan and handed that plan to the superintendent, who handed it to his crews," says Reiser.
Lean construction is based on decentralized plan control and production. Those who actually do the work are involved in the planning and manage production."We're trying to give them an opportunity by empowering them to be a part of the planning process," says Reiser.
"The project team identifies major project milestones as part of the"pull planning sessions". For example, if one of the milestones is to place a concrete slab, the team identifies and diagrams everything that must happen before the slab can be poured.
"It's a very rigorous approach to planning management," says Reiser, describing Last Planner, a production management system developed by the Lean Construction Institute."You start with a master schedule. From the master schedule, you pull out things that are going to happen within the next six weeks. Then you go through an intense evaluation - a constraints analysis. You're evaluating all the constraints that threaten the success of the building process."
Once the master schedule has been developed, the next step is to identify tasks to be completed on a week by week basis."We do a very detailed look at the next week, and we ask for commitments. It's a rigorous process of making promises and keeping those promises," Reiser explains.
Vendors and suppliers are a crucial component in the process. In construction, roughly 95% of time is spent on activities that add no value to the customer, notes Reiser. About half of that time is spent on required activities, such as moving steel from a truck to the point of installation. The rest is wasted on re-handling of materials placed in storage, waiting on parts, etc.
“It's real important to engage the supply chain - to get the supply chain involved in the planning and commitments," says Reiser."Just-in-time material delivery is a very important concept. You really cut down on re-handling."
A period of adjustment
While change can be good, it's not always easy."The biggest challenge with any change in an organization is breaking down resistance to change," says Reiser."There is a transition period and you have to get people to give up old habits."
Another hurtle was convincing employees that going lean did not mean eliminating jobs."The lean process is not used to get rid of people. Lean is intended to build in more capacity using the same amount of people," Reiser explains."What we want to do is increase the capacity so we can deliver more projects faster."
Boldt implemented an awareness building campaign, which included classroom training."It worked to get the concepts out there," says Reiser."Now, we have more and more projects rolling and more people who have worked on lean construction. Our approach now is on a project by project basis."
Training today tends to be via implementation rather than the classroom."It's more effective to be ‘knee to knee' with someone experienced in the process," says Reiser.
The company also found it necessary to adjust certain components of lean construction to the needs of its project teams."We have highly skilled people working for us, but they're technical skills. They're not always skilled in facilitation, leadership, communication," Reiser states."We had to find ways to get people to collaborate in a form that is conducive to how they do work."
For example, when the Last Planner system was first introduced, planning meetings for the week were held for up to two hours once a week. Meetings are now held for 15 minutes each day."If you change it from one two-hour meeting to daily 15-minute meetings, they're very concise and work like clockwork," says Reiser.
Boldt applies lean construction at varying levels on different projects. Full implementation on every job would be the ideal, but Reiser believes this is unrealistic, particularly for a company this size.
"If you're a smaller contractor, you can put your arms around it a lot faster. The principles apply to all sizes of companies, all sizes of projects, from the smallest to the largest," he comments.
But the complexity of the Boldt organization makes full implementation more difficult."We have 10 regional offices. They have multiple projects scattered out - the network is very large and complex. And every project is like its own little factory," says Reiser."It's hard to get the same level of implementation everywhere."
The next phase
For Boldt, lean construction has shown recordable results."In our best, most rigorous applications, we've seen 10% to 20% improvement in scheduling and productivity," Reiser states.
Yet, he is quick to add that such success can't be attributed to lean alone."When you get people who embrace the process, they're also willing to embrace new forming systems, 3-D modeling, new ideas," he points out."It contributes to faster project delivery and a productivity increase."
Boldt is now applying lean principles to other aspects of its business, including project design. "There are all kinds of inefficiencies in the design phase," says Reiser. "If we can engage the design and build process, we can find better ways to build."
In lean design, the contractor and suppliers are involved up front with the architect in order to expedite the design process, says Reiser. This eliminates redundancies in developing plans, plus identifies and corrects potential design problems early on. The result is substantial time and cost savings.
For example, Last Planner was used to design the St. Olaf College Field House in Northfield, MN, completed in 2002. The process resulted in a $2 million+ savings and a shorter project duration compared to a larger, comparable project at a nearby university. St. Olaf was so pleased with the results, it invited Boldt back to the table for a second, $50 million building project.
Today, Boldt is working toward deeper implementation of lean production management, as well as application of lean principles in its administrative offices. Next year, the company plans to review its equipment yard."We'll be looking at applying lean to managing our tools and equipment," says Reiser.
“Each year, we redefine our strategic initiatives," he adds,"and we always include something regarding the lean construction process."
For more information on lean construction, visit www.leanconstruction.org.
Moving Into the Lean Stream
St. Elizabeth Hospital in Appleton is in the midst of a $110 million expansion project. The Boldt Company has been commissioned to complete Phase I of the project, a $20 million job involving a parking ramp completed last June, plus a new main entrance, rehab center, admissions area and lab scheduled for completion in 2006.
The project is in the early stages of implementing an enhanced version of Last Planner, known as Lean Stream."We're trying to move into Lean Stream, where you get into more details with production practices," explains Larry Lehner, superintendent."With Lean Stream, you work three to four weeks out vs. six weeks."
The process involves even more detailed planning."Now, we break things down into daily tasks, as well," says Lehner."We're taking chunks of the project and working backward into the small details. We work to break it down to see overlaps, and shorten the duration required to complete segments. We try to trim a day or two off of individual tasks."
Although Lean Stream is a new development, Lehner has been using Last Planner for several years with positive results."It takes away a lot of the questions about where should I be now and what should I be doing," he states."It's also interactive. It's not just us telling the subs what to do. It requires thinking ahead week by week and planning it out ahead of time."
In meetings, project team members come together to discuss tasks that must be completed during each stage of a project, then develop a schedule."We're literally all working on the same page," says Lehner."We're able to bring up questions and issues early on in the process. For example, when the architect sits in on the meetings, he can answer questions right away. Everyone knows what everyone else is doing."
Lehner sees this as a major improvement over traditional methods of project planning."Before, it was helter-skelter. We met with the different project managers, but we didn't hash out details. We were never true to the actual time to completion," he points out."This comes directly from the field and is a lot more accurate."
Admittedly, it took time for Lehner to become comfortable with the lean process. But now he uses it on all the jobs he works on."You get out of it what you put into it," he states."It helps us to keep track of things. I've been using it religiously on all of my projects for 5 to 6 years."