Lean aids Productivity

The results of a recent productivity survey found that most companies have continued to make gains in productivity primarily due to Lean. (1) The research was conducted in Q3 of 2007, and surveyed 3,082 executives in mid-sized to large firms in the U.S., United Kingdom, Germany, Spain, Mexico, and Brazil. “Ninety-one percent of the executives surveyed reported productivity gains over the past year.”

“When asked to specify which productivity or quality improvements they used, nearly three-quarters of the executives identified Kaizen as their primary method, up from 29% in 2006.” Kaizen is a key Lean tool. It is a Japanese term meaning continuous improvement. It is commonly deployed during a two to five-day “event in which dedicated teams target one process for dramatic improvements in cycle time and waste reduction, with immediate changes made to the process.”

The survey found that executives identified the same two obstacles to improving productivity in the 2007 and 2006 surveys:
resistance to change (40%)
a lack of leadership (25%).

A recent survey of HVAC and Sheet Metal contractors found that only 18% of the contractors, who had applied Lean to construction, had used Kaizen events. (2) The contractors identified four other Lean tools as having greater value to their companies, these are:

1. Last Planner System
2. Just in Time
3. 5S’s
4. Value Stream Mapping

I feel that these four Lean tools do offer great benefits to contractors who apply them, but also wonder if maybe contractors do not understand the value of Kaizen events because so few have used them.

(1) “Lean Drives Productivity Gains and Value Chain Improvement - New study reports productivity gains in past year is directly due to Lean.” IndustryWeek, Friday, November 16, 2007
(2) “Thinking Lean: Tools for Decreasing Costs and Increasing Profits,” New Horizons Foundation,, Feb. 2008

The Last Planner System *

Most contractors track PPC (percent of planned worked completed) on a weekly basis. Consider tracking it on daily. While this would require a little more effort it can also do a better job of measuring how well the Last Planner System is working. By planning the work daily and then capturing what work was done as planned and the reasons for variance at the end of each day, problems are spotted and can be addressed more real time. Measuring PPC on a weekly basis allows some slop in the planning and in execution. If you don’t yet measure PPC start, it can be a very telling metric on how well the foremen are able to plan their work and keep their promises.

* Last Planner System is a trademark of the Lean Construction Institute.

Quick & Easy Kaizen

Quick and Easy Kaizen is a tool for involving employees in improving the organization. Bill Kluck, who has implemented this tool in several companies, offers these thoughts on applying it:

“They are not 'suggestions' or 'ideas' you're collecting, they are IMPLEMENTED IMPROVEMENTS. They document what was done, not requesting an evaluation of something they want to do. (The only restrictions should be that they don't affect any Quality/Production procedures, or company policies, or adversely impact safety.)

“They should cost nothing, and affect no one but the person making the improvement.

“No one will 'want' to participate, without some sort of incentive (or dis-incentive, see more below).

“This is a very powerful tool, which does 3 things:
a) It captures change that happens everyday, as a natural part of the personal and organizational learning curve
b) It documents those changes, which can then be shared (with benefits multiplied!) with the rest of the organization
c) Spurs even further innovative change (by requiring participation)

“Allow participants to evaluate the value of their change (in either cost, quality, delivery, safety, morale, etc...).

“THERE ARE NO BAD IMPROVEMENTS. Allow them ALL to qualify, even if you question the validity of the improvement... IF YOU RESIST EVEN ONE SILLY/RIDICULOUS IDEA, you will NEVER get another idea out of that person, and they could poison the rest of the well...

“Two improvements per month is for WIMPS! Require 1 per week, then work your way up to 1 per day. It's not like they aren't making these improvements anyway, and they should take no more than a couple of minutes to document.

“Ensure you have a place to post the improvements for all to see. Rotate them periodically (as the space fills up).

“Develop a method for cataloging the improvements, including a way of recording and accounting for the perceived value (just use a spreadsheet). Don't wait to implement until you have this, get those improvements recorded right away!

“If you use some sort of incentive program, management will try to kill it eventually (as a cost savings measure). Keep meticulous records on the value of the improvements, so they can't. For example, I targeted on QEK program on quality improvements, which saved $250 per improvement. I paid $1 for each improvement, and I was getting over 1000 improvements per month. All management could see was the $1000 cost, since we didn't see the 'cost' of a defect until much later.”

Source: Bill Kluck, NWLean Digest Number 1847

Visual Management

Use scoreboards to monitor Lean improvements and show how the 5S’s are working. Scoreboards work best if they are kept current. No one likes stale information. Who ever does the 5S audit should post the score. With this approach, each person becomes much more engaged in the process. Post the weekly work schedule and update it as the jobs are completed. This can apply in the field as well as shop. One company called this the “Weekly Board Meeting” as the schedule was posted on a board outside the trailer. (Sounds impressive to say, “I was at the board meeting today!”

Learning Opportunities

You may be interested in attending one of these training seminars:
March 20, 2008 – Eliminating Treasure Hunts - Applying the 5S’s for Lean Construction - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
April 3, 2008 – Lean Construction Practices, SMACNA – SMWIA – 2008 Partners in Progress, Las Vegas
April 17, 2008 – Job Planning that Works - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
April 28, 2008 – Gaining Customer Loyalty by Design, Oakland, CA – Sponsor: Bay Area SMACNA Chapter – contact Audrey Kerns at (510) 635-8212. Must be a SMACNA member to attend.
May 6, 2008 – 5S’s in Construction – ASQ National Conference, Houston, TX
May 15, 2008 – Problem Solving Lite: Root Cause Analysis - Phoenix, AZ – Sponsor: PIPE & 469 JAC, contact Cathy
May 21, 2008 - Lean Works in Construction, Portland, OR – Sponsor: Columbia SMACNA Chapter – contact Tom Goodhue at 503.220.2303. Must be a SMACNA member to attend.
June 2, 2008 – Lean Works in Construction, Oakland, CA – Sponsor: Bay Area SMACNA Chapter – contact Audrey Kerns at (510) 635-8212. Must be a SMACNA member to attend.
June 18, 2008 – Gaining Customer Loyalty by Design, Kansas City, MO – Sponsor: SMACNA- KC – Contact Sang 816-421-3360 ext. 112. Must be a SMACNA member to attend.

Other Lean Learning Opportunities:
March 20, 2008 - Relational Contracting with Will Lichtig, McDonough Holland & Allen, PC; Tom Owens, General Counsel for NBBJ and Scott Sleight, who recently represented Skanska, Seattle, WA, Sponsor: The LCI-Cascadia.

A Quick Thought

“Customers now expect value to increase continuously via declining prices, increased features, greater integration of services, and more support. If you can’t provide this total solution, you’re at risk. How will you create more value this year—and next year, and the year after—for customers?”
- John Brandt, CEO, The MPI Group

For more information about Lean applications to construction and especially the 5S’s contact Dennis Sowards at his office at 480-835-1185 or his cell at 602-740-7271 or at his web site: www.YourQSS.com