Getting Your Business in Shape: Think Lean

Making "Lean" Work

March, 2010 – Issue 78



This e-newsletter is dedicated to supporting High-Performing Contractors and all contractors working to become one. Written by Dennis Sowards

Going "green" is a top priority for many owners, and contractors are rushing to bid these jobs. Even with a U.S. Green Building Council LEED certified in-house expert, one may not be aware of all the potential risks associated with bidding a green project. Contractors need to be aware of the risks and account for them, so profits are not at risk. If you are bidding or reviewing such a project bid, consider the following risks (these may not include all risks, so use all your knowledge and in-house expertise to develop your bid).

The ASTM Standard E2114-06a defines a "green building" as one that provides specified building performance requirements while minimizing disturbance to and improving the functioning of local, regional and global ecosystems both during and after its construction and specified service life. The risks related with bidding a green building would include any events associated with the construction process. It would include risks related to the customer achieving a desired green certification. It would also include risks related to warranty and performance promises.

Prior to submitting any bid, contractors need to understand which green certification, such as U.S.GBC LEED certification, is being targeted to determine who has what responsibilities for achieving the certification. The green requirements can impact material and equipment costs and handling, labor productivity, installation sequencing and scheduling, equipment and system startup and checkout, and project closeout requirements. To learn about the impact of green requirements, the Sheet Metal and Air Conditioning Contractors’ National Association’s Bidding Green Task Force’s report, HVAC Contractor’s Guide to Bidding Green Building Projects (http://www.smacna.org/bookstore/index.cfm), is an excellent source, and some of the document’s information is referenced in this column.

Green contract requirements
There is a risk of not understanding the complete requirements of a green building. The project’s green requirements can be found just about anywhere within the bid documents. They may not all be in the specific section relating to the building functions such as the HVAC system. Some green requirements that impact everyone on site, such as construction waste management, should be included in the general requirements of the specifications. The prime contractor should point this out. "Should be" doesn’t always happen, so in preparing a bid for a green project, the contractor needs to be proactive in determining the green requirements and their impact.

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Toyota and Lean

Since Toyota is usually referenced for great Lean examples and has received much negative news lately, sharing some viewpoints from Lean leaders might add perspective.

Strategic Planning

High-performing contractors are always learning from others as they do their strategic planning. Ted Garrison, a well-known consultant in the construction industry, makes annual predictions for the coming year. Here are some from his 2010 forecast

There is some discussion in construction today about which is better to use — Building Information Modeling (BIM) or Lean Construction. You need to consider what each process offers before choosing one over the other.

Lean in the Office - Shortening the closing cycle

A company implementing Lean, examined its month-end closing process as part of the lean office initiative as well. They went from 5 days to 2.5 days close. Following are some wastes they were able to identify and eliminate: