Quality Assurance in Japanese Construction (Henry Loo)


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Assurance of agile projects conference, 27th November 2013

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Quality Assurance in Japanese Construction (Henry Loo)

  1. 1. Quality Assurance in Japanese Construction Henry Loo BSc MSc FRICS MAPM
  2. 2. Introducing Henry Loo ► ► ► ► ► ► ► ► ► ► ► Ex CE Honorary Deputy Chairman - Japanese affairs BSc Quantity Surveying (South Bank Polytechnic) MSc Project Management (University of Reading) Chartered Surveyor (FRICS) Qualified Project Manager (MAPM) 30 years UK & Overseas construction experience Previous roles as client, consultant & contracting Project Manager with Kajima between 1990 to 2000 Visited Japan 8 times since 2007, led 3 delegations, to study and learn from Japan’s construction industry Hands on experience with the style and workings of Japan’s Prime & EPC Contractors Passionate to improve UK Construction Industry by promoting the application of lean business operation principles and technique into construction projects 盧 仲力 副会長 - 日本事務特 使
  3. 3. Rethinking Construction The 1998 Egan report made uncomfortable reading for UK construction industry: ►For every £1 we spent, we waste another ►Deliver poor customer satisfaction ►Fragmented organisation, training, skills, & silo mentality kills communication ►Much of the waste is caused by non-collaboration and lack of integration within the supply chain ►Important to get the SME market right ►Wolstenholme’s report highlighted 4 major blockers to change agenda ►Evidential proofs that we are reverting back to our traditional stereotype of the ‘food chain’ ►Industry needs to improve in 3 key areas: Quality, Productivity, Customer Satisfaction ►Construction industry have got to sort itself out ►Something has got better since e.g. H&S Nov 2013 QA in Japanese Construction 3
  4. 4. KPI’s Comparisons between Japan & UK Scoping Study Results, Japanese Corporations, Compared to UK Construction Industry KPI's: Average and Demo Projects Benchmark Socre in relation to UK construction industry 120.00% 100.00% 80.00% Japan 60.00% Average UK Demo Projects 40.00% 20.00% co st ct io on st ru C tru ct io n n tim e ef ec ts D on s C Pr od uc tiv ity Pr of ita bl ilt y Sa fe ty nt s lie C C lie nt sa tis fa c tio n pr od at uc is fa t ct Pr io oj n ec se tp rv re ic e di ct Pr ia bi oj lity ec tp tim re e di ct ab ilit y co st 0.00% UK Construction Indicators 2006 Nov2013 QA in Japanese Construction 4
  5. 5. Today’s Presentation  Quality embedded within Lean Thinking  Context of Quality within Japan’s construction industry  Reflection Q&A 5
  6. 6. A simple definition of Lean? Making that direct connection between customer’s value and the product and services, in so doing, remove any wasted efforts and processes that do not contribute to the value of the solution the customer paid for (i.e. eliminate Muda) 6
  7. 7. TPS – Toyota Production System Toyota Production System (TPS) ( トヨタ 生産方式 ) is the philosophy which organizes manufacturing and logistics at Toyota, including the interaction with suppliers and customers. TPS is known more generically as Lean manufacturing . It was largely created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno; they drew heavily on the work of W. Deming and the writings of Henry Ford. When these men went to the United States to observe the assembly line and mass production that had made Ford rich, they were unimpressed. While shopping in a supermarket they observed the simple idea of automation in a can’s drink dispenser; when the customer takes a drink, another one drops down and replace it automatically. The main physical goal of TPS is to eliminate wastes efforts & process. At The Heart of TPS is Customer Satisfaction 7
  8. 8. 5 basic components of Lean Thinking* ► ► ► ► ► *Lean thinking got its Customer Value name from a 1990’s book "The Machine That Value Stream Changed the World : The Pull Story of Lean Production“ by Womack & Jones. The Flow book chronicles the Continuous Improvement transitions of automobile manufacturing from craft production to mass production to lean production The essence of Quality in Lean is looking at ways to reinforce Customer Value in the most efficient manner
  9. 9. The Lean Fundamentals The 4 P’s of Lean: ► Philosophy - a way of seeing & living change ► Processes – break down the end product into predictable & deliverable interconnecting tasks ► People & Partners - involvement & engagement ► Problem Solving - collectively and collaboratively Quality is inherently embedded within these 4P’s 9
  10. 10. The Zen of Lean ► Muri ( 無理 ) Overburden or unreasonableness ► Mura ( 斑 or ムラ ) Unevenness leading to inconsistency in the physical production output ► Muda ( 無駄 ) Activity that is unproductive or doesn't add value i.e. wasteful i.e. the environmental root causes of bad quality
  11. 11. The 7 Wastes +1 ►Transportation Each time a product is moved it stands the risk of being damaged, lost, delayed, etc. ref: Toyota Home off site approach ►Inventory Work-In-Progress (WIP) represents a capital outlay that has not yet produced an income either by the producer or by the consumer. ►Motion As compared to Transportation, Motion refers to the producer or worker. This has significance to damage, wear, safety. It also includes the fixed assets, and expenses incurred in the production process. ►Waiting Refers to both the time spent by the workers waiting for resources to arrive, the queue for their products to work on, as well as the capital sunk in goods and services that are not yet delivered to the customer. ►Over processing Using a more expensive or otherwise valuable resource than is needed for the task. There is a particular problem with this item as regarding people. People may need to perform tasks that they are over qualified for so as to maintain their competency. This training cost can be used to offset the waste associated with over processing. ►Overproduction Overproduction is the production or acquisition of items before they are actually required. Batching is a derivative ►Defects Quality defects prevent the customer from accepting the product produced. New processes must be added in an effort to reclaim some value for the otherwise scrap product. ►+ Skill Organizations employ their staff for specific skills that they may have. These employees have other skills, it is wasteful to not take advantage of these other skills as well. "It is only by capitalizing on employees' creativity that organizations can eliminate the other seven wastes and continuously improve their performance." ►Redundancy is also a waste - of employee’s knowledge and experience of the organisation that they built up.
  12. 12. Total Quality Management Deming laid the foundation in the 50’s: (a) When people and organisations focus primarily on quality, defined as: Quality = Results of Work Efforts/Total Costs quality tends to increase and costs fall over time. (b) However, when people and organisations focus primarily on costs, costs tend to rise and quality declines over time. Ishikawa’s 6 roots causes to Quality delivery:  Equipment, process, people, materials, environment and management  If a problem in quality occurs, go find and fix the root cause; not just fixing the problem presented
  13. 13. The 5s [Hygiene of Quality] Seiri ( 整理 ): tidiness, organization. Refers to the practice of sorting through all the tools, materials, etc., in the work area and keeping only essential items. Everything else is stored or discarded. This leads to fewer hazards and less clutter to interfere with producing quality works. ► Seiton ( 整頓 ): orderliness. Focuses on the need for an orderly workplace. Tools, equipment, and materials must be systematically arranged for the easiest and most efficient access. There must be a place for everything, and everything must be in its place. Use the right tool to deliver the right quality. ► Seiso ( 清掃 ): cleanliness. Indicates the need to keep the workplace clean as well as neat. Cleaning in Japanese sites is a daily activity. Everyone cleans up the work area at the end of each shift and everything is restored to its place. ► Seiketsu ( 清潔 ): standards. Allows for control and consistency. Basic housekeeping standards apply everywhere in the facility. Everyone knows exactly what his or her responsibilities are. House keeping duties are part of regular work routines. Standards facilitate delivery of quality. ► Shitsuke ( 躾 ): sustaining discipline. Refers to maintaining standards and keeping the facility in safe and efficient order day after day, year after year. Quality is sustained by consistency ► "Sort, Straighten, Shine, Systemise and Sustain“, and "Safety" as a 6th optional S 13
  14. 14. Strategic difference between Japanese & UK construction industries ► ► ► ► ► ► ► ALL contractors are licensed in Japan Over 50% business of ‘Big 5’ contractors are pure Prime Contracting – delivering customer value directly Designs by Clients’ consultants are considered as briefs Detail design developed directly in collaboration with supply chain i.e. shop drawings; hands-on control buildability, quality and easing the interface between packages Most A&E design are done in house and let on ‘fit for purpose’ basis i.e. performance base not specification base Earthquakes are a major driver to technology investment Innovation is differentiator between General Contractors 14
  15. 15. ► ► ► ► ► ► ► Strategic Business Approach TQM are feedback to benchmark & improve processes O&M data are directly fedback into design department Payment in public sector projects tends to be simple:  30% at contract commencement  30% at structural completion & weather tight 40% on completion. No retention on MC but on subs Subbies paid upon logical pre-agreed stage completion e.g. floor by floor (not monthly); Saturdays handover incentivise quality, productivity & promote collaboration amongst subbies Extensive use of IT in everything. Contractors involve in design much earlier, deeper and last longer; with shorter site duration. All strive to finish early. Savings not shared with client Client satisfaction drives everything. Repeat business bedrock of operation 15
  16. 16. Quality Function Deployment (QFD) Corporate Philosophy Simple Philosophy: ► Everyone participates in Quality Management (rub off from the manufacture sector) ► TQM system integration throughout its supply chain ► Profits by finishing projects early ► Use data and facts as the basis for corporate & project planning and continuous improvement ► Japanese process for construction: plan, study, design, construct (contrast with Deming’s PDCA) ► What's ours? Vision President’s Policy 3 - year Business Plan Branch Office General Manager’s Policy Department Manager’s Policy 16
  17. 17. Research & Development ► ► ► R&D are considered strategic critical to competitiveness Huge R & D spend. 60 largest companies each spend an average of 0.5% of its turnover on R&D Doctrine of long term future rest in constant innovation Kajima spends just over 1% Turnover. 15 years ago was 4% T/O WHY? Maintain its competitive edge (innovation as differentiator) Life time guarantee its projects (use research to reduce risks) Good marketing to enhance it’s quality reputation Identified the direct link to profits Corporate culture of knowledge as cornerstone to long term success 17
  18. 18. · · · · · · · Overall impression of Japan’s construction industry Delighted end users Deliver satisfactory returns to investors Consistently deliver defect free projects Time [and cost] predictable delivery are given Provide a safe working environment for all Vastly higher productivity than UK A strong self believe of improving the society through aesthetically pleasing, safe and environmentally friendly buildings and structures 18
  19. 19. Race for Change ► ► ► ► ► ► ► ► Our systems need deep change Rise of the Prime Contractor Taking the first few small steps will lead to quantum leap improvement Collaborative improvements together, supply integration later Lean is not cultural. Japan is only a model to start us off Other industries adopted lean with quick & spectacular results Construction industry have to develop own lean style The heart of Lean is customer value and customer satisfaction 19
  20. 20. Final word: Combined it’s a waste - separated it’s a resource; society-wide environmental philosophy 20
  21. 21. Your Reflection? Where is UK construction industry heading? ► Could we simply stay calm and return to business as usual now the economy is improving? ► Are we building for the better or for worse? ► What systemic changes are needed? ► What’s stopping us to take the first step to change? ► What will the UK market outlook in 3 years time? ► 21