6. 1
Low Margin, or target
Waste
A New Value Proposition Build better before built
7. LEAN Construction
Definition of waste:
1. Over Production
2. Defects (Rework)
3. Transportation
4. Waiting
5. Inventory
6. Motion
7. Processing
8. Lean Construction
Conventional CM/PM Approach
• Value-engineering
• TQM/QFD
• Constructability Reviews
• IT/CAD/PMIS
“Lean” seeks to restructure the projects operating system to focus on what adds
value and to smooth out the workflow
Lean Tools
• “Plan Do Check Adjust” (PDCA) process
• A3 reports
• “Value Stream Mapping”
• BIM and Real Time Estimating
• “Target Value Design”
• “Last Planner System” / Commitment-Based Planning
9. Making The Change – PPI’s
‘Reducing Cost Through Improved Management’
Improved project management
drives down cost here
Drives up value here
10. Integrated Project Delivery – CMAA 2011 Organisation,
Operating Systems & Commercial Terms
Why IPD? What are the major
problems for which IPD is
proposed as the solution?
Stated briefly, construction projects frequently
suffer from adversarial relationships, low
rates of productivity, high rates in inefficiency
and rework, frequent disputes, and lack of
innovation, resulting in too many projects that
cost too much and/or take too long to build.
Also, projects continue to injure or kill too
many workers, and owners are often
disappointed with the quality of the end
product. IPD, in all its varieties, is structured
to address these basic problems.
11. Project Organisation
Issue
− Traditional projects involve ‘siloed’ structures with fairly
rigid hierarchies
Solution
− Integrated Teams
• Owners / designers / constructors
develop project
• Co-location
• Integrated software – BIM, PMIS
− Integrated Governance
• Core group / project management team
• Executive Council – dispute resolution
• High performing team culture
12. Australia – Drivers for Innovative Contract Models
LITIGATION
- In the 1990s partnering and alliancing grew out of
an industry beset by adversarial conduct and
marginal projects.
TEAM INTEGRATION
- In the mid to late 2000s – we saw the pinnacle of
owner-contractor collaboration through
“conventional” Alliances and ECI’s.
BUYERS MARKET
- Recent push-back (particularly Treasury)
concerned about demonstrating VFM & contractor
“capture” heralded a return towards less
integrated, possibly more adversarial environment
- Dominance of dual ECI’s and Collaborative
Contracts
WHAT’S NEXT
- Emerging innovative practices (eg. Lean, BIM,
system thinking, etc.) more than ever require a
culture of sharing and interdependence.
- Integrated Project Delivery
13. Australian Alliance Structures
– The Fundamentals in a Slide
1. Integrated owner / team structure –
no barriers, full accountability
2. Commercial Framework
‘Direct Cost’ paid - no risk
Corporate Overhead and Profit at Risk
Painshare/Gainshare & Key Result Areas
No dispute / no sue new Professional Indemnity
3. ‘Best for Project’ (not for participant)
decision making
4. Integrated team derives Target Cost
and scope – with independent check
5. Quality based selection process, dual
Target Cost model
14. Concurrent Engineering:
Towards an integrated digital solution
The principle of Integrated Concurrent Engineering
(ICE) to collocate a multidisciplinary team of domain
experts and to use fast technical and social
integration to reduce the time required to answer
each question, or latency.
Stanford Uni (CIFE)
16. What is BIM?
Definition:
bIM = Building Information Modelling (as a process)
Building Information Model (as a noun)
bIM is the sharing and leveraging of
structured information over the
building lifecycle
Lesser known terms…
Project Information Management
Digital Engineering
Virtual Design and Construction
Building Information Management
Asset (Lifecycle) Information Management
Business Information Management
Better Information Management
17.
18. What is BIM?
− Competitive tender price
− Lower preliminaries
− Lower project financing costs
− Reduced waste and cost
− Improved risk management
− Greater transparency of project
− Improved design coordination
− Better-informed decisions
− Supply chain integration
− Better construction planning
− Greater use of prefabrication
− Better site utilisation
− Safer job sites
− Validation of design by end users
− Earlier commissioning
− OPEX cost reductions through:
• Better preventative
maintenance planning
• Optimised energy use
• Better space management
− Improved communication with
OPEX stakeholders
− Better equipment tracking
− Improved security
− Better disaster planning and
emergency response
DELIVERY OPERATIONS/MAINTENANCE
19. The BIM Trojan Horse
Cool 3D
BIM in it’s various
guises is becoming
a metaphor for
industry change –
it is helping set a
compelling vision
of
what a digitised
sector would look
like
using computer
readable data
20. • Dynamic
• Disruptive by design
• Rapid
Innovative early adopters create disruptive methods
Laggard
Incumbents
Drop Off
Tipping
Point
Main-stream
Take-up
Early adopters embrace new models
Advanced Incumbents
Adopt
Digitized Construction
The new normalBIM is not just about
creating a
better mouse trap
Transformative
23. Virtual Asset Lifecycle Modelling:
Allows the virtual production, analysis, evaluation and optimal
development of an asset in a digital environment that mimics the
understanding and behaviour of the solution to the realization of that
solution in reality.
Digital
Briefing
& Digital
Procurement
Optimised
Operation
Nestle: Build Better Before Built
24. Lean Principles and BIM
“Interaction of Lean and Building Information Modelling in Construction” by Sacks, Koskella,
Dave and Owen, Journal of Construction Engineering Management, 136, 968 (2010)
The paper itemises some of the technical
capabilities that BIM applications possess but
which are not provided, or are not provided well,
by conventional CAD systems. These include:
− Realistic visualization of architectural
proposals
− Rapid generation of design alternatives
− Predictive analysis of building performance
− Simulation of construction processes
− Maintenance of project information integrity
− Automated generation of drawings and other
documents
− Collaboration in design and construction
− Online/electronic object-based
communication
− Direct data transfer to computerised
component fabrication
− Optimised “As built” model for asset
operation and maintenance
25. Lean Principles and BIM
The authors point out:
“Lean construction and BIM are not
dependent upon one another (i.e. lean
construction practices can be adopted
without BIM, and BIM can be adopted
without lean construction). This is
illustrated by the numerous cases of
separate adoption of each in design and
construction companies within the past
decade. However, (it is suggested) that the
full potential for improvement of
construction projects can only be
achieved when their adoption is
integrated.”
It is undoubtedly the case that an understanding
of Lean insights and the adoption of appropriate
Lean principles will enhance an organisation’s
BIM implementation processes, and, equally,
that an understanding of the power of BIM will
help individuals and organisations to implement
their Lean strategies.
31. • First Party Professional Indemnity (PI)
- ‘No blame’ events based cover (Aon, Swiss Re /
Vero original lead)
- Now 6 underwriters providing this cover for most
major Alliances (300 in Australia) (Currently
cheaper than traditional PI)
• Contract Works Insurance
- LEG 3 extension (allows rectification to what it
should have been)
• Public Liability Insurance
- Design write back (design impacts covered)
32. USA IPD Drivers
Waste and Lack of Productivity
- 2004 Construction Industry Institute study 57% of time, effort, material
investment does not add value (26% in manufacturing)
Technological Evolution
- 2008 ‘Tipping Point’ – Building Information Modelling “BIM”
Owner Demand for Value
- 2004 CURT (Construction Users Round Table)
The difficulties experienced on typical projects as “artifacts of a
construction process fraught by lack of cooperation and poor information
integration”
33. USA - Contracts
Integrated Project Delivery (IPD)
Level 1 - Modified CM at risk and/or
design-build
Level 2 – IPD Non Multi-Party Contract
Level 3 – IPD Multi Party Contract
Level 4 – IPD: Single Purpose Entity
BIM Addenda to IPD contracts
ConsensusDOCS 301 BIM Addendum
34. Integrated Project Delivery
4 levels of Contracts
Level 1 - Modified CM at risk and/or
design-build
Consensus Docs 500. Agreement and General Conditions
between Owner and Construction Manager
Level 2 – IPD Non Multi-Party
Contract
AIA A195-2008 Standard form of Agreement between
Owner and Contractor for Integrated Project Delivery
Level 3 – IPD Multi Party Contract
Consensus Docs 300 – Tri-Party Collaborative Agreement
Level 4 – IPD: Single Purpose entity
(SPE)
AIA C195-2008 Standard form Single Purpose Entity
Agreement for Integrated Project Delivery
35. IPD Project Examples
Case Study Projects
IPD Characteristics
AutodeskAEC
SolutionsDivision
Headquarters
SutterFairfieldMOB
CardinalGlennon
Children’s
St.ClareHealth
Center
EncircleHealth
WalterCronkite
School
Early Involvement of
Participants
Yes Yes Yes Yes Yes Yes
Shared Risk and
Reward
Yes No Yes No Yes No
Multi-party Contract Yes Yes Yes Yes Yes No
Collaborative Decision
Making
Yes Yes Yes Yes Yes Yes
Liability Waivers Yes No No No No No
Jointly Developed
Goals
Yes Yes No Yes Yes Yes
Walter Cronkite School of Journalism
Cardinal Glennon Children’s Hospital Expansion
37. United Kingdom – Industry Reform
Key Industry Publications
1994
Latham Report
(ex-Conservative MP)
1998
Egan Report
(ex-CEO Jaguar)
Collaborative
Contracting
LEAN Principles
2011
UK Cabinet
Office
Whole-of-Govt
Reform
2001
National Audit
Office
Improved
Performance
Construction
Industry Board
(CIB)
Construction
Task Force
Key appointments
Strategic
Forum for
Construction
Chief
Construction
Advisor
2012-2015
Peter Hansford
(ex-Nichols)
2007
UK House of
Commons
Whole-of-Govt
Reform
Chief
Construction
Advisor
2009-2012
Paul Morrell
(ex-AECOM)
Constructing the
Team
Rethinking
Construction
Modernising
Construction
Construction
Matters
Government
Construction
Strategy
38. United Kingdom – Collaborative Contracting
Collaborative Contracts
− NEC3 Family of Contracts
− JCT Constructing
Excellence Contract
British Standard
BS11000
Collaborative Business
Relationships
HM Treasury
Alliancing Best
Practice in
Infrastructure Delivery
39. United Kingdom – Building Information Modelling
2012
HM Government
Building Information
Modelling
2.32 Government will require fully collaborative 3D BIM
(with all project and asset information, documentation and
data being electronic) as a minimum by 2016. A staged
plan will be published with mandated milestones showing
measurable progress at the end of each year.
42. Functionality is well
defined
CCC
Project objectives
are well defined
Project delivery
objectives are
defined
Project budget is
fixed
Construction start
date is fixed
Construction
completion date is
known
Scope is well defined Scope is simple
Time is available to
properly document RCC
Define functionality
Define project
objectives
Define project
delivery objectives
Fix project budget
Define construction
start date
Define construction
completion date
Is it possible to re-
define the scope
Risks are
manageable in RCC
Risk can be re-
distributed away from
the project
Stakeholder
management is
simple
Project brief can be
fully documented to
include stakeholder
issues
Can time be found to
document RCC
Project brief can be
fully documented
Initial brief can be
documented
Impact on
stakeholders is low
Alternative project
outturn costs can be
assessed
Re-asses all
previous decisions
No
Yes
Yes
No
No
No
Yes
No
Yes
CCCYes
No
Yes D&CYes
No
No
No
Yes
Yes
No
Yes
No
D&C is clearly the
best VfM
Yes D&CYes
Political / stakeholder
issues are simple
No
D&CYes
Client demands
certainty of final cost
outcome
Client demands
visible price
competition
Yes dECIYes
ECI
No
Client demands
certainty of a
proposal capable of
being accepted
dTOC
No
Yes
sTOC
No
sTOCYes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
No
MANDATORY REQUIREMENTS
No
PROJECT SPECIFIC OPTIONS
NOTES
Typical
Construction
Contract
Selection
Flowchart
Yes
Yes
No
Mandatory
Requirements
Defined
Mandatory
Requirements
Defined
Yes
CCC
D&C
dECI
ECI
dTOC
sTOC
WRONG
WAY
GO BACK
WRONG
WAY
GO BACK
Conventional Construction Contracts are
the ‘default’ delivery method.
Design and Construct Contracts require
careful documentation and high level
administration skills for successful
outcomes.
Early Contractor Involvement Contracts
are useful when constructors input to a
design is necessary to gain an optimum
outcome.
Collaborative Contracts are an ‘option of
last resort’ for complicated, high profile,
high impact projects.
Mandatory requirements define the project and
provide the data that each of the decisions are
made on.
Mandatory requirements must be defined to a
sufficient level of detail to ensure objective
decision making process.
Risk Assessment Categories
Project
Technical
Cost & Time
Political / Stakeholder
Community
Market
Risk assessment needs to consider the process to
get to the contract stage.
Consider the risks of the design phase in detail,
and separate to the risks in construction phase.
Key risks in this phase include:
Design resource availability and capability
Project timing: particularly construction start
Constructability input required
Requirement for Owner buy in design
There are 3 treatment strategies that enable this
decision:
Avoidance
Transfer
Acceptance
These strategies can be achieved through actions
such as:
Insurance
Early Works
Packaging
The mandatory requirements should be checked/
updated following implementation of such
strategies.
Outturn Cost = Constructors Cost and Owner Cost
Constructors Cost
Construction
Design
Transferred risk
Opportunity
Owner Cost
Project management
Planning
Contract admin
Retained risk
Opportunity
The individual components of the outturn cost are
assessed for changes under the compared
contract types:
Construction cost may vary from level of
competition
Seeking innovation may increase design
costs
Variations may vary under different contracts
The ability to manage risk may vary under
different contracts
The ability to innovate may vary under
different contracts
The commercial framework for dealing with
underruns and overruns may vary under
different contracts
If an assessment of all previous decisions does not
provide a path the project must be re-defined.
If the Initial Brief can not be adequately documented
the project must be re-defined.
Risk assessment is
well defined
Yes
Define risks
Yes
No
A
C
D
E
F
G
A
B
Indicator of available delivery systems.
A
B
C
D
E
F
G
43. Procurement Selection – categorised by risk assessment
− Simple – low risk
− Complex – medium to high risk
− Strategic – risk + complexity high to extreme
Risks: legal, commercial, financial, political, program
management (schedule), technical, logistics
47. Productivity Commission - Inquiry Report
Public Infrastructure
Recommendation 12.5
For complex infrastructure projects,
government clients should:
− provide concept designs using
Building Information Modelling
(BIM) to help lower bid costs, and
− require tender designs to be
submitted using BIM to reduce
overall costs.
48. Australian Progress
Australian Constructor Industry Forum (ACIF) and
Australasian Procurement & Construction Council (APCC)
The construction industry in Australia, the
US and the UK, is changing in response
to four key drivers of change:
1. Clients seeking greater value from
their investment in capital works -
wanting better value for money
outcomes;
2. Recognition that there is considerable
waste and wasted effort embedded
in the way the industry has done
things for years;
3. Technological change, in particular
the use of BIM in the broadest
possible way and across all stages of
the project; and
4. Changes in the insurance industry
enabling better integrated delivery
models.
51. Australian Challenges
- Procurement Process
(In a buyers market)
- PPP’s Preference –
Conservative Delivery
Models
- IP Exit from Government
Agencies
- Willingness to learn from
UK/USA
- FIDIC Asian Influence
- Lack of government
leadership in industry
reform
