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Lean construction practices save money, report says

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Millions of dollars have been saved using lean construction practices at the San Diego Community College District, according to a report released Monday by Umstot Project and Facilities Solutions.

Lean construction is the application of principles and practices to eliminate waste and deliver greater value to the customer for capital construction projects.

More than $13.6 million was saved on 15 projects — $900,000 on average per project — that used lean construction practices and building information modeling between 2007 and January 2014.

The report looked at 35 renovation and new construction facilities totaling $584 million between 2007 and January 2014. Some 20 of the projects did not use lean construction practices.

Project savings amounted to an additional $7.7 million, and maintenance costs were reduced by 53 percent over three years, according to "The Metrics of Public Owner Success in Lean Design, Construction and Facilities Operations and Maintenance" research paper.

David Umstot, vice chancellor of facilities management for the San Diego Community College District from 2007-13 and co-author of the paper, said he hoped the results of the research would show owners that there is a more efficient way to build.

“We want people to have a data base about lean construction so they can make informed decisions on how they build projects,” said Umstot, president and co-owner of Umstot Project and Facilities Solutions.

The rate of change orders dropped from 7.73 percent to 4.43 percent when lean construction practices were used on new or renovation projects for the San Diego Community College District.

“This really drives into what we are trying to do with lean construction,” Umstot said. “We want fewer busts between subs conflicting with each other, so using building information modeling and (software) clash detection prior to construction can eliminate potential problems on the jobsite.”

Three of the 15 projects that used lean construction were completed on the original contract’s stated date; one of the 20 projects that did not use lean construction came in on time.

Umstot said he wanted to show with these numbers that the old way of having someone offsite in an office, away from the active construction, is an ineffective way to formulate a construction schedule.

“We need to use the last-planner system,” he said. “We need to have crewmen and a foreman that are actually doing the construction work onsite, making the schedule in a collaborative manner and making those commitments to finish the work.”

Umstot went on to say that from 85 to 90 percent of the work is done on time when using the last-planner system, compared to an average 54 percent when using a scheduler who inputs numbers into a computer to formulate an estimate.

The paper was written with Dan Fauchier, senior lean consultant with the ReAlignment Group and Dr. Thais da C.L. Alves, assistant professor of the J.R. Filanc Construction Engineering and Management Program at San Diego State University.

Lean construction principles began to be used in 2008 because projects were coming in over budget for the Community College District’s $1.555 billion voter-approved capital bond program.

The use of target-value design helped deliver greener buildings, improved budget performance and reduced future maintenance costs.

Target-value design is an approach where the budget is published at the beginning of the project. The owner, design team, builder and specialty trades work together to use building information modeling and other tools to make decisions within the budget.

The use of target-value design helped increase the number of LEED Gold-certified buildings from 20 percent to 44 percent.

Target-value design also reduced energy consumption and future maintenance costs from $3.93 to $1.46 a square foot over a three-year period, resulting in savings of $13.3 million.

Umstot presented the paper in late June at the 2014 International Group for Lean Construction Conference in Oslo, Norway.

Representatives from more than 30 countries shared research and best management practices related to lean construction.

“We had a lot of interest in the numbers because not a lot of research has been done for this size of a program like at the San Diego Community College District,” Umstot said, “even though the conclusion didn’t surprise anyone because they expected those results.”

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