Healthcare, Lean Construction, Trade partnerships
How do you keep a small project that requires new processes from becoming too much to deliver on time and within budget? Pick partners you trust and focus on a few good ideas.
Sometimes smaller projects offer big opportunities to try something different. Whether it's a new tool or technology, new materials from different trade partners or a new process or approach that the construction team hasn't tried before, a project that is more "contained" may offer the perfect opportunity to experiment a bit.
On the flip side, smaller projects often mean smaller budgets and shorter timelines. Stepping away from the tried and true can increase the risk of things going wrong when you don't have the benefit of being able to adjust and correct your choices over the course of a longer schedule. How do you balance that risk with the potential for reward?
We recently completed a new medical office building in Round Lake Beach, Illinois that gave us the chance to successfully work through many of these questions, concerns and opportunities. After partnering for more than 20 years on multiple healthcare facilities, NorthShore University HealthSystem, their owner's representative, Integrated Facilities Solutions (IFS), Pepper Construction and the design team were well positioned to try something new. Our work together had evolved over the years from competitive bids to guaranteed maximum prices (GMPs), and our most recent efforts had benefited from the incorporation of lean principles, processes and tools. Using an Integrated Project Delivery (IPD) method and working under an Integrated Form of Agreement (IFOA), which help to align team members around specific objectives with the potential for shared financial risks and rewards, seemed like a natural next step.
Some initial struggles
From the beginning, we faced some of those smaller-project challenges. Many people believe that a project under $10 million – and ours was $9.4 million – can't be delivered successfully using an IPD method or an IFOA. To achieve its potential benefits, this approach typically requires more preconstruction planning time to ensure that team members agree on the project's goals and how their performance toward achieving those goals will be measured. But remember, smaller projects usually mean shorter durations, so how could we possibly accommodate this essential planning while still leaving ourselves enough time to construct the building by the promised delivery date?
Trying to be lean and integrated and at risk and do it all under a relatively short schedule – and do it all together as a team for the first time – had the potential to be overwhelming. Fortunately, we had the element of trust on our side. The core team had a long history of working together and we had carefully selected trade partners who would fit in with the collaborative dynamic that we had created. But even more important, we all truly enjoyed – and still enjoy – working together.
When concerns were expressed, we chose to face them head on. They ranged from the owner's concern that they were sacrificing the advantages of a competitive process by committing early to key trade partners, to the natural wariness of some of those partners to operate in a completely open-book, transparent manner. But by working together to think things through, identifying and addressing potential risks, focusing on efficiencies and incorporating technology and the lean philosophy, we were able to deliver this smaller project with higher returns for everyone involved.
Starting on the right foot and staying in step
Although our small project could not accommodate full-time co-location, which is often a main contributor to the collaboration that is so important to successful lean projects, we knew that we could use the jobsite trailer as a staging area for the field, trade and project management teams to brainstorm solutions to challenges that developed over the course of the project.
But even if we couldn't be together continuously, we knew that we wanted to start out on the right foot by inviting the entire team to participate in a large kick-off session on day one.
Together we established Key Performance Indicators (KPIs) and created a dashboard of key metrics that allowed everyone to see exactly where we stood as the project progressed. I'll share more about the dashboard, which turned out to be the cornerstone for our shared success, in a bit. We brainstormed ways to eliminate waste, from creating a paperless jobsite to enhanced use of technology. Other critical considerations included speed to market, incorporating more strategic advice from the field, reducing change orders, RFIs and submittal turn-around time, cutting out wasteful space from the design and maximizing Target Value opportunities.
Rather than being a detriment, we found that spending a little more time in the preconstruction phase than we would have with a traditional approach provided the following benefits:
- Careful evaluation of all options against NorthShore's values, such as considering if they will improve ongoing building maintenance requirements
- Vetting solutions to identified challenges, such as relocating the mechanical and water/sprinkler rooms from the north side to the west side of the building, which allowed us to cut a week from the schedule and save $50,000
- Incorporation of technology in more effective ways and taking the opportunity to try new programs that would help to further eliminate waste
And speaking of technology, one of the best tools we used to demonstrate transparency, encourage communication and identify potential issues was that previously mentioned IFOA dashboard. Utilizing Power BI, a Microsoft business analytics service, our team was able to capture and graphically display critical performance metrics against primary targets. Information was refreshed monthly, allowing the project team and NorthShore to see project-cost trends, generate on-demand reports and see how we were tracking against our shared incentive thresholds.
In addition, the dashboard helped us to identify potential issues before they became challenges. For example, we could see that early sitework efforts were running over budget and starting to dip into the team's shared profits. Armed with this insight, we were able to drill into each of the trade partners' numbers, discuss alternate approaches and identify opportunities for improvement that brought the shared profit potential back in range and ultimately improved the project.
Other benefits from technology included the following:
Paperless jobsite – BIM was utilized from the very beginning of the project and contributed significantly to the jobsite being paperless. By eliminating the "back and forth" of documents during preconstruction, we were able to drop two or three steps on many processes.
Eliminating waste in the field – Takt Time, which helps structure work around a set pace, allowed our superintendent to identify potential bottlenecks and maintain a stable workflow. One example on this project was to resolve scheduling and access conflicts between the flooring installers and painters.
Improving trade coordination – After previously using pull planning, a process that requires large boards and individual sticky notes to plan how trade partners will each progress through a job, the team chose to try Touchplan software. Benefits include online access to the plan from anywhere, faster and easier process management, which led to shorter planning meetings and higher engagement from trade partners, and a streamlined review process for NorthShore.
Another process that we encouraged and attempted to expand at Round Lake Beach to eliminate waste and create efficiencies was prefabrication. Some of our prefabricated elements were identified and planned early, but we continued to look for additional opportunities as the project progressed. As a result, we were able to take advantage of the benefits of prefabrication for everything from underground plumbing to kitting of electrical components and pre-built drywall soffits.
No job is too small for a substantial Quality program
The collaborative nature of this project also gave us the opportunity to provide design-assist services. As OKW Architects developed drawings, Corey Zussman, AIA, Pepper's Director of Quality Management in Illinois and Wisconsin, would review and provide input on how to better construct certain details or suggest alternative material options. This input could then be quickly priced for NorthShore's consideration. For example, the original design called for a fluid-applied air and vapor barrier at all exterior masonry cavity walls. Through page-turn meetings with the team, we realized that a peel-and-stick membrane system was preferred for this type of wall construction. This change saved the client approximately $40,000 and expedited the building envelope construction. A standalone exterior wall mock-up was created so there could be a full review of all exterior conditions to ensure air-vapor barriers, flashings and sealants were being properly installed on all exterior doorways, windows and material transitions. This also set expectations for exterior trade partners and allowed them to see exactly what they were required to deliver.
At Round Lake Beach, we also incorporated Pepper's standard practice of holding individual quality pre-installation meetings with certain trades, specifically those that work on the building envelope. Shop drawings and product data were again reviewed with Corey Zussman and the trade partners' project managers and foremen for quality assurance. Details were discussed to ensure proper installation methods were being followed, and meeting notes were converted into a project-specific quality plans for each trade partner. We were then able to monitor progress against those plans through weekly inspections. Everyone knew exactly what to expect in terms of the work and how long it should take, and that anything less than the standards established and agreed to would not be accepted – both for the good of the project and the benefit of all the partners.
Success today and for the future
In the end, not only did we successfully achieve our primary goals, we learned important lessons that we have been able to carry into our current project with many of the same team members – even though it's not formally using an IPD approach or an IFOA contract. I am proud of what our team was able to accomplish with so many "unknowns" in the mix. Perhaps the most valuable insight gained is that, while we knew we had to incorporate lean into our processes, we never allowed ourselves to get overwhelmed by what we didn't know or let the lean principles themselves become more important than the project. Instead, we started by looking for two good ideas that, as a team, we wanted to incorporate into our efforts. Once we established the daily mindset of always looking for ways to eliminate waste and opportunities to do things better, the ideas flowed, and the tools became almost second nature and easy to use.
The new medical office building at Round Lake Beach was definitely one of our smaller healthcare projects in terms of square footage, schedule and budget, but in terms of lessons learned and confidence gained to further utilize these tools and continue building on the processes, it's one of our biggest successes.