0. Linbeck Lean Project Delivery
We started our Lean Journey about 10 years ago
Original founding members of LCI
The tools displayed today are an evolution of lean concepts
Using a hospital client and project as examples today

1. As important who I am not Who am I and my motive
Introduction
Who I am not?
I am not a Lean consultant
I have nothing to sell and I am not being paid to be here
I am not an academic with a hypothesis to prove
Who am I?
President & CEO for Linbeck Group LLC
I am a builder; have never done anything else
I have a passion for the construction industry and finding ways to improve it
As important who I am not
Who am I and my motive

2. Lean Definition What is Lean Construction?
“Lean Construction is a set of ideas, practiced by individuals in the construction industry, based in the holistic pursuit of continuous improvements aimed at minimizing costs and maximizing value to clients in all dimensions of the built and natural environment: planning, design, construction, activation, operations, maintenance, salvaging, and recycling.”

3. Why? Why did Linbeck start doing this more than 10 years ago?
Competitive Reasons
Why should others do it?
To survive!

4. Don’t We Do This Already?
Some say yes – Life is easy; they already have all the answers.
Those who say no - Should they feel compelled to do something about it?

5. Yes or No?
Not according to Government Statistics

6. Industry Reliability Model
50%
25%
10%
90%
75%
Time
start
completion
Construction
Industry Norm
Lost Opportunity
Industry Wastes 40-50%
Reliability
Since I started 30 years ago
Efficiency experts
However-no solutions that sustained
(do it better, but circumstances remained the same)
A new leadership to address
Change to a Lean environment

7. Construction Professional?
Do you think the best and brightest want to work this way?
Sounds like a career of endless issues and unnecessary risk.
Are you considered a professional because you survived it?

8. Dr. Jose Solis – Construction Science
Value/Waste Relation
VARIABILITY
WASTE
VALUE
Dr. Jose Solis – Construction Science
Drive to predictability vs current variability
PREDICTABILITY

9. Waste Types: Discrete, Synergistic, Systemic
Production:
Under
Over
Untimely
Performance :
Non
Change
Scope
Conditions
Errors
External
Discrete Waste Sy
stemic
Waste
Capital Fa c
ility
Procurement and
Production
System s
Synergistic
(Affecting stockholders)
Owner
Designers
Contractor
Trade Partners
Synergistic Waste (x)
(Affecting Stockholders)
Discrete Waste (+)
Systemic Waste (xn)
Project Delivery System – Contracts
Systemic nature of the industry
Project Breakdown
Litigation (shift of value)
Devalued Market
National Debt
Discrete waste is additive
(symbol +)
Organization - Synergistic waste is multiplicative (symbol x)
Commercial Application - Systemic waste is exponential (symbol xn) 25

10. The principles we use for all things we do; not just projects
Lean Principles
Lean Thinking seeks to eliminate waste in both schedule and budget, so projects are delivered faster - and more cost-effectively.
The continuous application of the four steps above
Define Client’s Value
Map Value Stream
Achieve Value Flow
Respond to Pull
Seek Perfection
Actively understanding what is valuable to our clients in terms of budget, function, aesthetics, standards, and time
Identifying the most effective sequence of activities to deliver the value defined by the client
Eliminating unnecessary procedures to allow more work to be scheduled and executed
Doing work only when needed - when it triggers downstream tasks that will advance the overall process
The principles we use for all things we do; not just projects

11. Lean Operating System
Take those Lean principles and create a Lean Operating System (LOS)
Plan – Do – Check – Act
KPI – Key Production Indicators
Seems simple, but not intuitive to a project delivery based industry
This is how we reduce Discrete Waste

12. Root Causes - Prevention – Detection - Correction
Quality Assurance
Plan – Do – Act – Check
becomes
Root Causes - Prevention – Detection - Correction

13. Defining Value – What is valuable to your customer?
First Lean Principle
Defining Value – What is valuable to your customer?
Remember, I am not an academic or consultant; so I am presenting lean practice examples.

14. Cook Children’s Mission
Cook Children’s Health Care System will improve the health of every child in our region through the prevention and treatment of illness, disease and injury
The first principle involves our customers on projects
Proud of our involvement in Healthcare
What do we contribute?

15. First Principle – Defining Value to CCMC
Reliability - Capital Cost Budgeting
Speed – Time to Market
Uptime - Patient Care Areas
Customer Satisfaction - Maximizing Positive Patient Outcomes
Controlling Infection – Safe Environment for Healthcare
Cost – Leveraging Market Knowledge, Community Reputation & Fairness
Quality - Focusing on Long Term Facility Management, Operations & Maintenance at Lower Cost
Community Service – Support CCMC community mission
First Principle:
How do we support the mission?
Make the hospital’s business better
The value we can bring – key point

16. Fee @ Risk to Meet Owner Goals
• Removes the perceived conflict of interest in determining the Guaranteed Maximum Cost (GMP) of the project
• Prevents focusing on cost only, since the Client also has safety, quality, schedule, and functionality goals
• Decreases motivation to argue over minor changes, since there is no economic interest in increasing the contract amount
We put skin in the game to motivate our actions.
This encourages more progressive management practice.

17. Second Principle – Map the Value Stream
How we create value by removing discrete waste
Production
Under production
Over production
Untimely production
Performance
Non performance
Under performance
Over performance
Untimely performance
Change
Scope changes
Change in conditions
Errors
External changes
Value Stream
2nd Principle – Discrete Waste
Increase reliability by removing waste
Mapping how to extract value
Plan activity of the LOS
Eliminate discrete waste – Production, Performance, Changes

18. Define what you are doing Experiment and improve
Lean Principles
The right process will produce the right results
Continuously experiment and improve the process
Define Value, Map Value Stream
Engages stakeholders
Engage stakeholders
Define what you are doing
Experiment and improve

19. All company processes are based on value streams
Value Stream of Capital Project Delivery
See Feb 08 Board Package Recap
See April 08 Board Package
See Definition VS for Projects
All company processes are based on value streams
For the projects - Assessment, Definition, Design, Construction, Post Construction
VS is a detailed overlay of (Plan – Do – Check – Act)
Updated based on decisions in Feb 08
4/15/18

20. Linbeck Sponsored Insured Program (LSIP)
How Linbeck implements a contractor controlled insurance program
Represents actions from:
Legal, Operations, Risk Management, Accounting & Willis
It’s an agreement on what is valuable or necessary, how to execute and by whom.

21. Project Scope Waste Typical Bridge Work Structure
Closing ER entrance for 42 days
Identify Bridge
Criteria
Manage Operations Disruption
Manage Patient Dissatisfaction
Manage
Inefficient Work
Owner
Architect / Engineer
Design Bridge
Components
Bid Erection and
Enclosure
Award Trade
Contracts
Builder
Close Entrance to
Subcontractor
Fabricate Bridge
Steel
Quote
Emergency Room
What’s important –
Construction Efficiency
Hospital/Employee Efficiency
Customer Satisfaction
They all are!
VS represents a “Project Oriented Approach”
Labor/Delivery to NICU – Emergency at 1st floor
Legend
Open Street
and Emergency
Entrance after
42 Days
Erect Bridge Pieces 14 days
Open One-Half
Street
Enclose
One-Half
Bridge
14 Days
Enclose
Last One-Half
Bridge
14 Days
Contractual Relationship
Close One-Half Street
Close
Street

22. Linbeck’s Lean Process Keeps ER Entrance Open
Closing ER entrance for half day
Architect /
Engineer
Builder
Subcontractor
Provide
Constructability &
Manage Client
Expectations
Owner
Identifies
Process
(Value)
Minimize
Disruption
Of Bridge
Construction
Identify Bridge
Criteria
Close
Emergency
Room Entrance
One-Half Day
Determine Design
Options to
Accommodate Less
Intrusive Bridge Plan
Design Temp
Supports and
Lifting
Requirements
Bid Assembled
On Ground
Bridge Erection
Quote
Fabricate
Steel
Award Trade
Contracts
Drill Temp
Piers
7 Days
Erect
Bridge on Ground 7 Days
Assemble Enclosure on Ground 14 Days
Street
Bridge
One-Half
Day
Open Street and Emergency after
Design Bridge
Components
Better construction (took a risk)
Went against Supt. & field engr. advice.
Hospital employees not affected
Customer not affected
Legend
Contractual Relationship

23. Third Principle – Achieving Flow
Achieve flow by removing synergistic waste creating reliability with organization that addresses product needs
Relationships
Owner
Designers
Contractor
Trade Partners
Flow
3rd Principle – Synergistic Waste
Synergy is relational
Organize the team to produce product specific outcome

24. Owner Direct Contractor
Integrated Project Team
Integrated Project Team
Utilizing TeamBuild®
Approach
CMR –
Linbeck
Architects
INTEGRATION
CCMC
Owner
Owner Direct Contractor
Engineer
Linbeck
Project
Manager
1st step in relational integration
Linbeck as an “At Risk program manager.”
This is not an industry supported approach, but necessary for advanced lean approach.
Specialty Consultant
Specialty Consultant
FF&E Vendors

25. Able to support capital projects strategic vision with Board
Organizational Alignment
Able to support capital projects strategic vision with Board
Support operational needs with hospital President/Staff
Information provider to Finance, IT, Security
Ramp up or down as facility group needs support

26. Core Specialty Contractors
Integrated Project Team
Owner
Linbeck Risk
Architect & Engineer
Core Specialty Contractors
INTEGRATION
2nd step in relational integration
Linbeck as an “At Risk program manager” with Arch/Eng, Core Specialty Contractors, Owner.

27. Implementation of BIM in the LOS
Create the right “flow”
Involve the right people at the right time
Allocation of responsibility and authority
Create clarity
Map out the process and the value stream
“WHAT” “HOW”
BIM is a lean tool
Integrated into LOS
What we want from it – by whom
How to use it

28. Communicating via Model Communicating via Model
Lean BIM Tools
Fast
BIM Tools
Early
Procurement
Communicating via Model
Qualifying Trades
GMP at SD
Fast
BIM Tools
Early
Procurement
Communicating via Model
Qualifying Trades
GMP at SD
BIM Results
Project focused delivery would take 62 months
LOS approach – 49 mo’s – saving of 13mo’s/or $110M/Revenue
LOS with BIM – 37 mo’s – 12 mo’s or additional $102M/Revenue
Total Savings to this project = 25 mo’s or $212M/Revenue
Without BIM, we could not get the additional 12 mo’s 28

29. Fourth Principle - Responding to Pull
Respond to pull by doing work at the last responsible moment
Use pull driven approach
Define what is needed
Create what is defined
Not more
Execute flawlessly
Reliability creates a vacuum on the project
Next steps are ready as planned (not traditional)
2 week schedule example
Must be ready to take advantage of process
The DO step of LOS

30. Involve users, designers, builders Start with ultimate desired outcome
Using Tools – Pull Schedule
Involve users, designers, builders
Start with ultimate desired outcome
Work back to start of project (not intuitive) 30

31. “Stored” in Location in Assembled Sections-Protected
Responding to Pull
Pull Built-Up AHU’s - Design Through Construction
Below Grade Access
“Last Opportunity”
Shipped in “Larger” Sections
“Shrink Wrapped”
“Stored” in Location in Assembled Sections-Protected
AHU’s
Desire this to be stored on site – assembled
Shipped on time – shrink wrapped
Delivered at last (responsible) possible moment before basement mechanical room access closed

32. Percent Plan Complete Chart – Seeking Perfection
Baylor College of Medicine
5th Principle – Seeking Perfection
Need reliable commitments:
Organize them
Measure them
Utilize Last Planner System
Last Planner is the Foreman
The Check step of LOS

33. Cumulative Root Causes
Trend of Unsatisfied Schedule Items
Need to know root causes to eliminate them (removing bottlenecks).
Act part of the LOS.

34. Using Tools – Last Planner
When Reliability Increases
90%
LOS
75%
Saves Time (10-20%)
Reliability
Saves $ (3-10%)
50%
25%
Construction
Industry Norm
LOS and initial relational organization removes a significant amount of waste.
Operating System / Organization
“Discrete Waste” “Synergistic Waste”
10%
start
completion
Time

35. Where Are We Going? – Remove Systemic Waste
With an ever-changing economy
1900
“favoritism”
Informal
Design Bid Build
2000
Under-Bid Litigation
Design Build/CMAR
2010
Under Cut Fees/Market Value
Lean/ Integrated Contract
Future
Problem?
Solution?
Problem:
Solution:
Discussed discreet and synergistic waste removal
In the future, we focus on systemic waste
Currently starting an IPD

36. Commercial Application
Systemic Waste
Remove with IPD agreements/relationships
Project Delivery System – Contracts
Systemic nature of industry
Project breakdown
Litigation (shift of value)
Overcome Devalued Market
Overcome National debt
Commercial Application

37. Lean Operating System supports the implementation on IPD project delivery.
Most of the IPD concepts can not be optimized without a Lean Operating System.

38. Waste Types: Discrete, Synergistic, Systemic
Production:
Under
Over
Untimely
Performance :
Non
Change
Scope
Conditions
Errors
External
Discrete Waste Sy
stemic
Waste
Capital Fa c
ility
Procurement and
Production
System s
Synergistic
(Affecting stockholders)
Owner
Designers
Contractor
Trade Partners
Synergistic Waste (x)
(Affecting Stockholders)
Discrete Waste (+)
Systemic Waste (xn)
Project Delivery System – Contracts
Systemic nature of the industry
Project Breakdown
Litigation (shift of value)
Devalued Market
National Debt
Operating System - Discrete waste is additive (symbol +)
Organization - Synergistic waste is multiplicative (symbol x)
Commercial Application with relational type agreements - Systemic waste is exponential (symbol xn) 25

39. Integrated Project Delivery
When Reliability Increases
IPD
90%
LOS
75%
Saves Time (10-20%)
Reliability
Saves $ (3-10%)
50%
25%
Construction
Industry Norm
10%
Our new target – start out Lean
IPD allows you to start at a more reliable platform
start
completion
Time

40. Questions?