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Owner Controlled Team Project Delivery CMAA Introductory Discussion April 10, 2015

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Presentation on theme: "Owner Controlled Team Project Delivery CMAA Introductory Discussion April 10, 2015"— Presentation transcript:

1 Innovation in the Design and Construction Industry Led by Cleveland Clinic

2 Owner Controlled Team Project Delivery CMAA Introductory Discussion April 10, 2015

3 Owner Controlled Team Project Delivery OCTPD
Authors Stephen Lau Ronald J. Lawson Alan W. McKinney William R. Zollinger III Steve 3

4 InterContinental Hotel
InterContinental Hotel Broken schedule Busted budget 18 Mos. 100% Over Schedule 36 Mos. Ron $125 Mil 47% Over Budget $85 Mil 0% opportunity to recoup losses!

5 Industry Indicted Design – Bid – Build delivery model Near 100% use
Broken model Replace it

6 Industry Indicted Failing performance Waste, waste, waste ($)
Projects over budget % Projects over schedule 1 70% Waste, waste, waste ($) Material waste % Rework % Labor inefficiency 1 30% - 70% Steve 1 The Commercial Real Estate Revolution – Copyright 2009

7 productivity seriously lags Construction productivity declined
other industries by 138% Construction productivity declined 20% Bill

8 Innovation Wasteland Investment in R&D (of gross volume)
Other industries % Construction industry only .5% (one fifth of others) Most of construction industry’s R&D investment relates to materials, not construction processes

9 2004 The Defining Moment InterContinental Hotel project a financial train wreck Industry performance Highly inefficient Dysfunctional Results largely unpredictable Ron

10 Unacceptable Risk Risk potential unacceptable on pending projects ( ) $1 billion = $300 million at risk Ron/Steve Fundamental approach going forward required major change

11 2004 A Defining Moment $1 billion dollars lay ahead
The decision – begin looking for an alternative to the failed industry led approach Ron

12 New Approach Fundamental concepts Owner Controlled
Team Project Delivery Fundamental concepts Owner controls Owner fully engaged Owner leads decision making process Owner creates a TEAM Owner drives innovation Ron/Al

13 Logic of Fundamental Concept
The OWNER shoulders the risk The OWNER ultimately pays The OWNER has the power to bring order Ron/Al

14 Contrasting Experiences
InterContinental Hotel 2005 – 2010 Broken schedules Busted budgets Major litigation exposure Industry driven process On-time performance Budgets met Zero litigation Owner driven process Ron

15 2010 Major Cleveland Clinic Innovation Announced
The initial research, development and testing of the OCTPD process ended Cleveland Clinic leadership fully briefed in 2010 $1 billion dollars in new projects successfully completed OCTPD recognized as a viable replacement for industry led approach Additional 3 Year OCTPD research, development and testing process set in motion Steve

16 OCTPD 2013 3 Year (2010 to 2013) OCTPD research, development and testing process completed Another 5 large projects successfully executed Improved process and added to our knowledge of OCTPD Conclusion – belief in OCTPD concepts and logic strengthened Steve

17 OCTPD 2004 -2014 Validated by 10 years of experimentation
Fundamental concepts Owner controls Owner fully engaged Owner leads decision making process Owner creates a TEAM Owner drives innovation Fundamental logic of concept OWNER has the power to bring order OWNER shoulders the risk OWNER ultimately pays

18 OCTPD Value Proposition
Quality improvement Cost management Enhance risk management Reduce delivery time Enhance transparency and collaboration Greater opportunity for diversity Expand Cleveland Clinic’s brand Steve

19 OCTPD Innovations Bill/Ron

20 Hillcrest Team Purpose Statement
Team Environment Hillcrest Team Purpose Statement A unified construction process enhancing the community’s best hospital…“Building Excellence” Team Goals Fundamental Requirements Safety Schedule Budget Quality Diversity/ Participation LEED Innovation Awards Efficiency of Processes Change Management Dynamic Communication Teamwork Team Building Responsibility; Ownership of Process Customer Satisfaction Patients First User/Staff/ Physician Community Owner Administration Ron/Al

21 OCTPD Team Process Executive OCTPD Team Meetings
Invitees - Owner, A/E, CM, DA, Users Agenda - team focus only Team Purpose Statement Team Measurable Goals TYSON / KRYMOWSKI 21 21

22 OCTPD Team Process OCTPD Core Team Meeting
Day to day project leadership Reports to Executive OCTPD Team Establishes and meets with Task Teams Keeping ourselves oriented Attitude Consistent Our process for keeping eyes on the compass TYSON / KRYMOWSKI 22 22

23 OCTPD Team Process Focused Task Teams Change Management Schedule
OFE Coordination Building System Commissioning Owner Activation Project Close-Out Tacklers TYSON / KRYMOWSKI 23 23

24 OCTPD Team Process Project Meetings OAC Meetings
Trade Coordination Meeting Trade Schedule Review Facility Coordination Exec Small Group (Owner/A/E/CM) Trade Principals Meetings Administration Reporting TYSON / KRYMOWSKI 24 24

25 … misaligned interests!
Remove “Siloization” … misaligned interests! Bill Designers Contractors Vendors Owners

26 Selection of Team Experts (Architects/GC/CM)
Creation of world class design team Repeat opportunity (“select group”) Benefits of lessons learned “Working as a Unit”

27 Design-Assist Concept
Early selection of critical trade contractors based on Qualifications Target budget price Compensation framework accepted Intense collaboration and transparency between “knowers” and “doers” Team building environment Owner “opt out” provision for construction phase Ron

28 Design-Assist Results
Optimum value Heightened quality Cost reduction Risk reduction Enhanced schedule management Increased operational efficiencies of facilities Ron/Al

29 Evolution in Technologies / Processes
X-Ray CT MRI Nuclear Medicine The Owner Controlled Team Project Delivery is an innovative evolution of technologies and processes akin to the innovative evolutions in health care

30 Electronic Construction Records “ECR”
Project metrics Data-rich to information-rich Job data integrated analytics Quality information available timely Collected, organized, and distributed Via dashboards Steve/Bill

31 Enhanced Information and Communication
Schedule Driven by Model Enhanced Communication Bill

32

33

34 OCTPD Evolution Ron

35 Process Evolution 2004-2012 Control group of 10 projects, $1+ billion
Research / test / evaluate / publish Team building Business processes Management tools Electronic construction records Contract format Industry mentor Al/Steve

36 Process Evolution 2013 - Today
OCTPD Research Project Central Question Reduce costs / maintain quality / reduce risk Al/Steve

37 OCTPD Research Focus OCTPD Research Project targets 7 subjects
Costs - understand, define, search, identify and reduce cost Teams - organizing, behavior and performance Metrics - understand, identify, create, enhance and apply Quality Physical building components Processes with continuous improvement Risks - understand, define, identify and reduce Trust - understand, define, identify, and enhance Experience - for all stakeholders

38 Process Evolution 2013 - Today
Cost Reduction Leveraged buy on multiple projects Major MEP equipment Trade material / labor purchases Design assist multiple project opportunity Non-construction Medical equipment FF&A Finance Initiatives Accelerated pay Reduce retainage Al/Steve

39 Process Evolution 2013 - Today
Lean Study Action Team (SAT) The Toyota Way Use of A3s on critical issues Elimination of waste / efficiency Last Planner / pull schedule Big Room Mini Summit Al/Steve

40 Summit Discussion Topics
Communication process Component Team DA process LEAN Steve

41 Cancer Building Mini Summit
Al/Steve

42 Cancer Building Mini Summit
Al/Steve

43 Discussion / Q&A Bill/Ron

44


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