1. 1 Managing Risk in a Lean Environment Ray Sloane Mace Risk Management

2. 2 Challenge..? To find a connection between a Lean Construction environment, and how it interacts with risk, helping to reduce risk, and making it easier to manage risk with definable benefits.

3. 3 Questions Do they have common objectives Is Risk Management, and more specifically are “Risks” the opposite of Lean Construction?

4. The 3 Lean Opportunities Impeccable co-ordination The project as production system The project as a collective enterprise 4

5. 5 Impeccable co-ordination Constructors, designers and the client / end-user working together from the outset to achieve shared goals in design and construction. “Built in” Risk mitigation for……? (1) Poor interfaces (client / contractor / sub-contractor). (2) Lack of continuity / differing levels of maturity. (3) Poor scope definition. (4) Late changes in design (5) Differing levels of design maturity. (6) Re-design during construction period.

6. 6 The project as production system Designing the production system at the same time as designing the building or structure; assembling teams around systems rather than disciplines. “Built in” Risk mitigation for……? (1) Re-design / Re-work / Abortive work. (2) Inadequate building footprint to install equipment (3) Workface clashes (4) Late changes in design (5) Individual disciplines working in ‘silos / isolation’. (6) Re-design during construction period.

7. 7 The project as a collective enterprise To allow one trade partner to be compensated for investment that saves another even more (moving money across boundaries). To enable the Client to effectively manage Risk and Cost on the project. “Built in” Risk mitigation for……? (1) Insufficient funding available / annualised funding. (2) Commercial approach taken to extremes. (3) Breakdown of collaborative environment. (4) Professional differences between parties. (5) Identified OPPORTUNITIES not progressed as expected. (6) Cost increase – Construction or whole life cost.

8. Case study – A.M.A. Nuclear Ltd (SDP) 25 year old building 3 rd attempt to design a solution for processing of Intermediate level nuclear waste from a 50 year old facility New company (A.M.A. Nuclear Ltd) 3 x way JV between Mace Areva Atkins Legacy client with some employees on the project for 25 years. 1 st attempt - >£450m 2 nd attempt - >£900m 3 rd attempt - >£2.4bn 8

9. Case study – A.M.A. Nuclear Ltd (SDP) True Co-location – Client and Contractor adjacent desks Time taken to “set up” the project – Pre-mobilisation stage Project “Mission Statement” created by the project team Challenge Group setup, combined Client and Contractor Supply Chain Conferences Challenge / enable / encourage / learn / communicate 9

10. Lean Construction reduces the risk of:- Physical Risk - HSEQ People getting hurt Operational risk - Processes are not efficient Commercial Risk - Unexpected cost increase Reputational Risk - How can you quantify..? If any or all of the above fail in some way, it can mildly or catastrophically damage a company’s reputation. 10

11. 11 Workshop discussion Does Lean reduce the likelihood of risk and uncertainty? If so how might we quantify it?