Understanding

   
Target  Cost  
Delivery  
Operating  System:  Principles  +  Tools  

Collaborative
Transparency
Planning

Collaborative
Communication
 Set-based
BIM
Solutions
Creative
Tension
A3 Process
Collaborative
Design
Conversation
Target Cost
Choosing Estimate
By
Advantages
PDCA
Pre-Fabrication
 Target  Cost  

A management
approach that drives Drive Value
Drive Value
design to deliver to YET
defined customer values
Drive Cost
within
project constraints.
 Guideline  1  
Develop clear Conditions of Satisfaction (CoS) – what
is of value to the client
Economics  of  Trust  
From  “The  Speed  of  Trust”  
Traditional  Risk  Management  

Used with permission from Will Lichtig, Boldt Construction

Open-­‐Face  Risk  Management  

Used with permission from Will Lichtig, Boldt Construction

ProHit  Pool  /  Combined  Contingency  

Glazing Engineering
Architect Drywall
Electrical
CM Ext. Mechanical
Structure Civil

Contingency

Profit / Overhead

Direct Cost
 Sharing  of  Savings  

Savings $$
Validated Actual
Expected Cost
Cost
Design/
Production
Contingency
Owner % Incentive Pool %
Metrics
 Project  Phases  
Owner’s Project Budget
Set Project Definition Design Budget
Target Business Case (deliver X for Y)
Cost Construction Budget
Go
No/Go

Validation On-going Cost

Design Model
to Go
No/Go
Target
Design Development/ On-going Cost
Documentation Model

Go
No/Go
Build
to Construction/Production
Target
Commission/Turnover
 Guideline2  
  Develop a detailed estimate and design to it – any
cost over run is a team wide problem
  Estimate real-time through-out the design to keep the
design on “target”

  Embed estimation with all components/clusters -

estimators become part of the design team

  Traditional – estimate after the fact and value engineer

 Target  Cost  Components  

Mechanical

Building Envelope Structure

Interior / Component Site

Finishes Leaders

Electrical Landscape
Technology
 Component-­‐Based  Design  

Site Building Interior/ Mechanical Electrical Technology

$ Envelope Finishes $ $ $
$ $

Leader: Leader: Leader: Leader: Leader: Leader:

Civil Engineer Project Designer Project Designer Senior Engineer Senior Engineer Senior Engineer

Team: Team: Team: Team: Team: Team:

Project Designer Project Architect Project Architect Mechanical Engineer Electrical Engineer Electrical Engineer
Project Architects Structural Engineer Architects Electrical Engineer Mechanical Engineer Mechanical Engineer
Mechanical Engineer Mechanical Engineer Medical Planners Project Architect Project Architect Project Architect
Electrical Engineer Construction Mgr. Interior Designers Structural Engineer Project Designer Project Designer
Construction Mgr. Mechanical Engineer Services Tech. Group Interior Designer Interior Designer
Electrical Engineer Construction Mgr. Services Tech. Group Services Tech. Group
Construction Mgr. Construction Mgr. Construction Mgr.
 Design/Budget/Schedule/Constructor  

Design

Each cluster should integrate

Schedule Budget estimating, schedule, and
constructor with design

Constructor CLUSTER CLUSTER

Design/Estimate/ Design/Estimate/
Schedule/ Schedule/
Constructor Constructor
Leads to break-downs/
miscommunication
INTEGRATED
TEAM
Overall Budget/
Macro Schedule

CLUSTER CLUSTER
Design/Estimate/ Design/Estimate/
Schedule/ Schedule/
Constructor Constructor
 Target  –  Based  Cost  Modeling  
$533,176
$1,472,704
$1,082,510

Tech. Site
Power 4% 11% $1,719,343
8%

Structure
13%

$3,682,532 Thermal
Comfort $132.9M
28% Envelope
16%

$2,224,886
Interior
20%

$2,693,605
 Root Cause Knowledge
5-Why Sharing
Open
Sharing
Make
Visible

Continuous
Improvement

Go & See Big Room

(Gemba)

Reflection/
PDCA
 Guideline  3  
  Spend time together – work in with a “big room”
concept

  Set detailed agendas about the day(s) together – set

expected outcomes/ required participants

  Traditional – work in isolation and throw work over the

wall
 Guideline  4  
  Constantly plan together – how are you going to
meet the schedule

  Pull plan weekly in the big room – re-plan constantly

  Traditional – Schedules are done in isolation and are not

a “plan” (but a hope and a prayer)
 Look Check-in
Ahead Plan Sessions

Requests/
Reduce
Promises
Uncertainty

Manage
Constraints Pull Planning

Value Stream
Mapping
 Guideline  5  
  Design in conversation prior to drawing

  Determine the issues from multiple perspectives and

form decision together – design to the decisions

  Traditional - is to design then discuss and revise

 Guideline  6  
  Collaborate with the Constructors for constructability
of the design

  Include constructors in the conversations and

development of the design at a detailed level –
constructors are designers

  Traditional - is to “review, comment and revise”

 Guideline  7  
  Design in “sets of solutions” and hold off converging
on a solution until right time
  Gain input from all stakeholder
perspectives – use A3 process
to gain alignment and document

  Make decisions based on optimizing the whole

  Traditional - is to make decisions from narrow

perspectives and revise – value engineer
 Set-­‐Based  Solutions  
From  CPR  Program  

Create Analyze Converge Decide

“Product Development for the Lean
Enterprise”, Michael Kennedy
A3 Process
 Guideline  8  
  Set “no-compromise” goals – creative tension

  The 3-legged stool

  Traditional – one leg must be compromised

Creative  Tension    
CoS  
 Guideline  9  
  Eliminate waste and innovate

  Learn to “see” waste and become creative in eliminating

  Drive cross-team innovative ideas – create a focus

  Traditional – waste, waste, waste and fear of innovation

 Coordinated  Design  to  Fabrication  

Field Installation

3D Model
 The  40%  Dividend  (World-­‐class  Trust)  
from  “The  Speed  of  Trust”  

•  High collaboration & partnering

•  Effortless communication

•  Positive, transparent relationships

•  Fully aligned systems & structures

•  Strong innovation, engagement, confidence & loyalty

© 2011 All Rights Reserved
Used with permission from Will Lichtig, Boldt Construction