Posted by Paul Ebbs on July 09, 2015
Downtown Boise Skyline with Construction Cranes at Dusk
Much of the focus last month was on the preparation and delivery of Target Value Design (TVD) workshops. One of our clients Andersen Construction has a office in Boise, Idaho. It is a very picturesque city and was a real pleasure to visit. There is lots of new construction happening too. Jamal Nelson, Operations Director for Andersen Construction Boise, hosted the workshop and was very kind to show myself and Dave Umstot around Boise and buy dinner and a few local beers afterwards. Ben and Jerry ice cream topped off the evening nicely! I am already looking forward to returning for potential future engagements.
The TVD workshop was held at Boise State University. A broad range of 30 professionals was invited including Andersen staff (estimators, superintendents and project managers), university employees, City of Boise officials from the Planning & Architecture Departments and other Andersen Construction partners from Architectural & Engineering firms. There was over 700 years of combined experience to leverage which proved very helpful during the TVD simulation game and sample hospitality sector exercise.
Another TVD client is an owner in the entertainment and hospitality industry and will be using the IPD (Integrated Project Delivery) approach and IFOA (Integrated Form of Agreement) contracts on 10 of their upcoming projects. Target Value Design will be an integral part of their approach to these projects.
Dave kicked off the workshops by first asking the participants “What is value?” Unsurprisingly, their perspectives on value differed greatly. The workshop attendees (110 in total) noted many different perspectives on value. Some of their comments are shared below.
The workshops helped to expand my understanding of TVD requirements. What I observed is that knowing your customer, their needs, wants and perspective on value is a critically important first step. If you understand what they value, it makes it much easier to deliver it right the first time. This will eliminate assuming what people value. Quite often, assumptions are the mother of all mistakes which inevitably results in rework sacrificing added value. Value is not just lower cost but it can be a wide range of things. Reducing the waste that is embedded in the project procurement and delivery process can deliver both a lower cost and enhanced sustainability objectives (if that is what is of value of course!). Some very interesting public owner metrics on TVD, Lean Project Delivery and BIM from Dave’s time as Vice Chancellor of San Diego Community College District can download here: http://www.umstotsolutions.com/presentations/iglc-2014-metrics-of-public-owner-success-in-lean-design-construction-and-facilities-operations-and-maintenance/.
Learning TVD through a simulation
Texas A&M University has developed a TVD game which Professor Zofia Rybkowski, PhD kindly shared with us. We ran the simulation after lunch, prior to the sample exercise. Simulations can be really powerful, high energy and fun “learning-by-doing” exercises that foster high information retention rates.
Marshmallow Simulation Game
The TVD game uses the same concepts of Peter Skillman and Tom Wujec’s “Marshmallow Challenge” but applies TVD processes. It illustrates cooperation, competition, team building, collaboration, creativity, innovation and designing within budget constraints. Round 1 mimics the traditional Design-Bid-Build process. We had 30 people and formed 5 teams of 6 people. Each team has 2 owners; 2 designers and 2 contractors. The designers were given a list of inventory (spaghetti, coffee stirrers, straws, bamboo skewers, paper tape) to design a 2’ 0” tall free-standing structure with a marshmallow on top. The maximum allowable vertical variation was 2”. The design was then approved by the owner and passed to the contractor who built per the drawings. Requests for Information (RFIs) were used for any design clarifications. Once complete, the teams reported out the inventory they used, time taken and number of RFIs requested. The average cost of all the team’s “marshmallow structure” became the “market cost”. This was then reduced by 20% which equalled the “allowable cost” and a further reduction of 10% was set as the new “target cost” and the benchmark for Round 2.
The Cardinal Rule: target cost can never exceed the target budget!
In Round 2, the Integrated Project Delivery (IPD) approach was taken and the designer, owner and contractor designed, approved and built the new structure together within or below the new target cost. The simulation was high energy and lots of fun and effectively demonstrated all of the TVD concepts Dave outlined in his slide deck and reinforced the behaviors required for the sample hospitality sector TVD exercise that followed.
Following the TVD game we asked what did you feel or what did you see during both rounds? Round 2 benefited from better communication between owner, designer and contractor.
TVD Sample exercise: Developing the Site Concept
The sample TVD exercise really emphasized how important it is to have the right people in the room. Each stakeholder’s input (from planning, design, construction and operations) is required. This can eliminate rework in both conceptual design and estimating - almost immediately. In Boise, during the TVD exercise and the design charrette the position of the building on the site was changed on a white board following input from a City of Boise planning department official. In a real situation this would have saved countless hours of design rework and the associated costs – all waste. Also, designing to the budget or “target cost” during the conceptual design with all the key stakeholders is vital to success. 80% of the cost of buildings can be committed at Schematic Design (SD) so the input of speciality trades is particularly critical as typical MEP costs range between 30 and 40% of total costs. The choice of MEP systems will add or subtract from the life cycle cost and Total Cost of Ownership.
Site Plan Concept From Design Charrette
Key Workshop Takeaways:
If you are interested to find out more on TVD, a two page fact sheet outlining the key factors for successful TVD projects can be downloaded from our website: http://www.umstotsolutions.com/presentations/fact-sheet-on-target-value-design/
Next month the blog will be on the 23rd International Group for Lean Construction (IGLC) conference in Perth, Australia where I will present a conference paper “Lean Construction Theory and Practice: An Irish Perspective” and also my research to the Postgraduate Summer School.
Tags: lean construction, target costing, target value design, lean simulation
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