Lean Construction and Value

Engineering for Construction

Value
Cost value
Use value
Esteem value
Exchange value

Function
Purpose achieved desired by customer
Use
Sell
Mathematical function

Function identification
Step 1
What do it do?

Step 2
Select the basic and remaining as secondary

Step 3
Dismantle the product

Step 4
Identify the function of each

Step 5
Repeat 3 and 4 till the product is dismantled to basic
components

Cost
Cost and price
Cost
Direct labour
Direct materials
Overheads

Market decides price

Affordability of customer

Elements of cost
Direct materials

Proportional to volume of products

Raw materials
Tools
Packaging

Direct labor
Cost of hours spent
Directly proportional to volume of product

Elements of cost
Direct Expenses
Expenses for production
No linear relation with volume of production
Design cost
Travelling expenses for connection product
Manufacturing cost of main machinery

Overheads
Production overhead
Indirect materials
Consumable stores, regular tools, cutting oils, etc

Transportation expenses within plant

Depreciation of plant and machinery

Administrative overheads
Cost of administration, planning, finance,
personnel, Training and Development

Overheads
Selling overhead
Indirect materials
Consumable stores, regular tools, cutting oils, etc

Transportation expenses within plant

Depreciation of plant and machinery

Administrative overheads
Cost of administration, planning, finance, personnel, Training
and Development

Selling Overheads
Distribution Overheads

Function cost
Cost associated with the function it serves
Cost of function of the component
Multiple function by the same component
Cost allocated to each product

Value engineering is
System oriented
Multi disciplinary
Life cycle oriented
Function oriented
Proven techniques

Poor value
Lack of time
Lack of information
Lack of idea
Misconception
Temporary circumstances that inadvertently become permanent
Habits
Attitude
Politics
Lack of fees

Value engineering
Systematized approach to seek best
functionality, cost, performance and reliability
Job plan
Most economical combination of function to achieve
the task

Job plan
Identify key areas of unnecessary cost
New and creative way for performing
Proven effective
Analyze more than standard design

Job plan
Organized approach
Long time spent if unorganized

Forces a concise description of purpose

Define the requirements and assess true function

Identifies high cost areas

Think more than normal habit solution
Objective approach
Life cycle costing of the project
High cost saving factors to be identified

Universal approach

5 Phase Job Plan

Information Phase
Creative Phase
Judgement Phase
Development Phase
Recommendation Phase

Information phase
Defining the project

Value Chain
set of activities firm operating in a specific
industry performs in order to deliver a
valuable product or service for the market

Flow
Parts flow through a Value Stream
Upstream is the beginning or head of the flow
Downstream is the mouth of the flow, where the
part is pulled by the customer
Materials and parts are the parts in
manufacturing
Customers needs are the parts in service industry
Same for administration

Pull
It has become a matter of course for customers,
or users, each with a different value system, to
stand in the frontline of the marketplace and, so
to speak, pull the goods they need, in the
amount and at the time they need them.
Taiichi Ohno, Toyota Production System

Nothing is produced by the upstream

provider until the downstream customer signals
a need
Womack and Jones, Lean Thinking

Perfection

The complete elimination of all waste, so that

all activities along a value stream add value to
the product
Ideal State Map

Lean Tools

Value Stream Analysis

6S
Cells
Standard Work
Rapid Improvement Events

Value Stream Analysis

Use Value Stream Analysis as a planning tool
Break down the Value Stream in manageable
sections
Communicate the flow with maps
Information
Material

Use Value Stream Analysis to create 3 maps

Current
Ideal
Future (near time-within a year)

Develop action plan from the Future map

6S

Often confused with Lean, because you are

doing something
Second step, after Value Stream Analysis

6S

A tool to organize the workplace

SortKeep what you need, get rid of the rest

StraightenOrganize whats left
ScrubA clean workplace is more efficient
SafetyWithout our people, nothing gets done
StandardizeFind a best way and have
everyone do it that way
SustainDont let up

Cells Natural groups of parts or steps that add

value to a product
Single piece flow inside the cell
One at a time

If possible, one operator per cell

U-shaped to maximize human efficiency
Multi-skilled people required
Layout is based on the flow steps

Standard
Work
The precise
description of each work activity
specifying cycle time, takt time, the work
sequence of specific tasks, and the minimum
inventory of parts on hand to conduct the
activity
Everyone knows what they are supposed to do
at any moment in time

Rapid
Improvement
Events action, and
A seven
week cycle of preparation,
follow-up to improve one area or fix a
problem
People: work leaders, mechanics, workers,
supervisor, and a Lean Change Agent
Led by the supervisor or work leader
Guided by the Lean Change Agent

JIT
Kanban system
Pull system
Smaller lot that are better capable of providing variety for the
customer
Reduce set up time

lower costs
shorten lead
cycle time
improved quality

Features of lean production

Minimize cost of each part
No rework due to error
Decentralized decision making
Stoppage of work by worker if parts are defective

Pull WIP inventory

Lower WIP inventory
Decreased cost of design change
Less working capital

Lean construction
Clear objectives and delivery process
Maximizing performance for the customer
Designs concurrently products and process
Production control through out life cycle

Lean construction
Falling behind the critical path
Effort on offending activity
Duration and cost

Change the sequence

Trade cost for schedule
Managing combined effect of dependencies and variation
Partenring

Lean construction
Varying crew and varying resource availability
Activities decoupled by capacity or resource
buffer
Measuring and improving planning system
performance for workflow reliability

Lean contraction
Origin on brick laying
Motion and time study
Waste movement

Transformation Value Flow (TVF)

lean construction
flow process combined with conversion activities
reduce or eliminate flow activities
conversion activities made more efficient