POWER August 2010 - 67

PLANT CONSTRUCTION
improving the flow of work on a single capital
construction effort through the implementation
of lean thinking concepts in the field.
The project level does not necessarily concern
itself with ensuring that the individual businesses
that provide construction services are
operating efficiently, but rather focuses on
determining how all of the construct/install
steps for each trade can be done efficiently, as
shown in the relationship map in Figure 4.
The lean techniques in the blue-shaded
zone in the diagram involve several facets.
Among them are early contractor involvement
in design, multi-tiered and integrated
planning, and tracking of field commitments
between and among all parties. Though it is
beyond the scope of this article, field productivity
at the plant site is a major emphasis of
LPS and LPS-like systems. In practice and
theory, the mechanical trade installs its pipe
spools in a manner that will not conflict with
the electrical or structure trades and will
make tradeoffs to ensure seamless integration
of the build process on the plant site.
In theory, project managers or superintendents
for the mechanical contractor at the
project level, in harmony with the overall
plant construction project team, make daily
decisions that result in improved overall performance
for the project. This is significantly
different from the concepts discussed from
the firm's perspective. The project-oriented
lean solution may conflict with a trade contractor's
desire to reduce working capital
required for the whole firm that is balancing
supply and demand of piping spools for multiple
projects and customers.
Consider how the copper pipe production
system works at the project level. Any delay
in receiving prefabricated spools at the plant
site could cause negative consequences and
personal commitments to go unmet, perhaps
4. Improved management in the
field. This diagram depicts lean thinking focused
on the project activities that occur in
the field. Some lean techniques that are applied
in the blue-shaded zone include early
contractor involvement in design, multi-tiered
and integrated planning, and tracking of field
commitments between and among all parties.
Source: FMI Corp.
affecting plant start-up. Foreseeing a problem,
a wise superintendent might order extra spools
from the fabrication shop each week-more
than could possibly be installed given the constraints
they face. This action causes the bullwhip
effect, where the demand requirements
are amplified as you move upstream in the process
where there is less certainty concerning
the information related to project demands.
In extreme scenarios, the fabrication shop
could easily become cluttered with supply of
prefabricated spools as an insurance policy.
The problem is that this inventory of inprocess
material represents tied up working
capital, and much of this takes place out of
sight of the plant construction effort.
Toyota discovered that having only an efficient
assembly line was an isolated way of
thinking, because this forced waste or inventory
further upstream to suppliers, which drove
up total costs. In the case of power plant construction,
some of the waste from using popular
field-based lean techniques is shifted to the
trade contractor's fabrication shops and even
further upstream to the design and procurement
offices. The lowest cost of construction
will not fully materialize in this case.
For these reasons, a combination of the
lean firm perspective and lean project approach
is needed to create a holistic lean
solution that will transform the industry of
constructing power plants.
Lean Implementation at the
Program Level
At the program level, the plant has a predefined
amount of capital work to accomplish
in a given time frame, which could
be one year or five years. The sophisticated
plant manager has taken the time to organize
the work into buckets whereby some of the
work is bid and other work is negotiated.
5. Open lines of communication
and collaboration. Lean thinking should
be applied within an owner's construction program
and should cross organizational boundaries
through all design and build phases. The
goal of lean thinking is to eliminate waste and
improve operational consistency from project
to project, as shown in the blue-shaded zone.
Source: FMI Corp.
In some cases, the negotiated work scope is
made visible early to service providers to allow
for integrated resource planning. Most importantly,
the program level of lean thinking allows
for inter-company process improvement,
because the relationships are long-term ones,
unlike the temporary nature of a single project.
Furthermore, the level of innovation at the
program level can be groundbreaking and
yield significant enhancements in many areas
such as resource planning and technology rollout.
In this scenario, a dedicated team from the
AE, a dedicated team from the GC, the trades,
and the capital construction division of the
power company can act as a single entity.
The program is focused on improvement
through a holistic perspective of cash conversion
processes across company boundaries
by combining the firm and the project elements.
Lean thinking is applied to eliminate
waste and improve operational consistency
from project to project in many areas of the
blue-shaded zone in Figure 5. Project managers
for the contractor make decisions that
result in improved overall performance for
the business and related projects.
Looking at the whole North American
construction industry, the program level of
lean thinking is less common, although there
are some examples among underground utilities
companies and their service providers.
These examples provide the foundation necessary
to form a holistic lean construction
supply chain.
Beginning the Lean Journey
Some organizations have begun their lean
journey at the firm level by transforming their
operations and later adding field productivity
and other lean aspects as they participate
alongside other firms on a plantwide project.
Another approach is for a firm to become
involved with a project, such as a retrofit or
quick turnaround effort, in which one of the
trades or the GC has adopted LPS or other
integrated planning systems. Later, that firm
can work backward to transform its organization
internally (upstream) into a lean culture.
Experts agree that there is no single right
approach. Deciding where to start-the firm,
the project, and/or the program level-should
be the first step. Wherever you start, examples
from other corners of the construction
industry show that a lean transformation can
take two to three years. Lean construction
requires hands-on executive involvement, a
commitment to action, and perseverance to
Notes: D = design activities, P = procurement activities,
F = fabrication activities, I = installation activities, GC
= general contractor, O = owner or plant manager, AE=
architect/engineer.
August 2010 | POWER
Notes: D = design activities, P = procurement activities,
F = fabrication activities, I = installation activities, GC
= general contractor, O = owner or plant manager, AE=
architect/engineer.
www.powermag.com
cause the changes to stick. ■
-Jeff Lukowski, PE, CSCP (jeff.lukowski
@fminet.com) is a senior consultant with
FMI Corp., a management consulting firm
and investment bank to the worldwide
engineering and construction industry.
67
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POWER August 2010

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