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What Lean Procurement Barrier?

I really enjoyed writing the last couple of blog articles as the Murray Brain is full of new ideas from attending the Lean Construction Institute - Canada conference, hosting workshops from coast to coast and having to solve some real problems on a couple of projects I am involved with. The following important story needs to be told as a stand alone story, so I unplugged it from a previous post "Embrace Failure as a Driver for Change."

In the Moneyball story we learn the importance of hand picking the best team, especially if we are a low budget salary cap team. Without a different SYSTEM, there is no way that the Oakland A's can compete on the procurement of top players as they have one of the smallest player salary budgets in the league. They overcame this barrier by implementing a different kind of team procurement process. Maybe we can learn from them.

One problem worth solving is the perceived Lean Team procurement issue.

On a recent project we needed to deal with a Lean Procurement Barrier issue, or risk losing a huge value creation opportunity by delaying the implementation Lean implementation until the start of construction. As you will see in the email thread with the the Lean Construction Company, we are dealing with this process Procurement Issue. The project we are working on is a high performance green wood construction demonstration project. It is currently at the 50% design stage and the team is on board for considering adopting Lean Project Delivery, but are hesitant as they are unsure how to approach the client to get the the sub trades on board to help with the design.

To put this into context, we are often our own worst enemy assuming that there are real barriers to meeting procurement policy requirements. Request for Proposals that include a design assist fee and open book pricing is a TENDERING approach that will meet the requirements of most procurement policies.

Kick-Start the Lean Team Procurement Conversation

Email 1: Bob, Kathleen asked me to develop and share the attached template so that you can issue a Request for Proposal to procure a team for the Perceived Procurement Barrier Project using a Lean Construction Management approach.

Email 2 Response: Murray, Actually with that said, would either of you mind offering some insight on that? I'm wondering how much value there is in pushing/chasing the initiative at 50% design (Mostly Revit) and how hard we should push to make it happen with Client rules and regs.

Validate the Value of Getting Contractors to the Table

Email 3: Bob, I would think that any Owner would be interested in finding out how to avoid the risks of going over budget, having to carry a 10% contingency and miss the opportunity to get an early start on the project, not to mention the opportunity to save 19% of the cost using Target Value Delivery. Instead of asking and perceiving that there is an issue with using Lean Project Delivery, I recommend proceeding as if this is just the best way to deliver successful projects. Thanks, Murray

Email 4: We’ll broach this with the owner and see if there is an opportunity to get some design input on this project.Thoughts?

Set the Stage for Next Steps

Email 5: Bob the next steps need to be:

1. Select the Team using the RFP scoring system and interview all worthy proponents for the major sub-trades (Collaboration, Trust, Commitment, Profit Margin, Design Assist Fee)

2. Kick-off meeting to prepare for a Design Phase pull planning session. Identify constraints, issues and establish the start of a plan on how the team will work together. We will also need to verify that the Owners Project Requirments are clearly defined.

3. Pull Plan Design the design work needed to get the information needed validate the Owner’s Project Requirments to the budget and determine what is needed to get an early construction start.

4. Establish the project estimate with input from all of the trade partners, separate out the contingencies all risks (Risk Register), identify all the constraints (Constraint Log) and issues (Issue Log)

What Lean Team Procurement Issue?

As you can see by this real correspondence, is that there are no real procurement issues using an RFP process with a scoring system based on value, commitment and open book pricing. The take away from this story is that procuring a lean construction team early in the design process is best practice and like in Moneyball story "We need to believe in the Lean Thing Process" if we are going to win at the construction game.

So why would we do it the old broken way? Just do it!

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