McGraw Hill Construction, the Lean Construction Institute, and Dassault Systèmes teamed up to produce an in-depth report on Lean Construction. Below is a case study from that report on Value Stream Mapping, implemented on the Cardiovascular Research Building project at the University of California in San Francisco.
Achieving Savings Through Value Stream Mapping
Rosendin Electric was challenged by the project owner to look at ways to bring their projects even more under budget.
As a firm that prides itself on innovation and one that strives to remain on the cutting edge of technology, Rosendin tasked one of its in-house study groups to come up with ideas that would be able to save time and cost.
As a result, one of the approaches they decided to pursue was Value Stream Mapping (VSM).
Process Improvements Identified Through Value Stream Mapping
VSM, in its simplest term, sets out to observe every step of a process and identifies areas where improvements can be made to eliminate waste. The technique was first originated by Toyota and is a lean tool that employs a flow diagram documenting in high detail every step of a process.
The process they chose to study was the installation of pendant-hung fluorescent lights at the Cardiovascular Research Building at the University of California in San Francisco (UCSF).
As a first step, they needed communication to come from upper management to let the workers know that the VSM study was looking for improvements in the process and that it was not a judgment on anyone’s work. The communication also let the workers know that they were open to their ideas and feedback on how the process could be improved.
Joseph Leoncavallo, assistant project manager and one of the leaders of the VSM study, says, “We communicated to them that we didn’t want them to install the lights any faster than they normally would just because we were there watching them with a stopwatch and a piece of paper and writing down everything that they did. So it’s really important to have that honest conversation with the guys working in the field, first.”
The management team, as a result, got very positive feedback from the field. They were excited to be part of a process and to see what could be done going forward.
Bob Weisman, senior estimator at Rosendin states, “The field team want to be successful and to do things the best way for themselves and the company. And we’re giving them buy-in. We’re not telling them they have to do this; we’re saying: ‘what do you think?’ And that’s a big, big deal when you ask people what they think.”
Each Step Taken Into Account to Identify Waste
The VSM started with setting up an observation record where a list of every activity was recorded along with notes. The group started documenting every step of the process, including activities that workers might not ordinarily consider when they are estimating time spent, including answering a question from someone, bathroom breaks and grabbing a wire nut.
The whole process from start to finish was recorded. The group repeated the process four or five times to get a good understanding of the installation process.
As a next step, the current state map was created, which involved taking the observation record and putting it down as a process map. The map essentially provided a high-level overview of every step of the process. After all the steps were mapped out, the group went back and looked at the amount of time each step took. Two levels of time were recorded: non-value-added time and value-added time.
Value-added time is considered time that is spent directly contributing to the installation of the light fixture, such as physically hanging the fixture. Non-value-added time, on the other hand, is considered something that could be done in the factory such as installing an end cap, or it could be opening a box, a necessary activity, but one that does not directly contribute to the light fixture being hung.
The team then analyzed each step in the process and identified areas where processes could be improved and waste eliminated. These areas of improvements were displayed on the map in highlighted yellow, a Lean technique known as Kaizen bursts.
The areas of improvement that were identified included nine steps in the process that could be eliminated as a result of getting the fixture prefabricated by the manufacturer.
Prefabricating Provides Key Opportunity for Savings
Next, the team incorporated the Kaizen bursts into a future state map that displayed the improved process for installing the pendant-hung fluorescent lights.
According to Leoncavallo, “We were looking at about 22 minutes of time that could be eliminated from each fixture installation, most of it due to eliminating the on-site [work on just one component of] a single fixture. Some of that time was non-value added, and some of it was value added.”
Rosendin communicated to the manufacturer their need to prefabricate the desired fixture and were not met with resistance. The manufacturer had the capability to undertake this for them and wanted to maintain Rosendin’s business, so in the end, they included the additional steps in their agreed-upon scope of work with no additional charge.
While the advantage of being a big player was certainly a factor in the manufacturer’s cooperation in this process, this is potentially an approach that any firm could benefit from. Leoncavallo says, “I think [the decision of the manufacturer to cooperate is made on] a case-by-case basis, but I think the biggest lesson there is, if you don’t ask for something, you’ll never know.”
VSM Study Results in Project Budget Reduction
The time saved on this project as a result of prefabricating the light fixture resulted in the opportunity to reduce the project budget as the team had set out to do.
Weisman says, “I was convinced that we could at least save 15 minutes per fixture on 2,000 fixtures. So 15 minutes times 2,000 comes to 500 man hours, and our labor rate is close to $100 an hour. So I was able to lower my budget by $50,000.”
Tweet: Through Value Stream Mapping, one team
was able to lower their project’s budget by $50k
According to Weisman, the $50,000 savings against an overall project budget of $100 million was still considered significant by the owners. Especially when taking into account that overall only approximately $2,000 was spent on the VSM study, the time spent by the person conducting the study.
Value of the Process
Leoncavallo finds the value of this process exceeds the cost savings. “It gives you an opportunity to go out there, observe, really see what’s going on and eliminate waste, which is going to improve your flow and productivity.
“It deepens the knowledge of the installation process …. And the other thing is, it really improves communication between the field and management because you’re collaborating together on this solution.”
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