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Lean Principles for EPC Help Eliminate Waste - Black & Veatch

Lean Principles for EPC Help Eliminate Waste - Black & Veatch

   Subject Matter Experts:
Troy Ochoa: OchoaT@bv.com
   Ernie Wright: WrightE@bv.com
   Brian Schmidt: SchmidtBE@bv.com

Lean Principles for EPC Help Eliminate Waste

Lean construction and engineering principles are designed to identify and eliminate waste, and its continued growth is producing multiple benefits to all stakeholders. 

“Lean principles empower all stakeholders, from craft workers to management, with the ability to improve their work environment, thereby making their daily work practices better,” said Troy Ochoa, Project Manager and Lean Construction expert for Black & Veatch.  

Black & Veatch experts say that those that have fully endorsed lean principles for EPC (engineering, procurement, construction) and design-build projects will have the strongest outcomes. Many of the ideas for improvements at the construction site emanate from the skilled craft workers, which prompts a bevy of benefits. 

“It is a huge morale booster at the site,” Ochoa said. “When you recognize skilled craft experts for their great ideas in front of their peers, they know they’re being listened to, and that empowers them further.” 

Ochoa said there are four key components to implementing lean construction principles: 

  1. Identifying and eliminating of waste – Waste takes its form in many ways, including wasted motion, time, transportation, processes and more. 

  2. Creating a balanced workflow – This involves evening out all the ebbs and flows of building workflow to keep everybody consistently working all of the time.

  3. Creating a pull system versus a push system – This means the next person in line is able to pull the work when they’re ready for it versus being overloaded with work and having it pushed onto them.

  4. Adding value to each step – Management and craft workers challenge every task undertaken to ensure that it is adding value to the client or to the bottom line. 

Ernie Wright, Black & Veatch Senior Vice President, Energy, has been involved with implementing lean principles on EPC projects for the past 15 years and has witnessed its impact first-hand. 

“I firmly believe that the potential is there to drive 30 percent of costs out of a project through embracing these processes,” Wright said. “I am 100 percent convinced that it’s a huge differentiator, but very few companies really embrace it.”

Eight Different Types of Waste

There are eight different types of waste that are specifically identified in lean principles, and they are used to spell out the acronym DOWNTIME. 

D – Defects
O – Overproduction
W – Waiting
N – Non-utilized talent
T – Transportation
I – Inventory or storage
M – Motion
E – Extra processing

This terminology makes it easy to remember the different types of waste, then to seek out ways to eliminate it, Ochoa said. 

Lean Engineering Principles 

Brian Schmidt, Black & Veatch Energy Chief Engineer, said that lean engineering looks specifically at eliminating waste in activities within work processes that have no value, with a goal of continuous improvement.  A list of potential wastes in engineering include excessive drawing revisions, excessive specification requirements, waiting for supplier information to complete design, conservative bill of quantities, mistakes in calculations, interferences and more. These factors most often will create waste in procurement and construction.
“Every single day, we can improve,” Schmidt said. “If we don’t make improvements, we won’t stay competitive. Change is just part of the deal.”

Gila BendSchmidt said it is important to make a concerted effort to solicit feedback from engineers and technicians to evaluate the effectiveness of specific work processes. This helps gain buy-in from the professionals for any changes as well as securing vital information from those most impacted by the decisions. 

“We have a variety of tools – including scorecards, three-week forward-looking activities developed using the “Last Planner” approach, and our DOWNTIME improvement suggestions – that we use in order to identify wastes. Then we develop continuous improvements in our processes,” Schmidt said. “Our goal is not only to improve the engineering for a given project, but to share those best practices with all of our global engineering professionals and reap the benefits across all projects worldwide.” 

An example of lean engineering included a team that reduced the overwhelming 7,000-activity project schedule to approximately 600 critical engineering and procurement activities. This approach resulted in the development of better daily, weekly and monthly work plans. This process kept the team aligned, allowing for better monitoring of the monthly progress of the engineering work. 

“That change was a huge value for the project team, creating better team work and keeping them focused on completing critical work activities,” Schmidt said.

Observing Movements

Ochoa said the lean construction improvements often originate by simply observing movements of materials and craft workers – sometimes even videotaping the work – then gathering workers around to watch the video and ask for their inputs. He solicits ways that they could save steps, improve safety or change how materials are handled. 

“When you circle up with the craft, talk about what everyone collectively saw, and go over the DOWNTIME that lists the forms of waste, there is a real benefit,” Ochoa said. “We’ll ask craft experts which forms of waste they saw and then engage their ideas on how we can minimize, if not eliminate, those wastes.”

From experience, Ochoa has learned the first step in the process is earning the trust of the craft workers. 

“Most the time it‘s about listening,” he said. “It’s about the fact that we are working together to educate each other. We’re there to help each other, and when we walk away, it’s going to be everyone’s success. It’s about empowering everyone involved to improve the process.”

Using the Opportunity for Improvement

Black & Veatch experts say that another improvement method calls for the use of a simple form for craft workers to make suggestions. Formally called the Opportunity for Improvement (OFI), workers and supervisors are encouraged to fill them out at the job site.

“We’ve had teams save anywhere from $30,000 to $50,000 with a single idea that doubled our production and was much safer for them in the process,” Ochoa said.  “We’ve documented where team members say, ‘I’ve never been with a company that actually cares what employees think.’ And we’ve seen the morale go through the roof when we recognize people for making their work environment safer or improving productivity.”

Wright said it boils down to believing in the quality of the skilled craft workers, and always searching for improvements. 

“The craft are out there every day – they want to do a good job,” Wright said. “They want to go home feeling good about what they accomplished during the day. In order for them to do that, it’s our obligation to eliminate any roadblocks. Who knows better about what’s creating problems for them than they do?”

Wright said each improvement, no matter how big or small, can add value to the project. 
“When you have them engaged in the practice of identifying waste so that it can be eliminated, that’s where the home runs and the grand slams come in,” he said. “But even the little things, when you add them up, they become a huge benefit that you bring to a project.”  

Editor’s Note: This is the second of a six-part series on EPC/design-build that can be found in the Solutions Online library on bv.com. 

-- Story by Gordon Heft, Black & Veatch 

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