LCI 7th Congress Keynote Address, Dave Pixley, Sutter Health
September 21st, 2005 by Hal[Notes from LCI's 7th Annual Lean Construction Congress]
utter Health's Dave Pixley kicked off LCI's 7th Congress at the site of their future billion dollar hospital, just part of their $8 billion construction program in the next 7 years. Sutter Health has adopted lean construction as their approach to drive the waste out of their program. In doing so, they are establishing a new agenda for commercial contracting in northern California.
Sutter has embraced the five big ideas as the context for how they are implementing lean construction. All project managers have been challenged to do their projects using the Last Planner System™. Sutter is counting on the contractor and designer community to provide leadership to advance their lean agenda. Dave thinks that lean leadership must emerge broadly in the AEC community.
We must get out of the linear model of design and construction and embrace a collaborative model.
Dave shared their initiatives to make the five big ideas a reality.
- Collaborate, Really Collaborate
- Manage as a Network of Commitments
- Increase the Relatedness of the Project Participants
- Tightly Couple Learning with Action
- Optimize the Project at the Whole
Cost savings-based incentives has historically encouraged the wrong behaviors.
Dave Pixley shared Sutter is now using an integrated form of agreement to support working in lean ways. The owner, architect, and general contractor are all signing the same agreement. This is a significant departure from the AIA standard contracts that are signed between just two parties. Sutter has adopted a mechanism to formalize what everyone already knows: architects and contractors depend on each other.
Sutter has already documented $10 million of real savings on their early projects. "Lean is real and extremely exciting." Dave finished with a quote from coach John Wooden,
"It's what you learn after you know it all that counts."
What Did You Hear?
- Importance of metrics
- Client admits they are still learning
- Client seeing significant results
- The importance of the network of commitments
- Client changing their process through their contract
- Owner really knows what is going on
- They dig the five big ideas
- Sutter's challenge to the AEC industry to rethink how they deliver projects
- Reality-based architectural fees will be key
- CPM for milestones only, please!
- Time is right for change, cost is out of control
- There is a need for information sharing within the industry
- This is not an instant fix, it's a process.
Questions Provoked
- Like to know more of what Sutter is measuring on a project and across projects?
- What are the metrics for project planning?
- How can we strengthen the network of commitments as the foundation?
- Vendors are trained say yes to the clients. What is happening when they say no?
- How are they having fun doing projects?
- What lean concepts have been incorporated in the whole preconstruction?
- How is LPS used to eliminate waste in meetings?
- Embellish on getting early buy-in from
- Is Sutter planning to use building information models?
- Has anyone compared traditional costs to the LPS method?
- Like to see how the theory translate into results?
- How did Sutter decide on lean?
- What is the impact of using the lean principles to the end users of their facilities.
Dave's Follow-on Comments
My challenge is bringing 1000s of others along with me.
The scope of the presentation didn't intend to go into the detail the above questions imply. He intended to share his epiphany that intuitively lean is it. "I understand the potential of lean. Estimating as you go throughout the process rather than at the end of chunks. Making clear requests and negotiating promises struck me like a ton of bricks. I'm looking for ways for increasing my margin of error. Lean construction is the way.
It is amazing to see Herrero, Turner, DPR, and others acting quickly and causing major resources to shift resulting in gains on our projects.
We've got to measure many little things along the way. That will allow us to make course corrections. When I extrapolate the usual little variances across an $8 billion program I can see big problems.
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