I take it you were a construction project manager type of person first; I assume? I guess what drove the need to use Lean in construction and your planning discipline because you were pretty early. In 2001, there wasn’t a whole lot of people doing Lean Construction yet. I asked this question of Dave MacNeel of On Point Lean Consulting: Lean Construction and the results of his frist project was well disheartening, to say the least. An excerpt from next weeks podcast.
David MacNeel: Right, yes and it wasn’t called Lean, and I didn’t even discover Lean Construction until around 2005 and 2006. So yes, I was in operations running a division. The CEO, the President of the company Dan Baker, put some pressure on to say, “hey we hear about this thing called Lean Construction from some of the circles and we need to figure out what it is and how it applies and if we need to be doing this.” I was drafted, conscripted if you will into being the person to go in and figure out what this Lean Construction is.
I started where most people do, with a search on the internet and looked for some books, but I didn’t find anything out there. There were some research papers that talked about Lean Construction, but they didn’t make a whole lot of sense to me. I fumbled through it for about… Oh, I don’t know, maybe 16 or 18 months and I kept getting requests saying, what is this and do we need to be doing this. I still had my day job, and I wasn’t finding a lot out there, but what I did find about Lean was there were some general contractors, a handful, just a handful that were doing it. There were no subcontractors doing it at the time. I looked at that and said, well it looks like just a management tool and it sounded like a way to really get general contractors to keep their thumbs on the subcontractors, is what I thought it was.
The pressure kept coming; we needed to figure out what this is, and I finally went to a Lean Construction Institute seminar, a two-day seminar by Greg Howell and Glen Ballard in Cincinnati and the light really came on at that point. I thought, oh, there really might be something to this. The pressure kept coming to try it and do it, and so finally we decided to pilot it on a project that was starting right at the beginning of 2007. It was one that was in our backyard. It was close to our corporate office. I was heavily involved in the project. I could be there on a very regular basis to usher the program. We brought in some consultants who kind of taught us the Lean processes, and I saw it making a difference immediately. It got our crews planning, collaborating and thinking about their work in a much different way.
The surprise there is that that was one of the first projects that I’d ever lost money. I was a very successful project manager, operations manager and this project not only lost a million in profit that we were supposed to make; it also went out of pocket a million dollars. Everybody threw their hands up and said, oh this Lean stuff doesn’t work. Yeah, good job Dave and… But I was really tore up because I knew that our teams were scheduling, and thinking, and planning, and helping each other out much better than they had in the past. So I went back and did a study, and I pulled a lot of similar projects that Baker had done around the country. I found out in the past and the prior six years, the first one we piloted Lean on actually wound up being the second highest productivity project we had had. Well, okay, it wasn’t because of the productivity; it was because of the sales price. We sold a $15 million job for $13 million is what happened. As a result of that, we said, okay there is something to this. Even thought the job was a loser, we still want to keep doing it, so we decided to roll it out on all the projects I was running in the Midwest. It was five major projects in our second year, that was 2008, and we began to definitely see the improvements in productivity, and safety, and schedule, and quality. Everything was getting better across the board. That’s kind of how we got started.