Transcript Owner Controlled Team

Innovation in the Design and
Construction Industry
Led by Cleveland Clinic
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Owner Controlled
Team Project Delivery
CMAA Introductory Discussion
April 10, 2015
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Owner Controlled
Team Project Delivery
OCTPD
Authors
Stephen Lau
Ronald J. Lawson
Alan W. McKinney
William R. Zollinger III
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2000 - 2004
InterContinental Hotel
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Broken schedule
18 Mos.
36 Mos.
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Busted budget
$85
Mil
0% opportunity to recoup losses!
100% Over
Schedule
$125
Mil
47% Over
Budget
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Industry Indicted
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Design – Bid – Build delivery model
- Near 100% use
- Broken model
- Replace it
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Industry Indicted
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Failing performance
- Projects over budget 1
- Projects over schedule 1
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72%
70%
Waste, waste, waste ($)
- Material waste 1
- Rework 1
- Labor inefficiency 1
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The Commercial Real Estate Revolution – Copyright 2009
30%
10%
30% - 70%
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Construction
productivity
seriously lags
Construction
other
productivity
industries
declined
by
20%
138%
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Innovation Wasteland
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Investment in R&D (of gross volume)
- Other industries
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2.5%
Construction industry
only .5% (one fifth of others)
Most of construction industry’s R&D
investment relates to materials, not
construction processes
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2004 The Defining Moment
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InterContinental Hotel project a financial
train wreck
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Industry performance
- Highly inefficient
- Dysfunctional
- Results largely unpredictable
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Unacceptable Risk
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Risk potential unacceptable on
pending projects (2005-2010)
$1 billion = $300 million at risk
Fundamental approach going
forward required major
change
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2004 A Defining Moment
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$1 billion dollars lay ahead
The decision – begin looking for an
alternative to the failed industry led
approach
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New Approach
Owner Controlled
Team Project Delivery
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Fundamental concepts
- OWNER controls
- OWNER fully engaged
- OWNER leads decision making process
- OWNER creates a TEAM
- OWNER drives innovation
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Logic of Fundamental Concept
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The OWNER shoulders the risk
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The OWNER ultimately pays
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The OWNER has the power to bring order
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Contrasting Experiences
InterContinental
Hotel
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Broken schedules
Busted budgets
Major litigation
exposure
Industry driven
process
2005 – 2010
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On-time performance
Budgets met
Zero litigation
Owner driven
process
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2010 Major Cleveland Clinic
Innovation Announced
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The initial research, development and
testing of the OCTPD process ended
Cleveland Clinic leadership fully briefed in
2010
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$1 billion dollars in new projects successfully
completed
OCTPD recognized as a viable
replacement for industry led approach
Additional 3 Year OCTPD research,
development and testing process set in
motion
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OCTPD 2013
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3 Year (2010 to 2013) OCTPD
research, development and testing
process completed
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Another 5 large projects successfully
executed
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Improved process and added to our
knowledge of OCTPD
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Conclusion – belief in OCTPD
concepts and logic strengthened
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OCTPD 2004 -2014
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Validated by 10 years of experimentation
- Fundamental concepts
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OWNER controls
OWNER fully engaged
OWNER leads decision making process
OWNER creates a TEAM
OWNER drives innovation
- Fundamental logic of concept
• OWNER has the power to bring order
• OWNER shoulders the risk
• OWNER ultimately pays
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OCTPD Value Proposition
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Quality improvement
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Greater opportunity for diversity
Cost management
Enhance risk management
Reduce delivery time
Enhance transparency and
collaboration
Expand Cleveland Clinic’s brand
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OCTPD Innovations
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Team Environment
Hillcrest Team Purpose Statement
A unified construction process enhancing the community’s best hospital…“Building Excellence”
Team Goals
Fundamental
Requirements
Safety
Innovation
Dynamic
Communication
Customer
Satisfaction
Awards
Teamwork
Patients First
Efficiency of
Processes
Team Building
User/Staff/
Physician
Responsibility;
Ownership of
Process
Community
Schedule
Budget
Quality
Diversity/
Participation
LEED
Change
Management
Owner
Administration
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OCTPD Team Process
• Executive OCTPD Team Meetings
- Invitees - Owner, A/E, CM, DA, Users
- Agenda - team focus only
- Team Purpose Statement
- Team Measurable Goals
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OCTPD Team Process
• OCTPD Core Team Meeting
- Day to day project leadership
- Reports to Executive OCTPD Team
- Establishes and meets with Task Teams
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Keeping ourselves oriented
Attitude
Consistent
Our process for keeping eyes on the compass
OCTPD Team Process
• Focused Task Teams
- Change Management
- Schedule
- OFE Coordination
- Building System Commissioning
- Owner Activation
- Project Close-Out
- Tacklers
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OCTPD Team Process
• Project Meetings
- OAC Meetings
- Trade Coordination Meeting
- Trade Schedule Review
- Facility Coordination
- Exec Small Group (Owner/A/E/CM)
- Trade Principals Meetings
- Administration Reporting
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Remove “Siloization”
Designers
Contractors
Vendors
Owners
… misaligned interests!
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Selection of Team Experts
(Architects/GC/CM)
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Creation of world class design team
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Repeat opportunity (“select group”)
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Benefits of lessons learned
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“Working as a Unit”
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Design-Assist Concept
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Early selection of critical trade
contractors based on
- Qualifications
- Target budget price
- Compensation framework accepted
Intense collaboration and transparency
between “knowers” and “doers”
Team building environment
Owner “opt out” provision for
construction phase
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Design-Assist Results
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Optimum value
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Heightened quality
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Cost reduction
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Risk reduction
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Enhanced schedule management
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Increased operational efficiencies of facilities
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Evolution in Technologies / Processes
X-Ray
CT
MRI
Nuclear Medicine
The Owner Controlled Team Project Delivery
is an innovative evolution of technologies
and processes akin to the innovative
evolutions in health care
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Electronic Construction Records
“ECR”
• Project metrics
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Data-rich to information-rich
- Job data integrated analytics
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Quality information available timely
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Collected, organized, and distributed
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Via dashboards
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Enhanced Information and
Communication
Schedule Driven by
Model
Enhanced
Communication
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OCTPD Evolution
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Process Evolution 2004-2012
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Control group of 10 projects, $1+ billion
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Research / test / evaluate / publish
- Team building
- Business processes
- Management tools
- Electronic construction records
- Contract format
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Industry mentor
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Process Evolution 2013 - Today
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OCTPD Research Project
- Central Question
• Reduce costs / maintain quality / reduce
risk
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OCTPD Research Focus
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OCTPD Research Project targets 7 subjects
- Costs - understand, define, search, identify and reduce cost
- Teams - organizing, behavior and performance
- Metrics - understand, identify, create, enhance and apply
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Quality
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Physical building components
Processes with continuous improvement
Risks - understand, define, identify and reduce
Trust - understand, define, identify, and enhance
Experience - for all stakeholders
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Process Evolution 2013 - Today
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Cost Reduction
- Leveraged buy on multiple projects
• Major MEP equipment
• Trade material / labor purchases
• Design assist multiple project opportunity
• Non-construction
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Medical equipment
FF&A
- Finance Initiatives
• Accelerated pay
• Reduce retainage
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Process Evolution 2013 - Today
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Lean
- Study Action Team (SAT)
• The Toyota Way
• Use of A3s on critical issues
- Elimination of waste / efficiency
- Last Planner / pull schedule
- Big Room
• Mini Summit
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Summit Discussion Topics
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Communication process
Component Team DA process
LEAN
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Cancer Building Mini Summit
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Cancer Building Mini Summit
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Discussion / Q&A
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