In $2012,$ J$.$E$.$ Dunn made the decision to employ lean construction principles company wide

on selected projects. To support the effort from the corporate level, a position of National

Director of Lean was created to provide training and jobsite support to the construction

teams to implement the lean principles. Based on the new corporate lean philosphy and a

need for better results than the previous two phases, it was determined that Phase $3$ would

implement the Lean Construction Operating System.

Preconstruction Services

Preconstruction services are considered part of construction project management, which

includes planning, coordination, and control of a project from inception to completion aimed

at meeting a client$$s requirements in order to produce a functionally and financially viable

project. As illustrated in Figure $2,$ each phase of the project included a preconstruction

period from August through April each year that included the procurement process of buying

materials and services and the expediting of those materials. As indicated in Figure $3,$ these

procurement activities included preparing bid packages, soliciting bids, reviewing the bids,

and awarding trade contracts and material purchases. The expediting activities included field

measuring, submittal and approval of shop drawings, and the fabrication and delivery of

the materials.

Figure $3.$ Phase $3$ Nation East$/$Mitchell Hall Schedule

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Supply Chain Management

Supply chain management $($SCM$)$ is the management of the flow of goods and services. The

strategy for lean supply is to provide materials when needed to reduce variation, eliminate

waste, improve workflow and increase coordination among the trades. The supply chain is

defined as those activities that procure, engineer, fabricate and deliver required materials

and equipment to a project. The project manager$$s responsibility is to create a realistic

construction flow that shows the subcontractor$$s and contractor$$s dependency on the

suppliers. This flow helps all trades involved see their interrelationships with the suppliers

and each other. Supply chains also facilitate the tracking of work performance and resource

utilization, and provide feedback on workforce productivity. This feedback is necessary to

ensure corrective actions are done on a timely basis, which supports an environment of

continuous performance improvement.

Figure $4.$ Phase $3$ Trade Contractor Schedule of Values

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Supplier and Subcontractor Procurement

Today the construction industry$$s trend toward subcontracting has resulted in a fragmentation

of the industry which is now dependent upon trade contractor specialization. This

fragmentation also results in each trade contractor acting in its own best interest and the

relationships between the various parties often become adversarial. The bid packages

illustrated in Figure $4$ were re$-$bid for Phase $3.$

Historically, suppliers and subcontractors have been selected by the general contractor based

on the lowest bid price. Using the lowest bid price only works if you assume all suppliers

and sub$/$trade contractors are created equal. But there are many other factors that influence

the total delivered project costs and these should also be considered when selecting lean

suppliers and sub$/$trade contractors.

The lean supply chain seeks best value instead of just the lowest price. Whereas traditional

procurement focuses on the individual transactions, lean supply chain focuses on a

systems approach that promotes what is best for the project as a whole. Thus planning and

coordinating from a systems viewpoint is critical to making the lean approach viable. Using

lean partners is also essential to implementing a lean supply chain. As the construction

manager for the project you need to learn which suppliers and subcontractors either already

use lean principles or are willing to embrace them.

Questions

$1.$ This project included over fifteen bid packages. Given the conditions of this project as

described above, what other factors besides $$lowest price$$ should your team consider

when selecting lean partners?

$2.$ If you developed a survey to measure the performance of each supplier and sub$/$trade

contractor for future use what would it look like?

$3.$ To help ensure support of the lean construction implementation by all parties on this

project can you identify additional contractual terms you would like to include in the

supplier and subcontractor agreements?