According to the US Bureau of Labor Statistics1, there are 6.5 million people working in the US construction industry in 2016. The average construction worker is statistically more likely to work in a small or medium business than a large multi-billion company. Despite this statistic, many of the research and implementation case studies in Lean Construction have been on large multi-million or multi-billion projects. The goal of this blog post to present a case study of an application of the Last Planner System2 within a small 20-person company. Some of the following misconceptions are also addressed: 1) The Last Planner only works with large companies or on large projects, and 2) the Last Planner does not apply for short duration projects.
The D Air Conditioning Company is a full-service HVAC contractor and supplier based in Orange County, California. The company’s residential installation business will be the primary focus of this blog. Unlike most residential HVAC companies, the company has several retail stores where customers and contractors can come visit. These retail stores also serve as warehouses for materials and equipment to support the Last Planner System.
The company does approximately 500 installation projects each year. A typical project would be either: (a) changing out or installing a new central air system, (b) adding 1 to 5 ductless mini split to a residential home, or (c) doing a service call. No matter how big or small the project, the company’s production processes are designed to complete 99% of their projects within 1 day. Equipment, labor, and supplies are organized around the completion of individual projects.
A modified Last Planner is used to manage the flow of information, materials, and crew for this process. Unlike other applications of the Last Planner, the projects are fairly simple but the number of projects that go through the production system is very high and the speed of each project is very quick. This context creates its own set of challenges that the LPS solves.
Weekly Work Plan
When the customer is ready to proceed with their project, the store manager puts them on the production calendar. The production calendar is the “schedule” of all the projects and an entry includes the following details: 1) customer name, 2) address, 3) customer phone number, and 4) work to be performed.
Figure 1. Production Schedule
The entries are color-coded:
Green - projects that already have materials and equipment ready in the store.
Purple - service projects where no equipment is needed.
Orange - projects where the company must coordinate with their suppliers to have the equipment delivered to the jobsite.
Red - projects where there are opportunities for learning and improvement (i.e., there was a breakdown that must be analyze and corrected for the future).
The color code ensures that equipment and materials are ready before the installation date. Additionally, breakdowns in the production system are documented so that they can learned from and corrected.
One of the most important practice to have a reliable workflow is the make ready process. Every project needs the “right” equipment, material, crew, and instructions. In addition to coordinating with suppliers to make sure that the equipment and the materials are ready for installation, the company also performs a make ready process within the store. Common materials are kept within the store and replenished via a pull system.
Figure 2. Kanban System for Materials
At the end of the day, the office staff prepares the materials and equipment required for the next day’s work and places it in a staging area. Included in the staging area is an envelope with the customer’s invoice and instructions for the project. In the morning, the field crew will take the materials from the staging area onto their truck for the job site.
One of the practices that the company does that is uncharacteristic within the construction industry is provide free breakfast and lunch for the field crew. The field crew arrives at the store at 8am and puts the equipment and materials into their truck. Between 9am and 10am, the team has breakfast at a local restaurant. During this time, the team talks about the work that they had done in the previous day and discuss areas for improvement. Problems and breakdowns are raised as well as potential solutions. After breakfast, the crew heads to the customer’s house and perform their work. Since the company values learning and improvement, the team’s breakfast is a small investment in making this happen in a natural and social setting.
It is no surprise that applying Lean in any organization requires a lot of work. In addition to training and standardizing processes, the company also had to change the culture (a topic for a future post). Due to the increased productivity and elimination of waste, the company’s net profit margins increased by an additional 10%, customer satisfaction increased, and employee satisfaction also increased.