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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
U. S. EXPERIENCE WITH INNOVATIVE PRACTICE
Richard N. Wright
National Institute of Standards and Technology Opening Remarks
Today, as we are speaking about policies that will support innovation, I wanted to bring to your attention the views of the National Science and Technology Council, chaired by the President. Its Committee on Civilian Industrial Technology has as its purpose to focus and coordinate federal research and development (R&D) in cooperation with industry to support national competitiveness. The committee helps to set the national priorities for development and deployment of technology to enhance U.S. industrial competitiveness. The committee coordinates federal R&D activities to minimize duplication, encourages coordination with universities and private industry, and monitors foreign technology advances. As part of their role to advise on central programs, the committee identifies technology needs of industries particularly important to the U.S. economy, and certainly the construction industries and the owners that they serve fit this bill. They are also charged with involving the private sector in setting federal R&D priorities.
The following panel members bring into focus several aspects of experience with innovation in the United States.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
ABOUT THE SPEAKER
J. Peter Ellefson is Construction Manager-Engineering for the DuPont Company. He started his career with the DuPont Company in 1973 as an engineer in the Engineering-Construction organization at the Edge Moor Plant in Wilmington, Delaware. In 1977, he was transferred to Rochester, New York, as a project engineer in the Photoproducts Division. In 1979, Mr. Ellefson transferred to Parkersburg, West Virginia, as an engineer in the Engineering-Construction Group. In 1984, he relocated to Maitland, Ontario, as a member of a team charged with leading the construction of a major expansion project. In 1987, Mr. Ellefson returned to Wilmington, Delaware, and has held several engineering related and business support assignments. Mr. Ellefson received his B.S. in civil engineering from Bucknell University in 1973.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
U.S. EXPERIENCE WITH INNOVATIVE PRACTICE
J. Peter Ellefson
E.I. DuPont DeNemours and Company, Inc.
I intend to share with you an owner's perspective on construction innovation. First I will provide some background about DuPont.
DuPont is a research and technology-based global chemical and energy company. DuPont acquired Conoco in the early 1980s. Conoco is the energy portion. DuPont provides society with high-performance products based on chemicals, fibers, polymers and petroleum, and we serve a series of markets.
DuPont has a corporate vision of a great global company through people serving four constituencies: society; stockholders; customers; and last but not least, our employee base. We also have specific corporate drivers: reality, speed, step change, specificity—meaning being specific with what we are going after—and also accountability for actions. Linked with that we also have specific corporate values—safety, environment, ethics and respect for people. That gives a general flavor of corporate DuPont, from vision through what is important in terms of value and corporate drivers.
Like many large corporations, DuPont is in a transforming mode. We have been a very hierarchical organization for many, many years. We are shifting to a matrix leverage organization. We have many layers of management. It is much flatter today through downsizing. We have transitioned from being very cautious and conservative to being entrepreneurial in nature. We are transitioning from a “not invented here,” mode, and that's a cultural thing with DuPont within our strategic business units, to being in a “stealing with pride” mode. We're moving philosophically from continuous improvement to the next level, which is to step change.
DuPont has been a very paternalistic organization. Today personal contribution is assessed opposite value-adding criteria. It is really a stay for performance environment within the corporation. We have moved from a diversified, unrelated technology portfolio to core businesses based on core technologies.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
For the last 15 years, we have been in a restructuring mode. Over the same period, sales have increased from $28 billion to $39 billion. We have had a major shift in our employee population, down from 160,000 in 1983 to 107,000 in 1994, along with an increase in sales. This theme of doing more with less is prevalent throughout the corporation.
Just like the corporation at large, our engineering group is also undergoing transformation. Our engineering vision is people creating a competitive advantage for DuPont through engineering. Figure 1 shows significant shifts we have made. In 1973, when I was hired, I was proud that the organization that I was part
FIGURE 1 Transforming Dupont
of could go anywhere, anytime, and do anything in the world with internal resources. We were a full service, in-house organization. Now we focus on value-added contribution and we're highly leveraged with contractors. We were authorization focused. We did not manage projects from a cash flow focus. Now we are a capital expenditure, cash-flow focused organization.
The engineering group was very independent in the early 1980s. We have since become interdependent with all of the other business functions within the corporation. We've moved from functional roles to the concept of supply chain. The concept is that my activity as a successor activity affects something down the line; it's a value-added chain. We have gone from being engineers only to engineers who are business knowledgeable. We have also moved from a contractor mentality to an owner mentality. Rather than being always in the “doing mode,” we are into setting expectations, setting goals, and causing our contractors to implement the project.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
The engineering function has transformed its population base as well. In 1990, we had about 3,500 direct employees and 4,000 contract employees. Today, we have 1,100 direct employees and 2,100 contract employees. The effect on the DuPont construction organization within engineering is very dramatic. In 1972, we had over 800 people. Today, two of my peers and I manage a core of 120 people. Our people are at 40 active sites on six continents, and the theme is doing much, much more with much less.
I'd like to briefly address the engineering future state. We see ourselves as a technology-based organization, and we're focused on driving improvement in capital productivity. Capital productivity, in business terms, is sales and transfers divided by permanent investment. As an engineer, I need to be focused on capital productivity. We have certain metrics that we chart throughout the corporation. We focus on our new facilities and our existing asset base. We see ourselves as the global stewards of related best practices. We're focused on core competencies and renewal. We focus on creating a multicultural workplace occupied by an energized workforce—a really tough task when you're restructuring.
With all of that, we also see our role as seeking significant leveraged opportunities only, meaning we won't bring work back in-house. We 'll always seek to leverage with contractors. We try to maintain our competence globally. A very significant role is best practices identification and dissemination. If you think about the restructuring, and about functional excellence, we really have to focus on best practices. The other thing we focus on ardently are strategies for competitive advantage.
In the role of construction manager, my role is to ensure the functional excellence of the DuPont construction offering. To that end, I am constantly looking at identifying the right person, at the right time, in the right place, with the right skills. My whole role in life is functional excellence. I've got to make sure that our core people are equipped to deliver sound projects to the corporation. To that end, we have developed a strategy around a theme, “Constructing the Future.” My strategy is to focus on functional excellence via leading edge or breakthrough construction technology.
There is a tactic that I like to employ to create a process for construction technology functional transfer. I've set certain boundaries for myself. I'm not in the invent mode: I'm in the discover mode. I want to rediscover those items that are not being used today. I'm looking for practical application items; no “pie in the sky” stuff. We're also seeking these construction technologies from any source. We're “stealing with pride” everywhere we can, from other owners, other contractors. We're linked with the Construction Industry Institute and academia.
I have a vision for construction technology transfer. It deals with providing at least one practically applied construction technology per quarter to our core resources and a broader audience within DuPont and within our contractor base.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
As part of that vision, I want to be able to use professionally produced videos. As one of my tactics, I put videos out in boxes with a distinctive color on them, so that they don't come across in an old gray or black box when they hit the field engineer's desk. It causes a field engineer to pick it up, look at it, and put it in the machine. The response I get is, “Oh, wow, this is neat stuff. ” Along with this, I'll define potential benefits as they relate to safety, cost, schedule, quality and interrelationships. Our core people must be up to date with construction technologies. Most importantly, our core people need to shift from behaving as contractors to behaving as what I like to call the consummate owner's representative.
We've been engaged in this process for about 18 months now. This process will yield certain products. We're looking for leading edge breakthrough construction technologies. We intend to continue to drive the whole concept of equipping our people so that they are as functionally excellent as they can be and truly represent the owners' point of view in the project arena. Our focus is on reduced capital expenditures, reduced project cycle times. We've done enough benchmarking to know that we have ample opportunity for improvement in cycle time. We 'll strive for improved performance in safety, health, and environment. Lastly, we're looking for improved quality of products delivered to our businesses.
I'll briefly describe two new complimentary technologies that I'm really excited about. One is the ATLSS connector from Lehigh University. It is an adaptation of a carpenter's dove and tail. I see all kinds of applications for a very interesting concept like this. It would be excellent to use for steel erection. For speed of erection, for safety purposes, improvements in cycle time, ease of removal for maintenance—a great concept. We have used this and piloted it, in conjunction with Lehigh University, at a pigments plant in New Johnsonville, Tennessee. We are getting a lot of good press out of the concept. Added to it are other concepts, such as panelizing and modularization. We made a mockup for modularizing multiple bays on the ground, lifting them in place, and then this connection will guide it down. You can use a segmental structural assembly system, in conjunction with the ATLSS connector. It is a very, very interesting combination. Now we're starting to work with Lehigh in terms of integrating similar concepts.
A second new technology deals with spatial positioning. Spatial positioning was one of the winners at the Construction Innovation Forum's Nova Award ceremony in Detroit in March 1995. Envision someone going out in the field and displacing traditional surveying equipment with laser technology that has been around for years. Information that is captured by the laser technology could be beamed or broadcast to a satellite and from there to an on-line, real-time work station, which could beam information back. I can see the point in time where you would have a heads-up display on earth-moving equipment, and all the operator has to do is follow his contour on a screen. From a project
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
safety management point of view, Occupational Safety and Health Administration 1910.119 for documentation, you could use the spatial positioning technique to accurately document your plant site.
In addition, we have a piece on ergonomics awareness to prevent soft tissue injuries to craft people. We're really pushing craft ergonomics training at that level, and what we're seeing is a major reduction in soft tissue injuries right now.
We have identified another construction technology with a partner, Brown & Root out of Houston, where we're doing some computer-aided rigging. Our business is wrought with heavy lifts. We're losing capability all the time, so what we need to do is put in place a process whereby we can use a good database for planning and simulating heavy lifts.
Why is DuPont involved in seeking innovation of constructed facilities? The answer is really simple—global competitiveness. We want to win in the global marketplace. We want to get our projects done faster, and we want more value out of the projects.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
ABOUT THE SPEAKER
Volker Hartkopf is a professor of architecture and Director of the Center for Building Performance and Diagnostics at Carnegie Mellon University where he teaches design and building performance in the professional, M.S., and Ph.D. programs. Dr. Hartkopf directs the Advanced Building Systems Integration Consortium, an industry-university partnership dedicated to improving the quality of the workplace. In collaboration with a multidisciplinary team, Dr. Hartkopf has been actively researching and designing high-performance office environments, improved building components, systems, and systems integration. Between 1981 and 1985, Dr. Hartkopf spent two and a half years in the Executive Interchange Program with Public Works Canada in the Architectural and Building Sciences Directorate as a team member charged with developing a comprehensive methodology for Total Building Performance Evaluation. He was instrumental in establishing North America's first multidisciplinary graduate program in architecture, civil engineering, and urban affairs in 1975 with grants from the National Science Foundation and the building industry. His work has been frequently cited in the professional literature. Dr. Hartkopf has contributed over 60 technical pieces in books, journals, reports, and conference proceedings. Dr. Hartkopf received his Diplom Ingenieur from the University of Stuttgart, Germany, in 1969; M.S. in architecture, with a minor in business administration, from the University of Texas at Austin in 1972; and Ph.D. in architecture from the University of Stuttgart, Germany, in 1989.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
U.S. EXPERIENCE WITH INNOVATIVE PRACTICE
Volker Hartkopf
Carnegie Mellon University
In April of 1994, the National Science and Technology Council Subcommittee on Construction and Building (NSTC C&B) issued recommendations to the U.S. construction industry that underscored continued innovation as an essential component for America's prosperity and well being. These recommendations were congruent with the subcommittee's mission to enhance the competitiveness of U.S. industry, public safety, and environmental quality through research and development, in cooperation with U.S. industry and academia, for improvement of the life-cycle performance of constructed facilities. The subcommittee had proposed that these recommendations be implemented by the year 2000.
In the Center for Building Performance and Diagnostics at Carnegie Mellon University, we were impressed with the similarity between the recommendations issued by the NSTC C&B and the work we have been doing since 1987, in conjunction with a group of federal and industry partners, to promote innovation in the U.S. construction industry. We have long recognized that the building industry is a critical player in the U.S. economy, in worker comfort and productivity, and in advancing new technologies. As Americans spend over 80 percent of their time indoors and 50 percent of their alert hours at work, the office building becomes a major force in America's health and economy.
Traditionally, the advanced workplace has been defined by a long list of new products in telecommunications, electronics, security, automation, and building control systems. However, we believe insufficient attention has been paid to the overall quality of the integrated space that results and the accommodation or meshing of building products and systems.
Through a series of international studies, our research group has concluded that the creation of intelligent workplaces hinges on three principles: (1) the design must encompass six critical performance qualities, (2) building systems must be integrated to achieve these performance qualities, and (3) a team
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
decision-making process must be used in the design and construction of the workplace. The implementation of these three principles will lead to the design of workplaces that are truly intelligent—that is, ones that provide for unique and changing assemblies of recent technologies and work styles in appropriate physical, environmental, and organizational settings, to enhance worker satisfaction, speed, understanding, communications, and overall productivity.
Since 1989, a central focus of our work is the Intelligent Workplace (IW) project. This project will serve as a crucial testbed and demonstration project in
which to study the integrations of advanced technologies and innovations to develop workplace design solutions that create the best environment for the occupant and organization.
The Intelligent Workplace, a 7,000-sq-ft addition to the rooftop of an existing Carnegie Mellon building, will allow the study of building performance and systems integration in the advanced workplace (Figure 1). This project, scheduled for completion in spring of 1996, is being sponsored by the Advanced Building Systems Integration Consortium (ABSIC). ABSIC, sponsored by the National Science Foundation Industry-University Cooperative Research Program, is a university-industry-government consortium which pursues research, development, and demonstrations for the purpose of increasing quality and user satisfaction of commercial buildings and integrated building systems, while improving economic and energy effectiveness. I would like to review some of the innovations to be demonstrated and studied in the Intelligent Workplace.
FIGURE 1 The Intelligent Workplace
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
An Agenda for Building Performance
The Intelligent Workplace will exhibit the following main features:
demonstration of design innovations in the advanced workplace;
demonstration of high-performance products for thermal, air, visual, acoustic, and spatial quality;
demonstration of how these products perform in the integrated setting;
testbed for innovative products that enhance building performance in the advanced workplace;
training in material, component, and systems choices and their integration for performance;
hands-on training in field diagnostics, tools, and performance variables;
dynamic, lived-in laboratory, with occupancy instrumentation, and computer-aided design and drafting assessment packages;
workplace for faculty, staff, and graduate students in architecture and building performance.
Critical to the Intelligent Workplace design effort is the understanding of performance parameters and specifications and of the individual contributions of subsystems and components to the delivery of the six building performance mandates: thermal quality, air quality, visual quality, acoustic quality, spatial quality, and building integrity.
Providing offices for faculty, staff, and graduate students, the IW will offer students and professionals hands-on experience in studying performance issues, and hands-on contact with innovative products and high-performance assemblies in enclosure, mechanical systems, telecommunications, lighting and electrical systems, as well as advances in interior space planning, finishes and furnishings.
Interior Systems
The office of tomorrow will reflect a critical focus on the individual workplace and the emerging forms of work groups within the organizational setting.
The interior design of the IW will demonstrate and evaluate advances in interior components and assemblies, as well as their effective integration with base building systems.
The Intelligent Workplace will demonstrate the concept of an “intelligent neighborhood,” a 30- to 50-person work group, contained in no more than 10,000 sq ft, which has a clear definition of organizational mission and structure and corresponding telecommunications and equipment needs. The intelligent neighborhood of this size will have independent access to major building services. Therefore, the individual workplace within this neighborhood will be characterized by individualized spatial, thermal, visual, acoustic, and air quality.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
ABOUT THE SPEAKER
Richard L. Tucker has been Director of the Construction Industry Institute at the University of Texas in Austin since 1983. Dr. Tucker's research field includes construction engineering and project management. He received the R. L. Peurifoy Research Award in 1986 from the American Society of Civil Engineers and in 1987, the Thomas F. Rowland Prize. Dr. Tucker is a member of the American Society for Engineering Education, American Society of Civil Engineers, National Society of Professional Engineers, and the American Society for Testing and Materials. Dr. Tucker received his B.S. in 1958, M.S. in 1960, and Ph.D. in 1963 in civil engineering from the University of Texas.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
U.S. EXPERIENCE WITH INNOVATIVE PRACTICE
Richard L. Tucker
Construction Industry Institute
The Construction Industry Institute (CII) is probably the most innovative organization in our industry, in that it has combined owners with providers with academics to take advantage of the synergism of having all three groups involved. At any particular time, we have about 1,000 volunteers working on CII activities, so the amount of networking is very significant. CII produces many products—
publications, videotapes, educational modules, implementation guides, and micro-computer tutorials—related to issues of concern to our membership in improving the industry.
Issues of immediate interest to CII members include teamwork, reengineering, visioning, paradigm shifts, restructuring, and empowerment. In the 12 years from the time we started the CII (1983), major changes have taken place in the industry. Table 1 outlines some of these changes. Figure 1 illustrates as much of a change as anything that you can see in a 10-year period; the number of construction litigators in this country has increased by a factor of a little bit more than 10.
The net effect of these changes is that everybody is out-sourcing more, governmental agencies as well. This creates added pressure on contractors who are going to have to provide more services. In this period of change we also have to change if we're going to meet the needs of the industry.
The kinds of things that people think are giving high payoff are shown in Figure 2 and not very many of these were around 10 years ago. Let me caveat my remarks by saying that not all CII companies do all of these things on every project. Our work is project focused, not company focused.
Organized team-building efforts is the latest rage right now, probably more significant than anything else that we can do. If you want to improve your projects, just focus on team building in an organized fashion.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
TABLE 1 Changes in the Construction Industry in the Last Decade
1983
1993
U.S. Manufacturers
Healthy
Uncertain
Owner Engineering Organization
Central
Decentralized
Owner Engineering Size
Large
Small
Cost / Cash Sensitivity
Moderate
Strong
Organization
Structured
Flattened
New Facilities
Domestic
Offshore
Work Mix
New
Revamp
FIGURE 1 Increase in Construction Litigators
Constructability is a form of team building, bringing the designers and the constructors and the owners together to figure out how to design something efficient to construct. Other changes include a more organized safety approach, long-term strategic relationships, computer-aided design. We think these are going to be seeing a lot of utilization in the future.
CII set some goals in 1990 which are consistent with the strategic goals established by the National Science and Technology Council. CII said in a 10-year period that we wanted to lower the real cost of projects by 20 percent,
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
decrease total project schedules by 20 percent, and improve safety by 25 percent. We think we already have surpassed all of these goals.
Areas where we have identified the potential for improvement fall into about five categories—better project planning, standardization as much as possible, better communications, better technology utilization and better worker utilization. The curve shown on Figure 3 is known as the Cost Influence (CI) curve. It is not ours. We stole it with pride from Union Carbide several years ago. Nonetheless, what it says is that the opportunity for significant potential savings is in the time period before you ever bring the designers in, or at least historically, bring the designers in. By the time you begin the construction stage of the project, there is still some potential improvement to be made but it is relatively small. We have research data that show that the difference between poorly planned projects and well planned projects is 20 percent of total installed cost— 20 percent off the top by just making a difference in planning. This is not accidental; there is a method to do this, and the people who follow that method save 20 percent of total cost compared to those who don't.
A large portion of our membership is in the petrochemical business. They have decided on their own, on a voluntary basis, that they want to try to conform to standard practices in the industry as much as is useful and where it doesn't affect the proprietary nature of their business. About 24 companies are involved in separately funding this with about 150 people that actively participate. CII members tell me they will save 5 percent of the total installation cost of projects by just voluntarily conforming to these practices that are convenient for them. They can see the savings already. This is not the enforced conformity of building codes: instead, it is saying that companies are going to do this in a logical fashion, where it is convenient for them to do it. I have put a cost savings of 2 to 5 percent because as an engineer, I tend to be little more conservative. CII members tell me that we ought to be putting a 5 percent savings because they can see it already.
Teamwork is a function of activities such as:
design effectiveness,
constructability,
partnering,
team building,
disputes avoidance and resolution,
employee effectiveness,
project organization,
contracts, and
quality.
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FEDERAL POLICIES TO FOSTER INNOVATION AND IMPROVEMENT IN CONSTRUCTED FACILITIES: (Summary of a Symposium)
FIGURE 2 High payoff products
FIGURE 3 Potential savings are higher earlier in construction
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We have quantitative feedback on some of these. The statisticians tell me that there is an 80 percent confidence band there that says if you assume in your contract that you trust the people you are working with, the result is lower costs. We have 262 projects that at least validate that curve.
Table 2 lists activities that are related to communications savings. The constructability savings are based on several hundred projects. The average is over 5 percent total project cost savings by integrating the design and construction people. We don't have enough data to be definitive, but it looks like long-term strategic alliance relationships such as partnering result in about a 15 percent cost savings.
TABLE 2 Savings Through Better Communications
Activity
Percent Total Project Cost
Constructability
5
Partnering
15
Team Building
7
Dispute Avoidance and Resolution
2
We think we have enough data now to show that this 7 percent estimated cost savings for formalized team-building efforts is probably on the low side. Alternative dispute resolution techniques—keeping the attorneys out of it, staying out of the courtroom—appears to save about 2 percent of total cost. Establishing formalized, organized safety programs saves about 2 percent of costs. Regarding quality performance management systems (QPMS) that look at the total cost of quality and total quality management (TQM), we, frankly, don' t have enough feedback in the industry yet to know how well either of those activities is working.
The Corps of Engineers took the term “partnering” from CII and used it to apply to partnerships formed on projects after a contractor is awarded a competitively bid contract. CII considers “partnering” to mean long-term, continuing relationships and negotiated contracts. Project partnering, as used by the Corps, is considered closer to “team building” for construction activities. The Corps has a set of data for about 30 10-million-dollar projects comparing partnered projects with traditional projects. Specifically, the data compare increases between the original estimated costs and final project costs broken down by overall construction cost and cost increases due to schedule over-runs, the cost incurred from work change orders, and the cost of disputed claims from contractors for extra work. (Since the Corps partners all its projects now, it no longer has data to compare partnered projects with traditionally contracted
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projects.) The value engineering savings of those that were partnered were an order of magnitude more than the ones that were not partnered. These are very dramatic results.
Figure 4 and Figure 5 show safety data for CII. These are Occupational Safety and Health Administration (OSHA)-reportable accidents and show the national
FIGURE 4 Comparison of OSHA-recordable incident rates
FIGURE 5 Comparison of lost workdays
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average and the average for CII companies. The CII data represent about 500 million work hours a year or about a quarter of a million people. The adage is probably reflected here: “If you want to improve things, take your best activities. They are easier to improve than the worst activities are because they are better organized.” In 1989, the recordable incident rates for CII companies were about half the national average; in 1993, the recordable incident rates were about one fourth the national average. The ratio for lost workday cases is even more impressive. What this really means for the CII companies, is that about 3,000 less accidents occurred each year, resulting in $160 million in savings compared to 1989. These very dramatic cost savings and resulting reduction in suffering resulted just from improving safety.
In construction, we think that we have to do two things to better utilize workers. The first is to get away from the approach of turning people over on the job site all the time, saying one craftsman only does one particular thing, then laying him off and bringing in another craftsman. We can decrease labor turnover, through multi-skilling and a number of things. The second change is to improve the efficiency of the people while they are on the site. If you want to improve labor efficiency, there are about four elements to do this: constructability, technology utilization, minimizing delays, and multiple shifting. We don't think we're very far away from having foremen of crews with an actual remote control laptop computer with them to call up the things they need, as an example of technology utilization.
Table 3 shows the average costs for craftsmen resulting from administrative delays. A typical craftsman will say about 30 percent of his time is wasted due
TABLE 3 Costs of Administrative Delays
Cause
Percent Time Wasted
Materials
3
Tools
3
Equipment
3
Information
3
Crew/Craft Interface
3
Unexpected Moving
3
Design/Fab Rework
8
Field Rework
4
Total
30
to administrative delays. Each of these items will vary by a factor of two in either direction on a given project. If you can cut that 30 percent down to 10 percent, you increase the worker productivity by 50 percent. As nearly as we
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can tell, only about 40 percent of the average craftsman's time now is spent productively. If you can raise that to 60 percent, it obviously results in significant improvements.
All of the above factors involve using workers better, both in design and construction. These factors involve better management and better technology utilization. Now, the philosophy that we have undertaken is that you can reach only a certain amount of savings by continuous improvement. You have to have some breakthrough, or step changes, someplace along the line. We think that some of these breakthroughs are going to come by technology and some by management. As a matter of fact, we have chosen to focus more attention on management than on technology for the first 12 years of our existence. Management has a lot of potential for saving costs. If you added up all of the savings of all of the techniques discussed in a simplistic manner, you'd find out you get money back from projects! We know better than that, but if you add them correctly, by statistical methods, the sum still shows savings of more than 20 percent of total project costs. Most of that is from improvement in management. Management changes have a higher pay-off than technology does in the short term. It is also an area that the people making decisions can make happen. We tend to focus on management changes, but technology changes also offer long-range improvement potential.
Some of the step changes are going to come from better utilization of new technology and animation. The use of 3-D computer-aided design (CAD) integrated data bases, based on the data we have thus far, results in about a 7 percent savings. We think that is going to improve significantly as we get more experience with 3-D CAD and integrated data bases. We don't have enough data yet to say what modularization saves, because we've got so many projects where the reason for modularizing isn't driven by cost; it is driven by other factors. Everybody knows that modularization is good. We just can't compare it on a cost basis yet based on our data.
With improvement in the technology for virtually instantaneous global communication (fax, satellite transmission, on-line computer communication), we think the use of flexible personnel and overseas designers is going to happen. Offshore production designers can be hired for something like 15 percent of the price for American designers. Time lag can be taken advantage of to have some work going on here, some work going on east of here, and some of the work going on west of here and get 24 hours of work a day, a much more efficient utilization of personnel.
In summary, standardization and better planning, communication, technology, and worker utilization can result in significant time and cost savings. We have products and research that show that these things work. We have found that all of our many products average about 3 percent cost savings when implemented, but implementation is a challenge. The construction industry is a fragmented culture based on experience. New technology is tough to sell.
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Therefore we are putting more attention on trying to get these products, which are the result of a significant amount of quantitative feedback, implemented. We are trying to do some of that through education. We are investing more in our research budget. Starting about the first of the year, we will go out and gather more data than what I have already shown you. We have a benchmark and metrics committee that has spent two years to make certain that we get good quantitative data. We think we will have quantitative measurements that in themselves will be an inspiration for people to be more innovative and implement some of these activities.
If you want to improve things, you have to look for the dinosaurs in your own agencies. You have to remember that “dinosaur” means extinct and a fascination with looking backwards. We have to develop much more of a teamwork approach. The single biggest potential that we have is improving communications. We have to quit thinking of engineers as technocrats only. We have to start focusing on our opportunities for management instead of just being technicians. We have to coordinate the project approaches. We can't afford the luxury of all the fragmented approaches. Adversarial relationships have to be a dinosaur. If you make the assumption that everybody that you are dealing with is competent, motivated, and honest, you will probably be correct about 99.9 percent of the time. What we are finding has the biggest opportunity for improvement is making those assumptions about the people you work with. If you don't make those assumptions, I think you need to ask whether your organization is a dinosaur and would be better going out of business and letting a new organization develop that is unfettered by tradition. If you don't assume cooperation, I don't think you will be able to adapt, and I think you will be joining that other group of dinosaurs.
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ABOUT THE SPEAKER
Lloyd A. Duscha is a consulting engineer engaged in a wide range of domestic and international engineering and construction activities, much of it centering on infrastructure and water resource development. Prior to that, he served over 40 years in progressive assignments involving water resources and military facilities with the U.S. Army Corps of Engineers in various locations, culminating as the Deputy Director of Engineering and Construction in the Office, Chief of Engineers. He is a member of the National Academy of Engineering and has served on several National Research Council committees: Education and Utilization of Engineers, Contracting Practices for the Superconducting Super Collider, and New Technology and Innovation in Building. He has also served on the U.S. Committee on Tunneling Technology. He is presently a member of the Board on Infrastructure and the Constructed Environment. He also serves on the Board of Directors of the American Consulting Engineers Council's Research and Management Foundation. Mr. Duscha received his B.S. in civil engineering with distinction from the University of Minnesota.
Representative terms from entire chapter:
intelligent workplace
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