How has Lean Construction Contributed to our

Corporate Strategy?

Trond BølvikenDirector, Veidekke Entreprenør

29th October 2015

1

Agenda• Who, what and where is Veidekke?• The main Contributions of

Lean Construction to Veidekke• Is it working?• Concluding remarks

2

Who, what and where is Veidekke?• Norway’s largest and Scandinavia’s forth

largest contractor and property developer• 7,000 employees• Annual revenue of GBP 2 billion• Noted on the Oslo Stock Exchange• 51% of the employees own 18% of the

company• Has made a profit every year since 1936

DENMARK 8% of revenue

NORWAY67% of revenue

SWEDEN25% of revenue

CONTRACTS

Public

30%Private

70%

Non-Residential35%

Residential20%

Industrial15%

Civil Engineering30%

OPERATIONS

3

Trond Bølviken• Civil Engineer from Norway University of Science and

Technology (NTNU), 1979• Director of Strategy, HR and HSE• Worked 21 years at Veidekke

• Head of business unit: 7 years• Current position: 14 years• Member of Norwegian top management: 16 years

• Lean Construction• Attended my first IGLC-conference in 2004• Local Chair of IGLC in Oslo 2014• Author of several IGLC-papers

4

The main contributions of Lean Construction to Veidekke (this far)

• Strategy• Planning• Safety

5

Economical Process

Social Process

Logistical/ Physical Process

THECONSTRUCTION

PROCESS

Reference: Bjørn Andersen, Trond Bølviken, Hege Skårbekk Dammerud and Sol Skinnarland: Approaching Construction as a Logistical, Economical and Social Process, IGLC16 (2008)

6

Lauri Koskela Glenn Ballard and Greg Howell

How should we understand production?

And how should we apply this understanding to

construction?

What kind of production is construction?

References: Lauri Koskela: An exploration towards a production theory and its application to Construction, PhD-theses (2000)Glenn Ballard and Greg Howell: What Kind of Production is Construction?, IGLC 6 (1998)

7

Peculiarities of Construction

• Production is moved to the product (not the other way around)

• Production runs through the product (not the other way around)

• Project production

8

Mass Production

Order Production

Production by Rotating Labor

Project Production

Permanent Organization

Temporary Organization

Similar Products Unique Products

Reference: Trond Bølviken: On the Categorization of Production: The Organization – Product Matrix, IGLC 20 (2012)

9

Mass Production

Order Production

Production by Rotating Labor

Project Production

Permanent Organization

Temporary Organization

Similar Products Unique Products

Volume and Standardization

Standardized Roles

Flow

Collaborative PlanningIntegrating all Competence

Productivity Strategies

Reference: Trond Bølviken: On the Categorization of Production: The Organization – Product Matrix, IGLC 20 (2012)

10

INVOLVING MULTI-LOCAL

11

The Strategy of Veidekke (in the language of Veidekke)

• We execute projects

• We are a producer

• Production is a core activity

• Production is a strategic issue

12

Planning of design and production

13

• Project based production

• Management and leadership through planning

• Collaborative planningTime

Site Manager

Foreman

Crew-leader

Workers

14

Mass Production

Order Production

Production by Rotating Labor

Project Production

Permanent Organization

Temporary Organization

Similar Products Unique Products

Physical Protection and Standardized Work

Standardized Procedures and Roles

Physical Protection and Specific Risk Understanding

Risk is Identified and Reduced Collaboratively by the Entire Organization

Safety Strategies

Reference: Trond Bølviken: On the Categorization of Production: The Organization – Product Matrix, IGLC 20 (2012)

15

Michael Porter

Strategy involves creating “fit” among a company’s activities.

Reference: Michael Porter: What Is Strategy?, Harward Business Review (1996)

16

17

Collaborative Planning in Veidekke

18

2013: The first Veidekke guide to Collaborative Planning in Design

2012:The integration of time scheduling, site logistics and safety risk management

2008:The first Veidekke guide to Collaborative Planning in Production

2006-2008:Tests in all 4 branches

2003:The first project testing Last Planner

It’s not a quick fix

Do you work in a project using Collaborative Planning?

6 principles of Collaborative Planning

NO

YES

20%

80%

We remove obstacles systematically

We plan all operations based on the seven prerequisites

Different planning levels have different owners

We learn from reported non-conformances

Everyone is familiar with and able to influence their own work

Plans are made in collaboration with the people who are going to perform the work

54%

62%

62%

68%

79%

80%

0% 50% 100%We remove constraints systematically

19

0% 50% 100%

Is it working?

Profitability Safety

20

0%

2%

4%

6%

8% All injuries

2012 2013 2014per. August

20152009 2010 2011 2012 2013 2014Q22015

Our collaboration with the academic Lean Construction communityWhat has come out of it?

• From the Last Planner to our concept of Collaborative Planning

• Theory has contributed to our language and understanding

• Studies on time losses• The expansion of Collaborative Planning to design and

safety risk management

21

Concluding remarks

1. We must base our strategy on an understanding of project production

2. The way we plan and produce is a strategic issue3. Strategy is a question of the fit between its

building blocks4. Collaborative planning has the potential to act

as core in a holistic strategy

22