Becoming Lean at Knutson: Learning and Adapting the Toyota Production System

In the 1950's, a financial crisis at Japanese auto maker Toyota forced the company into a near-obsessive waste reduction mode. Workers were challenged to improve efficiency, and, to save money, parts weren't ordered until the last possible moment that they were needed. What started as a cost-cutting strategy soon evolved into a production system in which "identification of a problem became imperative and exciting."

The Toyota Production System, the benchmark for Lean production, evolved over the ensuing fifty years, with numerous industries adapting the core concepts of savings of time, energy and resources. Lean became synonymous with eliminating waste, errors or defects, and constantly identifying ways to make a production process more efficient. Toyota literally played a vital role in spawning this movement, lending consultants and other resources to a variety of industries.

One industry in particular - healthcare - has used the model to help providers improve the healing environments that they provide to patients. Advocates of Lean healthcare recognize that the needs of patients are rising while the pool of both skilled resources and reimbursement are shrinking, and have looked at new ways to do more with less while becoming more effective at dealing with the critical care needs of patients.

Because Knutson recognized that some of our valued clients were implementing Lean processes within their organizations, we began to explore how Lean production could help us serve these and other owners more effectively.

Learning About Lean

As a first step, Dave Carr attended a conference at the Lean Construction Institute (LCI), where he was able to learn from the leading implementers and inventors of lean processes that are used in construction nationally and internationally.

Based on what Dave learned at LCI, Knutson formed an eight-person study action team, including representatives from all three Knutson offices, to read about The Toyota Way (one chapter at a time) and investigate ways to adapt what we learn to the Knutson construction process. The group holds regular meetings to discuss, plan and brainstorm.

"We have already moved forward and implemented the nuts and bolts of a really good planning system that eliminates errors and makes corrections," Carr explained. "We are learning Lean concepts such as spreading information and learning quickly, for which Toyota has developed and maintained a highly effective process."

The work of the Study Action Team means that Knutson is taking the initiative to make changes to implement smart, sustainable, environmentally correct changes.

Lean: More Than a Buzzword

"Lean is the latest buzzword in our industry, but based on what we ve learned, we have a lot to gain by taking Lean seriously," Carr added. "It's good for our company, and it's good for our clients."

We are already recognizing how becoming a Lean organization is making a major impact at Knutson. We're not reinventing the wheel, but rather adding tools that add a dimension to our planning process that gives us a deeper understanding of each project.

For example, Knutson has started to implement the 5 stages of the Last Planner™ System (trademarked by the LCI), which includes a six-week "look-ahead" advanced planning scheduling system on job sites. Typically, our sites had used larger master schedules combined with 2-3 week schedules to manage intricacies of scheduling and other details. But the Study Action Team recommended that Knutson add this six week "look ahead" that enables the project team to proactively monitor activity, predict constraints, and look out for potential roadblocks to the project.

Carr explained that Knutson is also studying how to add a dimension of "pull" to our workflow. "In construction we're all pushers, finishing our part of the project and pushing it as hard as we can to the next person or subcontractor to work on. But we're also now doing pull planning in which, thanks to a predictable and reliable production process, the next person in line can pull the work from the previous person when they are most ready to handle it. It takes a lot of open dialog, preparation and planning, but it makes us all just a little more efficient."

For years, we at Knutson have prided our selves on understanding the intricacies of construction to be able to schedule projects - particularly healthcare projects - with limited interruption of workflow and minimal inconvenience for the operations still functioning. Lean project delivery fits what Knutson has been regularly trying to achieve: predicable workflow that's done right the first time. Person x can count on person y at z time to deliver something consistently. From there, you can reliably schedule exactly what is needed to deliver when it's needed.

Knutson began this learning process thinking: if we are to continue to provide outstanding service to organizations that have themselves embraced Lean production, then we need to thoroughly understand that model as well.

But in fact Knutson has much more to gain by becoming Lean. Toyota's success throughout the years demonstrates an important lesson about the benefits of their production system: becoming efficient in things that the customer doesn't see enables you to put more into the things that the customer does see.

Knutson's Lean Study Action Team Members:
Mike Beccheti
Amy Boelk
Dave Carr
Geoff Glueckstein
John Prishtash
Todd Schilling
Rick Vredenberg
Pat McEvoy

Source: John Gertner, "From 0 to 60 to World Domination," The New York Times Magazine, February 18, 2007, pp 34-41.