Running a Target Value Delivery Sprint

BACKGROUND

The owner created a strategic projects group to deliver three replacement hospitals. The project team used Last Planner System (LPS), A3 Thinking, and Target Value Delivery (TVD) to seek sound outcomes in project schedule, project decision-making, and project budget. The same design team moved from the first to the second project, with the opportunity to build on successes and lessons of the previous project.

OBSTACLE

The team from Replacement Hospital 1 achieved excellent results in LPS and A3 Thinking, but struggled to achieve any savings through their TVD effort. When the client presented the project to the Board they were instructed to reduce the cost by $50 million. Also, neither project was under an IPD contract with profit at risk, making TVD more difficult.

APPROACH

We rolled out the TVD challenge to the team on Replacement Hospital 2:

• Organized a 10-week sprint to focus effort in the cluster groups
• Set a savings target of $22 million divided by scope in cluster groups
• Established ideas target of $44 MM
• Created a cadence of $440k in savings per day to reach the target

We developed and promoted standard TVD work in the cluster groups to drive the effort:

• Put TVD on the agenda each week
• Start with an idea and quickly assign a ROM and a champion
• Work items collaboratively from week to week to gain surety
• Report out to the Big Room for help from outside of the cluster group
• Monitor the trend from week to week

We facilitated TVD ideas workshops in the cluster groups

• Socialize ahead of time to the team
• Ask stakeholders to come with ideas
• Assign ROMs as ideas are proposed
• Don’t wait for design to provide an opinion of cost!
• Assign a champion to shepherd the idea to completion

RESULT

Over the 8-week period, the team came up with over $35 million of potential savings ideas and were able to convert $22 million into savings to the project. The team continued the effort after the TVD Sprint and lowered the cost further.

LESSONS LEARNED

The owner truly supported TVD. The project team had excellent access to decision makers with the right people in place to make financial decisions on behalf of the project.

RECOMMENDATION: Ensure engagement of the owner with financial authority to make decisions?

Design to a detailed estimate. The designers got on board and were effective. They routinely generated millions of dollars of savings ideas and worked diligently to convert ideas into actual savings.?

RECOMMENDATION: Prepare designers for frequent sharing of incomplete information and encourage them to design to an estimated allowance

True continuous estimating is crucial. The trades actively participated in the effort and became efficient at estimating with incomplete information instead of waiting for packages. RECOMMENDATION: Coach the trades to price based on discussions, criteria, and past experience so ROMs can be developed quickly