Lean cost management

ABSTRACT Lean Six Sigma Executive Overview (Case Study) Templates are a guide to Lean Six Sigma Green Belt, Lean Six Sigma Black Belt, and Lean Six Sigma Master Black Belt Projects. Lean Six Sigma Practitioners use the DMAIC (Define, Measure, Analyze, Improve, and Control) Phases. The Lean Six Sigma Executive Overview (Case Study) include the most common tools used in the DMAIC Phases. There are Backup Slides that include the tools and templates of Optional or less often tools. There are guidelines in the notes section. These templates are used to document Lean Six Sigma Projects as they are executed. I wish you well on your projects. Steven Bonacorsi, Lean Six Sigma Master Black Belt.

The construction industry is heterogeneous and enormously involved with projects that are exposed to an uncertainty found in design and planning, presence of various interest of stakeholders, availability of resources, environmental factors, the economy of the country and statutory regulations. However, most activities of the industry have negative impacts on the environment by generation of construction and demolition wastes. Lean Construction (LC) technique gives the opportunity to more but with less of everything, lean use less of human effort, equipment, time, and space. This study seeks to appraise the benefits of LC technique based on professionals' opinion in the South African Construction Industry. Wellstructured questionnaire was prepared to collect data from respondents which include Quantity Surveyors, Architects, Construction Managers, Project Managers and Civil Engineers. Result of the analysed data revealed that clients, consultants and contractors agreed that the most significant benefits of adopting LC technique are waste reduction, efficient administration of materials and improved whole-life cost of construction projects. This implies that management of construction waste is one of the important management processes necessary to achieve project objectives. Recommendation was made that companies should use LC to identify and analyse waste to improve productivity, minimise time and accidents, improve reliability, improve quality and ensure more client satisfaction.

The construction industry is heterogeneous and enormously involved with projects that are exposed to an uncertainty found in design and planning, presence of various interest of stakeholders, availability of resources, environmental factors, the economy of the country and statutory regulations. However, most activities of the industry have negative impacts on the environment by generation of construction and demolition wastes. Lean Construction (LC) technique gives the opportunity to more but with less of everything, lean use less of human effort, equipment, time, and space. This study seeks to appraise the benefits of LC technique based on professionals’ opinion in the South African Construction Industry. Wellstructured questionnaire was prepared to collect data from respondents which include Quantity Surveyors, Architects, Construction Managers, Project Managers and Civil Engineers. Result of the analysed data revealed that clients, consultants and contractors agreed that the most...

Lean Six Sigma Measure Phase Tollgate Templates are a guide to Lean Six Sigma Green Belt, Lean Six Sigma Black Belt, and Lean Six Sigma Master Black Belt Projects. Lean Six Sigma Practitioners use the DMAIC (Define, Measure, Analyze, Improve, and Control) Phases. The Lean Six Sigma Measure Phase Tollgate Templates include the most common tools used in the Measure Phase. There are Backup Slides that include the tools and templates of Optional or less often tools. There are guidelines in the notes section. These templates are used to document Lean Six Sigma Projects as they are executed. There are checklists and guides to ensure the Measure Phase is completed and approved before moving to the next process improvement phase. I wish you well on your projects. Steven Bonacorsi, Lean Six Sigma Master Black Belt.

The key to realizing greater savings in your Lean initiatives and from more informed management decisions is to predetermine the "True" cost of downtime for each profit center category. TDC is a activity based costing methodology of analyzing all cost factors associated with downtime, and using this information for cost justification and day to day management decisions. Most likely, this data is already being collected in your facility, and need only be consolidated and organized according to the TDC guidelines

Buffers are often used in Construction to prevent the negative impact of Variability and Uncertainty on projects. Inventories of materials, budget contingencies, time float, and excess of equipment capacity are examples of the type of Buffers found in construction. However, usually the design and management of Buffers is based mostly on intuition and performed informally. New production philosophies such as Lean Production, Lean Construction and Theory of Constraints allow a more systematic and rigorous approach to the Design and Management of Buffers. This paper discusses the role of production management philosophies in the Design and Management of Buffers, and how selected IT tools can support this process.  The paper also provides some guidelines for the design of Buffers in repetitive construction projects using a proposed conceptual model.

Despite the environmental, managerial and technologies changes that have occurred in the last few decades, existing cost management systems tend to be very similar to the ones that have been used since the mid Twenties. Hence, this paper, which is an initial outcome from a doctoral study, systematically reviews the literature on traditional cost management and emerging issues dating back to 1977 with the aim to identify the historical evolution of cost management and its shortcomings. Some solutions to overcome the drawbacks in traditional cost management are then proposed. Possible gaps and claims without sufficient justification and future direction for the research development are discussed. The study is based on the analysis of a large number of publications on cost management (books, journal articles, and conference papers) using Google Scholar search engine and relevant databases.

Despite the environmental, managerial and technologies changes that have occurred in the last few decades, existing cost management systems tend to be very similar to the ones that have been used since the mid Twenties. Hence, this paper, which is an initial outcome from a doctoral study, systematically reviews the literature on traditional cost management and emerging issues dating back to 1977 with the aim to identify the historical evolution of cost management and its shortcomings. Some solutions to overcome the drawbacks in traditional cost management are then proposed. Possible gaps and claims without sufficient justification and future direction for the research development are discussed. The study is based on the analysis of a large number of publications on cost management (books, journal articles, and conference papers) using Google Scholar search engine and relevant databases.

Lean Six Sigma DMAIC Checklist Templates are a guide to Lean Six Sigma Green Belt, Lean Six Sigma Black Belt, and Lean Six Sigma Master Black Belt Projects. Lean Six Sigma Practitioners use the DMAIC (Define, Measure, Analyze, Improve, and Control) Phases. There are Backup Slides that include the tools and templates of Optional or less often tools. There are guidelines in the notes section. These templates are used to document Lean Six Sigma Projects as they are executed. There are checklists and guides to ensure the DMAIC Phase is completed and approved before moving to the next process improvement phase. I wish you well on your projects. Steven Bonacorsi, Lean Six Sigma Master Black Belt.

With lean methodology usage being the only way to stay competitive on nowadays market, it is important to implement it and spread it through the organization. In this paper, purpose of lean is explained, the most important definition and tools are given and differences between problem solving approaches are explained. It can be concluded that problem solving approaches are in first look different, having also different number of steps, but they are adapted to the company in which they are used and that they depend on the size, complexity and expected closing time of project.

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This paper, which is an initial outcome from a doctoral study, sets out to review the construction cost management trend. The primary concern was with the current situation of the issues being researched in the area of construction cost management and more specifically with what exactly would represent the frequency of the research area being researched and tries to understand and explain a phenomenon behind it, this indeed will help in finding the gaps towards directing the future study of this research activity. It looks at the issues being discussed and actively research in this area dating back to 1983 with the aim to contribute a framework for the categorization of literature linked to construction cost management. The study is based on the analysis of a large number of publications on construction cost management which include books, journal articles and conference papers using relevant databases.

Purpose -The purpose of this paper is to examine how effectively the cost appraisal system proposed measures the cost of poor quality (COPQ) in a construction project. The paper first formulates how COPQ can be measured and later clarifies the relationship between COPQ, labor productivity, and profitability. Design/methodology/approach -In order to measure COPQ, the researchers prepared data entry forms for recording COPQ items on a daily basis and formulated the cost contribution of lost material, lost man-hours, lost machinery hours, and lost overhead on the overall COPQ for the project. The proposed method was then applied in a case study. Findings -The results showed that, for the 60-days study period, COPQ decreased by about 24 percent while labor productivity and profitability increased by about 17 and 11 percent, respectively, after the implementation of COPQ measuring system. This study further supports the use of the COPQ system in construction projects as a mechanism to facilitate continuous improvement. Originality/value -COPQ is a major cost that is often ignored in construction projects due to the difficulty of measuring it. This paper presents a COPQ measuring and recording system capable of identifying COPQ. The implementation of the system is shown to increase productivity and profitability as demonstrated by the project used for the case study.

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Over last two decades, organizations are facing stiff competitions at global marketplace to set appropriate order winning outputs in terms of lead time, cost and customer delight. As a result of that, organizations have no choice other than putting significant efforts to improve their operational efficiencies. Philosophy of lean management enables the organizations to eliminate wastes and consolidate their operations for reduction in cost, to provide innovative and quality products for meeting ever changing customer expectations within an affordable lead time. The purpose of this research is to primarily assess the status of implementation of Lean Manufacturing (LM) practices and secondarily, to examine the processes being carried out in a ply wood setting from the perspective of Lean Manufacturing concepts. Value Stream Mapping (VSM) is applied to identify the wastes incurred by the system and thereby to formulate suitable strategies to eliminate the wastes for improving operational efficiencies.

This product-based thesis is meant to create an Activity- Based costing system tool for company X, which provides after-school care for children and is a sub-contractor of municipality of Y.

The thesis aims to create costing information system mechanism for the case company in order to be used as a means to understand cost, costing issues and profitability of the cost objects in this case. Hence this thesis does not address the way of using information and analyzing it. As that is another issue and relates to the Activity based management.

This study was started by meeting the manager of the company about the topic in February 2015. Then I started to study ABC’s system issues were then studied in view of theory. The process of creating the tool started by studying the income statement and interviewing the manager of the company to collect as much information as possible. During the process the nature and type of required information was revised and changed for many times. 

The final result is a tool which can be helpful to understand cost and profitability of the firm as a whole.

There is a need for project managers to readjust the policies with which they operate as the recent transformation in the world’s environment, economy and society can no longer accommodate the old principles. Although the issue of disaster management has been in existence for quite a long time, not until recently has project management begun considering the possibility of embedding sustainability practice into disaster management. In developed countries disaster management has maintained sustainability over the years; this however is not the case in other developing countries. As disaster events happen to be a universal phenomenon that inevitably brings the nations of the world together, this study seeks to understand disaster resilient relevant areas within the subject of sustainable development. And also explore the existence of loop holes within the past disaster management practices that needs adjustments. The researcher intends using a disaster Case study as an aid by performing a critical examination of an earthquake that occurred over nine years ago in the North of Pakistan. The purpose of the investigation is to analyse the use of sustainable variables in the course of handling the disaster aftermath and categorize them into different units of sustainability practice. The Disaster management team consisted of the government of Pakistan in collaboration with the United Nations whose body was made of the chain of nine other circular agencies.

Opportunities offered by the explosion of Information Technology (IT) tools are not being adequately used to solve productivity, schedule, cost and quality problems faced by the design and construction of industrial projects.
The Computer Advanced Visualization Tools (CAVT) concept defined as “the collection of all the necessary tools, which allow for the visual representation of the ends and the means of AEC/EPC needed to accomplish an AEC/EPC design and construction project” was developed and its impact in the design process of industrial projects was described as an answer to the stated problem.
The research was carried out using the observation-participation method in which the industry became a laboratory that offered the opportunity to have access to events and groups that are not commonly accessible to scientific research.
The design process was studied considering the state of the art about production principles applied to the construction industry through the Lean Construction approach. This allowed the ability to model, analyze, understand and describe the design process, providing and adequate framework to study the impact of CAVT which is presented mainly considering activities that add value to the design process.
The research led to discover change patterns and trends in the design process of industrial projects that can lead to obtain benefits in terms of cost and schedule reduction, and productivity, quality and safety increase in construction industry projects.

Análisis de los factores que influyen en la competitividad empresarial en general en las empresas y, en particular, en las empresas hoteleras y constructoras que operan en la Costa del Sol.
Posibles mejoras competitivas basadas en un estudio primario de mercado y en las mejoras estratégicas basadas en las normas ISO

Purpose – The purpose of this paper is to examine how effectively the cost appraisal system proposed measures the cost of poor quality (COPQ) in a construction project. The paper first formulates how COPQ can be measured and later clarifies the relationship between COPQ, labor productivity, and profitability. Design/methodology/approach – In order to measure COPQ, the researchers prepared data entry forms for recording COPQ items on a daily basis and formulated the cost contribution of lost material, lost man-hours, lost machinery hours, and lost overhead on the overall COPQ for the project. The proposed method was then applied in a case study. Findings – The results showed that, for the 60-days study period, COPQ decreased by about 24 percent while labor productivity and profitability increased by about 17 and 11 percent, respectively, after the implementation of COPQ measuring system. This study further supports the use of the COPQ system in construction projects as a mechanism to...

FPA is a strategic Army capability that correlates cost and performance information in salable and repeatable processes for Army enterprise programs and processes.

a. ASA (FM&C) is standing up a new Financial Management and Performance Assessment (FPA) organization, with the mission to conduct enterprise wide financial performance assessments for Army enterprise programs and processes (DoD’s core processes, Army end-to-end processes or Title 10 functions) in support of resource informed decision making, program and budget development and justification, and to support Army wide performance improvement initiatives.  The organization will also develop processes for other organizations and process owners to conduct financial performance assessments.

Published in Boeing Digital Aviation's "The BYTE", this article details the use and results of an emerging product development model, the LEAN Startup and direct customer engagement to determine a minimum viable approach that solves the biggest pain points with the FAA-mandated paper logbook process. This workshop was held May 5-7, 2014 in Seattle, WA.

Lean Six Sigma Executive Overview (Case Study) Templates are a guide to Lean Six Sigma Green Belt, Lean Six Sigma Black Belt, and Lean Six Sigma Master Black Belt Projects. Lean Six Sigma Practitioners use the DMAIC (Define, Measure, Analyze, Improve, and Control) Phases. The Lean Six Sigma Executive Overview (Case Study) include the most common tools used in the DMAIC Phases. There are Backup Slides that include the tools and templates of Optional or less often tools. There are guidelines in the notes section. These templates are used to document Lean Six Sigma Projects as they are executed. I wish you well on your projects. Steven Bonacorsi, Lean Six Sigma Master Black Belt.

Este trabajo presenta una parte de la investigación sobre el impacto del uso de Herramientas Avanzadas de Visualización Computacional (CAVT Computer Advanced Visualization Tools), en el diseño de proyectos de Arquitectura, Ingeniería y Construcción (AEC Architecture, Engineering and Construction), y en los procesos de planificación de la construcción. La investigación se realiza en un marco de colaboración entre la empresa Bechtel Chile Ltda y la Universidad Católica de Chile. Las CAVT se identifican como herramientas fundamentales provistas por las Tecnologías de la Información (TI) y son definidas, en sentido amplio, en términos de su característica fundamental de proveer la habilidad para visualizar los fines (modelos de Productos) y medios (modelos de Procesos) para el diseño de proyectos AEC y los procesos de planificación de la construcción. La investigación se basa en el estudio de las CAVT aplicadas por una Empresa de Ingeniería y Construcción en un proyecto de la vida real (caso de estudio), apoyada por fundamentos teóricos y contactos con expertos en TI en la industria de la construcción (TIC). El proyecto en estudio se diseñó totalmente en tres dimensiones-3D (Primer proyecto en 3D en América Latina) utilizando el software Plant Design System (PDS), un poderoso Sistema de Diseño de Plantas proporcionado por Intergraph, Inc. El software DesignReview (también proporcionado por Intergragh) brinda capacidades de visualización avanzadas para la visualización del modelo PDS 3D, y la tecnología de modelamiento y simulaciones en 4D se aplicaron a las tareas de planificación y programación del proyecto en estudio. El tema de la gráfica computacional se revisa y se analiza brevemente como una tecnología central a las CAVT en la industria AEC. El trabajo plantea que el conocimiento sobre modelación de Productos y Procesos que proviene de la comunidad académica, es, por lo general, pasado por alto o desarrollado en forma tácita en la práctica industrial, guiado más por el sentido común, que por una aproximación ordenada basada en técnicas, metodologías o prototipos que provienen de la comunidad académica. Se presenta y analiza la Realidad Digital(DR Digital Reality), como el paso que sigue a los modelos de productos en 3D y el modelamiento en 4D se identifica como la tecnología que gatillará los cambios fundamentales previstos debido al impacto de las CAVT según se describe en este trabajo. El grado en que las CAVT se están utilizando en el proyecto en estudio proporciona enormes beneficios a la compañía que las aplica. Sin embargo, los resultados de la investigación nos llevan a concluir que aún cuando las CAVT sean ya una realidad, la industria AEC no les está sacando todo el partido que debiera. Se necesita una aproximación más directa de la comunidad académica y de la práctica de las empresas de AEC que pueda revertir esta situación, beneficiando tanto a la industria como a la investigación. Las principales percepciones de esta investigación que se derivan del estudio de la aplicación práctica de las CAVT demuestran el enfoque anterior, lo cual debería llevar a que el mayor impacto de las CAVT vaya más allá de las actuales bien conocidas mejoras, para dar lugar a un insospechado avance en la industria AEC.

Global competition has prompted many companies to adopt new manufacturing approaches such as lean manufacturing in order to be more competitive.
Lean manufacturing can be defined as an extension of just-in-time (JIT) or the Toyota production system (TPS), first described in English by Sugimori et al. (1977). One feature of such system is its focus on the elimination of waste or muda (in Japanese) – anything that does not add value to a product – by means of continuous improvement activities.
Lean manufacturing places emphasis on the flow of materials from when a product begins to be manufactured until it is completed. According to Womack and Jones (1996), processes are seen as value streams and wasteful activities keep products from flowing down the value stream. A tool used to monitor flow and spot ways to remove waste, is value stream mapping (VSM). Maps show the flow of materials and information through all manufacturing operations and they give information on cycle time, downtime, inventories, and so on.
After four decades of research, the operational benefits of implementing lean manufacturing practices are clear. Operational excellence and the elimination of waste should lead to an improvement in efficiency, a reduction in cost and eventually an increase in net profit. But this is not the case and many firms find that their accounting methods clash with their lean manufacturing initiatives and this may discourage the adoption of lean manufacturing .
Some alternative costing techniques have been developed. One of them, called value stream costing (VSC), recommended for mature lean companies ,will be studied in this paper.

The construction industry has, over a long period, been criticised for its short term “hit-and-run” relationships which are focused on win-lose situations and poor performance. Despite the wide recognition of these problems the industry persistently resists the radical demanded of it. This paper attempts to investigate why this might be the case by reviewing prevailing safeguarding practices within the current commercial systems and structures through literature review and industry observation. Findings reveal that clients and decision makers often tend to safeguard their project-specific assets, against opportunism and exploitation, through the deployment of formal contractual arrangements and governance structures. These arrangements and structures typically dominate the management of the project delivery often to the detriment of the project itself; but because there is a belief that interests are safeguarded, clients and decision makers feel they have taken the best course of action. This goes a long way to explaining the coherence of the current construction model and provides the basic information for preparing a route to the radical change required to move to lean methodologies.

In productive processes where parts are assembled, the assembly time is one of the most important problems that should be solved. Due to this, a case study was carried out in one company in the wooden sector, in which the Lean methodologies and the Discrete Events Simulation are integrated, to evaluate and improve the assembly processes of four-input wooden stowage. This study began by validating the process, then it was simulated in the Arena software, where great variability is observed in the assembly time of the four-input pallets, obtaining an average result of 25+/-2 minutes. Due to this reason, the use of this methodology was proposed, applying the DMAIC cycle and carrying out controls in the process, it was possible to reduce it to 19 +/-1 minute per stowage unit assembled, which meant a 24% reduction in the time spent manufacturing. All of this positively influenced the final delivery time of the product, so, with this new time, the company could satisfy the demand of its customers, and will be able to place its product on the market in less time.

For the past decades, financial folks relied on old principles, techniques and theories in determining the performance of the companies and give feed backs to the executives and CEOs so they can make the necessary improvement and take decisions. The CEO wants help finding the resources to fund a new project; he wants to know where we can improve costs in products and services, and he wants to know whether improvements made have resulted in financial gain. The CEO needs help seeing where the company has improved or declined and what the future looks like given the current circumstances.

This paper discusses the observation-participation method (Yin, 1994) as a way to ground construction IT research in industry practice. This research methodology considers the industry as a point of departure, followed by examination of a case study using the observation-participation method (Yin, 1994). In this methodology, the researcher is not merely a passive observer, but assumes a variety of roles within the case study and participates in the studied activities. The observation-participation method application to the case study offers the opportunity to see what others have not yet seen (Stake, 1998) and allows gaining access to events and groups, which, in other ways, are inaccessible to scientific research. The researcher perceives reality from the point of view of someone “in” the case study instead of someone
“external” to it.
The research goal was to test 4D Planning and Scheduling (4D-PS) to demonstrate its benefits as a CAVT (Computer Advanced Visualization Tool) applied to the case study. The objective was to find out how 4D model reviews can help generate more constructable projects by assisting construction planners in optimizing construction sequences, identifying and resolving schedule conflicts and providing feedback from construction teams to design teams. To get tangible results, 4D-PS needed to be researched in a real life context. Hence, the observation-participation method was the most suitable research methodology to accomplish this task. This paper presents our experience with the observation-participation approach on a large construction project. It details some of the organizational and business challenges of creating synergies between a business and a research focus.

... Keywords: Activity-based costing (ABC), balance scorecard, lean cost management, theory of constraints (TOC), traditional cost management 280 Page 286. 1. Introduction This paper is a „thought paper‟ and an initial outcome from a doctoral study. ...

A recent topic, BIM could be considered as an effort to integrate all the information. So far, the integration of cost and schedule data has been done successfully as there is a good case of EVMS in order to synthesize those data. There have been many efforts to develop a 5D system that integrates cost, schedule data and a 3D model, but its technology is so difficult that few have succeeded. The 5D system will have many advantages once it is made: The visualization of schedule data and verification of cost in real time are possible and the future cost and schedule can be expected accurately. Especially, in case of an atypical structure the clash of members and errors of drawings which are hard to find in 2D drawings can be detected and corrected in a 3D model. This paper presents the methodology and results to develop a 5D system with the integrated cost and schedule data from EVMS, and a 3D model of the 2 nd Geumgang Bridge within nD-CCIR, a 5D system developed in the UK.

A recent topic, BIM could be considered as an effort to integrate all the information. So far, the integration of cost and schedule data has been done successfully as there is a good case of EVMS in order to synthesize those data. There have been many efforts to develop a 5D system that integrates cost, schedule data and a 3D model, but its technology is so difficult that few have succeeded. The 5D system will have many advantages once it is made: The visualization of schedule data and verification of cost in real time are possible and the future cost and schedule can be expected accurately. Especially, in case of an atypical structure the clash of members and errors of drawings which are hard to find in 2D drawings can be detected and corrected in a 3D model. This paper presents the methodology and results to develop a 5D system with the integrated cost and schedule data from EVMS, and a 3D model of the 2 nd Geumgang Bridge within nD-CCIR, a 5D system developed in the UK.