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Managing Risk in a Lean Environment
Ray SloaneMace Risk Management
To find a connection betweena Lean Constructionenvironment,and howit interacts with risk, helping to reduce risk, and making it easierto managerisk withdefinable benefits.
QuestionsDo they have common objectives
Is Risk Management, and more specifically are “Risks” the opposite of Lean Construction?
The 3 Lean Opportunities
Impeccable co-ordinationThe project as productionsystemThe project as a collective enterprise
Impeccable co-ordinationConstructors, designers and the client / end-user working together from the outset to achieve shared goals in design and construction.“Built in” Risk mitigation for……?
(1) Poor interfaces (client / contractor / sub-contractor).(2) Lack of continuity / differing levels of maturity.(3) Poor scope definition.(4) Late changes in design(5) Differing levels of design maturity.(6) Re-design during construction period.
The project as production systemDesigning the production system at the same time as designing the building or structure; assembling teams around systems rather than disciplines.“Built in” Risk mitigation for……?
(1) Re-design / Re-work / Abortive work.(2) Inadequate building footprint to install equipment(3) Workface clashes(4) Late changes in design(5) Individual disciplines working in ‘silos / isolation’.(6) Re-design during construction period.
The project as a collective enterpriseToallow one trade partner to be compensated for investment that saves another even more (moving money across boundaries).To enable the Client to effectively manage Risk and Cost on the project.“Built in” Risk mitigation for……?
(1) Insufficient funding available / annualised funding.(2) Commercial approach taken to extremes.(3) Breakdown of collaborative environment.(4) Professional differences between parties.(5) Identified OPPORTUNITIES not progressed as expected.(6) Cost increase – Construction or whole life cost.
Case study – A.M.A. Nuclear Ltd (SDP)
25 year old building3rdattempt to design a solution for processing of Intermediate level nuclear waste from a 50 year old facilityNew company (A.M.A. Nuclear Ltd) 3 x way JV between MaceArevaAtkinsLegacy client with some employees on the project for 25 years.1stattempt - >£450m2ndattempt - >£900m3rdattempt - >£2.4bn
Case study – A.M.A. Nuclear Ltd (SDP)
True Co-location – Client and Contractor adjacent desksTime taken to “set up” the project – Pre-mobilisation stageProject “Mission Statement” created by the project teamChallenge Group setup, combined Client and ContractorSupply Chain ConferencesChallenge / enable / encourage / learn / communicate
Lean Construction reduces the risk of:-Physical Risk - HSEQ People getting hurtOperational risk - Processes are not efficientCommercial Risk - Unexpected cost increaseReputational Risk - How can you quantify..?If any or all of the above fail in some way, it can mildly or catastrophically damage a company’s reputation.
Workshop discussion
Does Lean reduce the likelihood of risk and uncertainty?If so how might we quantify it?





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