Lean Project Delivery and Integrated Practices in Modern Construction by Forbes Lincoln H.; Ahmed Syed M.;

Author:Forbes, Lincoln H.; Ahmed, Syed M.;
Language: eng
Format: epub
Publisher: CRC Press LLC
Published: 2020-03-20T00:00:00+00:00

Sutter Health’s IPD approach

History

Sutter Health is a not-for-profit community-focused service-oriented healthcare network that operates in Northern California. Their vision is to lead the transformation of healthcare to achieve the highest levels of quality, access and affordability. The network has 50,000 employees, 5,000 physicians, 30 hospitals, and over a hundred general and specialty clinics and laboratories. It serves a patient population of approximately 3.5 million that is one of the most demographically diverse in the United States. In support of this it spends an average of $500 million annually on capital projects.

While several factors, organizations, and individuals influenced the development of IPD concepts, Sutter Health in California played a foundational role as it sought to improve its methods for securing the design and construction work for its healthcare facilities, reduce project cost overruns, and improve schedule reliability.

The Northridge earthquake in January 1994 caused significant damage to several hospitals, and the California legislature passed Senate Bill 1953 that same year requiring all healthcare providers in that state to upgrade or replace their acute-care facilities (e.g., hospitals) so that they would withstand major earthquakes and remain operational afterwards. In 1994 the deadline for compliance with the new law was extended to 2008; subsequently the deadline was extended to 2013 and tiers of compliance were introduced later with deadlines of 2020 and 2030. In the mid-1990s Sutter Health estimated that it was going to need to spend $5.5Billion over several years to comply with this legislation. Sutter Health engaged the firm of Lean Project Consulting Inc. to guide the adoption of lean construction. McDonough Holland & Allen PC, Attorneys at Law, provided legal services especially with developing an early version of the Integrated Form of Agreement (IFOA) that was an essential framework for its projects.

Prior to the use of the IFOA, the first two major projects in the replacement program did not go well, and both were ultimately delivered over budget and late. Sutter knew that if this pattern repeated itself over the whole replacement program, it would create a significant risk to the organization as a whole. It began to investigate how to mitigate the risk and found that there were alternative approaches to design and construction that were said to outperform the conventional delivery model.

Among the early influences on Sutter’s approach were the efforts of the Lean Construction Institute’s (LCI) founders Greg Howell and Glenn Ballard as they explored how production management, lean thinking, and supply chain collaboration could improve project delivery by reducing variation. These principles were embodied in the Last Planner System and the Lean Project Delivery System (Ballard 2000). At the time Sutter started its exploration LCI advocated improving collaboration through the formation of cross-functional teams, with the use of concurrent engineering including the involvement of specialty contractors during the design phase.

In March 2004, Sutter organized a Lean Summit for its design and construction partners in Concord, CA in which they shared their vision of collaborative project delivery. The summit concluded with the development of what came to be

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