Assurance of agile projects conference, 27th November 2013

1. Quality Assurance in
Japanese Construction
Henry Loo BSc MSc FRICS MAPM

2. Introducing Henry Loo
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Ex CE Honorary Deputy Chairman - Japanese affairs
BSc Quantity Surveying (South Bank Polytechnic)
MSc Project Management (University of Reading)
Chartered Surveyor (FRICS)
Qualified Project Manager (MAPM)
30 years UK & Overseas construction experience
Previous roles as client, consultant & contracting
Project Manager with Kajima between 1990 to 2000
Visited Japan 8 times since 2007, led 3 delegations,
to study and learn from Japan’s construction industry
Hands on experience with the style and workings of
Japan’s Prime & EPC Contractors
Passionate to improve UK Construction Industry by
promoting the application of lean business operation
principles and technique into construction projects
盧 仲力
副会長 - 日本事務特
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3. Rethinking Construction
The 1998 Egan report made uncomfortable
reading for UK construction industry:
►For every £1 we spent, we waste another
►Deliver poor customer satisfaction
►Fragmented organisation, training, skills, & silo
mentality kills communication
►Much of the waste is caused by non-collaboration
and lack of integration within the supply chain
►Important to get the SME market right
►Wolstenholme’s report highlighted 4 major
blockers to change agenda
►Evidential proofs that we are reverting back to our
traditional stereotype of the ‘food chain’
►Industry needs to improve in 3 key areas: Quality,
Productivity, Customer Satisfaction
►Construction industry have got to sort itself out
►Something has got better since e.g. H&S
Nov 2013
QA in Japanese Construction
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4. KPI’s Comparisons between Japan &
UK
Scoping Study Results, Japanese Corporations, Compared to UK Construction Industry KPI's: Average and
Demo Projects
Benchmark Socre in relation to UK construction industry
120.00%
100.00%
80.00%
Japan
60.00%
Average UK
Demo Projects
40.00%
20.00%
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UK Construction Indicators 2006
Nov2013
QA in Japanese Construction
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5. Today’s Presentation
 Quality embedded within Lean Thinking
 Context of Quality within Japan’s construction
industry
 Reflection
Q&A
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6. A simple definition of Lean?
Making that direct connection
between customer’s value and the
product and services, in so doing,
remove any wasted efforts and
processes that do not contribute to
the value of the solution the
customer paid for (i.e. eliminate
Muda)
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7. TPS – Toyota Production System
Toyota Production System (TPS) ( トヨタ
生産方式 ) is the philosophy which organizes
manufacturing and logistics at Toyota, including
the interaction with suppliers and customers.
TPS is known more generically as Lean
manufacturing . It was largely created by the
founder of Toyota, Sakichi Toyoda, his son
Kiichiro Toyoda, and the engineer Taiichi Ohno;
they drew heavily on the work of W. Deming
and the writings of Henry Ford. When these
men went to the United States to observe the
assembly line and mass production that had
made Ford rich, they were unimpressed. While
shopping in a supermarket they observed the
simple idea of automation in a can’s drink
dispenser; when the customer takes a drink,
another one drops down and replace it
automatically. The main physical goal of TPS is
to eliminate wastes efforts & process.
At The Heart of TPS is Customer Satisfaction
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8. 5 basic components of Lean Thinking*
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*Lean thinking got its
Customer Value
name from a 1990’s book
"The Machine That
Value Stream
Changed the World : The
Pull
Story of Lean Production“
by Womack & Jones. The
Flow
book chronicles the
Continuous Improvement transitions of automobile
manufacturing from craft
production to mass
production to lean
production
The essence of Quality in
Lean is looking at ways to
reinforce Customer Value in
the most efficient manner

9. The Lean Fundamentals
The 4 P’s of Lean:
► Philosophy - a way of seeing & living change
► Processes – break down the end product into
predictable & deliverable interconnecting tasks
► People & Partners - involvement & engagement
► Problem Solving - collectively and collaboratively
Quality is inherently embedded within these 4P’s
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10. The Zen of Lean
► Muri
( 無理 )
Overburden or unreasonableness
► Mura ( 斑 or ムラ )
Unevenness leading to inconsistency in the
physical production output
► Muda ( 無駄 )
Activity that is unproductive or doesn't add value
i.e. wasteful
i.e. the environmental root causes of bad quality

11. The 7 Wastes +1
►Transportation
Each time a product is moved it stands the risk of being damaged, lost, delayed, etc. ref: Toyota Home off site
approach
►Inventory
Work-In-Progress (WIP) represents a capital outlay that has not yet produced an income either by the producer
or by the consumer.
►Motion
As compared to Transportation, Motion refers to the producer or worker. This has significance to damage,
wear, safety. It also includes the fixed assets, and expenses incurred in the production process.
►Waiting
Refers to both the time spent by the workers waiting for resources to arrive, the queue for their products to
work on, as well as the capital sunk in goods and services that are not yet delivered to the customer.
►Over processing
Using a more expensive or otherwise valuable resource than is needed for the task. There is a particular
problem with this item as regarding people. People may need to perform tasks that they are over qualified for
so as to maintain their competency. This training cost can be used to offset the waste associated with over
processing.
►Overproduction
Overproduction is the production or acquisition of items before they are actually required. Batching is a
derivative
►Defects
Quality defects prevent the customer from accepting the product produced. New processes must be added in
an effort to reclaim some value for the otherwise scrap product.
►+ Skill
Organizations employ their staff for specific skills that they may have. These employees have other skills, it is
wasteful to not take advantage of these other skills as well. "It is only by capitalizing on employees' creativity
that organizations can eliminate the other seven wastes and continuously improve their performance."
►Redundancy is also a waste - of employee’s knowledge and experience of the organisation that they built
up.

12. Total Quality Management
Deming laid the foundation in the 50’s:
(a) When people and organisations focus primarily on quality, defined as:
Quality = Results of Work Efforts/Total Costs
quality tends to increase and costs fall over time.
(b) However, when people and organisations focus primarily on costs, costs
tend to rise and quality declines over time.
Ishikawa’s 6 roots causes to Quality delivery:
 Equipment, process, people, materials, environment and management
 If a problem in quality occurs, go find and fix the root cause; not just fixing the
problem presented

13. The 5s [Hygiene of Quality]
Seiri ( 整理 ): tidiness, organization. Refers to the practice of sorting through
all the tools, materials, etc., in the work area and keeping only essential items.
Everything else is stored or discarded. This leads to fewer hazards and less
clutter to interfere with producing quality works.
► Seiton ( 整頓 ): orderliness. Focuses on the need for an orderly workplace.
Tools, equipment, and materials must be systematically arranged for the easiest
and most efficient access. There must be a place for everything, and everything
must be in its place. Use the right tool to deliver the right quality.
► Seiso ( 清掃 ): cleanliness. Indicates the need to keep the workplace clean
as well as neat. Cleaning in Japanese sites is a daily activity. Everyone cleans
up the work area at the end of each shift and everything is restored to its place.
► Seiketsu ( 清潔 ): standards. Allows for control and consistency. Basic
housekeeping standards apply everywhere in the facility. Everyone knows
exactly what his or her responsibilities are. House keeping duties are part of
regular work routines. Standards facilitate delivery of quality.
► Shitsuke ( 躾 ): sustaining discipline. Refers to maintaining standards and
keeping the facility in safe and efficient order day after day, year after year.
Quality is sustained by consistency
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"Sort, Straighten, Shine, Systemise and Sustain“, and "Safety" as a 6th
optional S
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14. Strategic difference between Japanese &
UK construction industries
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ALL contractors are licensed in Japan
Over 50% business of ‘Big 5’ contractors are pure Prime
Contracting – delivering customer value directly
Designs by Clients’ consultants are considered as briefs
Detail design developed directly in collaboration with supply
chain i.e. shop drawings; hands-on control buildability,
quality and easing the interface between packages
Most A&E design are done in house and let on ‘fit for
purpose’ basis i.e. performance base not specification base
Earthquakes are a major driver to technology investment
Innovation is differentiator between General Contractors
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Strategic Business Approach
TQM are feedback to benchmark & improve processes
O&M data are directly fedback into design department
Payment in public sector projects tends to be simple:
 30% at contract commencement
 30% at structural completion & weather tight
40% on completion. No retention on MC but on subs
Subbies paid upon logical pre-agreed stage completion
e.g. floor by floor (not monthly); Saturdays handover
incentivise quality, productivity & promote collaboration
amongst subbies
Extensive use of IT in everything. Contractors involve in
design much earlier, deeper and last longer; with shorter
site duration. All strive to finish early. Savings not shared
with client
Client satisfaction drives everything. Repeat business
bedrock of operation
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16. Quality Function Deployment (QFD)
Corporate Philosophy
Simple Philosophy:
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Everyone participates in Quality
Management (rub off from the
manufacture sector)
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TQM system integration throughout
its supply chain
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Profits by finishing projects early
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Use data and facts as the basis for
corporate & project planning and
continuous improvement
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Japanese process for construction:
plan, study, design, construct
(contrast with Deming’s PDCA)
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What's ours?
Vision
President’s Policy 3 - year
Business Plan
Branch Office General
Manager’s Policy
Department Manager’s
Policy
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17. Research & Development
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R&D are considered strategic critical to competitiveness
Huge R & D spend. 60 largest companies each spend
an average of 0.5% of its turnover on R&D
Doctrine of long term future rest in constant innovation
Kajima spends just over 1% Turnover. 15 years ago was 4% T/O
WHY?
Maintain its competitive edge (innovation as differentiator)
Life time guarantee its projects (use research to reduce risks)
Good marketing to enhance it’s quality reputation
Identified the direct link to profits
Corporate culture of knowledge as cornerstone to long term success
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18. ·
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Overall impression of Japan’s
construction industry
Delighted end users
Deliver satisfactory returns to investors
Consistently deliver defect free projects
Time [and cost] predictable delivery are given
Provide a safe working environment for all
Vastly higher productivity than UK
A strong self believe of improving the society
through aesthetically pleasing, safe and
environmentally friendly buildings and structures
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19. Race for Change
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Our systems need deep change
Rise of the Prime Contractor
Taking the first few small steps will
lead to quantum leap improvement
Collaborative improvements
together, supply integration later
Lean is not cultural. Japan is only a
model to start us off
Other industries adopted lean with
quick & spectacular results
Construction industry have to
develop own lean style
The heart of Lean is customer
value and customer satisfaction
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20. Final word: Combined it’s a waste - separated it’s
a resource; society-wide environmental philosophy
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21. Your Reflection?
Where is UK construction industry heading?
► Could we simply stay calm and return to business as
usual now the economy is improving?
► Are we building for the better or for worse?
► What systemic changes are needed?
► What’s stopping us to take the first step to change?
► What will the UK market outlook in 3 years time?
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