Public works agencies in U.S. look to Japan for best practices in delivering more projects within budget

Brian MacClaren

Chief Operating Officer NOVACES, LLC New Orleans, Louisiana

or a country that only takes up 0.25% of the world’s land surface, it is amazing that Japan suffers about 25% of the total impact from the world’s natural disasters. It can be understood why Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) is responsible for 80% of all the construction projects in the country. That’s between 20,000 and 30,000 newly commissioned projects each year.

With the same budget crisis that has affected the U.S. public agencies since the economic downturn in 2008, it is a wonder that they were able to cut construction timelines by over 20% and costs by 30%, yet deliver more projects.

As a result of the high demand for projects to quickly develop, maintain, or repair public infrastructure, workers there were operating at very high stress levels. After long periods of excessive amounts of overtime, productivity was poor and costs were quickly adding up. Leaders like Yoshichika Takai, director of Meishi National Highway Office for MLIT, decided, “As our office had been wanting to make drastic business improvements, we implemented Critical Chain Project Management.”

Critical chain, a project management strategy and philosophy invented in the late 1990s, represents the next major step in how projects are managed by organizations. This strategy includes many aspects of the traditional project management approach as well as various new capabilities. Most organizations that

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What is required to ensure a project is successful?

• A reliable schedule to deliver on time and on budget. • The optimal utilization of workers and resources.

• Clarity on priorities to decide where to focus management attention.

implement critical chain project management see improvements in their businesses including:

• Project time reduction of 20-50%

• Project due date performance greater than 95%

• Cost reductions 10-30%

• Improved employee satisfaction, teamwork, and morale

Instead of managing projects so that each task is completed on schedule, critical chain principles help to determine where to focus so that the entire project is done on time. As a result, critical chain can be of enormous utility in ensuring that projects are completed on time, within budget, and while delivering all promised objectives.

Unlike conventional project management methods, critical chain prevents several behavioral tendencies in people that cause project delays, such as multitasking. Multitasking is the unplanned switching between unrelated activities. In today’s fast-paced business culture, most multitasking is regarded positively and even encouraged. However, suspending work on one task in order to work on another unrelated task will delay completion of the suspended task and add setup time. In such instances, multitasking becomes a major source of inefficiency and poor quality.

Figure 1: Adoption of CCPM at Japan’s MLIT

After implementing this project management strategy at MLIT, projects have gone from finishing on schedule just 30% of the time to 86% on time in the Fukuoka Prefecture. They have nearly eliminated the need for costly overtime labor and cut costs by nearly 30%.

In the Kagawa Prefecture the organization is churning out 131% more project throughput. According to Kiyoshi Okudaira, then DirectorGeneral of Hokkaido Bureau MLIT, the results have garnered praise by all stakeholders involved. “Good for the residents, good for the contractors, good for the government—a winwin-win relationship,” said Mr. Okudaira during a 2009 presentation at the TOCICO International Conference.

The win-win-win approach has recently caused the use of this project management strategy to skyrocket in Japan’s public works projects. In 2006, just 15 projects used the approach, and in 2008 there were 4,000 projects managed using critical chain. Today the government recommends that government managers and their contractors use critical chain project management for all 20,000 yearly MLIT projects.

Hilbert Robinson, an expert on critical chain project management at NOVACES and one of the early adopters who pioneered its use in U.S. companies, was interviewed about his experience. “I believe it is imperative that U.S. construction companies take a serious look at how critical chain can help make their companies stronger, and do so sooner rather than later. The first ones to do so will have a strong competitive advantage over their rivals.”

Brian MacClaren can be reached at (732) 383-6013 or bmacclaren@ novaces.com.