[00:00:00] Roberto J. Arbulu: It is my pleasure to introduce Todd Zabelle, who will lead us to PPI’s thinking about modern construction and will frame pretty much the entire day for us. A couple of quick comments and an introduction about Todd. Todd is the founder of Strategic Project Solutions, SPS, as well as the Project Production Institute.

[00:00:24] Roberto J. Arbulu: Prior to founding SPS, Todd founded Pacific Contracting. Established in 1993, Pacific Contracting was recognized in the mid-90s for its use of various innovations, including Lean Construction and Virtual Design & Construction. In July, 1998, this effort was acknowledged in the UK Government's Rethinking Construction Report.

[00:00:50] Roberto J. Arbulu: In the past two decades Todd has authored numerous papers on the topic of optimizing engineering, fabrication and construction. These papers have been published in various technical journals, presented at numerous conferences around the world, and cited by several other authors. So without further ado, over to you, Todd.

[00:01:08] Todd R. Zabelle: Okay, thanks, Roberto.

[00:01:10] Todd R. Zabelle: Welcome, everybody. This is very exciting. I think the membership growing in PPI and in the involvement and the global movement is really starting to pay some dividends for those that are involved in what's going on here. I'm going to take a few minutes to talk a little bit about what modern construction is, including our vision and what needs to be done to make it happen.

[00:01:36] Todd R. Zabelle: All right? And for me personally, I keep going back to this question that the construction users round table asked back in 2019 in the Voice magazine, and that was, “When is construction going to adopt modern production?” And I find these photographs most interesting, number one, because if you understand production, what is happening in this car factory on the left

[00:02:00] Todd R. Zabelle: is actually fairly modern production and when compared to construction, if you will, this is a line flow production system. It has physical controls built in. We don't see a lot of unnecessary work and process laying around. And everybody seems to be doing their job in a fairly safe environment. And that was all the way back in the 1930s.

[00:02:20] Todd R. Zabelle: So the question of modern production from a construction perspective is quite interesting. I would like to start with a roadmap on what we see people doing out there now. Okay. So there are companies looking to adopt industrialized construction digitalization and more modern ways of approaching their projects.

[00:02:42] Todd R. Zabelle: But we see, and I'm not going to go too far on this, I'm going to let James talk about this later with the panel that he's put together. But what we see out there is pretty much a typical journey, and we see that because at some point we get a call after people have attempted to do different things, and there's some confusion.

[00:02:58] Todd R. Zabelle: But what the journey most often looks like, and it's pretty standard, is someone decides that they're going to move from a potential conventional design build and then get involved in either digitalizing or automating what they're currently doing or moving work offsite or a combination. And then somewhere down the road, they decide they're going to standardize and productize, and they begin to start looking at things like design for manufacturing, assembly or DFX, depending on what you want to call it.

[00:03:26] Todd R. Zabelle: 3D modeling obviously, and automated takeoff and pipe routing and so on and so forth is done at the automation, and they kind of get in that area and they get a little bit stuck. All right. And James is going to talk later in more detail, but I'm going to talk about why they get stuck and what necessarily happens.

[00:03:46] Todd R. Zabelle: At some point they begin to see that there's more to the story. All right. Now, just a word on this whole idea of digitalization, automation. I think that Peter Drucker provided the most interesting quote, and that is there's nothing so useless as doing officially that which should not be done at all.

[00:04:02] Todd R. Zabelle: So there's a fair amount of stuff going on out there in the way of automating and digitizing things that perhaps we shouldn't even digitalize and things we shouldn't even be doing. All right. And so first of all, we probably need to step back and look at this thing from a little bit different perspective.

[00:04:16] Todd R. Zabelle: At the same time, when it comes to this idea of industrialization, there's all sorts of scenarios happening from using robotics on doing the same work, but doing it offsite because we're in a factory environment or going with a fully automated type production system where in this particular instance you can see someone says they could do 300 lit, 20 linear feet of adhesive application per minute.

[00:04:42] Todd R. Zabelle: Is that even necessary? Right. So lots going on, but what we believe is that there is a lack of a framework for how you'd approach it. All right, so if you get one thing out of what I'm presenting right now for the rest of the day, it’s that we're going to set forward using a construction type graphic, if you will, a framework for what we believe to be modern construction.

[00:05:07] Todd R. Zabelle: All right? And so clearly there's automation, clearly there's industrialization and digitalization. We submit to you that the underlying foundation and everybody involved in this call, for the most part, is involved in some form of engineering construction. We all know the importance of the foundation.

[00:05:26] Todd R. Zabelle: The foundation from our perspective is operation science, and I'm going to talk a little bit more about that and how it plays into this. All right, so again, autonomous vehicles are coming, automated production is coming. Right, or industrialized production, if you will. And digital's coming. There's no doubt about that.

[00:05:50] Todd R. Zabelle: And we as the construction industry, other than building the facilities and the capabilities for people to leverage these innovations, really aren't that involved in it. Okay? These things are going to happen regardless of whether we decide to embrace them or not. So the question for us, and we'll talk about this later, the final panel is, if autonomous is available and industrial

[00:06:14] Todd R. Zabelle: production techniques are digital, what are we going to do with it? And to me, and I see three people, let's take an autonomous vehicle. There's the person that'll say, “I'm never going to let an autonomous vehicle arrive on my site to make a delivery.” There's another one that'll say, “Ah, I'm indifferent to it.”

[00:06:32] Todd R. Zabelle: That was cool. And then there'll be the third one that says, “Wow, that is really an equal opportunity to track through the digital, tracking of that vehicle to know when my delivery's going to come, whether that's a plane, a surface ship, or even a a vehicle.” Okay, so this stuff's coming. I think the question for everybody is, “How are we going to use it?”

[00:06:58] Todd R. Zabelle: All right? And again, later in the day, we're going to talk about that, but we're also going to talk about this idea of industrialized construction, right? Okay. So what is operation science and why should you care? Again, we'll submit to you that the administrative foundation of construction management. When I'm talking construction management, I'm talking about the defined term that's taught in universities and has been written in numerous books.

[00:07:23] Todd R. Zabelle: This idea of construction management is not well certified for this journey. Not well-suited, excuse me, for this journey. If your goal is to optimize how you deliver construction projects, especially if you're getting involved in the design and making of things, this is not of much value to you. And what we're beginning to see as practitioners of this have pushed way beyond and are beginning to understand that, yes, I need to have the administrative functions associated with construction management or project management, but that's not of much value for what it is.

[00:07:55] Todd R. Zabelle: I'm trying. So what do we mean by this? Okay. And I'm going to go through what we call the PPI framework for thinking about production on projects and its underlying concept of operation science. So we're all very used to the idea of creating a schedule to forecast and measure progress as to what is happening or could happen on a project.

[00:08:24] Todd R. Zabelle: All right? And so we like to call that the “should” or what we want to have happen. All right? An extreme amount of effort goes into creating these schedules and updating these schedules. And we might want to call this the demand. Here's what we want to have happen, or what should have happened, so that we get this result that we're looking for as the Project Management Institute calls it, right?

[00:08:46] Todd R. Zabelle: The purpose of a project is to create a product, service, or a result, right? At the end of the day, the supply end of this, or the production system, is going to dictate what will happen. And so the first thing we want to do is get our head around the concept that this network, doing, for lack of a better word, whether it's knowledge, work and engineering, and design architecture, whatever the case may be,

[00:09:11] Todd R. Zabelle: even the administrative work and the craft work and the logistical aspects are the production systems. For the most part. The elements of those production systems are already in place. Precasters are precast. Steel fabricators are fabricating pipe fabricators, fabricating engineering companies or engineering.

[00:09:31] Todd R. Zabelle: The work is going on and really all a project is, is an accumulation or configuration of a bunch of capacity that's out there in the market to go deliver a specific project. So the first thing that we want to do as the day goes on, let's be thinking about the difference between construction management and its development of a schedule that creates a demand for what we're going to call production management, which is the ability to do all the stuff that needs to be done to deliver to that demand.

[00:10:03] Todd R. Zabelle: And the big idea here is the production rates within the production system will drive the milestone dates. Okay, now most people understand that but a lot of 'em don't want to admit that because it questions everything that we know. Okay. And so the framework that we're proposing to further simplify this as the years go on as a 4-5-3 – four verbs, five levers, three curves, okay?

[00:10:26] Todd R. Zabelle: And again, we submit to you that the first thing we need to do once we understand and acknowledge there's a production system, is to focus on how things are designed, how things are made, how things are transported, and how things are constructed or built on site. All right? By design we mean requirements definition.

[00:10:48] Todd R. Zabelle: Concept design, detailed engineering, schematic design, whatever you want to call it. General arrangements making is anything that is related to processing, manufacturing, fabricating, assembly, and so on and so forth. And then obviously we take things to a location, so transport is important. Okay.

[00:11:10] Todd R. Zabelle: Those four verbs and the configuration of the production system is always based on what we call five levers, how you design the product and the product could be a pipe spool, it could be a beam, it could be a calm, it could be a precast element, or it could be an entire facility or a campus. But the design decisions that are made, if we decide to bolt the connections versus welding the connections, that is going to force a different process design.

[00:11:38] Todd R. Zabelle: Okay. And so we call that the product process. Concurrent engineering aspect or concurrent design. And a lot of the DFMA work is focused in that area about the relationship between the product and process. But there's a third part of all this, which we call the relationship between capacity, inventory, and variability.

[00:12:01] Todd R. Zabelle: Once you understand the five levers, you can understand why people are doing what they're doing. Okay. And I'll give you a for instance: the productization and standardization of product design. And we're not saying you shouldn't do that, but what you're attempting to do when you do that is you're trying to mitigate or minimize variability, right?

[00:12:20] Todd R. Zabelle: And so the more scenarios you have in how you design and what you design, creates more variability. And there's relationships between variability, inventory and capacity. Right? Now, a lot of people say, “I don't understand what you're talking about. I don't know why I need it. I'm in construction. What does this have to do with construction?”

[00:12:44] Todd R. Zabelle: Well, a large number of people on the phone today, or on the webinar today, are moving far beyond designing assembly things on site. Right? They're moving into what we're calling modern construction or industrialized construction as a sub, as a segment. So it is critical and it is understood, and this is what they think about in manufacturing.

[00:13:10] Todd R. Zabelle: They think about the relationship between capacity utilization and cycle type. They know the higher the utilization, the longer things take. So if you go into a factory, as we did when Gary and I had the opportunity to visit Ford, they're not focused on high utilization. They're focused on throughput.

[00:13:33] Todd R. Zabelle: So they want an F-150 to come off the line every— Or tack time of every minute one truck. Okay, so their focus is on tack time and throughput. And they achieve that by managing their work in process, not in progress, in process. They know at some point that they can GM— the more they GM in their, in the way of WIP

[00:13:59] Todd R. Zabelle: they're not going to get any return. As a matter of fact, what might happen is they might open so many boxes that it takes longer than it could. All right? And so we believe that it's important to begin to, well, not even to begin to fully understand these concepts and these three simple curves. But I know most of you are saying, “What is this guy talking about and why is he talking about this?”

[00:14:23] Todd R. Zabelle: If you truly want to move into modern production, if you truly want to be in industrial construction and modernized construction, you need to understand these relationships. Driving workers to work harder and produce more might make your project take longer. Starting more things might make your project take longer, right?

[00:14:46] Todd R. Zabelle: These are mathematical equations that are understood by manufacturing that we're now introducing to the construction industry. And we understand, and we hear it all the time, “We don't know why you're talking about this. This is not what we have to do.” And a lot of times we take that with, “Well, you're just not there yet.”

[00:15:03] Todd R. Zabelle: Okay. Now another thing that we try to get people to understand is there's no free moves on the board. You can't tinker with the capacity utilization and not have some kind of relationship with the inventory. You can't redesign the process. Without some implications to increasing, reducing variability, playing around with the inventory and, again, the working process.

[00:15:26] Todd R. Zabelle: So these things are interconnected and because of that, and James is going to talk about this later, you have to look at this from a sequential nature. Okay. All right. The other thing that's going on there, to bring this back to the autonomous and the digital part, is there is no doubt, as we said, that within the production element of

[00:15:48] Todd R. Zabelle: things are becoming more autonomous and more robotic. All right? And that's a good thing. That in turn is producing a significant amount of data that is being managed through a variety of data centers, networks, telecommunications capabilities and technologies and so on and so forth. As that data's being produced, we have to ask ourselves, “What are we going to do with it?”

[00:16:13] Todd R. Zabelle: Right? If you have real time production data flowing. Back and forth. Why would you be messing around with a critical path schedule? I've never been in a high volume manufacturing plant where they use a critical path schedule, right? They don't use earned value in semiconductor production, trust me. Right?

[00:16:30] Todd R. Zabelle: And so what we need to do is we need to shift our mindset and get more clear on what it is that we need as our foundation, if you will, to ensure that we build a strong house for modern construction. All right, so with that, let's go see what's happening out there and let's have a great day. Thank you very much.