Managing Operations in a World of

Constraints

KLU MBA 2020

MODULE 3.2 / Prof. Dr. Kai Hoberg
April 29, 2019
Ebraam Elias
Since many years, our construction company has suffered from not delivering the
projects in time, within budget and with the quality demanded by the customer.
Due to these problems, the loss of big projects to international companies is
obvious.
Value stream mapping (VSM) is used to identify value-adding activities and those
considered wasteful of materials and the flow of information and people, and the
paper searched for an effective way to consider the cost for studied construction
of plumbing pipes.
For mapping the current state map, the information for different activities for
plumbing pipes installation was collected from the contractor, site engineer, site
supervisor and workers. It was conducted to record the actual cycle time for each
construction stage accurately as presented in the below table:

Construction Activity Cycle Time (Hours) No. of laborers

Cutting & Fitting-up 4 6

pipes
Shifting to site and fixing 2 6

Welding 2 4

Insulation 4 6
Partial backfilling 1 2
Pressure test & Work 2 2
inspection
Final backfilling 2 2
 Start

Cutting & Shifting to site

Welding
Fitting-up pipes and fixing

Insulation

Finish

Final backfilling Pressure test Partial

backfilling

Fig 1. Current state map

Identifying wastes from current process:

According to the present state map, the pipes are ordered 10 days before the
execution of work. Pipes received on the 7th day of order. Once the pipes received
at the pipes yard, which is at 100-meter distance from the construction site, they
are sent for cutting and fitting-up. It requires 4 hours for 6 laborers to cut and fit-
up the pipes according to the approved shop drawings of the project. Shifting of
10 pipes to the construction site takes 2 hours for 6 laborers. Welding process
requires 2 hours for 4 laborers, and insulation takes 4 hours for 6 laborers.
Wages paid to the plumber is AED 15 per hour. Therefore, total money spent for
the first 4 processes:
Process 1 = 15 x 4 x 6 = AED 360
Process 2 = 15 x 2 x 6 = AED 180
Process 3 = 15 x 2 x 4 = AED 120
Process 4 = 15 x 4 x 6 = AED 360

Therefore, total money spent after the first 4 processes is AED 1020, and the
whole process took 12 hours. (working daily hours are 10 hours)

A large space is occupied because of the pipes inventory. Inventory holding cost is
paid to the security agency. Three watchmen work at the pipes yard in day,
evening and night shifts. Daily wages paid to each are AED 150. So, money spent
for the security of pipes yard is AED 450 each day.

Waste is generated due to the cut of pipes. Error in cutting of fitting-up pipes or
mistakes in read of shop drawings causes the waste in pipes.

Recommendations for improvement in current process:

To avoid such expenses in the current process, it was suggested to order

readymade modules of pipes on site. Readymade modules is a company made
pipes prepared as per client’s requirements and details given by approved shop
drawings. There are many benefits for using readymade modules of pipes in
construction works.

Readymade modules providers give a faster delivery of final product. It can be

received at site on the 8th day of order.

 AED 1020 paid to laborers for cutting, shifting, welding and insulation can be
saved.
 Space for the pipes inventory is saved. It can be used for other purposes.
 Security is no longer required at pipes yard. AED 450 is saved.
 No waste generation by cut pieces of pipes.
 12 hours are saved.

Using this technique, procurement planning can be improved due to indent of

readymade pipes modules. It makes a great impact on cost savings as well as time
savings if it can be carried out throughout the project. The project can be
complete before its delivery time.
Few considerations to be taken care of:

 Readymade modules are 8% to 10% more expensive than normal pipes.

 Rental of crane for lifting the modules should be considered.

Start Crane lifting Wall fixing

Finish
Final backfilling Pressure test Partial
backfilling

Fig 2. Future state map

Conclusions:
The VSM technique will allow construction managers to efficiently identify and
measure waste sources. It will enable managers to more effectively see
improvement opportunities and propose tangible plans to implement them. Thus,
they will be able to reduce costs as well as materials and energy usage, improve
the human resource management, comply with the schedules and quality
standards, and decrease the process variability.
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