In the last episode, we identified the program and the projects within it, so you know where to begin your scheduling journey: the program master schedule, the project master takt plan, and the phase takt plan. Once you have those levels, you’re ready to create your structure, and in my opinion, the structure starts with the milestones. When I talk about Last Planner, that’s trademarked by the Lean Construction Institute, and the Takt Production System is now trademarked too. They work together like peanut butter and jelly.
Short answer: Either fit the takt plan within given start and end milestones, or schedule from the start date what’s actually possible and propose an end date. Check it with (wagons + zones − 1) × takt time. Research what substantial, final, and financial completion really mean, and set intermediate milestones at the ends of phases and around the one-third and two-thirds points.
What Milestones Does a Project Have?
It’s not as easy as a start milestone and an end milestone. There’s the conception of the project, design, preconstruction, purchasing and coordination, the NTP, intermediate milestones, the end milestone, and the maintenance and warranty phase. But when we focus on construction, at a minimum you’ll have your start and end milestones.
What Are the Two Ways to Make a Takt Plan?
| Option | How it works |
|---|---|
| 1. Fit within the milestones | Identify the start and end milestones and design the plan to fit within those parameters |
| 2. Schedule what’s possible | Identify the start date, schedule what you feel is possible per current regional market conditions and labor and resource availability, and propose an end date |
When I first did lean training, Hensel Phelps sent me while we were doing work at a large semiconductor plant. The lean consultant said, identify milestones and work back from there. Lean is all about getting it done within the parameters you’ve been given. I do understand that, because if you don’t have a need, you won’t look for continuous improvement.
But so many times in our industry we get unrealistic durations. I’m not saying anyone’s doing evil, but project directors, project managers, owners of companies, owners, and architects will literally guess on the duration, or use historical information that isn’t quite accurate. Those milestones aren’t based on customer need. They’re based on customer guesses. So you have to be very careful, and I always add the second option.
What Do Takt Practitioners Say?
A lot of takt practitioners get after me: Jay Money, buddy, you can’t just ask for what you need. You have to go from the constrained end milestone or the stipulated date. And I say that’s fine, as long as it’s possible. What they mean is you design your phases within the milestones you were given, interconnect them, and optimize the takt time and the zone quantities and sizes to create a throughput time that meets your end date.
However, when you take design, your supply chains, your phases, your interdependencies, and your buffers into account, you’d better have enough time. Nowadays, with the Little’s Law formula, you can know:
(Takt wagons + takt zones − 1) × takt time = duration
Plug that in and you’ll know if you’re at what we call a responsible level, and you can optimize it to a norm level and know if you’re going as fast as you possibly can. I’m a fan of doing both, or of identifying the start date and scheduling what’s possible. Either way, you need to determine through research the start and end milestones that define the parameters of the project, and the intermediate milestones, which might come later once you’ve done your macro and norm level planning for the phases. At least you know your parameters, your goalposts and your sidelines. See Creating Your Norm-Level Takt Plan.
Do You Know What Substantial Completion Means?
It’s easy to identify a start milestone. End milestones are very rarely understood. Off the top of my head, most substantial completion definitions include:
- Punch list complete, or a punch list from the architect
- Preliminary balancing report complete
- Elevators complete
- Fire life safety complete, including the fire sprinkler inspection, the life safety walk, and fire alarm testing
- The building enclosed and functional, with HVAC systems operating
- The building generally ready to observe in its fully functional state
After substantial completion, you do functional performance testing, get your final balancing report, complete your punch list, and make sure any life safety corrective actions are complete. But a lot of people don’t understand the real definition of substantial completion. It’s a guess or an industry term. Get it from your prime agreement, the Division 1 specifications, and the authority having jurisdiction, and know exactly what it means before you put it on a schedule. Do the same for final completion. Read Substantial Completion vs Final Completion Explained.
What Is Financial Completion?
There’s substantial, final, and then what I call financial completion. If you’re asking, what in the world is that, Jay Money? Here’s what I mean. Financial completion is the duration of time your general conditions and general requirements are covered on a project. Here’s why it matters. Say you’ve been delayed and you got a time extension. You’re good, right? Did they pay you for it as well? If you got a three-month time extension but no cash, you’re out three months of your monthly burn rate for general conditions and general requirements. See Substantial, Final, & Financial Completion.
This is called objective planning. If you have a deadline shorter than substantial or final completion for your financial target, we need to know, because it’s part of the overall financial strategy.
| Milestone | Question to answer |
|---|---|
| Design milestones | What are they? |
| NTP or start | When do we start? |
| Substantial completion | What’s the target, and what does it mean in the contract? |
| Final completion | What’s the target? |
| Financial completion | How long are general conditions and requirements covered? |
You may not always want to communicate financial completion to your owners if you have a strategy. I’m not saying don’t be transparent. Just be careful posting it on all your schedules, and have your strategy for how you’ll communicate it.
Where Do Intermediate Milestones Go?
Intermediate milestones are typically at the ends of phases. I also like milestones at least around the one-third and two-thirds points so you’re monitoring the project as you go. In the first third, the project needs to be kicked off and the superstructure needs to go up. In the second third, you’re preparing for all your systems and getting your interiors and exterior. The last third is all about grinding down and completing, month by month, everything required to finish out spaces and to start up and commission your building. It’s a natural way to chunk out your project.
So here is the challenge. For your next project, write down the start, substantial, final, and financial completion milestones, with where each definition comes from. Then check the duration with the formula.
Bottom line: Get your milestones right first. Then you can start designing phases, which is next in the series.
If your project needs superintendent coaching, project support, or leadership development, Elevate Construction can help your field teams stabilize, schedule, and flow.
On we go.
Takt Production System series:
Previous: Programs and Projects
Next: Phases
FAQ
What are the two ways to make a takt plan for a project?
One: identify the start and end milestones and design the plan to fit within those parameters. Two: identify the start date, schedule what you feel is possible per current regional market conditions and labor and resource availability, and then propose an end date. Jason is a fan of doing both, or of the second option.
How do you check if a takt duration is realistic?
Use the Little’s Law formula as adapted to takt: (takt wagons + takt zones − 1) × takt time = duration. Plug it in to know if you’re at a responsible level, then optimize to a norm level.
What is financial completion in construction?
The duration of time your general conditions and general requirements are covered on a project. If you get a three-month time extension with no cash, you’re out three months of your monthly burn rate for general conditions and general requirements.
People Also Read:
What Is a Project Milestone?
How to Track Milestones, Variances, Roadblocks, and Procurement in Construction
What Are General Conditions in a Construction Budget?
The Takt Production System: Scheduling That Maps Flow Through Rhythm
If you want to learn more we have:
-Takt Virtual Training: (Takt Virtual Training)
-Check out our YouTube channel for more info: (Elevate Construction on YouTube)
-Listen to the Elevate Construction podcast: (Elevate Construction Podcast)
-Check out our training programs and certifications: (Training Programs and Certifications)
-The Takt Book: (The Takt Book on Amazon)
Discover Jason’s Expertise:
Meet Jason Schroeder, the driving force behind Elevate Construction. As the company’s Founder and COO, he’s dedicated to taking construction to new heights. With a wealth of industry experience, he’s crafted the Field Engineer Boot Camp and Superintendent Boot Camp – intensive training programs engineered to cultivate top-tier leaders capable of steering their teams towards success. Jason’s vision? To expand his training initiatives across the nation, empowering construction firms to soar to unprecedented levels of excellence.