Lean project planning – Bridging last planner system and earned value management

Earned Value Management (EVM) has become a <i>de facto</i> standard for project planning after decades of applications worldwide, and most industry contracts that require some of the reporting features of EVM. However, EVM has shortcomings such as too early release of work and no process perspective to facilitate improvements. The Last Planner System (LPS) was developed to overcome the shortcomings of EVM utilizing insights from lean manufacturing. Unfortunately, LPS has not reached the same level of acceptance as EVM. A new approach, Lean Project Planning (LPP), is developed to take advantage of the strengths of both approaches. In this paper, LPS and EVM are compared to each other, and the resulting LPP is presented. The paper discusses a LPP implementation across the project portfolio at a Norwegian pressure vessel fabrication company. The results show that LPP provided accurate Estimate At Completion (EAC) for both costs and delivery times despite taking on many major Variation Orders. The approach is arguably a step forward for turning plans into planning in project-based industries such as shipbuilding and fabrication of pressure vessels. The complexity of pressure vessel fabrication stress-tested the LPP, and some improvements were identified for future work.