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Benefits of Lean Construction

Lean Construction

What Is Lean Construction?

The Lean Construction Institute defines Lean Construction as, “A collaboration-based system that is founded on commitments and accountability. It requires a significant shift in the trust that each stakeholder places on another. The adversarial relationship that has existed in the industry between contractors and design teams over many centuries is challenged, with all stakeholders having to align with goals and objectives. In projects where Lean construction management principles are applied, teams integrate through collaborative tools and search for ways to eliminate waste. Teams seek to continuously improve through reflection. Lean processes are designed to remove variation and create a continuous workflow to drive significant improvement in predictability and strongly encourages respect for all people involved.”

As expected, as Lean management becomes more widely adopted in the construction industry, some of the benefits that the manufacturing industry experienced are now making their way into how construction teams operate and projects are executed.  

The 5 Principles of Lean Construction

There are five simple principles that undergird Lean Construction:

  1. Define Value – Put simply, this means figuring out your customer’s needs on a project. What exactly do they want? How much are they willing to pay for it? Coming up with answers requires a lot of inquiry and research, and what you learn gives a roadmap for the rest of the project.
  2. Map the Value Stream – What does it take to move a project from conception to a final product? Mapping the value stream requires a builder to uncover activities that would be considered waste, and then eliminate them to save the owner time and money.
  3. Create Flow – You figured out how to get rid of the waste. Now you have to make sure all the necessary work moves smoothly, with no bottlenecks. This might mean training employees on new equipment or techniques, or leveling workloads so no one is saddled with unrealistic goals.
  4. Establish Pull – Why deliver more materials than you need six months before you need them? A pull-based system delivers only the necessary quantities at the time that workers are ready to put them to use. It’s a customer-centric system, driven by their needs.
  5. Pursue Perfection – Make the previous four principles a part of your company’s culture. Get everyone striving for perfection in delivering exactly what the client needs. The result: happy customers.

A Brief History of Lean Construction

Lean is far from a new concept. The term Lean was actually first used to describe the production principles applied in automobile manufacturing. It was coined 1 by John F Krafcik during his time at MIT Sloan to describe a production policy he observed at car manufacturing plants that were able to produce a wide range of models while still maintaining the highest levels of productivity and quality.

In his article, Krafcik asserts that even the use of high technology did not yield the desired impacts on quality and productivity if it is applied without proper production management policies. He then goes on to define the key policies applied at the most productive plants, which have become the basis for Lean Production principles and the last 30 years of Lean studies and policies:

  • Workflow standardization→removing waste
  • Decentralized process improvement responsibilities–workers as more than cogs in a machine→adaptability and flexibility towards improvements
  • Just-in-time inventory system→remove waste
  • High emphasis on teamwork – respect, mutual trust, and peer development

For those who have spent years working in construction, it’s not difficult to recognize how different a construction project and a construction site is from the majority of manufacturing plants and products. In manufacturing, a team can analyze the efficiency and productivity of a product over and over again until they are able to nearly perfect the process and the product’s quality. In construction, every project is a “prototype”. There is no other exact copy, with the same conditions, same people and same process built before to “practice” on. In fact, every week and every day is different than the one before, and the lessons learned from one sprint may not at all apply to the next. But even then, there are definite lessons and principles from Lean manufacturing that can be applied to construction in an effort to achieve higher levels of productivity and quality, similar to the improvements seen in car manufacturing plants.

Indeed, starting from 1992, the earliest written thoughts on Lean principles and their application to construction management came from Lauri Koskela2challenging the industry’s paradigm that time-cost-quality are at a continuous trade-off with each other.

Further research on Lean construction stemmed from observations by Glenn Ballard and Gregory Howell that “normally only about 50% of the tasks on weekly work plans are completed by the end of the plan week.” Their insights gave way to reviewing and rethinking the principles applied to traditional construction management. Since those initial efforts, the entire industry has recognized that low productivity, inefficiency, and continuous schedule and cost overruns are not acceptable. As a result, this has driven owners and construction teams to embrace the principles of Lean in search of a more successful and reliable project delivery.

In applying Lean construction management principles, the industry has defined one of the contractual or project delivery processes as Integrated Project Delivery (IPD).

The Benefits of Lean Construction

Maximizing efficiency and reducing waste are worthy goals. But there are heaps of trickle-down benefits to achieving both that have an enormously positive impact on your project, your team, and your customers.

Improved Work Quality – Because Lean Construction requires tighter integration of delivery processes and goal-sharing, there is a greater emphasis on communication between team members. Employees feel more empowered to point out ways to improve quality without stepping on someone else’s turf.

Increased Employee Collaboration and Accountability – Better communication reduces some of the innate protectionism between varying stakeholders that has afflicted the construction industry in the past. Technological tools and software that allows for collaborative problem-solving is a key component.

Boosts Project Satisfaction – Tighter collaboration is helped by everyone on the team understanding the project owner’s objective. Keeping that objective front and center means every decision is made with achieving it in mind. This leads to faster resolutions of problems, reduces frustration for members of the team, and most importantly, makes the client happy.

Saves Money – Want to keep an owner really happy? A satisfied team that works together to solve problems will also reduce costs.

Increases ROI – An increase in efficiency from happy employees will naturally lead to an increased return on investment. In addition, any reduction in material waste resulting from using a pull system for ordering, or reduced procedural waste brought about by streamlining workflows, will raise ROI.

Essential Strategies and Tools for Lean Construction

Unlike an industry such as manufacturing, no two construction projects are exactly alike. That makes adopting standardized processes and tools a challenge for any company.

But there are a few tools that can help companies as they implement Lean practices for all their projects.

IPD, takes various disciplines–contractors, subcontractors, architects, and so on–and builds a team that can work together for the length of the project. This team mimics the structure of a company, giving everyone clearly defined roles and putting everyone under the same contracts and agreements. This way, everyone is working with the same goal in mind: to build a successful end product.

Another available tool is the Last Planner System. Designed by the founders of the Lean Construction Institute, LPS is a scheduling and learning system that helps a project’s last planners build out a timetable for completion of a project and all its various phases. LPS starts with a master schedule, within which planners can set a calendar for completing a project’s phases, looking ahead to future obligations, determining weekly goals and learning what is working for team members and what isn’t, and adjusting processes accordingly.

Finally, the adoption of technological tools, like PlanGrid, that cut out paper, provides advanced tools for planning and visualizing a project and streamline efficiencies are part of the Lean Construction machine.

Signs It’s Time for Lean Construction Technology

1. Excessive Rework Rates

After an extensive review of existing research, Navigant Construction Forum found an average rework cost of just over 4% per project. That means, on a $500,000 project, that can result in a loss of $20,000 or more. 

If your firm is measuring higher rework rates than this, it’s definitely time to invest in lean construction methods for reducing mistakes and last-minute change requests. Since lean management emphasizes pull planning techniques rather than reactive methods, rework is prevented by addressing problems when they first arise.

2. Multiple Concurrent Projects

Managing multiple projects at once is an essential skill for growing from a small- or medium-scale construction company into a large firm that can compete on an international level. Taking on multiple commercial or infrastructure projects without the right management system can result in major failures that could sink an entire business. 

Implementing lean construction technology and methods prior to expanding into concurrent project management is ideal. However, even a late implementation is better than waiting until a project has failed to try to catch up.

3. Large-Scale Contracts

In addition to managing more than one project at a time, lean construction is also indispensable in megaprojects. Many construction firms gear up to take on multimillion-dollar infrastructure projects hoping to turn a healthy profit, but these projects often offer some of the smallest margins of all commercial work. 

Lean construction technology and management is essential to keeping these huge and complex projects on time and under budget so they don’t eat into a company’s other responsibilities. The extended cycles of large-scale projects also provide more opportunities for completing the final stages of lean construction methods which tend to focus on continuous improvement. Smaller construction projects often wrap up by the time teams find the right rhythm, but investing in workflow management pays off on the long-scale projects.

4. Client Requests

How many are change orders and other claims affecting each construction project? Once the number climbs in the dozens, rather than just the handful, project managers will become tied up with this kind of revision work alone. Lean construction technology is ideal for tracking and addressing client requests so that none of them go unaddressed. Missing essential client requests during the first round of revisions is a major cause of costly late rework, so techniques that keep track of requests are well worth the investment.

5. Wasting Skilled Labor

Each hour a project engineer or manager spends searching for the right documents, organizing job site photos or other non-essential planning tasks represents a loss of labor costs. Unfortunately, the average manager spends 35% or more of their time on these kinds of administrative tasks. That’s more than a dozen hours a week and nearly 50 hours a month just for tasks that could be largely automated by using the right construction technology. 

If lean construction is all about eliminating waste, tightening up construction administrative processes is clearly a priority.

6. Rising Accident Rates

Workplace accidents don’t just remove some of your most skilled workers from the labor force, they also introduce lengthy delays that can sink a project’s profit margins. Any time accident rates start to rise despite ongoing efforts to meet the latest safety requirements, it’s clearly time for a top-down approach to reorganization. 

Lean construction places a strong focus on respect for the individual workers serving the company, so it’s a great fit for improving safety records and reducing accident numbers in a hurry.

7. Extra Inventory

Construction companies may handle a lot of raw materials in the process of creating new structures and renovating old ones, but those materials should be used up as soon as possible to reduce storage costs. Dealing with the unexpected and extra inventory of building materials leads to waste, especially if natural conditions ruin otherwise brand-new materials while waiting for another use for them. Even extra machinery increases maintenance and storage costs, yet liquidating needed tools results in extra rental costs. 

Use lean construction technology and methods to develop a better inventory holding and on-demand ordering system to eliminate these inventory issues permanently.

8. Delayed Subcontractors

Do projects keep stretching out beyond the initial time frames due to delays in the arrival of subcontractors? Wrapping up the electrical, plumbing, HVAC and other systems in the building requires a system that coordinates the efforts of dozens of different workers all at once. 

Manual planning techniques just can’t keep up with automated lean construction technology like pull planning software that helps the project manager determine who to have on the site on any given day. Subcontractor teams can be scheduled right down to the hour so they’re on hand as soon as it’s time to complete their part of the work. Don’t put off the finishing touches for days or even weeks due to scheduling conflicts when lean construction techniques are already available to streamline the planning process.

Lean Is the Future of Construction

No project is about to get less challenging, but how projects are managed can be streamlined and simplified. In order to stay ahead in the business of construction and balance the increasing complexities of projects, companies need to start thinking and applying Lean. Although Lean construction management might sound idealistic in theory, when implemented correctly, it truly helps teams maximize project efficiency and reduce overall risk. From a reduction in waste, increased ROI, a higher quality of work, and more, the benefits of Lean construction can no longer be ignored.



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