Lean Construction: Why owners should pay more attention to it

Luis Terry
During the last decade, Lean Construction has been trending in the construction industry. Contractors, subcontractors/trade partners, and even some designers are embracing these methods aimed at maximizing value for clients while minimizing waste.

However, several owners haven’t jumped on board yet. Considering that they are probably the party that can benefit the most from employing Lean Construction, it’s surprising how few actually do.

What is Lean Construction?

Lean Construction is delivering construction projects while focusing on four key elements.

The first element is identifying or creating value from the owner’s perspective. Most capital projects begin with limited input from the final users of the facility. As the project progresses and more stakeholders are involved, changes to the design are needed. Often the changes are identified late in the process, creating additional costs and schedule impacts, and owners end up with a facility that does not fully meet their expectations. Lean Construction advocates for identifying and understanding what the owner perceives as a value early on to ensure the new facility is suited for the intended purpose.  

Another key element of Lean Construction is eliminating waste. The Lean Construction Institute (LCI) identifies eight categories of waste: transportation, inventory, motion, waiting, overproduction, overprocessing, defects and underutilization of talent. Lean Construction encourages continuous identification of waste in the capital delivery process and devising ways to reduce or eliminate it.

Lean Construction practitioners also focus on process and flow—process, product and information flows. For example, to ensure flow, the upstream process team must complete all prerequisite work to prevent impacts to the downstream process. Also, the project teams should work together to find ways to eliminate steps that don’t add value, as well as utilize tools and technology, including adoption of PMO’s, BIM and holistic ePM, Document Management and project dashboarding, in order to deliver the projects more effectively. This shortens the process while focusing on flow and efficiency. The Last Planner® System is the most common Lean Construction tool aimed to manage the production process by focusing on flow and commitments among the different teams performing the work. 

Finally, a mindset of continuous improvement for the capital delivery process is the essence of Lean Construction. Practitioners understand that the status quo needs to be challenged to move the industry forward.   

How can it help owners?

Studies show that between 25% and 50% of construction costs are due to waste and inefficiencies in labor and material control [1]. Who is paying for all these inefficiencies? The obvious answer is the owner, which is why they should embrace Lean Construction as an integral part of their capital project delivery process.

Owners will get the most out of Lean Construction by investing time up front and actively collaborating with supply chain partners.  One way our organization has leaned in (no pun intended!) to support our clients is by facilitating a Design Accelerator, an event similar to a value engineering workshop. Held at the earliest stages of a project, we bring together all the stakeholders and look at what the ultimate outcomes are for the project and then interrogate the delivery model both from a commercial and process perspective. We give careful attention to the many new tools and technologies that now permeate the construction space. We uncover ways existing methods perhaps applied earlier in the process can yield better results. For example, we can now leverage digital twins and generative design tools to run constructability and even life cycle cost analyses during the planning stage to evaluate more options in less time, as well as commence efficient commissioning, asset management and net zero planning efforts very early on in the design process.

Why isn’t everyone doing it?

Lean Construction implementation should be a high priority for most owners, but because of certain barriers, that is not the case.

Procurement methods can be barriers. Some owners use procurement methods mainly focused on cost, which are not suitable for procuring design and construction services. Likewise, the terms and conditions included in construction procurement agreements should reflect the unique traits of the construction industry. Contrary to what owners might believe, they don’t get the best value for these services if they don’t use a construction-specific procurement method. They also don’t get all the benefits of using industry-disruptive approaches like Lean Construction.

Another potential barrier is the belief that implementing Lean Construction could be more expensive than using the traditional project delivery process. While Lean Construction might generate higher up-front costs, they are usually offset by the savings realized during the construction and operation of the facility. Lean Construction focuses on delivering value for the owner, and both initial and life cycle cost (LCC) are considered throughout the process. Construction projects are often designed without considering cost as design criteria and as a result, cost-cutting measures becomes necessary to move forward with the project. Incorporating the Design Accelerator event early in the design process can help owners avoid these measures and ensure facility values increase and life cycle costs decrease.

With no official implementation manual, the prospect of implementing Lean Construction methods can be daunting. The best candidates for Lean Construction implementation are owners who are open to new ideas and willing to take some risks.

How to get started?

When starting with Lean Construction, you first have to acknowledge that there is room for improvement in the way capital projects are delivered. Then you should follow these three steps:

  1. Increase your Lean Construction awareness. Owners should get familiar with Lean Construction principles, tools and applications. Joining the local LCI chapter is a good idea. Lean Construction implementation starts with a personal commitment to seek better ways to do the work we do.
  2. Dare to try. Lean Construction principles can be applied to any project delivery method. Start by undertaking a Design Accelerator or implement some Lean Construction tools, such as the Last Planner® System, which supports production management and reliable scheduling, or Target Value Design (TVD), which aims to make construction cost a key design criterion. Using third-party support has proven to be effective in ensuring Lean Construction tools are properly implemented.
  3. Showcase the benefits and discuss the challenges. The Lean Construction implementation process will be full of ups and downs, so it’s important to discuss the results of Lean Construction implementation with the company’s upper management and keep them engaged. Also keep in mind that practice makes perfect when it comes to implementing Lean Construction. And the implementation journey is not a one-size-fits-all—each organization needs to map out its own path.

While Lean Construction implementation requires more owner involvement, the benefits of these methods are well worth it. To put it simply, if owners want risks managed, projects delivered on time and on budget, and waste and rework minimized, if not eliminated, then Lean Construction is the way to go.

References:

[1] Forbes, Lincoln H., Modern Construction Lean Project Delivery and Integrated Practices, Boca Raton, FL, CRC Press, 2011.

https://www.economist.com/business/2000/01/13/new-wiring

 

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