Intro to Lean Construction

7/26/2019 Intro to Lean Construction

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Introduction to Lean Construction

Janette Keiser, PE, JD1

1.

What is Lean Construction?

Lean Construction is about adding value to your customer through the elimination of waste and

continuous improvement of your business operations. Routinely, projects are late, over-budget or fail in

some way to satisfy the client. The application of Lean Construction principles changes this. Projects

using Lean Construction principles are completed on time, at budget and fully satisfy the client. Projects

using Lean Construction are more profitable than projects where traditional methods are used.

Lean Construction was developed through the best thinking of several 20 thcentury thought leaders and

industrial practitioners, including:

a.

Henry Ford, the father of the modern assembly line. Mr. Ford develop a production assembly

process that enabled his factory to systematically produce automobiles faster than what was

being done in craft plants where cars were made one-by-one.

b. Mr. Taiichi Ohno, who took the Ford assembly line processes back to Japan and made them

even more efficient by developing processes to eliminate waste, such as the 5S program and

application of continuous improvement processes.

c. Dr. William Edwards Deming who developed Total Quality Management processes into an

international movement.

d. Dr. Glenn Ballard and Gregg Howell, PE, MSCE, two university professors and construction

industry practitioners, who invented the Last Planner System, which evolved traditional critical

path network methods into practical applications for planning and monitoring field construction

work.

2. Why do we need Lean Construction?

There are a variety of reasons why traditional construction processes need to be improved with the

application of Lean Construction processes. First, traditional construction processes breed waste.2 For

example, in traditional manufacturing, the work flow includes:

Value-added activities 62%

1Copyright 2010 Janette Keiser

2These statistics were quoted by Dennis Sowards, Quality Support Services, in his July 14, 2010 presentation

Overview of Lean Construction Building Knowledge in Design and Construction. Mr. Sowards attributed the data

to the Construction Industry Institute.


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Support activities 12%

Waste 26%

Only a little over half of the efforts involved in traditional manufacturing procuresses constitute value!

The situation is even worse in traditional construction processes where the work flow includes:

Value-added activities 10%

Support activities 33%

Waste 57%

Clearly, the construction industry needs to improve its operations to reduce waste and increase the

value it brings to its work.

Second, traditional organizations have experienced a decrease in productivity over a period of forty

years. In the United States from 1964 to 2003, non-farm labor productivity in the United States

increased by more than double whereas construction productivity for the same time period decreased

by at least 25%3(computed by comparing a constant value of contracts with the number of work hoursof hourly workers).

Third, traditional contract methods threaten quality. We see examples of this in every segment of the

construction industry. For example:

In 2010, a highway project built by the Washington Department of Transportation experienced

over $800,000 of waste when an east ramp and a west ramp, which were supposed to meet and

be joined into one continuous alignment, were off by 16 feet.

Also in 2010, a project involving the construction of piers for a new bridge experienced $1.5 to

$2 million of waste when the construction team discovered one of the new bridge piers would

be driven directly into a major sewer line if the pier was installed as designed. The manholes for

this sewer were visible on the surface and the sewer line was shown on the as-builts. Despite

these facts, the discrepancy was not discovered until construction had already commenced.

In 2001, a 27-story office, retail and condominium building was constructed in downtown

Seattle at the cost of $32 million. Less than ten years later, the City officials and building owner

determine that the buildings structural capacity has been compromised by the improper

application of the spray-on fireproofing. The city building department ordered the building to

be demolished, a $32 million waste, not including the additional millions of dollars wasted bydemolition costs, attorney fees, lost rents, lost opportunity and damages paid to building

tenants who had leased space on the retail and residential floors.

Fourth, traditional contracts defy commercial reality. It is a fact of commercial reality that a party to a

contract only performs well when it is in her best interests to do so. Most contracts use a system of risk

3Reported by U.S. Department of Commerce, Bureau of Labor Statistics


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allocation where one party or the other bears the burden of a risk. Typically, if any of the risks actually

happen, the party to whom the risk was allocated pays the costs and if the party doesnt have the

financial wherewithal to weather this storm, the viability of the entire company could be put at risk.

Clearly, a system that mitigates this risk would offer value to the industry.

Next, competition in this economy is stiff, often cut-throat. Not only are there more bidders now thanever because there are fewer jobs to bid on, but there are new players in every construction market

segments. For example, legions of residential contractors moved from the vanished residential market

to the public works market. Contractors are taking bidding on jobs at cost or even below cost, to get a

job. This makes it hard for a hard-working company to compete fairly to get jobs and to make a profit

on jobs that it does win.

Next, the work force is shifting. The traditional labor force is aging out and a new generation of

construction workers is moving in. This creates personnel issues. On one hand, the younger workers

have different expectations of their work environment. On the other hand, there are more and more

workers for whom English is a second language. Managing this diverse work force is challenging under

any conditions.

Further, todays construction projects are more and more complicated. New technology and new tools

are being developed and utilized to keep up with the increasing architectural and engineering

complexity of todays construction projects. For example, it is now common place to utilize Building

Information Modeling (BIM) technology to lay out mechanical systems in vertical construction. Often,

this is the only way the builders can be sure that all the systems will fit into a given space. Plus, there is

an increased attention on safety and environmental compliance. These issues are governed by a

complex net of local, state and federal rules and regulations. Projects are frequently multi-jurisdictional

these days, either because they are so large in scope or cover such a large geographical area that no one

agency can pay for or manage the project. Finally, the sheer urban density of many of todays projects

makes them more complicated as they have to work around existing infrastructure and development.

For all these reasons, we need Lean Construction to eliminate waste and enable us to build projects

more cost effectively, more safely and more efficiently.

3. What are the benefits of Lean Construction?

The best way to appreciate the benefits of Lean Construction is to look at case studies where the

principles have actually been used. A classic example involves two buildings constructed by Baker

Concrete Construction (Baker)4. Baker introduced Lean Construction principles into the company by

training a number of project managers and superintendents in Lean methods and referring to this team

as a Special Forces team that would be employed on designated projects. As it happened, Baker got

the perfect opportunity to demonstrate the effectiveness of Lean methods. It was issued a contract to

design and build a building using pre-cast panels and a high degree of mechanical and electrical work. It

4This case study was presented at a meeting of the Cascadia Chapter of the Lean Construction Institute on October

5, 2010, by David MacNeel, LEED AP, Operations Manager, Baker Concrete Construction.


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did not employ Lean methods on that building. A few months later, the owner awarded Baker another

contract for an identical building adjacent to the first one. Baker dispatched a project manager and

superintendent who had been trained as part of the Special Forces team.

This team started employing Lean Construction methods into its project and continued using the

methods until the project was completed. Then, Baker compared the metrics of the building uponwhich Lean methods had been employed with the metrics of the building which did not use Lean

methods. The contrast was remarkable. The building that used Lean principles achieved:

67% increase in safety performance;

19% lower duration to complete the project;

12% higher productivity;

28% lower job costs; and

68% reduced overtime at the end of the job to finish up the punch list and complete re-work.

These accomplishments are significant! They are clearly enough to make the difference between a

profitable job and an unprofitable job. Over time, they can clearly make the difference between

keeping a construction company in the black and seeing it go into the red.

4. What are the Basic Concepts of Lean Construction?

Lean Construction is more than a philosophy or a state of mind; it is a system that utilizes specific

processes, which increase value and reduce waste. Some of these processes have evolved from the

manufacturing industry and some of them originated specifically within the construction industry.

Either way, they have proven track records, whether used in combination or one at a time. Following is

a brief description of the basic concepts which comprise Lean Construction and tools which can be used

to implement each concept. Some of the methods are intuitive and some of them are not. The goodnews is that there is now a cottage industry of consultants who can provide training and coaching to

help companies learn these tools. Many major construction companies have engaged consultants to get

them started and then have developed in-house training programs.

A. Waste vs. Value. The basic over-reaching principle of Lean Construction is to eliminate waste

and create value.

What is waste? Taiichi Ohno identified the following distinct types of waste:

i. Over production

ii.

Waitingiii. Inventory

iv.

Moving materials, tools and equipment from place to place.

v. Hunting for stuff

vi. Re-work

vii. Processing

viii. Underutilized talent


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Each one of these acts, failures to act or circumstances creates waste, which impedes the

efficiency with which a project is build. Each one of these elements of waste detracts from

value and costs the project in time, money or effort.

What is value? Value is what the customer looks for in a project or a transaction and it may not

have anything to do with the effort it actually takes to build the project. For example, in orderto build a house, you have to order materials, wait for their delivery and when they are

delivered, incorporate them into the houses construction. The owner is probably happy to pay

for the actual incorporation, but would be less than happy about paying for the time spent

waiting for the de livery. The waiting does not add value. The customer does not want to pay

for this. Smart contractors will work hard to reduce the time spent waiting. Most projects have

a lot of this activity that does not add value, and instead constitutes waste.

In order to adopt Lean Construction principles, companies must understand what customers

value and focus on those efforts. One tool, which can be used for accomplishing this, is called

Value Stream Mapping. It involves analyzing the steps and information inputs that are required

to deliver a product so that delays, inefficiencies and other waste can be identified. This tool

helps create process improvement through the elimination of waste.

A tool which can be used to identify waste is the simple process of taking a Gemba Walk.

Gemba is the Japanese word for waste. A Gemba Walk is a deliberate walk around the worksite

to consciously look for waste excess inventory here or disorganized workstations there. Both

constitute waste and are easy to correct.

B. The 5 S Plan. Another basic concept of Lean Construction is the application of the 5 S plan to

decrease waste and add value. The 5 S Plan, a development of Taiichi Ohnos, is a standardized

methodology of organizing the workplace. It includes the following elements, which all startwith the letter S:

i. Sort sort through a target area and sort through the stuff. Pull out anything that you

do not need there. If you arent going to use it in the next 30 days, move it out of the

immediate work area.

ii.

Set in Order have a place for everything and put everything in its place.

iii. Shine clean and inspect items. Look for safety hazards or anything that could cause a

breakdown and fix it. Everybody participates. Clean the jobsite. Keep tools and

equipment clean and prepped for use. Remove dunnage and crating promptly.

iv.

Standardize have guidelines, policies or rules. Follow the rules and enforce them.

Develop cleaning schedules and cleanliness standards to maintain the first 3 Ss.Maximize prefab prior to placement in the batch area.

v. Sustain keep the effort going. Share lessons learned. Reward and recognize successes.

Review the workplace regularly. Make it a habit. Expect to continually evolve and

improve the system.


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C. Work Flow. Another basic concept of Lean Construction is the concept of continuous work flow.

The concept of work flow is based the standard industrial engineering principle, which provides

that the reliability and predictability of an operating or production system is more important

than the speed at which the system operates in achieving productivity. For example, at Boeing,

the airplane production system once operated on a batch basis. This meant that one fuselage

would come into the plant and would stay in one place while the assembly workers put it

together. This system allowed Boeing to produce one airplane every 30 days. Then, Boeing re-

engineered its plant to more of a work flow system. A fuselage would come into the plant, be

placed into a slowly moving line and as the fuselage flowed down the line the assembly

workers would install the necessary parts and equipment. The parts they needed would flow to

the assembly site by material stock workers as the assembly workers needed them. This work

flow system allowed Boeing to produce one airplane almost every day, a tremendous increase

in productivity.

This concept of work flow can be translated to the construction industry through effective

scheduling and work planning. The increases in productivity can be just as dramatic.

D. Last Planner System. A tool which has been developed by Greg Howell5and Dr. Glenn Ballard6to facilitate work flow on construction projects is the Last Planner System. This is a

scheduling system that goes beyond critical path methods and focuses on pull planning to

establish the work flow. With pull planning all the stakeholders to a particular element of

work are collected in a room to discuss how their work will be coordinated. The last planner is

the person responsible for the delivery of the end product. In the pull planning process, the

last planner identifies what efforts it needs from the other stakeholders, in order to deliver the

end product. For example, if the end product is a finished kitchen, the last planner might be the

cabinet installer. The cabinet installer would identify the predecessor activities that must be

completed before the cabinets can be installed. For instance, the sheetrock must be done

before the cabinets can be installed so the cabinet installer would identify this work as a need.

Then, the sheetrock installer would identify what it needs before it can finish its work and so on.

In this manner, a work schedule is built in reverse, from end product to each predecessor

activity, which must be completed before the end product can be achieved, and where the

people who will be performing the work are integrated into the work plan process.

This is markedly different from a traditional critical path scheduling process where the prime

contractor develops the schedule, often in isolation from the trade subcontractors who will be

performing the work.

5Gregory A. Howell, P.E., MSCE is the Association of General Contractors Visiting Professor in Construction

Management at the University of New Mexico. He is co-founder of the Lean Construction Institute.6H. Glenn Ballard, Ph.D. is an associate adjunct professor at the College of Engineering, U.C. Berkeley, who

researches and lecture on Lean Construction and related topics. He is co-founder of the Lean Construction

Institute.


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One primary benefit of the Last Planner system is that it facilitates, in fact, demands,

collaboration among the people who will be performing the work. The dialogue generated

during a pull planning session is powerful because it enables the various team members to

identify problems early and work together to find solutions that will be cost effective for

everyone. This system helps the team think, plan and act as a team, instead of a collection of

companies who have come together by commercial coincidence to work on a particular project.

Once the initial pull planning session is conducted, the team engages in regular mini-meetings,

say 15 minutes, on a daily basis to monitor the work and make adjustments when required.

Construction personnel, such as job superintendents, who have been part of this process, say

they will never go back to doing it the old way. Implementing a pull planning system into a

project is tricky because it requires a new mindset. But, again, there are consultant

practitioners who can help companies get started on individual projects as well as organize

company-wide initiatives.

E.

Reliable Promises. Another benefit of the Last Planner System is that the pull planning

method of scheduling work flow builds accountability and trust between team members. This is

because during a pull planning session, the various team members are required to think

through the promises they make to other team members so that only reliable promises are

offered and accepted. A reliable promise is a promise where

i. The conditions of satisfaction are clear to both parties

ii.

The performer is known to be competent and has the right tools.

iii. The performer has estimated and blocked out the time necessary.

iv. The performer is sincere and is authorized to commit to the promise.

v.

Regardless of what the future holds, the performer will make good on the promise or

accept the consequences.7

There is a process for eliciting promises that are reliable and measuring whether the promises

are actually kept. This process involves analyzing whether the promise is realistic and whether

there are any barriers to keeping the promise. This process is taught as part of the Last

Planner system.

F. The 5 Whys Analysis to ensure continuous improvement. Another basic concept of Lean

Construction is the practice of continuous improvement. This involves analyzing breakdowns in

the system, which cause defects, failed promises and other performance failures and remedies

those breakdowns. Processes have been developed to help teams conduct the analysis, identify

remedies and execute sustainable change that will improve the process. A key process is the 5

7These five elements of a reliable promise, as described by Hal Macomber, principal of Lean Project Consulting,

Inc., and self-proclaimed Project Reformer, in his paper Securing Reliable Promises on Projects, A Guide to

Developing a New Practice. 2001, 2004.


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Whys analysis of failures. In this process, the question why is asked five times in different

contexts to understand why promises were broken, why defects occurred and why failures were

experienced. The point is to understand why failure occurred so it can be prevented from

happening again.

G.

Cultural Change. While the basic principles and practices of Lean Construction can be applied in

different ways in different organizations, one thing is clear - introducing and applying Lean

Construction any organization, large or small, requires a cultural change if the principles and

practices are to become sustainable. Change is often perceived as a 4-letter word. Change isnt

easy, but it is necessary. Dr. W. Edwards Deming, one of the centurys most influential

proponents and teachers of organizational change for purposes of adding value to industrial

processes said, It is not necessary to change. Survival is not mandatory. that is, organizations

that fail to change put their own survival at risk.

Any cultural change requires the presence of several key factors, which if they are missing, will

mean the chances of successful, sustainable cultural change are zero to none.

i. Leadership is crucial. If the executive leadership is not fully, 100% committed, even

passionate about making and sustaining any kind of organizational change, it will not

succeed. Further, it cant be commitment in name only. Organizations have

personalities just like people and as a general rule they are pretty smart people. They

can sense when the leaders dont walk the talk of a new initiative or when a new idea

is the flavor of the month. Anything but complete, candid, and transparent

commitment will be met with resistance, backsliding and even scorn.

ii.

Leaders must be effective agents of change. It is not enough for the leaders to becommitted to change; they must have the capacity to effectively lead the change. There

are best practices, which experience has shown can help achieve and sustain long term

change. The leaders need to understand these principles and be able to effectively

employ them. This doesnt mean the leaders cant have help. Quite the contrary, most

effective organizational change initiatives are facilitated by consultants or other people

who are outside the organizations mainstream. However, the leader needs to

recognize when to bring in outside help and how to find and utilize outside help

effectively.

iii.

Organizations must become learning cultures. The personality of the organizationmust become open, receptive and welcoming to change. The processes for teaching

and practicing change must be institutionalized within the organization. Individuals who

authentically learn, practice and become proficient with change must be rewarded and

those who resist or even sabotage change must be re-educated, replaced or encouraged

to self-select out.


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iv. Workers must be able to deliver bad news without fear of retribution. Learning

cultures must be authentic and not afraid to identify and share bad news. This is

because bad news can only be addressed and converted into positive outcomes if it gets

into the open. Yet, many organizations dont hear about bad news because their

people are afraid they will be blamed and suffer some loss if they bring bad news

forward. Individuals must feel that they can delivery bad news without fear of being

blamed.

H. Advocates. Lean Construction is actively taught, promoted and utilized by some of the most

prominent and influential players in the construction industry. These advocates span the

regional, national and international construction market. Representative examples of

prominent advocates include:

i.

The Association of General Contractors (AGC) has created a Lean Construction Forum8

to teach and serve as an advocate for lean construction principles.

ii. Sellen Construction is a regional general contractor in the Pacific Northwest, which is

utilizing Lean Construction principles on health care projects and which has initiated

training programs to teach Lean Construction principles to its employees.

iii. Turner Construction, is a national general contractor, introduced the Last Planner

System on one of its large projects, the Miami Intermodal Center, when the project

was already 30% into construction. The firm estimates that before using the Last

Planner System, the project team was achieving an average labor cost of $23,000 per

month. After implementing the Last Planner System, they were achieving an average

labor cost of $13,000 per month. This is a dramatic turn-around, which could easily

mean the difference between a profitable job and an unprofitable one. Turner

Construction has institutionalized a Lean Construction training program into its own

organization.

iv. Skanska, a global general construction firm that builds heavy civil and vertical

construction projects, has adopted Lean Construction in some of its operations in the

United States.

v. The Lean Construction Institute (LCI)9is an international, non-profit organization

devoted to the advocacy, training and practice of lean construction principles. The LCI

recruits members and sponsors to support its activities, which includes research,

collecting case studies, development of resources and annual meetings, where

practitioners, academicians and advocates gather to share information and strategies.

8See the AGCs Lean Construction Forum website at www.agcleanforum.org.

9The website for the Lean Construction Institute is www.leanconstruction.org.


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Further, the LCI has chapters in over 35 states and the number is continually growing.

The individual chapters offer training and support advocacy of Lean Construction

principles. Many of the trainings are co-produced by other members of the construction

industry, such as the Architects Institute of American, the Construction Management

Association of American, the Construction Users Round Table, etc.

vi. The LCI even has a program designed to address the special needs and interests of

owners, the Lean in the Public Sector (LIPSI) chapter, which has international

participation from Lean practitioners in Finland, Germany, Australia and other countries.

vii. The entire construction industry in Finland, reported at the December 8 -10, 2010,

meeting of LIPSI, has adopted an industry-wide initiative to go Lean! Thats

commitment, vision and leadership.

Indeed, the broach reach of advocates for Lean Construction demonstrates the broad appeal of

an initiative that promotes efficiency, reduces waste and increases profitability. These players,the general contractors, architects, engineers and other industry representatives are not in the

business for their health or good looks, but to make money as well as improve their ability to

demonstrate and deliver value. You can be sure they would not be remotely interested in Lean

Construction principles, let alone advocating and teaching the principles to their own employees

if they didnt think so doing would help them make more money or otherwise add value. That is

perhaps the best testament to the initiatives potential.

Conclusion:

There have been many programs and initiatives over the years that have promised to make the

construction industry more efficient, more user-friendly and more profitable. Most of these initiatives

come and go or are imposed by government regulation, without any real hope of achieving positive

outcomes. However, Lean Construction is different.

First, it was born out of frustration and dissatisfaction with the status quo of inefficiency and waste.

Further, the current economic climate demands that to survive, let alone thrive, companies must

become more competitive. These factors mean there was is strong motive for change.

Second, many of the basic principles of Lean Construction evolved from proven principles utilized for

many years in the manufacturing industry. These principles are not flashes in the pan. They have a long

track record of success.

Third, there is a growing record of success by prominent industry players and a growing movement to

expand on this record by institutionalizing Lean Construction into organizations that are not only

regional, but national and even international in scope.


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Finally, support for Lean Construction principles is growing and has become international in scope. This

growing body of knowledge and advocacy is crossing industry, geographical and political sectors become

multi-disciplinary and multi-cultural in its application.

Clearly, Lean Construction as a movement is gaining ground. Its not a quick or easy solution, but it is

effective and can be sustained within any construction organization if introduced and maintained as anelement of organizational growth and change. Further, Lean Construction means and methods do not

need to be introduced to a project at the inception to achieve positive outcomes; Lean tools can be

introduced at any point along the projects timeline to increase value and decrease waste.

Intro to Lean Construction

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