Lean Construction
An Introduction to Lean Construction
Construction labor efficiency/productivity has decreased while all other non-farming labor efficiency has doubled or more since the 1960s. Currently, 70% of projects are over budget and delivered late.
The silos created around architects, designers, engineers, general contractors, trade contractors and specialty providers have introduced significant waste into the delivery system. A lack of trust has created systems of checks, double-checks and over specification to cover legal ramifications both real and perceived. These are the problems that Lean construction seeks to solve. Evidence from three LCI-funded research sources show that projects that implement Lean principles and methods have much better outcomes across a variety of benchmarks.
What is Lean Construction?
Lean construction is a production management-based approach to project delivery that emphasizes respect and relationships. It focuses on creating value for the customer while identifying and eliminating waste throughout the entire design and construction process.
This involves fostering a culture of continuous improvement and collaboration among all project participants to maximize efficiency, minimize waste, and deliver exceptional project outcomes.
Lean Construction In Practice
The vast majority of construction projects utilize design-bid-build or design-build contracts, which separate the various parties of a project into smaller, separate projects agreeing to separate contracts.
This leads to tunnel vision among the individual parties in which each group is only interested in the success of their part of the process. If an issue arises, fingers point in every direction and nobody actually attempts to solve the problem at hand. These project delivery methods suffocate innovation because nobody has financial incentive to improve outcomes.
Utilizing Integration
Lean construction practices often advocate for Integrated Project Delivery (IPD), a triparty contract that fosters collaboration by aligning the owner, design team, and construction team (including any additional contractors) under a single agreement. This approach establishes shared financial targets at the outset, with all parties sharing in both profits and savings. IPD incentivizes collaborative behaviors and shared risk, creating a powerful “skin in the game” dynamic that motivates everyone to improve outcomes. It’s considered the nirvana of Lean construction contracting strategies.
By integrating all parties into one contract, IPD ensures everyone is involved throughout the entire design and construction process. This means the building team actively participates in the design phase, and designers remain engaged throughout construction. However, it’s important to acknowledge that IPD isn’t feasible for every project.
Fortunately, the principles of Lean construction are flexible and adaptable. Even within the constraints of traditional contracting strategies like design-bid-build or design-build, Lean practices can be applied to improve efficiency, minimize waste, and enhance collaboration.
Utilizing Innovation
Lean Construction methods emphasis collaboration, which is key because trust and collaboration are necessary ingredients to create an environment where innovation can thrive. A team working together towards a common goal, as encouraged in Lean construction, is more likely to seek new ways to solve problems. Ultimately, this collaborative and innovative approach generates more value for all stakeholders.
The History of Lean Construction
Henry Ford is often thought of as the grandfather of several foundational Lean concepts such as standard work, continuous flow, and waste reduction with his creation of the assembly line for the Model T in the early 1900s. The use of Lean in design and construction specifically begins with the erecting of the Empire State Building, even if they didn’t know it at the time.
The 1930s - 1970s: The Revolutionary Concept
Design on the Empire State Building began in late 1929. Construction started in early 1930, and the construction process was completed just a year later. This was accomplished through several radical (for the time) concepts:
- An optimized workflow, with multiple trades working simultaneously with minimized constraints and delays.
- Material logistics (reduced waste) via dedicated railways to transport materials to the jobsite, which minimized transportation delays.
- Prefabrication, where steel beams and window frames were prefabricated offsite.
- Collaborative planning, scheduling daily meetings with the architects/engineers and construction teams which led to clear communication and alignment.
- A value-driven approach, in which the Empire state building was designed with a focus on functionality and efficiency.
Today, it seems remarkable that the tallest structure of the early 20th century was built not only ahead of schedule, but under-budget too. At their most productive, Empire State Building workers were building a floor a day.
After World War II, Toyota revolutionized the manufacturing industry with the Toyota Production System. The TPS refined and formalized many Lean principles, focusing on eliminating waste (muda), continuous improvement (kaizen), and respect for people. The Toyota Production System became a global benchmark for manufacturing efficiency.
The 1980s-1990s: “Lean” is Born
The term “Lean” was born several decades later from a MIT research group that was researching Toyota’s Production System.
Krafcik, an American businessman and researcher, first coined the term “Lean” in his 1988 article titled “Triumph of the Lean Production System.” This article, based on his master’s thesis at MIT, examined the Toyota Production System and its remarkable efficiency.
The concept of Lean was further defined and popularized in the 1990s by researchers James Womack and Daniel Jones in their book “The Machine That Changed the World” and later in “Lean Thinking.” These works helped solidify the core principles of Lean and its application across various industries.
The Lean Construction Institute was formed in 1997 by Glenn Ballard and Greg Howell as a way to develop and disseminate new knowledge regarding the management of work in projects. They realized the construction industry had many of the same problems as those in the manufacturing industry, and began bringing Lean thinking into the built environment.
Today: Lean Design & Construction Continues to Grow
In 2011, the T-30 Hotel in China was built using Lean construction tools and methods such as just-in-time, Total Quality Management (TQM) and supply chain management. The 30-story building was put together in just 15 days and included a number of innovative features including five times the standard earthquake resistance for the area. Impressively, zero people suffered work-related injuries during the building’s construction.
This is the standard that Lean construction seeks to set. Through a mindset of making continuous improvements to practices and methods, Lean construction aims to maximize value for stakeholders while minimizing waste and improving efficiencies across the board.
Lean Construction in the Long Haul
The construction industry is wasting time, money and resources at an alarming rate. A 2020 study by McKinsey found that “annual productivity growth over the past 20 years was only a third of total economy averages,” and that “digitization is lower than nearly any other industry.”
In 2021, the Lean Construction Institute & AGC co-sponsored research conducted in collaboration with Dodge Data & Analytics, which concluded that projects utilizing Lean methods are more often completed ahead of schedule and under budget. Lean streamlines logistics, creates a culture of collaboration, eliminates waste and overages and ultimately leads to more value for stakeholders.
Collaboration
Embracing Lean construction’s collaborative methods and practices brings immediate process improvements to any project. However, the true power of Lean unfolds over time and across subsequent projects. As team members gain experience and master Lean tools and systems such as The Last Planner System®, they contribute to a growing culture of continuous improvement, leading to even greater efficiency, value creation, and project success.
Collective Knowledge
The Lean Construction Institute champions a vision of a healthy and thriving building industry that consistently delivers outstanding project outcomes for everyone. By harnessing the collective knowledge of the world’s architects, engineers, designers and builders, and fostering a culture of continuous improvement, the Institute believes we can not only solve current challenges but also proactively address future needs, ultimately transforming the industry for the better.
Learning Lean Construction Principles
The Lean Construction Institute is committed to transforming the design and construction industry by providing Lean educational resources, conducting research, and facilitating local and national Lean events. It is only through the power of the LCI Corporate Members that LCI is able to offer the supplementary resources below.
Lean Assessments
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