All About Lean Construction From the Founders of Lean

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

How strong is your Lean knowledge? Take a Lean assessment to determine your current state so you have a baseline for improvement. Lean assessments are available for individuals, teams, and organizations alike. Whether you’re new to Lean or are an experienced Lean practitioner, Lean assessments are a great way to get started at LCI!

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Lean Construction Resources

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Lean Construction Defined
Lean Construction is a respect and relationship-oriented production management based approach to project delivery. Download to learn more.
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Implementing Lean Construction
Implementing Lean in construction then becomes a matter of developing and acting on knowledge. Gain this knowledge and implementation advice by downloading this free resource.
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Lean Construction: 2000 to 2006
This paper reviews the conference proceedings for the International Group for Lean Construction (IGLC) from 2000 to 2006.
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Project Definition
Project definition is the first phase in project delivery and consists of three modules: Determining purposes (stakeholder needs and values), translating those purposes into criteria for both product and process design, and generating design concepts against which purposes and criteria can be tested and developed.
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New Production Philosophy in Construction
Download this report for a detailed understanding of Lean Construction basic concepts.
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eLearning Courses
Introduction to Lean Project Delivery
Gain insight to Lean Project Delivery (LPD) by understanding how the Lean System connects People, Principles, and Practices to optimize results by shifting both mindset and behaviors. The key achievable goal of this course is to prepare and enable team members with a foundational understanding of Lean approaches for daily use within a project environment.
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Introduction to the Last Planner System®
This course will allow you to gain in-depth insight to the practical application of the Last Planner® System (LPS) through multimedia, hands-on interactions, diagrams, worksheets, and more. The key achievable goal of this course is to learn how to engage at all five levels of LPS effectively on a day-to-day basis with a team implementing the system.
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Effective Big Room
Gain a foundational understanding of the concept of a Big Room by learning the benefits, purpose, and implementation considerations. Understanding how to improve collaboration and drive transparency within your team. Identifying venue types, set up, and activities that work best for your projects. Learning how to effectively advance work and learning to support the success of future projects.
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Lean In The Design Phase
Gain insight to Lean approaches and tools relative to the design phase of project delivery to optimize team communication, collaboration and results. Understand how a Lean strategy can drive innovative solutions by connecting People, Principles and Practices. The key achievable goal of this course is to prepare and enable team members with a foundational understanding of Lean approaches for daily use within the design phase of a project.
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Last Planner System® In Design
Gain a foundational understanding of implementing Last Planner System® (LPS®) during the design (pre-construction) phases of a project. Identify the essential foundational principles of the five conversations of LPS, gain practical application insight for each, and access key action guidelines.
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Target Value Delivery
Gain an understanding of Target Value Delivery (TVD) by identifying the different phases and components that make up the delivery approach. Discover how the Lean components interact together to improve the process and outcome of the project.
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LCI Publications
Transforming Design and Construction: A Framework for Change

William R. (Bill) Seed, Executive Editor

A diverse set of practitioners collaborated to create the Transforming Design and Construction: A Framework for Change book based on the transformative projects and experiences of their Lean practices. The papers, presented in short chapter format, are intended to encourage discussion, learning and experimentation individually or with a team. Read the first and most popular book in LCI’s Transforming Design and Construction series to gain a high-level understanding of various Lean principles, strategies and methods.
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Target Value Delivery: Practitioner Guidebook to Implementation

Executive Editors: Kristin Hill, Katherine Copeland and Christian Pikel

Target Value Delivery: Practitioner Guidebook to Implementation was collaboratively written by a team of more than 20 Target Value Delivery (TVD) practitioners to provide current state practical guidance to implementing TVD with a project team. This guidebook portrays TVD as an umbrella over Target Value Production for construction and Target Value Design by taking a broader approach rather than focusing only on the design phase. Read LCI’s second book in the Transforming Design and Construction series to gain practical insight to current practices for implementing Target Value Delivery on any project.
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