Lean construction

Lean construction is a translation and adaption of lean manufacturing principles and practices to the end-to-end design and construction process. Unlike manufacturing, construction is a project based-production process. Lean construction is concerned with the holistic pursuit of concurrent and continuous improvements in all dimensions of the built and natural environment: design, construction, activation, maintenance, salvaging, and recycling. This approach tries to manage and improve construction processes with minimum cost and maximum value by considering customer needs. (Koskela et al. 2002)

The term "Lean Construction" was coined by the International Group for Lean Construction in its first meeting in 1993.

Historical Development

The [http://www.leanconstruction.org/pdf/Koskela-TR72.pdf seminal work] of [http://www.scri.salford.ac.uk/the_team/people/biography/lauriKoskela/ Lauri Koskela] in 1992 challenged the Construction Management community to consider the inadequacies of the time-cost-quality tradeoff paradigm. Another paradigm-breaking anomaly was that observed by Ballard (1994), Ballard and Howell (1994a and 1994b), Howell and Ballard (1994a and 1994b) and Howell (1998). Analysis of project plan failures indicated that “normally only about 50% of the tasks on weekly work plans are completed by the end of the plan week” and that constructors could mitigate most of the problems through “active management of variability, starting with the structuring of the project (temporary production system) and continuing through its operation and improvement.” (Ballard and Howell 2003).

Evidence from research and observations indicated that the conceptual models of Construction Management and the tools it utilizes (work breakdown structure, critical path method, and earned value management) fail to deliver projects ‘on-time, at budget, and at desired quality’ (Abdelhamid 2004). With recurring negative experiences on projects, evidenced by endemic quality problems and rising litigation, it became evident that the governing principles of construction management needed revisiting. In fact, a respondent to the 6th annual Survey of Construction Owners by [http://www.cmaanet.org CMAA] (2006) included a comment: "While the cost of steel and cement are making headlines, the less publicized failures in the management of construction projects can be disastrous. Listen carefully to the message in this comment. We are not talking about just materials, methods, equipment, or contract documents. We are talking about how we work to deliver successful capital projects and how we manage the costs of inefficiency."

A New Paradigm

Koskela (2000) argued that the mismatch between the conceptual models and observed reality underscored the lack of robustness in the existing constructs and signaled the need for a theory of production in construction. Koskela then used the ideal production system embodied in the Toyota Production System to develop a more overarching production management paradigm for project-based production systems where production is conceptualized in three complementary ways, namely, as a Transformation (T), as a Flow(F), and as Value generation(V). Koskela and Howell (2002) have also presented a comprehensive review of the shortcomings existing management theory – specifically as related to the planning, execution, and control paradigms – in project-based production systems. Both conceptualizations provide a solid intellectual foundation of Lean Construction as evident from both research and practice.

Recognizing that construction sites reflect prototypical behavior of complex and chaotic systems, especially in the flow of both material and information on and off site, Bertelsen (2003a and 2003b) suggested that construction should be modeled using chaos and complex systems theory. Bertelsen (2003b) specifically argues that construction could and should be understood in three complimentary ways, namely, as a project-based production process, as an industry that provides autonomous agents, and as a social system. With more developments in this line of thinking, it is very likely that the Lean Construction governing paradigm will change to it. And so, the process will keep on repeating!

What is lean construction?

Lean construction is a “way to design production systems to minimize waste of materials, time, and effort in order to generate the maximum possible amount of value (Koskela et al. 2002) ”. Designing a production system to achieve the stated ends is only possible through the collaboration of all project participants (Owner, A/E, Constructors, Facility Managers, End-user) at early stages of the project. This goes beyond the contractual arrangement of design/build or constructability reviews where constructors, and sometime facility managers, merely react to designs instead of informing and influencing the design.

Lean construction aims to embody the benefits of the Master Builder concept. Essentially, Lean Construction recognizes that desired ends affect the means to achieve these ends, and that available means will affect realized ends (Lichtig 2004).

Lean construction supplements traditional construction management approaches with: (1) two critical and necessary dimensions for successful capital project delivery by requiring the deliberate consideration of material and information flow and value generation in a production system; and (2) different project and production management (planning-execution-control) paradigms.

While lean construction is identical to Lean Production in spirit, it is different in how it was conceived as well how it is practiced.

The common spirit flows from shared principles:

**Whole System Optimisation through Collaboration and systematic learning
**continual improvement/pursuit of perfection involving everyone in the system
**a focus on delivering the value desired by the owner/client/end-user
**allowing value to flow by systematically eliminating obstacles to value creation and those parts of the process that create no value
**creating pull production

The differences in detail flow from a recognition that construction is a project based production where the product is generally a prototype.

As Sowards stated (2004) the priority for all construction work is to:
1) keep work flowing so that the crews are always productive installing product;
2) reduce inventory of material and tools and
3) reduce costs.

While Lean Construction’s main tool for improvement in construction is the Last Planner System (see below), other lean tools already proven in manufacturing have been adapted to the construction industry with equal success. These include: 5S, Kanban, Kaizen events, quick setup/changeover, Poka Yoke, Visual Control and Five Whys (Mastroianni and Abdelhamid 2003, Salem et al 2005). Other Lean tools may prove useful once tested in construction.

Cain (2004 [- a or b Clive?] ) suggests "lean construction" be defined by six goals of construction best practice:
**1. Finished building will deliver maximum functionality, which includes delighted end users.
**2. End Users will benefit from the lowest optimum cost of ownership.
**3. Inefficiency and waste in the use of labor and materials will be eliminated.
**4. Specialist suppliers will be involved in design from the outset to achieve integration and buildability.
**5. Design and construction will be through a single point of contact for the most effective co-ordination and clarity of responsibility.
**6. Current performance and improvement achievements will be established by measurement.

"One can think of Lean Construction in a way similar to mesoeconomics. Lean Construction draws upon the principles of project-level management and upon the principles that govern production-level management. Lean Construction recognizes that any successful project undertaking will inevitably involve the interaction between project and production management." (Abdelhamid 2007)

Practical applications

(it would be good to add examples from other countries here such as Denmark, US, Chile, Brasil, Peru, Sweden, in addition to others from the UK)

In the UK, a major R&D project, "Building Down Barriers", was launched in 1997 to adapt the Toyota Production System for use in the construction sector. The resulting supply chain management toolset was tested and refined on two pilot projects and the comprehensive and detailed process-based toolset was published in 2000 as the 'Building Down Barriers Handbook of Supply Chain Management-The Essentials'. The project demonstrated very clearly that lean thinking would only deliver major performance improvements if the construction sector learned from the extensive experience of other business sectors. Lean thinking must become the way that all the firms in the design and construction supply chain co-operate with each other at a strategic level that over-arches individual projects. In the aerospace sector, these long-term supply-side relationships are called a 'Virtual Company', in other business sectors they are called an 'Extended Lean Enterprise'.

The UK 'Building Down Barriers Handbook of Supply Chain Management-The Essentials' states that: 'The commercial core of supply chain management is setting up long-term relationships based on improving the value of what the supply chain delivers, improving quality and reducing underlying costs through taking out waste and inefficiency. This is the opposite of 'business as usual' in the construction sector, where people do things on project after project in the same old inefficient ways, forcing each other to give up profits and overhead recovery in order to deliver at what seems the market price. What results is a fight over who keeps any of the meagre margins that result from each project, or attempts to recoup 'negative margins' through 'claims', The last thing that receives time or energy in this desperate, project-by-project gladiatorial battle for survival is consideration of how to reduce underlying costs or improve quality'.

Last Planner System

The Last Planner System (LPS) improves both design and construction schedule/programme predictability – work completed as and when promised. It is a system of inter-related elements – full benefits come when all are implemented together, over time. Based on simple paper forms, it can be administered using Post-it notes, paper, pencil, eraser and photocopier. A spreadsheet can help. LPS begins with collaborative scheduling/programming engaging the main project suppliers from the start. Risk analysis ensures that float is built in where it will best protect programme integrity and predictability. Where appropriate the process can be used for "programme compression" too. In this way, one constructor took 6 weeks out of an 18-week programme for the construction of a 40 bed hotel. Benefits to the client are enormous.

Figure 1: intense discussion during a programme compression workshop

Before work starts, team leaders make tasks ready so that when work should be done, it can be. Why put work into production if a pre-requisite is missing? This "MakeReady" process continues throughout the project.

Figure 2: part of a MakeReady form for documenting the process of making tasks ready (this one for use in design)

There is a weekly work planning (WWP) meeting involving all the last planners – design team leaders and/or trade supervisors on site. It is in everyone’s interest to explore inter-dependencies between tasks and prevent colleagues from over-committing.
Figure 3: part of a Weekly Work Plan form used by trade foremen on site or design team leaders to prepare for the WWP meeting.

This weekly work planning processes is built around "promises". The agreed programme defines when tasks "should" be done and acts as a request to the supplier to do that task. The "last planners" (that is the trade foremen on site or design team leaders in a design process) only promise once they have clarified the conditions of satisfaction and are clear that the task can be done.

Figure 4: the promise cycle (after Fernando Flores)

Once the task is complete the last planner responsible declares completion so that site management or the next trade can assure themselves that it is complete to an appropriate standard.

A key measure of the success of the Last Planner system is PPC. This measures the "Percentage of Promises Completed" on time. As PPC increases. project productivity and profitability increase, with step changes at around 70% and 85%. This score is measured site-wide and displayed around the site. Weekly measures are used by the project and by individual suppliers as the basis for learning how to improve the predictability of the work programme and hence the PPC scores.

A key part of the continual improvement process is a study of the reasons why tasks promised in the WWP are delivered late. The following chart shows typical reasons:
Figure 5: example of a reasons Pareto chart

Recording the reasons in a Pareto chart like the one above makes it easy to see where attention is most likely to yield the most results. Using tools like 5 Why analysis and cause-effect diagrams will help the team understand how they can improve the clarity of information and ensure that there are sufficient operatives.

Last Planner benefits don’t stop at project predictability, profit and productivity; it contributes to positive changes in other industry KPIs. Danish research shows almost half the accidents and up to 70% less sickness absence on LPS managed sites.

Last Planner System development continues under the direction of Lean Construction Institute Directors [http://www.leanconstruction.org/ballardbio.htm Professor Glenn Ballard] and [http://www.leanconstruction.org/howellbio.htm Greg Howell] with support from users around the world. For more information about the development process see Ballard (1994, 2000) and Ballard & Howell (2004) for example

For a more detailed description and list of benefits [http://www.obom.org/DOWNLOADS2/LPSoverview.pdf see here] For more on Learning how to implement Last Planner [http://www.leanconstruction.org/learning see here]

Differences between Lean Construction approach and PMI approach

The differences between lean approach and PMI approach are listed below:

*Managing the interaction between activities and combined effects of dependence and variation, is a first concern in lean construction because their interactions highly affects the time and cost of projects(Howell,1999);in comparison, these interactions are not considered in PMI.
*In lean construction optimization efforts focus on making work flow reliable (Ballard, LPDS,2000 ); in contrast PMI focuses on improving productivity of each activity which can make errors and reducing quality and result in rework.

*The project is structured and managed as a value generating process (value is defined as satisfying customer requirements) (Howell, 1999), while PMI considers less cost as value.
*In lean approach, downstream stakeholders are involved in front end planning and design through cross functional teams (Ballard, LPDS, 2000); on the other hand PMI doesn’t consider this important issue.

*In lean construction, project control has the job of execution (Ballard, PhD thesis, 2000); whereas, control in PMI method relies on variance detection after-the-fact.

*In lean method, pull techniques are used to govern the flow of materials and information through networks of cooperating specialists (Ballard, PhD thesis, 2000); in contrast, PMI uses push techniques for releasing the information and materials.

*Capacity and inventory buffers are used to absorb variability. Feedback loops are included at every level, to make rapid system adjustments, (Ballard, PhD thesis, 2000); in comparison, PMI doesn’t consider adjustments.

*Lean construction tries to mitigate variability in every aspect (product quality, rate of work) and manage the remaining variability, while PMI doesn’t consider variability mitigation and management. (Ballard, PhD thesis, 2000)

*Lean approach tries to make continuous improvements in the process, workflows and product (Howell, 1999); whereas PMI approach doesn’t pay that much attention to continuous improvement.

*In lean construction, decision making is distributed in design production control systems (Ballard, PhD thesis, 2000); by comparison, in PMI decision making is centered to one manager some times.

*Lean construction tries to increase transparency between the stakeholders, mangers and labourers, in order to know the impact of their work on the whole project (Howell, 1999); on the other hand, PMI doesn’t consider transparency in its methods.
*In lean method a buffer of sound assignments is maintained for each crew or production unit (Ballard, PhD thesis, 2000); in contrast, PMI method doesn’t consider a backlog for crews.

*Lean construction is trying to develop new forms of commercial contract to give incentives to suppliers for reliable work flow and optimization at the deliverable-to-the-client level (Howell, 1999); while PMI doesn’t have such policy.

*Lean construction’s design production control resists the tendency toward local suboptimization. (Ballard thesis); however, PMI persists on optimizing each activity.

*The PMI-driven approach only considers managing a project at the macro-level. This is necssary but not sufficent for the success of projects. Lean Construction encompasses Project and Production Management, and formally recognizes that any successful project undertaking will inevitably involve the interaction between project and production management."

LC Teaching and Research

- [http://www.leanconstruction.org The Lean Construction Institute] conducts research and industry outreach activities

- There are national Lean Construction Institutes in [http://www.lci-uk.org UK] , Denmark, Sweden, Norway, Chile and Germany

- [http://www.iglc.net The International Group for Lean Construction] (IGLC) holds an annual conference

- The [http://www.iglc.net/links/construction/link.2005-04-26.5853893085 European Group for Lean Construction] holds meetings twice a year

- [http://www.leanconstructionjournal.org The Lean Construction Journal] launched October 2004.

- [http://p2sl.berkeley.edu Project Production Systems Laboratory at the University of California, Berkeley] The Project Production Systems Laboratory (P2SL) is dedicated to developing and deploying knowledge and tools to manage project production systems and organizations producing and delivering goods and services through such systems. Research includes lean construction.

- [http://www.C2P2AI.msu.edu (C2P2AI)] The Center for Construction Project Performance Assessment and Improvement(C2P2AI) at the School of Planning, Design and Construction, Michigan State University investigates and develops efficient and effective construction processes that result in a built environment with maximum value to both the construction client and participants. The center provides research, outreach, and education services to the construction industry.

A number of universities around the world teach and conduct research on lean construction.

References

Koskela, L., Howell, G., Ballard, G., and Tommelein, I. (2002). “The Foundations of Lean Construction.” Design and Construction: Building in Value, R. Best, and G. de Valence, eds., Butterworth-Heinemann, Elsevier, Oxford, UK.

Abdelhamid (2007). Lean Construction Principles. Graduate class offering at Michigan State University.

Abdelhamid, T., S. (2004). “The Self-Destruction and Renewal of LEAN CONSTRUCTION Theory: A Prediction From Boyd’s Theory”. Proceedings of the 12th Annual Conference of the International Group for Lean Construction, 03-06 August 2004, Helsingør, Denmark.

Ballard, Glenn (1994). “The Last Planner.” Northern California Construction Institute Spring Conference, Monterey, CA, April, 1994.

Ballard, G. and Howell, G. (1994a). “Implementing Lean Construction: Stabilizing Work Flow.” Proceedings of the 2nd Annual Meeting of the International Group for Lean Construction, Santiago, Chile.

Ballard, G. and Howell, G. (1994b). “Implementing Lean Construction: Improving Performance Behind the Shield.” Proceedings of the 2nd Annual Meeting of the International Group for Lean Construction, Santiago, Chile.

Ballard, G. and Howell, G. (1998). “Shielding Production: Essential Step in Production Control”. Journal of Construction Engineering and Project Management, Vol. 124, No. 1, pp. 11 - 17.

Ballard, Glenn (2000a) , Ph.D. thesis, University of Birmingham

Ballard, Glenn (2000b). “Lean Project Delivery Systems.” LCI white paper-8, (Revision 1)

Ballard, G., and Howell, G. A. (2003). “Competing Construction Management Paradigms.” Proceedings of the 2003 ASCE Construction Research Congress, 19-21 March 2003, Honolulu, Hawaii.

Cain, C. T. (2003). ISBN 0-415-28965-3. 'Building Down Barriers-A Guide to Construction Best Practice'. A simple guidebook explaining supply chain management and lean thinking, primarily aimed at the demand-side client.

Cain, C.T. (2004a). ISBN 1-4051-1086-4. 'Profitable Partnering for Lean Construction'. A detailed action-learning guidebook that explains how to set up the extended lean enterprises that are the essential first step towards lean construction. The book provides case history evidence that the approach advocated can deliver savings of over 30% and explains what clients need to do differently to enable lean construction to flourish.

Cain, C. T. (2004b). 'Performance Measurement for Construction Profitability'. ISBN 1-4051-1462-2. A detailed action-learning guidebook aimed at supply-side construction firms (including trades contractors) explaining why performance measurement is the key to lean construction.

Howell, G. A. (1999). “What is Lean Construction.” Lean Construction Institute

Koskela, L. (1992). “Application of the New Production Philosophy to Construction”. Technical Report # 72, Center for Integrated Facility Engineering, Department of Civil Engineering, Stanford University, CA. www.leanconstruction.org/pdf/Koskela-TR72.pdf 10 mar 07

Koskela, L. (2000). An exploration towards a production theory and its application to construction, VVT Technical Research Centre of Finland.

Koskela, L. and Howell, G., (2002). “The Underlying Theory of Project Management is Obsolete.” Proceedings of the PMI Research Conference, 2002, Pg. 293-302.

Kuhn, T. S. (1970). The Structure of Scientific Revolutions. University of Chicago Press.

Bertelsen, S. (2003a). “Complexity – Construction in a New Perspective”. Proceedings of the 11th Annual Meeting of the International Group for Lean Construction, Blacksburg, Virginia, USA.

Bertelsen, S. (2003b). “Construction as a Complex System”, Proceedings of the 11th Annual Meeting of the International Group for Lean Construction, Blacksburg, Virginia.

Bertselen, S. and Koskela, L. (2002). “Managing The Three Aspects Of Production In Construction.” Proceedings of the 10th Conference of the International Group for Lean Construction, Gramado, Brazil, August 6–8.

Construction Management Association of America (2006). “Sixth Annual Survey of Owners.” FMI, Management Consulting, http://cmaanet.org/user_images/sixth_owners_survey.pdf (visited 6/11/06).

Sowards, Dennis, “5S’s that would make any CEO Happy,” Contractor Magazine, May 2004.

Mastroianni, R. and Abdelhamid, T. S (2003). “The Challenge: The Impetus For Change To Lean Project Delivery”. Proceedings of the 11th Annual Conference for Lean Construction, 22-24 July 2003, Blacksburg, Virginia, 610-621.

Salem, O., Solomon, J., Genaidy, A., and Luegring, M. (2005). “Site Implementation and Assessment of Lean Construction Techniques." Lean Construction Journal, 2(2), pp. 1–21.

Lichtig, W. (2005). "Ten Key Decisions to A Successful Construction Project." American Bar Association, Forum on the Construction Industry, September 29-30, 2005, Toronto, Canada.