Taiichi Ohno (1912-1990) is credited as the father of Lean Production Management, a production approach he pioneered at Toyota shortly after World War II. The overall concept was to better organize and manage customer relationships, the supply chain, product design and development, and manufacturing operations. More recently, the Lean Production Management revolution — responsible for dramatic performance improvement in manufacturing — has been applied to the construction industry. While there are some differences between manufacturing processes and those involved in construction, the principles of Lean Production Management can be tailored and effectively applied to the construction project life cycle.
What Is Lean Construction?
Lean is a production management strategy for achieving significant, continuous improvement in the performance of the total business process of a contractor through the elimination of all wastes of time and other resources that do not add value to the product or service delivered to the customer.
Subject to the defined parameters in a construction contract, the financial performance objective is to maximize the present value differential between the cash disbursed and the cash received during the life cycle of a construction project (hopefully, with cash received being the greater of the two amounts!).
Lean Construction, by eliminating wastes, increases project velocity, reduces project cycle time, and facilitates the “cash-to-cash” life cycle.
While there have been a variety of methods proposed to categorize types of waste in a construction process, they generally include the following elements:
- Transformation/Processing inefficiencies
- Waiting and delay
- Wasted motion
- Excessive or missing inventory
- Defects, scrap, and rework
- Excessive transactions
- Inefficient/Excessive transportation
- Underutilized human knowledge and talent
Industry research suggests that as much as 50 percent to 70 percent of the time spent on construction projects is nonproductive or cost-added (versus value-added). This situation affords most contractors the opportunity to significantly improve their operating performance, profitability, and overall customer service level.
Characteristics of Lean Construction
Contractors who have successfully implemented Lean Construction methods and practices exhibit many or all of the following characteristics in completing their projects:
- Fast, synchronized, and uninterrupted flow of construction activities.
- Low levels of material inventories on site with frequent replenishment of (only) needed materials. Materials and supplies brought in are based on visual pull signals at the job site.
- Rapid response and root-cause resolution of problems such as defects.
- Construction crew works with a permanent sense of urgency.
- Employees are empowered to make decisions within their defined scope of job performance responsibility. Self directed work teams have short, daily project meetings.
- Subcontractor design review helps to ensure (ease of) constructability and cost effectiveness.
- Standardization of component materials (design engineering/product simplification).
- Job site layout, organization, and cleanliness (housekeeping!).
- Fitness for use; all internal construction processes meet the needs of the next (internal) customer in the construction process.
- Construction material is delivered to the point of use and handled one time only.
- Implementation and use of Web-based project design and scheduling collaboration tools.
- Visual job site displays and devices that convey project information (e.g., status boards).
Lean in Action
It’s interesting to note that many Lean Production Management practices were employed in various construction projects well before current Lean terminology was scripted and the various Lean concepts were described and organized. Some of this construction activity even predated Taiichi Ohno’s manufacturing work at Toyota. The Empire State Building in New York City serves as an excellent example.
Historians claim that the steel building parts formed and fabricated in Pittsburg, Penn. were shipped by rail to New Jersey, barged and transported using specific predefined routes to the mid-town Manhattan construction site (only as needed, as there was no place to store inventory!), and were lifted from the delivery vehicles directly into position on the building. The steel parts were still hot to the touch from the forming/fabricating process completed in Pittsburg only 18 hours earlier. Iron workers were organized into teams of four under an all-or-none arrangement — no substitutes were permitted. The 102-story building — the tallest building in the world at that time, which used 57,000 tons of steel and 7 million man hours — was completed in May 1931 and ready for occupancy in only 1 year and 45 days.
Lean has long been responsible for dramatic performance improvements in manufacturing and, as evidenced by the Empire State Building, among other structures, the principles behind Lean can be effectively applied to construction. Taiichi Ohno once said, “The Toyota Production System represents a revolution in thinking because it requires us to change our way of thinking in fundamental ways.” Once that shift has occurred, however, the sky’s the limit.