Lean construction and its principles are becoming more popular in the construction industry as a way to maximize results and decrease costs. But what exactly is lean construction, and how does it improve ROI?
Lean construction focuses on eliminating waste and increasing the flow of value from the customer’s point of view. It increases ROI and customer satisfaction and improves efficiency. Waste includes unnecessary inventory, transport, waiting time, and more.
Continue reading if you would like to learn more about lean construction and how you can implement it in your own construction business to get more done and cut down on costs while improving customer satisfaction at the same time.
What Are the Objectives of Lean Construction?
Lean construction has several objectives, but its main goal can be summed up like this in a nutshell: Decrease expenditure and unnecessary waste while increasing productivity and return on investment. Alternatively, it can be described as follows: Eliminate waste and increase value, as explained in this short three-minute video:https://www.youtube.com/embed/OTH0z6xSSJM
Lean construction is all about providing value to the customer. It strips unnecessary costs so that the customer can get more out of less. By extension, it will benefit your business as well and help you earn greater profits. It will improve your bottom line and help your business grow.
Here are the two top objectives of lean construction:
- Identify and increase value for the customer: Lean construction is about placing your customer first. You have to identify what is considered “value” for them so you can cut through the noise and get straight to the important things. Identifying what is “value” based on the customer’s point of view must be done from the get-go so you can plan ahead and base your entire construction plan on increasing that value.
- Eliminate waste: There are various kinds of waste that can be eliminated, which we will go through later. By being more efficient and eliminating unnecessary costs, materials, efforts, and downtime, you can improve your bottom line and deliver more to the customer.
Who Lean Construction Benefits
Lean construction benefits everyone. Let’s go through some of the people who will benefit from the implementation of lean construction:
- The client: Of course, the main goal of lean construction is to benefit the customer by placing them first. The client will be more satisfied since the construction workflow is set up in a way that benefits them first and foremost.
- The contractor: The contractor can go into a project knowing exactly what the objectives of the project are and what the goals are. They will have a clear picture of what needs to be done and what is unnecessary. In addition, they will enjoy greater client satisfaction, increased ROI, fewer expenses, an improved bottom line, better teamwork, better reviews, an improved reputation, and increased efficiency.
- The team: Everyone who is working on a project will benefit from improved teamwork and understanding. This goes for all teams working on a project, including the design team. They will be able to work together and support each other with fewer disagreements and misunderstandings, as the main objectives and goals will be clear.
The Advantages of Lean Construction
Now that we know who lean construction will benefit, let’s go through how lean construction benefits them.
Increases ROI and Improves Bottom Line
This is probably the top benefit that you, as a contractor, will get by implementing lean construction. Here are some of the ways lean construction contributes to a better bottom line:
- Fewer unnecessary costs: You will focus on cutting out unnecessary costs on things such as transportation.
- Increased customer satisfaction: This will lead to a better reputation and more projects, both from existing and new customers.
- More time: As you will be eliminating unnecessary, wasteful time expenditures, you will have more time to complete more projects.
Decreases the Labor Shortage
A surprising benefit of lean construction is that it can reduce the labor shortage. It is no secret that many construction companies are struggling to find workers to help complete projects. Other construction companies may need more workers but may not be able to afford to hire new employees. Fortunately, implementing the principles of lean construction can address this problem.
As productivity is increased and less time and effort is spent on processes that do not add value for the customer, employees will have more time and effort to spend on other important tasks and processes. By eliminating wasteful expenditures that do not add value, the company will have more resources to spend on expenditures that are necessary and which do add value.
Increases Collaboration and Improves Teamwork
When working on a project, all individuals and teams involved should be focused on achieving the same goals and objectives. These objectives must be made clear from the very get-go before any workflow planning takes place. With lean construction, these objectives are clear: Add value from the customer’s point of view while decreasing unnecessary expenditures, efforts, and other forms of waste.
This allows everyone to get things done quicker. When everyone is on the same page and knows what they are working towards, communication will be improved.
Results Are Achieved Quicker
With lean construction, you can shave off a lot of time in terms of how long it takes to complete a project. By focusing on what matters for the end goal and eliminating wasteful time expenditures, you can finish a project quicker. This will enable you to get started on another project quicker. Overall, you will be able to serve more clients as well as clients with more projects and demands.
Improves Employees’ Working Conditions
Instead of overworking your employees and assigning tasks that are ultimately unnecessary, lean construction focuses on helping each worker do the most they can without wasting time. Part of this must include focusing on the workers’ needs and improving their working conditions; this includes improving safety conditions as well.
Workers will be able to enjoy less stress, be more productive, and focus more on what needs to get done instead of distractions. In addition, unnecessary workers can be eliminated, decreasing misunderstandings and arguments.
Reduces Rental Costs
This is a side effect of the implementation of lean construction principles on a large scale. Going back to the benefits the client gets from lean construction, those benefits, in turn, trickle down to the clients of the client. If the client is renting out apartments in the building, tenants will be able to enjoy a higher quality of living at a lower cost due to the overall lower cost of creating the apartment building.
In addition, it will reduce repair costs as the quality of construction will be improved, and fewer defects will become apparent later on.
Methods, Techniques, and Characteristics
In this section, we will go over the different methods and techniques used in lean construction strategy. We will also go over some core principles that are necessary for lean construction to be implemented correctly.
Identify Value From The Customer’s Point of View
The first step is identifying what can be considered “value,” and it must be considered from the customer’s point of view. By identifying what can be considered value, you will be able to assess each process and determine whether it adds value or not. If it does not, it can be considered waste. As such, any ideas coming from the customer must be taken into consideration.
Identify and Eliminate Waste
It is also important to identify and eliminate waste. Waste is anything that is not necessary for achieving the aforementioned value. Even if it does add value, it can be considered a waste if that value can be achieved in less costly, less time-consuming methods. There are eight main forms of waste that must be eliminated in lean construction, which we will go over in the next section.
Map Out the Workflow
All processes must be planned and mapped out from the outset. All teams involved in a project must be brought together, so the objectives are clear, and everyone is on the same page. By using added value from the customer’s point of view as a guiding point, you can efficiently eliminate processes that do not add value.
However, your workflow must be open to flexibility. You cannot allow yourself to fall into the trap of following your plan to the letter, with no flexibility. That is the opposite of the lean methodology and what causes businesses to waste time and money. If something needs to be improved, revise your plan and improve it.
Get Your Scheduling On Point
Proper scheduling is crucial for an efficient workflow. Each process must be completed on time so that the next process can start. Focus all of your efforts on making sure that a process is delivered on time to eliminate waiting, a form of waste.
Listen to Feedback
Feedback from both the customer and the workers must be taken into account in an effort to increase productivity and eliminate waste. No idea should be automatically discarded but analyzed to determine whether it does, in fact, increase value from the customer’s point of view. Ideas that don’t focus on adding value must be ignored.
Make Adjustments and Improvise
Just because you mapped everything out from the get-go, that does not mean you should not continuously try to figure out ways you can improve the workflow. If you notice hiccups in the system, remove them. If you discover that a certain plan is not the most optimal for adding value and eliminating waste, change or abandon it.
Types of Waste to Eliminate
In this section, we will focus on the different types of waste that MUST be eliminated in order to improve the workflow and add value.
The transport of unnecessary items must be eliminated. If a transport does not provide immediate value, it is a waste of time and money. This includes both transports that are not ultimately necessary and those that are not yet necessary.
Motion is unnecessary work. “Work smarter, not harder,” should be your guiding principle in this regard. Any type of work that is not necessary for the ultimate completion of a project or achievement of a goal is considered motion, not work. Inefficient processes lead to motion.
This includes unnecessary and excess inventory that are not needed for production. Too much inventory takes away space, requires unnecessary transportation resources (another form of waste), requires superfluous spending in order for them to be purchased, and distracts from the main objectives and goals of the project.
Waiting occurs when a process has not been completed on schedule (this goes back to what we mentioned before about planning and scheduling). This can be an inventory that was not delivered on time, workers/specialists that were not brought on-site in time, or a task that was not completed on time. This requires others to wait around and do nothing.
Time is precious and can not be wasted. The reverse is true as well: Waiting can also be caused by overproduction, which is the next form of waste covered.
A task that is completed too soon can also lead to waiting. Alternatively, overproduction of a project or task that adds what is not “true value” to a project leads to increased expenditures and prevents the simplification and streamlining of the construction process.
Overprocessing examples include having two people complete a task instead of delegating only one person to complete that task and unnecessary reprocessing or double-checking. These increase effort and time expenditure but do not add value.
If something is built or completed incorrectly, it will disrupt the workflow and require additional costs for it to be corrected. Focus on eliminating errors in the construction process. Defects also include results that do not meet client expectations or industry standards. Doing everything right the first time will help you avoid spending more time, money, and resources on making corrections.
Misapplying resources can lead to unnecessary expenditures. For example, if a laborer has a unique talent, it would make no sense to apply them to a task that requires less talent when they could be using their talent to do something most other laborers can not. Skills must be directed for optimal added value.
Challenges of Switching to Lean Construction
As you make the plan to switch to lean construction, you will likely face a number of challenges in incorporating the lean methodology into your approach. These challenges may come from your workforce. Here are some challenges you can expect. In the next section, we will discuss important tips for incorporating lean construction principles into your work processes.
Getting Everyone on Board
As mentioned before, everyone must be on the same page for lean construction to work. If one team completes a project too late, for example, that will lead to waiting. You can’t implement the principles of lean construction without making sure everyone is on board. This will require training and dialogue. It is important for everyone to understand the importance of lean construction and how it will benefit everyone.
Some team members may initially be resistant to change. It is essential to get them on board as well. Otherwise, you may have to let them go (such a decision must be made after careful deliberation). Again, lean construction requires everyone to be on the same page.
Training is important. Workers will need to understand the different types of waste, as explained earlier. Everyone will have to understand the role each team and laborer plays in the process and how they are responsible for a smooth, uninterrupted workflow. After all, a chain is only as strong as its weakest link.
A Transition Period Is Necessary
Even after everyone understands the importance of lean construction, its principles, and its objectives, it may take some time until everyone gets used to this new methodology. This is okay; make sure everyone has time to figure out how this all works. The training and implementation period may initially result in increased expenditure.
You may consider this to be “waste,” but change can’t happen otherwise. As such, be patient with the transition period.
Communication Must Be Improved
Communication must be improved on all fronts. This starts with communication between management and teams. You must be able to train employees, answer questions, and help them understand their roles. You must also be available for feedback. By listening to what both the client and your employees have to say, you will learn about new ways to improve.
Communication must be improved between employees as well. Everyone must understand what their role is and how the roles of others affect or are affected by their work. In addition, distributors and suppliers must be brought into the plan as well; communication must be improved with them too.
Lean Construction FAQs
Here are some common questions and misunderstandings about lean construction that should be cleared up before the end of this article.
Does “Lean” Mean Cutting Corners?
Some people think that “lean” construction means doing less, but this is not the case. Lean construction is NOT about cutting corners but rather about reducing inefficiency. Lean is a methodology that must be implemented and improved upon over time; it must encompass the entire company culture and worldview.
Are Lean Construction & Lean Production the Same?
This is another common misunderstanding. Lean construction and lean production may be used interchangeably mistakenly, but they are two very different things. Lean production is a methodology that was used in the auto industry. It was developed by a Toyota engineer who came up with a method for increasing production and value while minimizing waste in auto production.
The Toyota engineer who came up with the principles of lean production was called Taiichi Ohno. To be sure, lean production served as an inspiration for lean construction. The goal in both is the same: Add value while minimizing waste. However, lean construction is not just applying lean production to the construction industry. It started out as an idea of its own, and inspiration was taken from lean production as well.
How Is Lean Construction Different?
Until lean construction became popular, the construction industry lacked a general theory and methodology. Construction projects were often completed based on contract enforcement, without focusing primarily on adding value from the customer’s point of view and maximizing efficiency. Often, what was lacking was predictability.
This lack of predictability often led to delays, overproduction, and other forms of waste that would cut into the bottom line.
Lean construction is a philosophy that encompasses all aspects of a project and forces everyone involved in a project to work together as a whole. Performance must be maximized at every level possible, while waste must be eliminated at all levels to achieve a smooth workflow.
There must be a clear set of objectives and goals. Benchmarks and performance indicators must be used to ensure those objectives will be reached on time.
Who Invented Lean Construction?
Lean construction predates the Lean Construction Institute by at least a few years, but the LCI definitely served as a major driving force for bringing the lean construction methodology into the mainstream of the construction industry. In 1997, Glenn Ballard and Greg Howell founded the Lean Construction Institute.
Why Was the LCI Created?
Glenn Ballard and Greg Howell noticed that traditional construction methods were focusing on following and enforcing contracts without making productivity and value creation the top priorities. Looking at data that showed that only a little more than half of the assignments were completed within the week they were meant to be completed, they knew there must be a better way.
Taking inspiration from Taiichi Ohno, they figured out that by addressing the same issues he addressed in the auto production industry, they could clean up the construction industry and increase productivity across the board.
What Is the International Group for Lean Construction?
The IGLC, or the International Group for Lean Construction, predates the Lean Construction Institute by a few years. It was founded in 1993, and its goal is to bring together researchers in the construction industry to figure out ways to reform the industry according to the principles of lean construction.
One of the major viewpoints of the International Group for Lean Construction is that the construction industry has long lacked a clear methodology and clear theories for the production process. This lack of theory has led to overproduction, overprocessing, defects, and other forms of waste, to the detriment of contractors’ bottom lines and clients all around the world.There is an annual IGLC conference, which takes place on a different continent each year (and in the cloud in 2020).
Why Are Contractors Switching to Lean Construction?
According to a Bureau of Labor Statistics report, while the productivity of other industries rose over the past few decades, productivity in the construction industry has remained stagnant for decades. According to studies cited by KaiNexus, up to 30 percent of waste is created by entrenched attitudes in the management of projects.
Clearly, something must be changed, and switching to lean construction allows companies to remake themselves.
Will Lean Construction Cause People to Lose Jobs?
This is a common fear, but the word “lean” does not mean cutting jobs. It is possible that there are some jobs that are “wasteful” and unnecessary, in which case adopting lean construction principles may cause them to be cut.
However, in general, “lean” is not about cutting jobs specifically but about eliminating waste in all areas. This starts with things like transportation, inventory, waiting, and overprocessing, not jobs.
Will Lean Construction Address the Labor Shortage?
Yes, lean construction can address the labor shortage by eliminating unnecessary tasks and assignments. All too often, employees are caught up in assignments that can be considered wasteful. Lean construction focuses on getting the most out of everything, including employees.
What Are the Main Principles of Lean Construction?
The basics of lean construction are very simple. There are a few main principles of lean construction that should be followed at all times.
- Put the customer first: Customer satisfaction is at the top of the lean construction values pyramid. As mentioned, lean construction is all about providing value from the customer’s point of view.
- Minimize waste: Not all forms of waste will be immediately apparent as such. In lean construction, it is important to identify all forms of waste, including the eight forms mentioned in this article, and eliminate them.
- Always improve: Lean construction is not something that is implemented once. It requires continuous improvement. By constantly monitoring your benchmarks and productivity, you will be able to make changes as necessary to further eliminate waste and add value.
Incorporating lean construction into your business might be a challenge. It will take time to get everyone on board and used to this new methodology. However, it will make your business more efficient and productive, and you will be able to stop wasting time, money, effort, and resources on things that don’t add to your bottom line.
- Esub: What Is Lean Construction & Why You Should Care
- Kainexus: Our Best 6 Tips for Implementing Lean Construction
- Buildings Guide: An Introduction to Lean Construction
- Construct Connect: Breaking Down the Principles of Lean Construction
- Plangrid: 5 Unexpected Benefits of Lean Construction Management
- Kainexus: 6 Principles of Lean Construction