application of lean principles & practices in construction management

APPLICATION OF LEAN PRINCIPLES & PRACTICES IN CONSTRUCTION MANAGEMENT John Gresh, Drexel University The Big Deal about Lean Lean as a production philosophy can often be credited to the Toyota Production System (TPS) but Lean Production methodology transcends manufacturing operations. Applied specifically to Construction, Diekmann et al. (1994) defines Lean Construction as: “the continuous process of eliminating waste, meeting or exceeding all customer requirements, focusing on the entire value stream, and pursuing perfection in the execution of a constructed project”.

an organization is doing (or not doing) to achieve value. Value is a capability provided to the customer at the right time at an appropriate price, as defined in each case by the customer. Lean thinking has been described as a goal established against measures of perfection. Perfection may not be attainable in the construction environment, but represents a desirable future state where defects are minimized, delays, and additional costs and especially detractions from the customer’s needs.

Lean thinking fundamentally should begin with an understanding of value, why it is important, and then what

Construction Waste The leanness of a process is increased by reducing or eliminating the waste that occurs between activities in order to increase the overall process efficiency. Waste in a production system is defined as a non-value added activity. Improving the efficiency of individual activities within a project does not necessarily improve the efficiency of an overall process, waste can occur as one trade hands off to another in the form of delays or defects.

Types of construction waste include Quality costs (12% of total project cost); Quality cost during operation (4% total project cost); Lack of constructability (6-10% of total project costs); Poor materials management (10-12% of labor costs); Excess consumption of materials on site (10% on avg.); Working time used for non-value adding activities on site (Appr. 2/3rd of total time); and Lack of safety (6% of total project costs). Causes of Construction Waste are presented below:

Causes of Waste Overproducing

Occurs when a subcontractor wants to maximize his daily productivity to request more payments not realizing that he has overstepped on the work of somebody else’s. This may lead to partial demolition and rework to get back on schedule. Example: drywall contractor installs drywall before electrician has completed circuits. Idle time Poor coordination results in lost/idle time in projects. Example: For a concrete pour for a slab, if poor coordination results in late delivery, waiting laborers to direct the pour result in wasted labor expense. Transporting Excessive transport consumes resources, not add value. A poor site layout can result in long travel distances to bring materials to the point of use. Example: Drain pipes stored at a location far from where the installation is planned for results in added expense to transport cost. Processing Research has shown high levels of material waste in construction. As materials can be 50-60% of projects, there is high cost overrun potential. Material waste can be due to: 1) Design (poor anticipation of design impacts; 2) Procurement (wrong material or suboptimal order quantities). Inventory Excessive amounts of inventory (materials and supplies) can result in: 1) tying up capital and impacting cash flow negatively, 2) storing excess inventory has carry cost for storage, 3) managing the storage of materials long term has a risk of spoilage or unexplained loss of materials. Wasted operator Inexperienced trades may not be familiar with best practices and not be able to reach the same levels of productivity of motion (using experienced workers. Poor job organization could cause the operator to make additional steps to carry out the job. I.e. unnecessary motion) experienced trades use templates or jigs, setup kits, prefabrication, appropriate tools and fasteners so that each installations can proceed quickly without risk of error or delay. Producing defective Construction that does not meet codes may be rejected by an inspector. It then has to corrected by rework. Construction goods errors require correction and inhibit downstream activities because of the time delays that usually result. “Making do”

This is caused when a task is initiated without ensuring that all needed resources are available (information, equipment, materials or workers that have a needed skill for the work). Also occurs if resources become unavailable after the task has started and continuing the task. Not speaking and not Not listening is caused by the “command and control” style of leadership in which those in power are disinclined to listen to listening those who are closest to the problem. Not speaking arises as a conditioned response from overt or implied signals that by saying something contrary to the prevailing beliefs of management, one will be labeled as going against the grain, or a complainer or troublemaker.

Note: From Forbes and Ahmed, 2011.

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Traditional Construction Practice vs. Lean Traditional construction management is activity or contract centered; transactional contracts and assignments define the objectives of participants. When stakeholders interact with each other, each naturally acts in their own interests seeking to optimize their use of their labor, equipment, and materials. But it is this local optimization of resources that leads to an overall reduction in the productivity, risk to schedule performance, and higher costs. Formal coordination between organizations or crews is controlled from a master schedule that establishes sequence and determines when an activity will start. Costs, errors, and learning occur within project activities, and that while cost reduction can result from improved productivity, the usual approach to shortening project duration is by accelerating activities or by rearranging the schedule to adjust for concurrent work. The waste is the cost that could have been avoided within the activities such as rework, or cost due to extended activity duration along the critical path (Ballard and Howell, 1998).

Lean construction does not replace CPM network scheduling but works within to improve the delivery of short term assignments. CPM plays a strategic role, it identifies major project milestones and the sequencing of critical activities; Lean planning is tactical in nature, by planning the work flow for the next four or five weeks (Forbes and Ahmed, 2011). Lean construction has at least two different focus areas: 1) waste reduction, and 2) the management of flows. Production systems contain two aspects: conversions and flows. Conversion activities add value because they take material, information, or other input and transform into a product. Conversion activities are bound together by Flow activities which are non-value adding and consist of activities such as inspections, waiting, or moving. Traditional construction management emphasizes the conversion only and does not give attention to the design of systems and processes to manage work flow.

Implementation – Stabilizing the Work Environment Fundamentally, Ballard and Howell explain that Lean implementation consists of stabilizing the work environment which is accomplished in three broad phases. They are: 1) Shielding upstream variation and uncertainty – shield direct production from variation and uncertainty in the flows of directives and resources. (Upstream means planning or execution that occurs prior to current work); 2) Reduce flow variation; 3) Improve performance downstream. Generally, it is a strategy of improving the stability in planning through a bottom up approach. The “Last Planner” system is the foreman or team leader with a Weekly Work Plan (WWP) and is the initial point

of intervention when appropriate work is selected and commitments are made. Then, flow variation can be minimized through a specific, production-system oriented Look-Ahead schedule, minimal but well coordinated buffers, and to the greatest extent possible, just-in-time supply. Without, these first two steps in place, attempts to implement improvements will be obstructed. While improving construction operations can be multifaceted, the following areas can then be addressed: 1) the “making” of assignments (goal setting, division of labor), 2) acquisition and management of shared resources, and 3) the design of work methods.

The Last Planner System, a Tactical Tool In order to make labor and resources maximally productive, the Last Planner system (LPS) accommodates project variability and smoothes work flow. The Last Planner is the empowered site foreman or other professional who is in direct contact with the work to plan and schedule detailed tasks. Since traditional work planning establishes time frames but cannot effectively establish the tasks that are necessary for project completion or handle works starts or stops, it is the decentralized decision making of the Last Planner who can match labor and material resources to accomplish assignments in response to future demands. Last Planners can be expected to make commitments only to the extent that it can be done, by making assignments only from a workable backlog (activities that the last planners know can be accomplished).

The LPS is based on at least three levels of schedules and planning tools: 1) the Master Pull schedule which identifies major project phases and documents milestones; 2) the Look-Ahead schedule which uses items pulled from the master schedule and is used for work flow control; and 3) the Weekly Work Plan (WWP) provides a detailed work plan that specifies handoffs at each phase between trades. Besides preparing the specific work assignments for the next day, the Last Planner prepares the WPP which also includes a buffer of work activities based on future work. Weekly accomplishment is measured as Percent Planned Complete (PPC) which is the number of completed assignments divided by the total number of assignments. The definitive aim is to have tasks completed as promised. The project manager and site

APPLICATION OF LEAN PRINCIPLES IN CONST. MGMT. superintendent shift roles from controlling the process and motivating participants to engaged planning, preparing, and directing the personnel performing the work. Their

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function is to see that workers are in a position to be successful with their efforts.

Lean Application and Assessment Though its principles are defined, Lean Construction is in its relative infancy. There are a number of technical tools that when employed individual or in various configurations, can achieve waste reduction and flow efficiency. In a study conducted by Salem, et al., a Lean Assessment tool was utilized to assess the implementation of several Lean Construction techniques. The assessment tool evaluates six lean construction elements: last planner, increased visualization, huddle meetings, first-run studies, five S’s, and fail safe for quality (2006). In the test study, the selected General Contractor agreed to implement and test 6 lean construction techniques on a parking garage project. Evaluation was conducted by a research team during a 6-month period. For each Lean tool, a champion was selected to lead the implementation of each technique. This Lean assessment tool used in the study is noteworthy because it can be adapted to any project and the particular needs of any company. An Operations manager or PM could lead the assessment and be supported by staff members appointed as the champion of each selected technique. The progress of the implementation of Lean tools was shown on a spider-web/radar diagram. Average values were based on 3 measurements: 1) the initial state, 2) target value established by each champion; 3) final level of implementation at the end of the study. There was an improvement in most of the lean techniques by the end of the study. Importantly, the results of the study were tangible in that the project was under budget and 3 weeks ahead of schedule. Despite initial skepticism, the majority of project participants contributed the performance of the project to the use of lean construction methods and noted that they appreciated the long term learning process. As reported by Salem et al., (2006) a summary of the case study is as follows: Reverse Phase Scheduling: All subcontractors were encouraged to plot their schedule on a wall with post it notes, and eventually were able to see how their schedules had impact on the project phase completion times. Planners began to rely on reverse phase scheduling to estimate activity durations rather than referring to the master schedule. 6-Week Look-Ahead: The 6-Week Look Ahead schedule was prepared by the research/evaluation team because the project manager was not familiar. The PM did

start to prepare it regularly when he found that he could easily show updates of project tasks to be completed. Variance analysis: At the start of the project, the only performance indicator was cost variance. As assignment variance was not tracked, the PM initially provided the immediate cause such as weather or scheduling issues for delays. But with closer attention to flow management, the PM was able to better identify the root cause of variance which helped in establishing action plans. Percentage Plan Completion (PPC) Charts: PPCs were completed at the project and subcontractor level. The Project Staff prepared and posted PPC charts in the site trailer. Wanting to improve the quality of their own work, the subcontractors were primarily concerned in their own PPC value. By the end of the study, the average PPC chart value was 76%, 20 points above the initial start values. Increased visualization was accomplished through Commitment Charts, Mobile Signs, and Project Milestones. A safety commitment pledge was signed by all project participants and posted in the jobsite trailer as a commitment to safe jobsite practices. Additionally, the GC vice president led a safety presentation in which the project personnel gave examples of safe practices. Mobile safety signs were posted throughout the jobsite, and importantly, input towards the design and content were gained in a brainstorming session, thus actively involving project personnel in safety process implementation. Huddle meetings: Prior to this research study, informal project foreman meetings were the most common type of meeting. These informal meetings were replaced with weekly work plan (WWP) meetings which focused on the completion of assignments during the following week. Specifically, discussions emphasized overlapping activities and identified potential problems on the job site. Agreed to actions were recorded in minutes to be reviewed the following week. Start-of-the-Day Meetings were conducted for 5 to 10 minute periods each day with project personnel to review the work for the upcoming day. Safety, scheduling, and housekeeping were the most common issues to arise. Based on surveys, 42% of project personnel provided feedback during the meetings; at least 67% of project personnel found value in the meetings. The workers also stated that they are most likely to talk directly with foreman at that time of the day.

APPLICATION OF LEAN PRINCIPLES IN CONST. MGMT. First-Run Studies (Plan, Do, Check, Act): PLAN: After input from the foreman, superintendent, and PM, two tasks were selected: 1) installing bumper walls (selected because it was a high cost activity) and 2) construction joint installation (selected because of high variability). DO: While these tasks were documented with productivity studies and video recorded, the crew was entirely focused on the task and the only input came from the foreman. A more detailed description of the activities could have been obtained with input from the work crew. CHECK: The research and evaluation team led formal meetings that were attended by the PM, foreman, and work crew. The purpose was to look for potential improvements and learning opportunities; most participants provided suggestions as to what could be improved for the next time. Recommended improvements included new methods, crew composition changes, and better sequencing of activities. ACT: Ideas suggested during this meeting were tested on the same crew on the next iteration of these tasks. Results were that the cost of crash walls was reduced 38% and the cost of construction joints were reduced 73%. Closing comments were that first-run studies needed improvement before future use, in that activities have to be identified to be documented, reviewed on a monthly basis, and the PM should lead the process.

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Five S’s: SORT: Housekeeping first began with placement of tools and materials close to work, considering safety to include crane movement. Materials were separated by reference. STRAIGHTEN: Materials were arranged in a consistent pattern and tools were secured in jobsite gang boxes. Importantly, each contractor took responsibility for specific work areas on the job site. STANDARDIZE: In order to standardize, a material layout design was prepared which functioned as a guide for locating incoming material, reducing crane movements, and reducing walking distance for the crews. The material layout design contained key information of each work activity on the job site. SHINE: A housekeeping crew was established to check and clean hidden areas on the job site. Project personnel were encouraged to clean the workplace once an activity was complete. SUSTAIN: Sustaining involves maintaining processes. This was not fully achieved primarily because project personnel had to be continually reminded of housekeeping practices; they did not see housekeeping as a continuous effort. To be effective for future use, the five S’s would require an awareness program and some disciplinary actions.

Conclusion While some may be skeptical of Lean construction in that it may cost more or be the flavor of the month, a critical element that takes Lean beyond conventional project management is the training and empowerment of field people so they can optimize interactions and handoffs between trades. PMs cannot do that alone as effectively. There is also measurement and real-time learning from successes and mistakes.

informed owner who embraces the Lean concept, followed by a design and construction team that buys in, gets trained, and relational contract that rewards Lean behaviors. Benefits include shared decision making throughout the project lifecycle, contingencies are pooled, and incentives for team performance are provided for. Most importantly, traditional adversarial relationships are reduced or eliminated.

While some subcontractors adopted lean on their own because they believed in it, true Lean projects start with an

References Alarcon, Luis F. (1997) Lean Construction Taylor & Francis. Ballard, Glenn and Howell, Greg. (1994) Implementing Lean Construction: Stabilizing Work Flow, Reducing Inflow Variation, Improving Downstream Performance. 2nd Annual Conference on Lean Construction. Ballard, Glenn and Howell, Greg. (1998) Implementing Lean Construction: Understanding and Action. International Group for Lean Construction (ILGC) Proceedings. Diekmann, James, et al. (1994). Application of Lean Manufacturing Principles to Construction. Construction Industry Institute, RR191-11. Forbes, Lincoln H, and Ahmed, Syed M.. (2011) Modern Construction: Lean Project Delivery and Integrated Practices. Taylor and Francis, USA Liker, Jeffrey, (2003) The Toyota Way, McGraw-Hill, New York. Neil, Gregory. (2011) What is the Last Planner System? Gregory Neil Associates. Salem, O.; Solomon, J, Genaidy, A.; and Minkarah, I. (2006) Lean Construction: From Theory to Implementation, Journal of Management in Engineering. Womack, James P. and Jones, Daniel T. (1996) Lean Thinking: Banish Waste and Create Wealth in Your Corporation,

APPLICATION OF LEAN PRINCIPLES IN CONST. MGMT. Simon & Schuster, New York.

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