What is Lean Opportunity Assessment (LOA)?

This topic addresses supply chain problems encountered when delivering construction projects. The delivery of construction projects often follows ‘business as usual (BAU) model. BAU has made poor project delivery pervasive in construction. The application of LC practices is hampered by the gaps between training/teaching and practice. To bridge an implementation gap, lean opportunity assessment (LOA) is used as a start, and the application of LOA is performed so that the potentials for improvements can be identified. The LOA outcomes are benchmarked against best practices. The LOA is done to help a company to identify the potential for improvement by analysing various aspects and processes from a lean perspective.

Why LOA?

The application of LOA is needed as 'lean failure' can occur if it is not introduced properly in a company. Current realities suggest that some contractors in developed countries such as the USA use lean construction practices, while most contractors in developing countries such as South Africa are shying away from its implementation. In South Africa (which serves as a case example), the application of lean supply chain management (SCM) concepts in construction appears marginal. SCM in construction is the project relationship between suppliers and their contractors. It involves resources, logistics and people working together to delivery a project on time and budget.

LOA helps the lean journey because it is not done to generalize the causes and effects of a problem. Instead, it is done to assess the current state regarding the lean implementation intentions of a single company. With case studies and the general train-do method, lean has made steady progress. Despite the recorded progress, there is a gap between the 'train' and the 'do' (practice). This gap between general lean training and implementing the process is why doing an LOA is important (Myerson, 2012). The LOA can be done to help an enterprise identify the firm's potential for improvement by analysing various aspects/work processes from a lean perspective.

How to conduct LOA (Way Forward)?

This write-up suggests that contractors should consider lean construction practices from the SCM perspective. Evidence from practise shows that a significant cause of SCM problems is improper work and information processes. For contractors keen on making a difference, there are three basic steps to follow:

1. Use the LOA protocol from the ‘lean supply chain and logistics management’ book by Paul Myerson to compile an assessment tool.

2. Schedule interviews within the supply chain to obtain access.

3. Administer the LOA protocol:

• Notify the critical people in the contracting companies.
• Obtain the organogram of the contractors.
• Send the LOA templates.
• Explain the rationale behind the LOA evaluation.

The LOA template provided in Myerson (2012: 237 to 248) can be modified to align with the realities of a contractor. Apart from Myerson (2012), other LOA templates can be used for similar business self-assessment/evaluation. Areas to be evaluated include internal communication, visual systems and workplace organization, operator flexibility, continuous improvement, mistake proofing, quick changeover, quality, supply chain, balanced production, total productive maintenance, pull system, standard work, engineering, performance measurement, and customer communication.

The crucial evaluation outputs include 'as-is' analysis, current-state value stream mapping (VSM), future state VSM, and recommended improvement opportunities. For instance, Figure 1 shows where value is delivered and where waste (non-value adding activities) harms a contracting firm. While the LOA is a first step that helps to identify and plan for improvements, a VSM provides a road map for the journey. Evidence from past VSM based International Group for Lean Construction (IGLC) papers implies that people in a company would agree on how value and waste are produced in their processes when a visual map of value stream is created.

Figure 1: Lean opportunity summary graph for five South African contractors

As an illustration, Figure 1 gives insight into waste elimination opportunities in the work processes of the five South African contractors. The figure shows the weaknesses and strengths of the contractors regarding the need to embrace mistake-proofing, ensure workflow in their physical construction activities, promote continuous improvement, standardize their work, and think about using total productive maintenance where necessary. Undertaking this exercise with VSM would show various connections between activities, information and material flow that impact both value-adding activities and wastes in firms. The overall purpose should focus on establishing priorities for improvement efforts based on the LOA, encouraging a common language about construction processes, and creating a basis for an implementation plan regarding Lean transformation.

REFERENCES

Emuze, F., Masoga, T. & Sebetlele, C. 2017, 'Lean Opportunity Assessment of Contractor's Supply Chain in South Africa' In 25th Annual Conference of the International Group for Lean Construction. Heraklion, Greece, 9-12 Jul 2017. pp 789-796

Myerson, P. 2012. Lean supply chain and logistics management: McGraw Hill Professional.