The idea that construction is broken has been long recognised by governments. Since the 1930s the UK government alone has commissioned over 15 reports aimed at trying to improve the way work works in the construction sector. Some of the reports have been about specific issues and others have been more general. Murray & Langford’s book (2003) describes a dozen of them. The US and other governments have also commissioned reports.
No-one seems to be happy with the way construction works — yet, so far as I can make out, no-one has attempted to systematically catalogue the many ways in which the construction sector is broken. Members of the lean construction community have focussed on one or more of the ways as part of their research.
What is wrong with the way construction works?
My focus here is on the predominant paradigm that operates within the construction sector. The paradigm is based on bi-lateral, transactional and adversarial contracts, distrust, pushing risk down the supply chain, minimising first cost, separation of design and production, telling workers what to do based on a schedule that is not grounded in reality & low or no investment in learning, training, R&D and other things (like pre-fabrication, automation, etc.) that might help improve what happens. The paradigm is coherent; it makes sense. And it does not deliver what the customer wants.
This paradigm creates dissatisfied customers, delivers projects with reduced scope that are late 61% of the time and over budget in 70% of cases (Bughin et al 2017).
Notwithstanding the above most industry practitioners (55%) who operate within the dominant paradigm (the blue bars below) are satisfied with the way it works. By contrast, those who have implemented lean practices (red bars) see the sector very, very differently.
Most people in the construction sector have grown up knowing nothing else. They were taught about it as an apprentice, at college or at university. It is all they have experienced at work. So when they look at what is happening it all seems perfectly normal — and OK. Even most of those dissatisfied owners/clients don’t see anything wrong with the dominant paradigm. Let's look at the major elements of the current dominant paradigm in turn.
Procurement
Construction is the only remaining sector of the economy that still systematically separates design from production. The dominant paradigm is based around variants of the design-bid-build (DBB) process in which constructors are hired after the design is substantially complete. This contributes to buildability issues.
Once the bids are in, Value Engineering is often misused to reduce the scope of the project as a way to reduce cost.
Why do owners/clients allow this to continue? Many of them know of no alternative.
Even when owners/clients know of and actively encourage another way, many constructors are reluctant to change their behaviours as Highways England know all too well (Christensen et al 2019).
Commercial terms
The commercial terms used in DBB type projects are bilateral, adversarial (they assume neither party can be trusted) and transactional. These terms encourage parties to mistrust and to cover their backsides with bureaucratic, defensive actions. Even though many owners/clients think the project team is the most important contributor to performance, this contributes to unreliable teamwork.
Work is generally done in silos with minimum communication between team members. On site workflows between trades yet the commercial agreements are between each trade the the CM/GC or a higher tier trade.
Owners and Clients are concerned to minimise work waiting for workers. Trades on the other hand want to minimise workers waiting for work. There is no provision in the typical commercial terms for conversations to create a balance between these two competing objectives.
Risk
The commercial terms encourage the construction manager or general contractor (CM/GC) and upper tier constructors to contract out their risk to lower tiers of the supply chain, often to a level where it cannot be adequately managed. Consequently prices are inflated to pay for the almost inevitable manifestation of the risk. There is no realistic expectation that risk will be collaboratively managed.
Project Management
Within the dominant paradigm, project management tools are used to deliver the project. They don’t work (Howell & Koskela 2000). Critical Path Methods (CPM) are used too, even though they don’t help to manage production on a construction site as the originators of CPM warned around 1960 (Fondahl 1962).
Safety
The sector kills and maims too many people. Numbers are falling but they are still too many.
Materials
Materials are frequently late – often because they have been ordered late – defective, damaged or impossible to find in the lay-down area or wherever else they have been stored on the project. Some materials are delivered to site well before they are needed ‘just-in-case’. Often this means they have to be moved multiple times before they are installed as they are in the way of other trades. They can be damaged while they sit on site or as they moved from one storage location to another.
Quality
The overall quality of the project falls if it is necessary to misuse Value Engineering (or Value Management) following the receipt of bids to cut costs by descoping the project.
Detail project quality also suffers as there is no formal system to check that each trade understands what subsequent trades need from them to deliver quality work. Trades come to site determined to get in, get on and get out.
Rework
Estimates of the proportion of project cost that is spent on rework vary enormously. Almost all the estimates are greater than the average margin that is quoted for most projects. The majority of estimates are in the 5-15% range but some go as high as 30%. Whatever the proportion is, it is the owner/client who pays rather than the CM/GC.
Learning
There is no systematic learning within the dominant paradigm. Yes there are lessons learned sessions at the end of projects and sometimes part way through + some companies have invested in knowledge management systems, but it is of limited value when it is not safe to own up to errors and omissions that have not been revealed to other parties in the project. To do so is to invite a claim against yourself or your company.
Trade-offs
Some who work in the dominant paradigm are fond of saying that their customers can have any two of Quality, Cost and Delivery. If that was true it would be bad enough, but when 61% of projects are late and 70% over-budget even that is a lie.
Productivity
Since the mid-1960s construction productivity has fallen steadily while over the same period manufacturing and agricultural productivity has risen significantly. Why?
Owner/client challenge
As Greg Howell noted almost 30 years ago, buildings are increasingly complex, owners (clients) want more, faster & for less & material prices are increasing. All of these remain true.
Margins
Constructor’s report that their margins are shrinking and designers that their fees need to cover more and more work.
Why does this continue?
Paradigms are very powerful. Along with the culture they define ‘the way we do things round here’. Paradigms influence the way we see the world (Korb & Ballard 2018). Lean has many proven advantages yet those embedded in the dominant paradigm can quickly find reasons why these findings will not apply to them, so they will not see any need to change.
Some constructors use the small margins as another reason for not putting those margins at risk by trying something new. It doesn’t help that the sector is so totally fragmented and that no single organisation speaks for it.
What can you do instead?
Lean construction is a different and equally coherent paradigm. It is an assembly of ideas from a wide range of sources each of which can improve the way work works in organisations and on projects.
Lean, lean construction is an unending journey of transformation, a system change, a paradigm shift.
You can apply it within the context of bi-lateral, transactional and adversarial contracts — that is where lean construction started. You don’t need the approval of the owner/client to do that. Learning and improvement become much easier when owners and clients begin to use relational procurement (see e.g.Mosey 2019; Fischer et al 2017)
Many of the other blog posts on this site talk about elements of the lean construction paradigm. Find the bottlenecks in your production process and look for elements of the lean construction paradigm that will help you eliminate the bottleneck so that the work flows smoothly again. Learn from that experience. Slowly increase the rate of flow until you encounter the next bottleneck. Eliminate that and learn from what you did. And so on.
It doesn’t matter when you start, as Dr Deming once said, so long as you begin today.
Nothing is so good that it cannot be made better. (Wenger nd)
I will be holding a webinar to go over the aspects of construction that are broken and how we can overcome some of these problems. Please join me for the webinar on February 10, 2020.
References
Bughin Manyika Woetzel 2017 Reinventing-Construction- a route to higher productivity-McKinsey Global Institute
Christensen, R., Greenhalgh, S., and Thomassen, A. (2019) When a business case is not enough, Motivation to work with Lean. Lean Construction Journal
Fischer, Martin, Howard W. Ashcraft, Dean Reed, and Atul Khanzode (2017) Integrating Project Delivery Wiley
Fondahl, John W 1962 A non-computer approach to the Critical Path Method for the Construction industry 2edn
Howell, GA and Koskela, LJ 2000 Reforming project management: the role of lean construction. IGLC
Korb, S. & Ballard, H.G. 2018. “Believing is Seeing: Paradigms as a Focal Point in the Lean Discourse.” In: Proc. 26th Annual Conference of the International. Group for Lean Construction (IGLC), González, V.A. (ed.), Chennai, India, pp. 177–186. DOI: doi.org/10.24928/2018/0208. Available at: www.iglc.net.
Mace, Bevan & Donna Laquida-Carr 2016-06-17 How satisfied, really satisfied, are Owners? LCI National Webinar Owner Project Performance Study Overview and Call To Action.
Mosey, David 2019 Collaborative Construction Procurement and improved Value. Wiley.
Murray, Mike & David Langford (Eds) 2003 Construction Reports 1944-98. Wiley-Blackwell
For more information:
Ballard, Glenn (2000) The Last Planner System of Production Control. PhD Thesis, U of Birmingham.
Bryson, Barbara White with Canan Yetmen 2010 The Owner’s Dilemma: Driving Success and innovation in the design and construction industry. Ostberg, Greenway
Deming, W Edwards 1985 Out of the Crisis MIT Press
Forbes, Lincoln H & Syed M Ahmed 2011 Modern Construction: Lean Project Delivery & Integrated practices. CRC Press
Fischer, Martin, Howard W. Ashcraft, Dean Reed, and Atul Khanzode (2017) Integrating Project Delivery Wiley
Groak, Steven (1991) The Idea of Building. Spon Press
Get It Right Initiative 2015 Improving value by eliminating error A Strategy For Change. https://getitright.uk.com
Get It Right Initiative 2016 Improving value by eliminating error Literature Review Revision 3 – April 2016.pdf
Get It Right Initiative 2016 Improving value by eliminating error Research Report Revision 3 – April 2016.pdf
Get It Right Initiative 2016 Improving value by eliminating error Research Report Revision 3 – April 2016
Koskela, Lauri (2000) An exploration towards a production theory and its application to construction. PhD Thesis. VVT Technical Research Centre of Finland.
Lemke, Klaus 2018 Better Building: Lean Practice for the Project-Driven Organization. Lean Project Publishing
LePatner, Barry B 2007 Broken Buildings, Busted Budgets: How to Fix America's Trillion-dollar Construction Industry Chicago UP
Li, Long, Zhongfu Li, Xiaodan Li, Guangdong Wu, (2019) "A review of global lean construction during the past two decades- analysis and visualization", Engineering, Construction and Architectural Management.
Miller, Rex, Dean Strombom, Mark Iammarino, and Bill Black 2009 The Commercial Real Estate Revolution: Nine Transforming Keys to Lowering Costs, Cutting Waste, and Driving Change in a Broken Industry Wiley
Murray, Mike & David Langford (Eds) 2003 Construction Reports 1944-98. Wiley-Blackwell
Pearce, David 2003 Social & Economic Value of Construction: The Construction Industry’s Contribution to Sustainable Development 2003 FR03 nCRISP
Umstot, David and Dan Fauchier (2017) Lean Project Delivery: Building Championship Project Teams
+ lots of papers at iglc.net and elsewhere
