Lean Construction Won’t Happen and Here’s Why

The concepts of lean have been applied to the design and construction of capital facilities for twenty years or more. I think it’s high time that we in the construction industry face the hard truth – lean is not going to happen in our lifetime – not really.

Yes, we have seen some innovative trends and techniques rolled out. There are many organizations that espouse and embrace the principles of lean – establishing Conditions of Satisfaction, utilizing Target Value Design, value stream mapping, the Last Planner Method, Choosing by Advantages, Building Information Modeling, and Integrated Project Delivery. But guess what? Despite our best efforts, with the deployment of these and other methods, and a landfill full of used sticky notes, we don’t really deliver projects at lower cost, faster or with higher quality. The question is “Why?” I believe there are, in no particular order of importance, at least ten major reasons why real Lean Construction isn’t happening:

1. The construction industry relies on a very large number of small, lower-capitalized entities that utilize a wide array of systems for accounting, scheduling, estimating, and document production.

2. As an industry, construction invests very little, on a percentage of revenue basis, in research and development compared to manufacturing or health care.

3. The various software platforms employed across the industry suffer from a lack of interoperability and ineffective utilization.

4. While some might state that the building permitting process, particularly in the United States, is over-regulated, the larger issue is that most authorities having jurisdiction still rely almost exclusively on old technologies and processes (paper).

5. Owners, particularly in the public sector, still rely on the traditional design-bid-build project delivery method and are not very interested in alternatives.

6. The concept of “coordination” is not understood correctly. Architects should provide a coordinated design while contractors coordinate the work. As it stands today, especially on complex projects, contractors appear to be coordinating both which leads to mistakes, delays, and cost overruns.

7. The industry, through specialization, has become fragmented. Architects, in particular, who once were “The Master Builders”, are now one among many in a loose collaboration of consultants and specialty contractors brought together – usually for the first time – to deliver a project.

8. Perhaps as a reflection of society, we have become victims of misplaced values and typically prioritize money over time. This, in turn, results in the waste of both.

9. The mitigation or transfer of risk in contracting has fostered a reluctance to innovate in terms of contracting methods, design solutions, and deployment of advanced practices for achieving greater efficiency. This is driven primarily by the legal “standard of care” doctrine. Since everyone fears being sued, we just continue to do the same thing – over and over.

10. Economic conditions in general, and perhaps stigmas associated with construction work versus tech or finance, have led to a decline in human resources; impacting the decision by many firms to forego the implementation of lean practices.

Considered as a whole, this list presents a compelling case for a top-to-bottom overhaul of the way we design and build. The question becomes what would the truly lean project delivery process look like. Here’s my take:

  • Start with the contract. Throw away all those standard forms of agreement between owner and architect and owner and contractor that constitute the traditional design-bid-build method. Utilize design-build as a delivery method and write your own agreement without fear of the court system. Rely only on trusted professionals who have successfully worked together to deliver the projects. Realize the benefit as an owner of no longer warranting the design to the contractor, placing yourself on the hook for every design error – even with a CM and a so-called guaranteed maximum price contract. Owners want buildings delivered to meet their operational, cost and schedule requirements, so put a team together and go for the desired end result right from the start.

  • Taking the contract one step further, insist that all agreements be relational instead of transactional. What does this mean? In its simplest form, it means that overhead and profit is fixed for the project to pay every participant – architects, engineers, general and sub-contractors. Profit is split and paid at the successful conclusion of the project. Interim billings are for direct costs only, based on documented expenditures. Working together would then become paramount to the success of all and no big wins are taken at the expense of others. Everyone stands to gain if the relationship is the focus instead of the transaction. This may pave the way for the use of Blockchain in the future as trust becomes the driving factor.

  • Elevate the usage of Building Information Modeling to 5D, cost and schedule inclusive, from the inception of the project and utilize a database of industry accepted and locally adjusted methods for cost estimating and productivity. This would enable real time evaluation of cost and schedule as the design progresses. The software exists and should be utilized to its fullest potential. Having real data associated with a design, beginning at the concept level, would go a long way towards keeping projects in line with owner’s expectations.

  • Productivity must be driven for any project to be truly lean. In that regard, a major step towards lean would be to deploy scheduling techniques that are predictive and enable the project manager and superintendent to propose beneficial course alterations when productivity trends below the target schedule. This means it’s time to abandon the Critical Path Method as the tool for project scheduling. CPM is well past its use-by date. Let’s quit using a product developed by the government to build bombs and submarines how about it? Location Based Scheduling – also known as Flowline or Line of Balance scheduling – is a better choice for the design and construction of buildings owing to its inherent ability to utilize space (location) as well as time , activity, and resources to schedule and manage productivity.
Each of these suggestions is a challenge to the project participants.

Many owners still truly believe that competitive bidding – “put the project on the street because contractors are hungry” – is the only way to achieve lowest cost. Lowering the true cost of a facility which is found in its ongoing maintenance and utility cost over its useful life and considering the return on investment gained by having a project delivered well ahead of schedule would be far better goals for achieving business objectives.

Owners should insist that their delivery team develops a building information model to a level of detail required to produce a coordinated design. This would eliminate a large percentage of late-stage requests for information and potential change orders and would free the contractor to focus on coordinating the work itself rather than dealing with the surprises that surface from clash detection exercises during construction.

Owners should also stipulate that prefabrication be considered from the inception of design. This critical advantage is often lost simply because it is brought to the table too late. This is a no brainer.

When it comes to contract changes, it’s hard to imagine that anyone would object to using agreements that are simpler and less adversarial. Not much else needs to be said about this, though it worth noting that in America architects are outnumbered roughly 10:1 by lawyers.

Designers typically don’t want to be responsible for cost and schedule. They insist that is the realm of the contractor and that actual costs can only be determined by the market. While this may be true in some sense, imagine the levels of uncertainty that are removed with the establishment of a realistic baseline cost and schedule from the beginning that is refined and improved as the design progresses. The arduous task of “value engineering” is eliminated. Who wouldn’t be glad to see that go? This is the essence of Target Value Design and makes total sense, but is it being used effectively?

Contractors, by and large, are the principal drivers of change in the industry. I predict that those who would be willing to revise their approach from design-bid-build to design-build delivery, revise their subcontracts and associated processes to become relational instead of transactional, deploy location based scheduling and the productivity management associated with it, and utilize the opportunities afforded by prefabrication will be the true lean construction organizations. In fact, we now see increased interest by venture capitalists in those organizations that have done just that.

There are projects, teams, and organizations that have incorporated many of the ideas presented here. But, the construction industry as a whole, has miles to go before it is truly lean.

Even so, and despite the title of this article and its obviously sarcastic tone, I believe the construction industry is on the tipping point of change. As Barbara White Bryson stated in her book The Owner’s Dilemma: Driving success and Innovation in the Design and Construction Industry, “In a few years, it is highly likely that the industry will flip, turning processes, value chains, and the final products of design and construction head over heels.” Consider the ideas presented here and decide if any of them might make sense for your current or next project. Check out the Lean Construction Institute at www.leanconstruction.org and see if there is a Community of Practice near you. If we, as an industry, continue to raise awareness, then perhaps lean construction will happen. Perhaps.

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