Lean Construction Management helps against increasing complexity

Due to various challenges, the complexity in construction projects is continuously increasing today. The reasons for this can be, for example, many different project participants or the increasing cost and time pressure and the high degree of individualization of each construction project. In addition, diversity and requirements for safety and sustainability have increased. As a result of these hurdles, it is becoming increasingly difficult to manage construction projects and to achieve goals in terms of quality, costs and deadlines.

Based on these challenges, Lean Construction has developed on the basis of lean management methods. Lean Construction Management means that you optimize all phases of a construction project and organize them in such a way that your processes become "lean" (from the English: lean and effective).

Lean Construction is a management method and originates from the Toyota Production System. Consequently, these methods have been adapted for the construction industry. Thereby the basic principles and thoughts of Lean Management and thus adapted, or methods developed to apply the principles to the construction industry.

"Lean."

"Lean" was developed by Toyota for the automotive industry. The developer of the production system we know today as TPS was Taichi Ohno. He recognized that the process of car production, from order entry, through production, to delivery and invoicing, took far too long and much non-value-added work was being done. The son of the company's founder, Toyoda, had already started to "streamline" the manufacturing process during the wartime period in the middle of the century and to cope with the difficult conditions by "just-in-time" delivery.

Taichi Ohno developed these ideas further after the Second World War. He got his inspiration from the USA and the assembly line production of Ford. Finally he recognized the added value of this type of production, but also saw that the "push" principle used there was not very suitable. With these preconditions and influences in his head, he developed and perfected the TPS over the years, which made Toyota the largest car manufacturer in the world.

Definition: Lean

The actual term "Lean" only came into being in the 1990s. The two American economists James P. Womack and Daniel T. Jones examined the superior TPS and worked out the principles scientifically. This review of TPS led to the development of the term "lean" and its practical implementation through "lean production".

In the course of the spread of lean production in the automotive industry, other economic sectors have also addressed the topic and made their processes and workflows "lean". As a result, an overarching management philosophy was formed in the form of "Lean Management", which is now applied in all economic sectors.

The book "Lean Thinking" by Womack & Jones has not only coined the term Lean, but also the 5 principles behind Lean. Although various sources and papers have often expanded on the 5 Lean Principles, generally only these 5 principles are defined for Lean:

Customer added value

What does the customer really want and for what is he really willing to pay money? This question should be asked again and again in order to always be able to work in a customer-centered and needs-oriented manner.

Process optimization

Once the customer added value has been defined, the next step is to analyse and optimise the underlying process. For this purpose, the activities are divided into three categories: "value-adding", "necessary" and "wasteful". Process optimization aims at maximizing the value-adding work, minimizing the necessary activities and eliminating waste.

Flow efficiency

The optimized process should be kept in a continuous flow and ensure a smoothed flow. Buffers and intermediate storage should be avoided, as well as uneven degrees of utilization.

Pull principle

Production should be on demand and on call! This means that the flow of information runs contrary to the production flow and the last "station" thus requests the performance of the previous one.

Kaizen

Kaizen is Japanese and means "continuous, never-ending improvement". Because nothing is so good that it cannot be further improved. This principle should be applied to everything according to Lean. The four preceding lean principles should also be reviewed and questioned again and again.

Here you will find all details about the five lean principles.

What is Lean Construction?

Lean construction is "a way of designing production systems in such a way that material, time and labour input is minimised in order to generate the greatest possible value" (Koskela et al, 2002).

Lauri Koskela, Gregory Howell and Glenn Ballard are seen as the developers and brains behind Lean Construction. After all, they have applied the lean methods and principles just mentioned to the construction industry and thus embarked on a new, innovative path away from classic project management. Lean construction has become more and more present, especially in the German-speaking world, in recent years. However, like lean management in general, the origins of lean construction date back to the 1990s. Glenn Ballard noted that the international average for weekly commitments is only just over 50 %. This means that it often takes twice as long to complete a project as originally planned, which also reflected the status quo in the construction industry. Lean Construction is the result of the fact that traditional project management methods do not deliver the benefits needed to deliver construction projects within budget, on time and to the agreed quality.

To meet this challenge, Lean Construction places the collaborative work of project participants at the beginning of each project. Contractors, users, builders and project managers should work together throughout the entire development process and work towards the common project goal.

Last Planner System

The Last Planner System (LPS) is a method for collaborative planning of processes in which trades and specialist planners (the "last planners") collaboratively create the schedule on a daily basis. Glenn Ballard and Greg Howell already developed it in the 90s. The LPS divides planning of the construction process into five different levels of detail.

One of the most important points in implementing a functioning Last Planner system is that all elements of the system are actually implemented. Not only individual elements such as a 6-week preview should be introduced, because the building blocks and the entire system build on each other in terms of content.

Here you can find all details about the Last Planner System.

Takt time planning

Cycle planning and cycle control is another method for process planning on the construction site. Here the focus is on the process flow, which is developed by creating a linked sequence of trades (also called a trade train). This "flows" through the building in a defined sequence. The building is divided into various sub-areas that are suitable for the trade train. These subareas are called lot, cycle area or equal area.

First, repetitive lots are defined, which can be processed in a fixed sequence of trades.

At the beginning, the overall process is analyzed similar to the Last Planner system. The goal is to identify the cycle areas and visualize their process. Based on experience or effort values, the lots are divided into work packages of equal size. If necessary, several trades are combined in one wagon. In residential or hotel construction, for example, this could be one floor. In road construction and civil engineering, a route to be completed is usually used as a clock generator.

Following the identification of the common/clock areas, all workflows, dependencies and interfaces within the process are planned. Finally, the cycle, i.e. the speed of the repetition, is determined. This usually results from the previous planning. So that after completion of the work in the first cycle area, a trade begins work in the second area.

Summary

Your project - Our solution

Target Value Design (TVD)

Target Value Design is a collaborative design process in which planners, builders, suppliers and all other project participants work together to create a design that provides the greatest value to the owner. The budget, i.e. the target value, is a design criterion. To do this, the team jointly drafts the budget without the traditional process of estimating the cost of the design and then constantly redrafts it to avoid budget overruns. The TVD process uses responsibility-based project planning and relies on lean systems applied by all team members.

In summary, TVD is based on 5 fundamental criteria:

Set the budget for planning

Work structuring

Collaboration

Independent planning

Collocation/Assembled in one place

5S Method

The 5S method is a systematic approach to designing one's own workplace and working environment in such a way that one can concentrate optimally on value-adding activities. Waste is eliminated or reduced in the process.

In the 5S cycle, a total of five individual steps are carried out, each of which begins with the letter "S".

Sort

Sorting out creates more space for actually required work equipment and materials. The clarity at the workplace and the efficiency in task processing increases.

Systematized

The workplace should be systematized in such a way that things needed for the completion of value-adding work are quickly at hand. The materials should be arranged in such a way that they can be used according to the frequency and/or sequence of use. In order to have a tidy and clear workplace in the long term, storage locations and the associated materials should be marked.

Clean up

The work area should be cleaned regularly and kept in good order. During the cleaning process, an inspection of the workplace should be carried out at the same time.

Standardization

Recurring work steps should be standardized in order to be processed as quickly as possible. It helps to develop a routine for such work in order to be able to concentrate better on individual and non-routine work and tasks.

Continual improvement

Like the 5th Lean Principle, this method is also based on the following: constantly question yourself and think about how you can improve your system. Can your standard process be simplified or accelerated?

Lean - Six Sigma

Six Sigma (6 σ) is a management system for process improvement. Statistical quality objectives are described, measured and analysed. At the same time, Six Sigma is a method of quality management with which business processes and their improvement can be monitored and statistically evaluated.

Products and services are the result of previous processes. These processes have a decisive influence on quality. Both Lean and Six Sigma consider customer added value as the overriding objective. In practical implementation, this results in the establishment of process stability and the establishment of a continuous improvement process in both systems. However, the orientation of the methods is different. Because with Lean the focus is on this, the right things to do, the focus of Six Sigma is on do things right. Of course, there is a large overlap.

With Six Sigma, deviations from the ideal state are related to the tolerance range of the respective characteristic in a so-called process capability study. The key figure standard deviation (letter: σ; pronounced: sigma) plays an important role in this process. It measures the variance of the characteristic. This analysis is usually based on the quality of the product produced.

With Lean, process stability is primarily determined by means of simpler key figures. The standard key figure here is the number of commitments met, which is given as a simple percentage value. This is based on the planned process and makes a statement about how good the forecasting ability of the participants is for upcoming processes. It is assumed that a stable process has a positive influence on quality through good forecasting ability.

This makes it clear that Lean and Six Sigma pursue very similar goals, but the methods used to achieve them differ in some respects. By intelligently combining the two systems, they complement each other perfectly and thus create efficiency in the sense of customer added value.

The added value of Lean Construction Management

Construction projects are becoming larger and more complicated. The tendency of project volumes is increasing, but also the number of people involved in such projects. From highly specialized technical planners to sustainability officers and testing agencies, modern building and civil engineering projects have reached an enormously high level of complexity. Despite the many risks and high level of complexity, margins of approx. 4 % are the norm in the construction industry.

McKinsey study on margins in various industries

Unique piece production and productivity problems

Productivity in the construction industry

Another circumstance that makes construction projects so complicated is that Building nothing else than big prototypes are. Because every new project is a unique specimen and with every project you have to overcome new hurdles. These reasons just mentioned lead to the fact that normal is considered to be the most appropriate when projects break your budget for time and money and the project is not of the quality originally intended. What would be considered unacceptable in other sectors of the economy is unfortunately an everyday occurrence in the construction industry. If one compares the labour productivity of the manufacturing industry with that of the construction sector, the large gap that has opened up between them becomes even clearer. While the manufacturing industry has experienced an increase of 100% over the last 20 years, the labour productivity of the construction industry has increased only marginally.

Increased productivity through lean construction

As mentioned above, dissatisfaction with these circumstances has given rise to lean construction as a management method. However, since the establishment of lean construction as a common project management method, there are a large number of large international projects which have been brought to a successful conclusion by lean construction despite their size and complexity. One of the best examples to illustrate what is possible with lean is the Olympic Games in London. After all, the 2012 Games were the first to be completed on time and within budget. In addition, the venues are finished in a much higher quality, as was the case in previous Olympic Games. The reason for this can be identified as the significantly higher communication on and among the various construction sites. This allowed processes and workflows to be harmonized and stabilized. As a result, many disruptions and disturbances were avoided, as risks could be identified and avoided at an early stage. Expressed in figures, Lean Construction promises to speed up construction processes up to 30%, with a significantly lower accident rate and significantly improved schedule adherence.

Comparison of lean and classic project management

Focus on contracts vs. focus on production system

In classic project management, a lot of time and effort is invested in the preparation of contracts in order to be as "secured" as possible in case of delays and defects. Lean Construction shifts this focus towards an efficient and functioning production system in order to avoid such problems in the ideal case or to eliminate them as quickly as possible and with foresight.

Achievement of objectives vs. added value

Lean is implemented according to the first Lean Principle, which is value-oriented. In classic project management, added value often takes a back seat and inefficient goal-setting with tunnel vision is the result.

Silo thinking vs. transparent, collaborative collaboration

The normal situation on German construction sites and in planning offices is classic silo thinking. Because each party involved only has his own tasks in mind, consultation with other trades and planners only takes place selectively. This is where Lean Construction comes in and promotes transparent and collaborative cooperation, with a healthy culture of error (errors are unavoidable and should not be concealed). The planning of buffers is equally transparent with Lean. After all, buffers for your own work are no longer planned without consultation and completely overdrawn.

Rare improvement vs. continuous improvement and learning during the project

A learning effect and improvements are not encouraged in classical project management. Because project participants learn slowly through experience across projects, but an exchange rarely takes place in the project. If Lean is applied, precise key figures are developed, processes are recorded and continuously evaluated. As a result, from week to week, improvements take place in areas such as personal assessment and cooperation between those involved.

The future of Lean Construction Management:
Data-based, digital process planning

As already mentioned, rising construction costs and the resulting low margins are a familiar picture in the construction industry. In order to counteract the resulting rise in rents, lean construction was increasingly used, especially in Germany. As a result, significant improvements were also achieved in this country. In accordance with the lean principle of continuous improvement (Kaizen) and in the course of digitalization, there have been some approaches and ideas in the recent past, Digitally depict lean systems.

In many ways, a digital image is an improvement on the previous analogue system. This is because non-value-adding travel time to the lean meetings that take place at regular intervals can be eliminated to maximize the proportion of value-adding work. However, the greatest potential of a digital lean system lies in the possibility of collecting and analysing data. While in other industries working with data and information plays a significant role in the course of digitalization, in the traditionally shaped and innovation-poor construction industry there is still no qualitative and comprehensive data evaluation for process optimization. As a result, mistakes made in past projects are often repeated in similar projects. Even if the individual participants have a small learning effect, the consolidation of information from all project participants on one platform does not take place.

digital lean construction

Process Management Software Construction Industry

The future of Lean Construction lies in process-based data evaluation on a large scale and the consolidation of information and resources on one platform. The research and development of such innovative and promising software has been increasingly supported by venture capital in recent years. The objective of this development is artificial intelligence (AI), which supports the planning process and thus enables a symbiotic cooperation between trades/planners and machines. With a digital solution, an increase in efficiency is possible in the future, which is still foreseeable today and will strengthen the construction industry in the long term.

That's why we have a lean construction software developed. Experience Yolean - digital, data-based process optimization!

Summary

lean construction management

Lean methods in planning and on the construction site!