Is it time to go lean?

Construction Productivity is at a 15-Year Low: Why? is the title of a recent publication by Matt Stevens, Stevens Construction Institute Inc. Despite advances in methods, technology and human factors, U.S. construction productivity has declined since 2005 to less than it was in 1997, he said. The situation in Canada is not much different, recording weak or negative growth over the past two decades, depending on the source of the data.

Stevens offers a number of answers to his question, including “significant misalignment” between the interests of owners and contractors and lack of an iterative method that enables the parties in a project to ensure that complete and constructible plans are created.

Sagging productivity was also a concern for post-WWII Japanese automakers. They responded with a series of initiatives, one being the famous Toyota Production System, to rationalize manufacturing. The North American auto industry was very skeptical of the TPS at first, but ultimately was driven to adopt lean practices by competitive pressure.

Now, it’s the construction industry’s turn.

Gaining traction

It’s not a new concept. The Lean Construction Institute, a leading North American consultant and repository of data, was founded 25 years ago, notes Dick Bayer, LCI’s interim director.

Buy-in was slow at first. “Five years ago, [LCI] might have had two chapters, or communities of practice. Now we have 26 in the U.S., and we’re growing all the time,” he says. The group has also received five inquiries regarding possible chapters in Canada.

There are two key elements to lean construction, according to Bayer. One is a set of tools aimed at eliminating waste and increasing value. The other is integrated project delivery, which drives collaboration and transparency into the design and construction process.

“Never confuse those two,” says Bayer. “You can use lean construction tools like the Last Planner System on any project—no matter how crazy the contract might be.” (The Last Planner System is a production-planning system developed by LCI to facilitate predictable workflow and rapid learning in programming, design, construction and commissioning of projects.)

“With integrated project delivery, the designer, the contractor and the major subs are all involved, so you are both designing the building and designing how the building will be built,” says Bayer.

Take HVAC as an example. If the mechanical contractor comes into the design process early and discusses the system he is proposing to use, the building’s design and schedule can be adapted if necessary to minimize risk.

“In an integrated project process, that kind of risk is everybody’s problem. You’re managing a single contingency, and you can go and find a solution,” says Bayer. It is the difference between insuring against risk and eliminating risk. “We don’t believe that buying and selling risk A) ever works, B) ever works, or C), ever works,” says Bayer.

Bayer has done several presentations on lean in Canada and feels that Canadian contractors have something of an advantage. “In general… levels of collaboration seem to be higher,” says Bayer. “Canadian contractors often work with the same suppliers and the same subs over multiple projects. That makes ideas like lean construction easier to bring in. There’s a baseline of trust in the beginning.”

Changes in methods are needed. “In a typical Gantt schedule, you look at the work you think you’re going to do at the start of the month. Then, at the end of the month, you look at the work that you actually did. Then, you start scurrying around so you can pretend to the owner that everything is OK,” says Bayer.

“With the Last Planner System, the trade contractors are called upon to plan their work with each other, rather than with the superintendent. Where the superintendent used to be basically a babysitter or a traffic cop, he can actually enhance the ability of the trades to do their work,” says Bayer.

Just-in-Time inventory practices are also part of lean construction.  The objective is to avoid both shortages and having unused inventories of materials sitting around a jobsite.  These inventories can be obstructions and safety hazards, and might be damaged.

“In construction you usually talk about a trade-off. You have time, cost and quality. The common assumption is that you can only have two out of the three. With lean, we can have quality, savings, and do it faster. There is no trade-off,” says Bayer.

100 years of waste

Pascal Dennis, president of consulting firm Lean Pathways Inc. in Toronto, has worked with a variety of industries in Canada and the U.S. on implementing lean—including residential and commercial builders in the U.S.

One American construction executive told him that the homebuilding industry is where the auto industry was 100 years ago. “He said we have been able to get away with this amount of waste for a number of reasons—one of them, the absence of really tough offshore competition,” says Dennis.

A Toyota Canada veteran, Dennis asserts that lean cannot be implemented with a cookie-cutter approach. “It’s a common failing. People come out of Toyota and think that they can just spout off what they learned there. What worked so well for them at Toyota Canada often causes them to fail disastrously in other types of businesses.”

You have to understand each business thoroughly. “I can’t apply the principles without translating them. For example, what does ‘standardized work’ mean in the new context?” asks Dennis.

The objection that construction is too different from manufacturing for lean to work is predictable, he says. “That’s exactly the same kind of pushback we saw in healthcare, financial services, universities, the process industries… And the lean business system has been applied very successfully in all those areas.”

“Lean is fundamentally about being awake. All the other elements are just little flags that alert you to problems. Project planning by itself will not do that. You have this massive PERT (Program Evaluation and Review Technique) chart and other data, and nobody can really understand it and nobody ever checks it. You tell yourself ‘It’s in the computer, so everything’s OK.’”

Lean is not a set of tools, according to Dennis. “It is a way of thinking that is supplemented by tools.”

“Step one is seeing the waste,” he says. “If you think it’s normal to have a lead time of six months to build a house, or three or four years to build a commercial building, then you can’t see the waste. But once you see it, you can’t believe it.” Of the seven forms of waste specified in the TPS, “We have found that delay waste and inventory waste are the biggest ones in construction.”

In roadbuilding, if you are laying mile after mile of asphalt day after day, you need a management system based on routines—which can be considered standardized work. “When you are building a road, moving down a highway, you need good visual management so everyone knows where everything is, what the quality standards are and what today’s work is and are we ahead or behind? Working without that information is like watching a hockey game without a scoreboard,” says Dennis.

A common misconception is that lean is all about cost cutting.  “It is not just about reducing waste. That is a part of it, but
it is not a scavenger hunt for waste. Fundamentally, it’s a growth system. By reducing waste and variation, by making problems visible, by solving problems, you release a tremendous amount of capacity. The leader’s job is to go after more volume,” says Dennis.

It is a long-term commitment. “You have to build a system, a ‘machine’ that will prosper in all kinds of economies. Anybody can make money when things are good. But can you make money when things are bad? Many builders fail that test,” says Dennis.

Operations

There are many challenges in operationalizing any new technology, notes Thomas Strong, director of Virtual Construction at EllisDon. “That’s because construction companies tend to operate in a decentralized way. Each jobsite tends to operate almost as a separate business.”

BIM has been an important focus for Strong, who considers the company still to be “immature” in lean construction. “There are a lot of people in the company exploring [lean]. We have pilot projects on the go and we are learning, but we have not operationalized it yet the way we have with BIM and virtual construction.”

“The elements of lean were already in the company,” says Strong. “Now, scheduling has to become a process rather than a skill and we have to operationalize it in such a way that it works well on a jobsite level.”

One of the company’s early initiatives in lean construction is a data centre currently under construction, says Wayne Leduc, general superintendent, EllisDon.

“One of the things we did right on this project was including the requirement for BIM and the Last Planner right in the contract. The subs came on board understanding they would have to go through a learning curve on both fronts,” says Leduc.

“I don’t know whether everybody really understands the full concept [of lean],” he says. “We keep the Last Planner board up to date and go over the milestones on a periodic basis. We also have a laptop dedicated to a BIM model, and we bring that up as required,” says Leduc.

“In the very beginning, there were some wide eyes… but the subs have seen the benefit and they are there every day, participating and cooperating,” says Leduc.

Reducing waste led to schedule economies. “Instead of having to chase people around the building and say you have to move this or that, things just flow a lot better,” notes Leduc.

For example, approximately $35 million worth of electrical equipment was delivered to the site between early December and late March, according to Leduc. There is one loading dock for all the supplies. At the daily planner meeting, one board is dedicated to deliveries and how they affect the corridors. “People won’t be trying to work in a certain corridor when they know we are going to be bringing equipment up that corridor all day long. That is one of the bigger benefits, at this stage of the job,” says Leduc.

Peer pressure has become a factor in the meetings. “You can’t keep going to the meetings saying you couldn’t get this done or that done,” says Leduc. Communications has improved, too; new information gets down to workers in a more timely way.

“It’s in their own economic interests,” says Leduc. “They understand that when there are delays in the field, everyone is impacted. If everyone works together and the job flows smoothly, then there are fewer disputes going on.”

The pioneers are at work on lean now, and the early indications are promising.

“Lean in the construction industry is in its infancy. The world will beat a path to the door of the contractor who can devise a lean construction system that can translate and integrate these ideas. The opportunities are enormous, because the amount of waste is enormous,” concludes Dennis. 

Jim Barnes is On-Site’s contributing editor. Send comments to editor@on-sitemag.com