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by Dennis Sowards

Construction is possibly the last frontier for lean. Although manufacturing’s productivity has improved during the last 40 years, the construction industry has experienced a slight decline, as seen in figure 1 below. Even though the construction world has embraced high-tech tools, we still manage projects the same way we always have, and we’re still getting the same poor results. Less than 30 percent of projects come in on time, on budget, and within specification. The answers to improving construction productivity are not in more software or technology.

Waste is construction
In the construction world, waste is rampant. A study, “Owners Talk about Revolutionary Changes in Construction Contracting,” presented by SMWIA/SMACNA Partners in Progress at their 2006 conference, found that 57 percent of the time that crews spend on a job site is waste.

Before sharing examples of lean application in construction, let’s identify the seven types of waste readily found in construction:

Defects. Everyone in construction understands this type of waste. It includes doing the wrong installation, defects in fabrication, and errors in punch lists. Not meeting the required code is waste. Rework in construction is rarely measured.

Overproduction of goods . This happens when we fabricate material too early or stockpile material in the warehouse or at the job site. Estimating and bidding jobs that are not won is a form of this waste. Printing more blueprints or making more copies of a report than needed is overproduction.

Transportation. This waste occurs when we move material around the shop, when we load it on the truck or trailer, when we haul it to the job site, when we unload it, and when we move the material from the lay-down or staging area to the installation point.

Waiting. Construction is full of this waste, including when a crew waits for instructions or materials at the job site, when a fabrication machine waits for material to be loaded, and even when payroll waits for the always-late timesheets.

Overprocessing. This waste includes overengineering, requiring additional signatures on a requisition, multiple handling of timesheets, duplicate entries on forms, and getting double and triple estimates from suppliers.

Motion. These “treasure hunts” happen when material is stored away from the job or when workers look for tools, material, or information. This waste also occurs in the office or job site trailer, when looking for files, reports, reference books, drawings, contracts, or vendor catalogues.

Inventory . This includes uncut materials, work in process, and finished fabrications. Some contractors claim that they have no inventory because they job-cost all material. While this may work for accounting, if the material is not yet installed and isn’t being used by the customer, it’s waste. This waste includes spare parts, unused tools, consumables, forms and copies, employee stashes, and personal stockpiles. One could argue that the unfinished facility is inventory and is waste until operational.

 

Waste is everywhere in construction and has been for hundreds of years. This is not a statement of blame, just fact. It is so much a way of life that most construction managers don’t even see it. They accept waste as inevitable and unpreventable and add it into the cost of the job. Thus, the customer pays for it.

However, some construction companies don’t accept waste as a necessary part of doing business. They attack it through the application of lean.

Masaaki Imai says, “If one is not doing 5S, one is not doing lean.” In construction, 5S (traditionally translated as “sort,” “set in order,” “shine,” “standardize,” and “sustain”) has been applied in the shop with great success.

Grunau Co., a Milwaukee-based mechanical contractor, used 5S on its main yard. Like those of most construction companies, Grunau’s yard was littered with stacks of material returned from jobs and saved for just-in-case situations. The yard was also crowded with equipment and material being made ready to go out to current jobs. Grunau implemented the first “S” by separating the material and tools found in the yard into two groups: using and not using. Any material or tool that fell into the second group was disposed of in the most economical way. The items in the “using” group were set in order by identifying a specific home for each item (the second “S”). These locations were visually marked. The third “S” (sweep or shine) was done to keep the area clean and return used tools or equipment to the designated locations. Next the team looked at ways to standardize the work area (the fourth “S”). The last “S” is self-discipline (or sustain). Here the team looked at ways to maintain the gains it had made in the yard. After applying 5S, one manager reported, “It was like night and day to see the difference.”

5S works well in the office, too. One contractor’s purchasing department had problems finding partially issued purchase orders when a buyer was out of the office for the day. The department applied 5S and redesigned the buyers’ work area so that all buyers had a designated tray for all unprocessed orders and another for those partially filled. This seems small, but it saved time for other buyers and for the accounts payable staff.

A heating and air- conditioning contractor’s accounting department kept duplicate copies of all shop invoices. During the past two years, the department accumulated about 18,000 invoices. The 5S group decided that this was no longer necessary, and threw the duplicates away, making space available and reducing handling time.

Field construction operations are also realizing the value of 5S. One company used 5S to clean up the stashes each foreman had started. Excess material was returned for credit, and the crew’s gang boxes (large metal cabinets for storing tools on job sites) were organized to reduce the time crews spent looking for tools.

Another contractor set up a rack with the workers’ names on it for the air-balance crew to hang its safety harnesses. Air-balancing a facility is done to create an even flow of air for heating and cooling through the plant. To take readings and adjust equipment, the crews must hang from the ceiling and sides of elevated floors and equipment. Harnesses are used to tie the worker safely to the facility or equipment while performing the balancing tasks. When just thrown into a storage box, the harnesses usually become entangled. Using the rack, with assigned locations for each harness, reduced time spent untangling and resizing the harnesses each morning. This approach saved 15–20 minutes every morning for each of the 22 employees working the air-balancing function.

A basic kanban approach has been used in construction, both in the field and shop, to signal the need to refill consumables. When one bin of bolts or screws is empty, the second bin replaces it. The empty bin becomes a signal to refill it by placing it in a designated location. In the bottom of the bin is a card that has the bolt type, part number, quantity to be ordered, and the supplier’s contact information.

In the article, “Building Quality at Veridian Homes” in the October 2006 issue of Quality Progress , author Denis Leonard writes about kaizen (i.e., waste reduction) events that have been used successfully in construction. Veridian Homes, headquartered in Madison, Wisconsin, uses what it calls kaizen redline events to review all of its home plans. This helped Veridian develop plans that are more constructible. The company has 50 different plans, and involving the people who design and build these models has led to major improvements. In these kaizen redline events, the team examines every part of the design, looking for ways to simplify, reduce duplicate efforts, and standardize the installation work. The event consists of two parts. First, a team of representatives from design, construction, and customer service reviews a specific plan. This includes the key subcontractors. Then, the team presents its findings and concerns regarding that plan to all design, construction, management, and customer-service people in a 90-minute monthly meeting. Usually three plans are reviewed per meeting. After each presentation, they discuss key issues and identify opportunities for improvement (OFI). Other data regarding customer complaints and defects are also brought to the meeting for analysis. Many times an issue that surfaced in one plan is identified as common to all plans. They assign OFI teams to resolve the issues. According to Leonard, Veridian’s quality-improvement efforts have accomplished the following:

Model-homes-sold cycle time reduced from 32 to 15 days

Drafting time per model reduced by more than one hour

Estimating time per home reduced by 32 percent

Material variance (i.e., difference between ordered and used, possibly due to damage on site) reduced by 20 percent for lumber, 24 percent for siding, and 30 percent for trim

Paperwork processing reduced by 208 hours per year

Person hours reduced by 200 per year through escrow and warranty process improvements

Reduced inspection (and inspection costs) by 50 percent while reducing defects by more than 50 percent

 

Some construction companies are using value-stream mapping (VSM) to improve how they deliver the design and the project, according to Peter Dumont, P. E., of Lean Engineering, in a presentation he made to the Lean Project Delivery Workshop on April 11, 2007. The Boldt Co., a construction-services contractor headquartered in Appleton, Wisconsin, used VSM to reduce accounts payable from 87 days to 67 days. Tracer Industries Canada Ltd., based in Edmonton, Alberta, specializes in providing turnkey management systems for industrial and commercial projects. The company applied VSM and decreased total engineering design time from 20 days to 1.2 days. Direct labor cost per drawing has decreased and is generating a $1.3 million annual increase in earnings before interest and taxes.

The Last Planner System
The Lean Construction Institute has developed a tool specifically for applying lean to project management. It is called the Last Planner System. The “last planner” in construction is the field supervisor who assigns work to the crews. In “The Theory of Project Management: Explanation of Novel Methods,” a paper written and presented by Lauri Koskela and Greg Howell at the proceedings of the International Group for Lean Construction held in Gramado, Brazil, on August 10, 2002, the LPS was described as outperforming traditional project management methods by:

Reducing variability common in construction so that work flows from one completed task to another

Completing a look-ahead plan—i.e., making work ready to be performed so that crews can finish a task without interruption, rework, or remobilization

Performing the weekly work plan—i.e., holding weekly coordinating meetings where last planners (supervisors) make commitments to each other in support of the schedule

Managing the project by monitoring the plan’s completion rate rather than the progress compared to schedule (effort). This creates a learning process by investigating plan failures.

 

The LPS consists of developing and using several key plans along with a weekly meeting and constraints measurement.

The master schedule is common to all major construction projects. The LPS breaks the master schedule into phased schedules. The team of trades and management, which is responsible for the work of that phase, develop each phase schedule. The master schedule shows how the phases of the project come together and when. The master schedule does not show the way work will be done within each phase; this is the role of a phase schedule. The phase schedule identifies the major activities and the rules for release of work to move from one activity to the next. The phase schedule sets the sequence and timing of activities in finer detail than the master schedule.

Activities developed in the phase schedule drop into the look-ahead plan when they are six weeks from happening. In look-ahead planning, these activities are magnified into greater detail (i.e., tasks). Each task is screened using a checklist to ensure that all requirements are made ready so that the task can be performed. A typical look-ahead plan focuses on when the activity is to be done and leaves the make-ready work to each supervisor.

The last planner, usually the foreman, develops a weekly work plan by selecting from the look-ahead plan those tasks that are ready to be done and are critical in the schedule. The key is to plan only work that is ready, regardless of when it should be performed. This is like pulling the cord on Toyota’s assembly line. In essence, the foreman says, “Stop, we will not do the work that is not ready to be done.” Typically, construction work is driven by schedule, not task readiness; project managers drive the subcontractors to start work that isn’t ready. This usually causes the crew to spend additional time returning later to finish the task. This wastes time and resources. The weekly work plan is the foreman’s commitment plan, and because it’s made up of tasks ready to be done and committed to by the foreman, it has a much higher likelihood of being completed within that week.

After each week’s work, the last planner identifies any constraints that kept him or her from doing the work as planned. These constraints are analyzed in a weekly coordination meeting, and action is taken to prevent future occurrences. Part of this weekly learning cycle is measuring the percentage of work completed.

Phased planning takes place several times, depending on the complexity of the building project. The look-ahead and weekly work plan, as well as the constraints analysis, are done weekly and represent current best knowledge of the job’s progress. The LPS provides the necessary tools for planning and controlling projects. In LPS, planning is what needs to be done and how it will be done; control is about making it happen. The LPS helps shield the crews from the variability common to construction and keeps them focused on installation. See figure 2 at right for an overview of the LPS.

In 2001, the Lean Construction Institute published research that found, on projects where the planner system of production control (PPC) was greater than 50 percent, companies averaged a productivity factor of 0.85 (meaning the projects averaged 15% under budget). Jobs with PPC less than 50 percent averaged a 1.15 productivity factor (15% over budget). Although the research did not explain why the cutoff was 50 percent, the data support the logic that if more of the work is completed as planned, the crews will be more productive.

Lean has been used in many industries for years and is just beginning to show success in construction. Because almost everyone and everything is affected by the cost of construction projects, becoming lean should be of great benefit to the construction industry and its customers.

About the author
Prior to starting his own consulting firm, Dennis Sowards was the manager of continuous improvement and communications at Kinetics Systems Inc. He led several successful projects that applied lean thinking techniques to construction. One of these, the 5S implementation at Kinetics Southwest, received the Mechanical Contractors Association of America’s E. Robert Kent Award for Management Innovation.