As head of global marketing for the AEC Industry at Dassault Systèmes, Mr. Moriwaki launches and promotes groundbreaking Industry Solution Experiences including "Optimized Construction," "Façade Design for Fabrication," and "Civil Design for Fabrication." He is a member of buildingSMART.
A Deep Dive into the Benefits of Lean: General Contractors Share Direct Experiences
February 13th, 2014 by Akio Moriwaki
McGraw Hill Construction, the Lean Construction Institute and Dassault Systèmes teamed up recently to produce an in-depth report on Lean Construction.
One of the main takeaways from the research is that “education about Lean and the need for and benefits of increasing efficiency must be a major priority for the industry at large.”
To that end, we’d like to share a portion of the report detailing the benefits of Lean practices.
The following is an excerpt of the SmartMarket Report, “Lean Construction: Leveraging Collaboration and Advanced Practices to Increase Project Efficiency.”
In-Depth Interview Findings
Benefits of Adopting Lean Techniques
Firms that adopt Lean construction techniques at their respective firms realize a wide-ranging set of benefits. Most strikingly, experts in Lean construction believe that use of these techniques drives their success and their ability to compete in a challenging market.
One expert says that Lean has been a contributing factor in the company’s overall financial success in recent years. “I can point to jobs we’ve won because of our experience with Lean,” he said. “We’ve gotten work with repeat clients where we implemented Lean, and they were absolutely thrilled with the results, and they just handed us work. There are examples where trade contractors who have worked with us, have had a better experience on our jobs and as a result we get better pricing.” Another contractor states that “if we didn’t do [Lean], we would have struggled [finding] work.” Because they made that commitment, though, he was able to state definitively, “We didn’t have a downturn.”
Others note that Lean construction promotes a higher level of engagement by staff and project partners. “The biggest reward is that people get more engaged in their work,” one expert said. “They get more excited about coming in and doing things everyday.That turns into higher quality, better safety and the things that are tough to quantify.” Another impact that is hard to quantify but noted by a trade contractor is that the adoption of Lean practices “keeps the culture of innovation [at their company] active and prospering.”
All of the experts interviewed have realized significant benefits by using Lean construction techniques, and there is strong consensus among them that all of the following benefits are achieved from the use of Lean.
GREATER PROFITABILITY/ REDUCED COSTS
GCs all agree that project costs could be reduced by cutting waste. For example, through better detailing, less materials could be used. Similarly, better modeling could lead to reduced rework. Notably, GCs say this does not necessarily translate to greater profitability, particularly those who operate under guaranteed maximum price contracts. “If there’s a savings on the job, it goes to the owner,” said one contractor.
Several trade contractors also agree that they see project costs reduced, but not all, and not consistently on every project. One advanced trade contractor, though, finds that, even if the profit margins are not frequently higher on Lean projects, they are more certain: “Our margins have improved to expectation, so instead of taking a job at 4 or 5%, and being lucky to get 3%, we’re taking the job at 4 or 5%, and we’re making 4 or 5%—maybe getting a little extra, but not going below that.”
Numerous Lean techniques can contribute to safer worksites, including more predictable workflow, cleaner sites, improved ergonomics and better material handling. In particular, contractors note that prefabrication and modularization could improve safety by removing work from the field and executing it in a controlled environment. In fact, half of the trade contractors find improved safety to be one of the top two benefits from undertaking a Lean approach.
GREATER ABILITY FOR SUPERVISORY STAFF TO FOCUS ON MANAGING WORKERS
Better planning and greater predictability can lead to fewer conflicts in the field, freeing up staff for other activities. A GC reports, “Previously to [adopting Lean techniques], 90% of the [field staff’s] day was spent resolving conflicts and clashes between trades… That has been virtually eliminated… Now they focus on production planning, smoother workflow, how to get the project completed on time and working with the workers.”
And a trade contractor concurs, “We have probably found a 60% increase in [a supervisor’s] ability to directly manage the labor force,” which he attributes to prefabrication and the ability to automate tasks like material takeoffs, ordering and logistics.
HIGHER QUALITY CONSTRUCTION
Some GCs note that by reducing rework, teams increase the likelihood that construction quality can be improved. Others note better design and preconstruction collaboration within an integrated team reduces or eliminates the need for value engineering.
Prefabricating in a controlled environment also promotes higher quality, according to both general and trade contractors.
One trade contractor considers improved quality one of the top benefits of Lean because the processes they have put in place help them to “deliver exactly what the customer wants—no more, no less.”
GREATER CUSTOMER SATISFACTION
This benefit carries greater weight with GCs than with trade contractors since half of the GCs interviewed say that customer satisfaction is the most significant benefit of Lean construction, a trend not found among the experts from trade firms. Customers may see some but not all the same benefits as contractors, such as lower costs, reduced schedules and higher quality.
Notably, many GCs also report that customer influence was a driver in adopting Lean techniques on projects. As such, successfully delivering a Lean project to a customer who requests it, naturally leads to customer satisfaction.
However, most trade contractors do see this as a benefit they achieve on projects, due to reliable outcomes, better adherence to schedule and higher quality.
Through improved planning, some experts say that schedules are more reliable on Lean projects. As noted above, one trade contractor considers this to be the true outcome of Lean, rather than increased profitability. Another trade contractor notes that the reliability of outcome due to their Lean practices has changed from about 20% to about 80 to 85%. Other factors, such as better detailing, fabrication and preassemblies contribute to delivering a more reliable product.
REDUCED PROJECT SCHEDULE
Improved planning at both the project and craft levels, can lead to shorter construction schedules. “The first project I worked on… the superintendent thought it would take seven to eight months and he told the owner it would be done in six,” said one expert. “We did it in 4.5 months without any overtime.”
In the spirit of cutting waste, firms are actively pursuing ways to remove obstacles and help workers be more efficient. For example, several note that use of the Last Planner System helped improve productivity in the field by creating more predictable workflow.
However, some note that Last Planner, which requires more upfront and detailed planning on projects, could also increase the workload of project management staff. This may be due to a lack of expertise with that system and could be less of an issue as users become proficient with the system.
BETTER RISK MANAGEMENT ACROSS PROJECTS
There are a multitude of risks on projects, and many can be addressed through Lean. Several of the benefits listed here can contribute to improved risk management, including better safety, greater reliability and higher quality. A couple of trade contractors consider this the most significant benefit of Lean.
SOURCE: McGraw Hill Construction SmartMarket Report, “Lean Construction: Leveraging Collaboration and Advanced Practices to Increase Project Efficiency”