Needless to say, the construction industry is badly broken and needs fixing. How does the industry rise up and meet the challenges of customer demand for higher quality, improved profitability, and the shortage of skilled workers?
The first step is to cast aside the not invented here syndrome and embrace a time-tested manufacturing solution -the Toyota Production System-commonly called Lean.
Why should construction company managers even consider Lean as a way to improve their business? Here are some eye-opening facts about the U.S. construction industry:
- 60% to 85% of construction time is spent waiting or fixing mistakes
- The average construction worker operates at 40% efficiency
- Critical shortages exist in qualified and skilled workers
- The return on equity for construction pales in comparison to all other U.S. industries
- Customers are frustrated with poor quality, confrontation, excessive change orders, and scheduling delays
These are some of the same or similar issues Japanese companies like Toyota faced in the 1950’s. Lean construction can help remediate the dire conditions described above. While Lean is no silver bullet, lean construction offers substantial improvements to the problems facing the construction industry. If construction companies want to prosper in the 21st Century then they should move toward lean thinking.
Why so Much Waste?
Why so much waste? Construction projects are so fragmented. Many times subcontractors do their work disregarding how what they do impact the work of other subcontractors. We call this the ”throw it over the wall’ mentality.
One functional department ( in this case subcontractor) completes its part of the project and throws it over the wall to the next department (subcontractor) who throws it back over the wall because it isn’t right. This mentality sub-optimizes the performance of the entire project creating quality and schedule problems.
Lean thinking is a new way to manage construction. Many people object because they believe lean is a manufacturing strategy and has no application in a ”unique” industry like construction. The goal of Lean Process Improvement is to maximize value and eliminate waste using techniques like one-piece flow, Just-in-time delivery, and inventory reduction.
There is a small but growing movement to apply lean principles to construction. Applying lean principles to construction really means applying them to project management. This transformation involves mapping your construction processes, determining the most efficient work flow and establishing a pull system.
How do you create a pull system? As a contractor you can begin by looking at what the completed project should be, and then work backwards, identifying each preceding step.
Downstream processes determine what the upstream processes will be and when they should take place. Taking this view of the project will help you control the work flow. You should also look at creating value stream or process maps of your job support processes as well as project processes. Processes like job setup, estimating, payroll, accounts payable, purchasing, tool and material handling are good candidates for mapping.