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What Emerging Contractors Can Learn From Lean Construction Principles

The CrewCost Team
Published Jan 18, 2024

Historically, the construction industry produces a lot of waste. Not just garbage and debris generated from projects (although that is part of it too), but waste in cost, time, and in efforts of the individuals involved in managing the project. Much of this waste is due to the uniqueness of each and every construction project; no building or project is exactly alike and there will always be inefficiencies in trying to create something unique. 

The unique nature of each project is the main differentiator between construction and manufacturing, where the process is outputting the same product, repetitively, over and over. In manufacturing, it’s easier to refine and optimize a production process for efficiency, because the variables involved in the process are far more predictable and easier to control.

However, there are also many similarities between construction and manufacturing, and some of manufacturing’s philosophies can be adopted by the construction industry to create more efficiency-focused processes. One such philosophy is called Lean Construction.

Lean Construction isn’t just a fancy buzzword; it’s a proven methodology for streamlining projects, eliminating waste, and maximizing value for clients. Lean Construction was, in part, developed from Toyota’s famed production system and Lean principles can be a game-changer for general contractors at small to midsized construction companies, helping you optimize operations, boost profitability, and stand out from the competition.

Key Takeaways

  • Lean Construction is related to Lean Manufacturing and is focused on eliminating waste and inefficiencies throughout the construction process in order to reduce costs and delays while improving quality and productivity.

  • Core principles of Lean Construction include defining value, mapping the value stream, eliminating waste, enabling continuous workflow, pull planning, and fostering a culture of continuous improvement.

  • Lean Construction practices like improved communication/collaboration, just-in-time material delivery, process standardization, and employee empowerment can help emerging contractors boost efficiency and profitability even through small, incremental changes.

What is Lean Construction?

In essence, the Lean approach focuses on identifying and eliminating non-value-adding activities, also known as “waste,” throughout the entire construction process. This includes everything from excessive material handling to rework due to miscommunication, delays, and inefficient workflows. By minimizing waste and maximizing value flow, Lean principles aim to achieve:

  • Reduced project duration and cost. – If you are communicating and performing the work more efficiently and effectively, while at the same time optimizing delivery of materials and planning the work, you will reduce lost time due to delays, double-handling of materials, and rework.
  • Enhanced quality and customer satisfaction. – Lean Construction utilizes the Kaizen concept to help improve quality. This concept stems from a Japanese term that means “continuous improvement”, and focuses on discovering and celebrating the discovery of quality issues, under the assumption that one will learn from the issue and they will have discovered one way that will not produce the desired results.
  • Improved team communication and collaboration. – Lean Construction incorporates the Last Planner System in scheduling and communicating the work activities. This means that the ‘last planners’, or the frontline managers running the work, communicate and coordinate the work on a continual basis. This helps to reduce unrealistic expectations set forth by a more rigid schedule.
  • Increased productivity and profitability. – Lean Construction focuses on a bottom-up method of driving decisions, meaning that the frontline managers and leaders, who are most closely involved with the actual work, have the ability to plan and drive the work moving forward. This allows the leaders who are truly responsible for production to help run the project in a way where supply does not outpace demand of what the team is capable of building, or vice versa.

Principles of Lean Construction

Lean construction is a fairly easy philosophy to start applying to your projects. Here are some of the major tenets of Lean Construction and how you can apply them to your projects today:

  • Defining Value – Understand what holds value for your client. This could be time, reduced cost, higher quality of the finished project, or a variety of other items, but ultimately if you understand what holds most value on the project, it becomes easier to prioritize activities and practices during the course of construction that help facilitate and realize that value.
  • Value Stream Mapping – Identify and analyze the entire sequence of activities from client needs to project completion, pinpointing opportunities for waste elimination. This is a collaborative approach incorporating all members of the project; a key part for Lean Construction to be effective is that all members of the team are given respect and their voice is heard. In order for a holistic approach to efficiency to work, all parties need to be bought-in, and so everyone must have a voice in the conversation.
  • Eliminate Waste – Focus on minimizing non-value-adding activities like overproduction, waiting, transportation, rework, and defects. There is a lot of waste in construction as it is, and by training your eye to identify waste on projects (time, double-handling, inefficient use of space, etc.) and focusing on how it can be eliminated, you will find you can quickly start to cut out unnecessary waste on your projects.
  • Continuous Flow – Create a smooth, uninterrupted workflow by optimizing the sequence of tasks and minimizing bottlenecks. This ties back into waste. If the flow of the project is continually moving, you are minimizing wasted time and making sure you make the most of the time that everyone on your project is spending on the jobsite, including your own self-performed crews and subcontractors. When you step back and start to identify opportunities where you can improve flow on the project, you’ll be surprised at how many small gaps in productivity and flow there are.
  • Pull Planning – Implement collaborative planning techniques where work progresses based on downstream demand, preventing overproduction and material stockpiling. Pull planning is a collaborative way to involve the ‘last planners’ in managing the work as it happens. Again, by managing the work this way, as opposed to directing the flow of work based on a more static schedule, the project management team allows for the managers directly responsible for the work to produce it as efficiently as possible with the available constraints and resources, making the work flow as fast and as much as possible.
  • Continuous Improvement – Foster a culture of continuous learning and experimentation, encouraging everyone to identify and implement improvements. This goes back to the concept of Kaizen, the Japanese philosophy of making incremental, continuous improvements. If your team members adopt this mindset and implement it by learning from mistakes and trying new methods the next time a similar scenario occurs, that will mark the beginning of the process of continual improvement.

👉🏻 Check out our guide to the Foundations of Construction Management

How Emerging Contractors Can Apply Lean Principles

Getting Lean Construction practices started on your projects is not that big of a lift. While implementing Lean may seem daunting at first, even small steps can make a significant difference. Here are some practical ways you can start incorporating Lean principles:

  • Start with pilot projects. – Choose smaller projects to test Lean principles and gain insights before implementing company-wide. These can be projects that you feel confident your team knows like the back of their hand and represent minimal risk for your organization. By choosing low-risk projects as pilots, you can begin to see how Lean adds value and begin to get your team comfortable with a slightly different workflow before launching Lean practices on bigger work.
  • Focus on communication and collaboration. – Break down information and communication silos and encourage open communication between teams through regular meetings and visual tools. Regular coordination meetings with the last planners, as well as a weekly pull planning session with your crews and subcontractors can be the beginning of drastic improvements in the sharing of information.
  • Streamline material handling and inventory management. – Reduce unnecessary material movement and waste by implementing just-in-time deliveries and minimizing on-site stock. Just-in-time deliveries focus on having the materials arrive right before they are needed, so make sure you have a complete understanding of when the work is scheduled, the material lead time, and what space you have available for staging to ensure you don’t have the material show up too soon or late.
  • Standardize key processes. – Create clear best practices for common tasks like prefabrication, quality control, and safety procedures. The largest contractors are typically the ones that have been around for awhile, and during that time you better believe they have built standardized the processes that allow them to accomplish the work and make money. Standardization of processes is a key initiative for any business, but in the context of Lean Construction, it allows for predictability in the workflow of your project and a degree of certainty that obvious mistakes won’t be made.
  • Empower your team. – Encourage employee participation in identifying and implementing improvement ideas. This means everyone needs their voice to be heard, down to the equipment operator and laborer. Often, some of the best ideas on process improvement can come from the field workers, as these are often the people that see how office-generated plans for the work shake out and where the failure points are from an intimate perspective.

The Benefits of Lean Construction Go Beyond Time-Savings

Lean Construction is more than just a set of tools; it’s a cultural shift for your business. By embracing Lean principles, you can drive significant improvements in efficiency, profitability, and client satisfaction, ensuring that the owners you work for can see the added value by this set of ideas.

Remember, by following the concept of Kaizen, small, incremental changes can yield big results. Common mistakes can be identified, celebrated (we are celebrating that we have learned one more way NOT to perform the work), and improved upon. Start implementing Lean methods today and build a stronger, more resilient construction business moving into the future.

The CrewCost Team

The CrewCost Team consists of men and women who have worked in the construction industry as project managers, general contractors, sub contractors and more. They share their decades of experience on our blog as a way to help other contractors grow healthier and more profitable businesses.

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