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Lean construction: How general contractors and subcontractors can lower costs

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In a business world where time is money, construction efficiency processes continue to evolve and it is important to consider the growing trend of lean construction.

An effective means to re-evaluate a construction schedule while reducing costs and driving quality control standards, lean construction is an important tool in the commercial real estate industry.

Many companies are demanding more from their contractors and subcontractors, with some intending to hire only those who follow lean processes.

Lean construction consists of scheduling labor and materials so that they arrive at the moments you need them; meeting regularly with the architect, general contractor and subcontractors as a team and completing six week "look-aheads" to keep everyone informed about the project and to set timelines for completion of tasks, as well as creating quality assignments for all workers on the project.

The exciting part of lean construction is that quality improves, costs are reduced and jobs are finished on time.

Historically, lean concepts were introduced in American factories during World War II. Able-bodied workers became part of the military, leaving older workers and women to produce tanks, guns, destroyers and airplanes. New workers were trained to produce on assembly lines using the three concepts mentioned above.

After the war, the military returned and took up where they left off. They returned to their old habits and lean concepts were forgotten.

But not in Japan. Toyota (NYSE: TM) learned about lean factories that incorporated lean processes into their production process. Pace, another component of lean construction, was used by the Japanese to halt production, work to solve the problems at hand and then return to drive production.

The American model has been to continue production and try to solve the problem at the same time. We should not have been surprised to learn a few weeks ago that Toyota became the world's major automobile maker.

In an article entitled "Shielding Production: An Essential Step in Production Control," writers Glenn Ballard and Gregory Howell state that "the construction analog to stopping production rather than pass on bad product is to make only quality assignments. It also reveals what management needs to know in order to truly control and improve production."

They go on to say, "Research has supported the claim that performance against commitment plans can be improved by improving the quality of assignments and that production unit productivity also increases. Making only quality assignments shields production from workflow uncertainty and is the first step in a process of implementing a production control system for construction."

Weekly work plans are effective when they meet specific quality requirements for definition, soundness, sequence, size and learning. These requirements prompt the questions below.

Definition: Are assignments created that are specific enough that the right type and amount of materials can be collected and so that work can be coordinated with other trades? Is it possible at the end of the week to tell if the assignment was completed?

Soundness: Are all assignments sound, that is, are all materials on hand? Is design complete? Is prerequisite work complete?

Sequence: Are assignments selected from those that are sound in the constructability order needed by the production unit itself and in the order needed by customer processes? Are additional, lower priority assignments identified as workable backlog, available in case productivity exceeds expectations?

Size: Are assignments sized to the productive capability of each crew or sub-crew, while still being achievable within the plan period? Does the assignment produce work for the next production unit in the size and format required?

Learning: Are assignments that are not completed within the week tracked and reasons identified?

Failure to make quality assignments exposes production units to nonproductive delays looking or waiting for resources, to multiple stops and starts, and to inefficient construction sequences and the resulting rework.

Where measurement is possible, prior to implementing shielding rules, contractors have consistently been found to complete less than 60 percent of assignments and sometimes as little as 35 percent.

For construction crews, the largest categories of reasons for failure are missing materials and failure to complete prerequisite work.

Once production units are shielded from workflow uncertainty, time and energy are released for improving downstream performance, specifically for detailed design of work methods with high involvement of direct workers and line supervisors.

Just as leadership in energy and environmental design (LEED) construction was rarely mentioned a few years ago as the construction equivalent of green and is now commonplace, so too will lean construction become more and more common, especially if you start asking: "Are you considered lean contractors?"

Raybold is vice president of marketing and sales for General Coatings Corp.

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