Common Misconceptions Construction Managers have about Lean

Of course this could work if every job we did was the same, you know, like they have in manufacturing, but all our projects are different” —   A.Projectmanager

“Well you know, we have lots of peaks and troughs in our workload, feast and famine, sometimes we don’t have enough staff and other times there is not enough to do and we have guys sitting around, I can see how this lean stuff might work when you have a predictable workload, but it wouldn’t work here” —– A.Director

These are the kind of statements we hear all the time and are representative of some of the most common misconceptions about lean thinking.

In construction, there appears to be a perception that all manufacturing is lean. Also that manufacturing is totally predictable and simple, with essentially identical repetitive tasks taking place and so “of course you could do lean” under these circumstances.

Lets look at some of these common perceptions surrounding lean, manufacturing and construction.

Perception 1.

Manufacturing is Lean.

Wrong! – should read:- Some exemplars in the manufacturing sector are Lean but there are very many companies that are far from it!

 

Perception 2.

Manufacturing is simple compared to construction

I once visited Rolls Royce in Glasgow. This factory makes a few rubber seals and some small high tech pieces of metal called stators that form the outer ring of a jet engine. The factory is about a mile long and contains machines as big as houses, all very high tech. The startling fact is that this is only one of seven factories across the UK that are needed to make just a jet engine, let alone the rest of an airliner. – Really simple then!

 

Perception 3.

Offsite is lean isn’t it?

Oh no it isn’t! – it just happens somewhere else!

 

Perception 4.

Lean means doing BIM doesn’t it?

Well it depends what BIM is nowadays. It started off as 3D cad. Well it’s certainly lean to be able to visualise process. However there were exemplars of lean in existence in the 1980’s, about the era of the Sinclair ZX Spectrum, so no 3D cad back then. The new PAS 1192 calls for collaboration and joined up thinking in the design process and this is BIM. Isn’t this evident in a lean organisation anyway? Trying to mandate collaboration may be akin to herding cats.

 

Perception 5.

Lean doesn’t suit bespoke projects like ours.

This is maybe one of the most prevalent. The idea that lean will only work when you have stable and repeatable tasks that is. Actually the opposite is true. The real key to lean is flexibility and the ability to adjust very quickly to changing conditions. This includes being able to easily flex the workforce by 30% to cope with varying demand, multi-skilling, having processes that are transparent and visually managed so that the thread can easily be picked up by a colleague or anyone else involved when necessary.

The Design / Procurement Paradox

It will be widely recognised that over the last 5 years we have seen a slide back to ‘lowest cost’ dominating the procurement thinking in both Client organisations and, naturally therefore, contracting organisations.

Even for those organisations that philosophically support collaborative working, their systems and staff aren’t equipped with the tendering strategies for true collaborative working and aggressive market conditions have ultimately led to the ‘cheapest’ bid delivering most of the UK Construction Industry Work.

ProcurementParadoxThe results are clear to see in UK Construction Industry statistics, with only 34% of projects delivered on time in 2012, compared to a pre-recession high of 58% in 2007, where two stage mechanisms dominated with a relatively nurtured supply chain. (Constructing Excellence & Glenigans)

Whilst transfer of risk in a ‘buyers market’ has led to high levels of cost certainty for clients, 2012 contrastingly saw Contractor profits being the lowest on record at 2.7%, with many organisations burning the last of their cash reserves to maintain this position.

In an attempt to squeeze margins out of projects, contractors have given commercial teams aggressive buying targets.

Contractor QS, and also Client PQS, have typically used the programme time to ‘play’ the market and sought new suppliers in an attempt to drive down contractor costs.  Before placing orders the commercial teams will seek to tie down designs and transfer risk back out to their supply chains.  Reality hits when orders are placed, the appointment triggers Change and redesign to accommodate supplier needs; frequently leading to increased cost and likely delay.

Building Regulations, the sustainability agenda, consultant appointment structures, acoustic standards, changing construction technologies, air tightness demands, renewable technologies have all generated a position where the traditional design team can only progress the design so far before specialist supplier input is required to conclude the building design.

With the advent of Building Information Modelling (BIM) this demand for early specialist input will only increase if the full benefits of BIM to the construction process can be realised.

In a lean world we advocate integrated supply chains and collaborative design and planning to eliminate waste in construction through improved quality, productivity and reduced cost.

In the harsh commercial world of lowest cost tendering the opportunities are limited and the commercial pressure to buy ‘cheap’ generates two key paradoxes:

  • How can the QS get design certainty at order stage on bespoke buildings without key suppliers involved in the design?
  • How can we effectively plan the works and identify and capitalise on programme opportunities if we are mostly procuring to the “latest start time”?

It is generally accepted that the market is starting to recover and with that there are already indications of a stiffening of resolve within the supply chain, and a change in attitude with regards to whom the suppliers will work with and what projects they will price.

Lean encourages us to maximise value added activity, eliminate waste and reduce support activity.  Traditional procurement merely pushes waste and cost from the Client to the Contractor on to the Supply Chain or up the other way, dependent on demand and supply metrics in the market.  Under conventional subcontract procurement routes the Main Contractor does not care how efficient the sub contractor is as long as he is cheapest and he gets the job done on time; this approach typically increases waste as both supply chain and main contractors try to reduce cost by reducing supervision and resource rather than focusing on eliminating waste and increasing productivity. One of the key indicators is the cost of poor quality in the industry, which research indicates is at least 5% of turnover when considering both pre Completion and Post Completion defects.  Real opportunity exists to reduce cost for all by true supply chain integration.

Lean philosophy and systems thinking offer an effective framework for the UK Construction Industry to excel in meeting the industry technological and legislative challenges; this change requires energy and leadership within organisations to implement the transformations.

The creation of new procurement methodologies requires construction businesses to move away from traditional silo thinking; traditional roles such as Estimator, QS, Project Managers and Designers should be challenged and construction managers encouraged to genuinely interrogate their supply chain and their supply chain processes and staff skills.  The tendering process should be considered a genuine preconstruction activity, not merely a mechanism to get work through the door; strategic supply chain relationships and the integration of complex subcontract packages in tender design development should be common place rather than the exception.  BIM will demand this.

If Clients and Contractors are to succeed in delivering projects and generating a sustainable business and industry, new supply chain strategies will be needed and organisations need to consider carefully how they integrate the supply chain early on in the project life and develop the trust and mechanisms to ensure they get a genuine market price.  The Industry needs to up skill the team, from Client to Supplier, to acquire the necessary hard and soft skills needed to work in a genuinely open and collaborative way to compete, consistently deliver and generate profit through the supply chain.

Starting out

I’m not sure whether it was thinking about my own latest arrival or perhaps the accompanying sleep deprivation that caused me to reconsider my own introduction to lean at 3am on Monday. My obligatory review of website discussions again yielded the same familiar questions of ‘how do I get started?’ and ‘what are the critical factors for the success of lean?’. I’m not sure that anyone has yet found the perfect answer to these; indeed our own Steve Ward is conducting a PhD into it! As for me it was simple, learn and learn quick!

My ‘training’ consisted of a trawl through a previous company’s intranet and then out to conduct workshops the next day. This baptism of fire did have two distinct advantages. Firstly there was a real imperative for me to learn, if I didn’t I was going to fall flat on my face in front of 30 people. Second, the only thing I had to focus on was lean thinking. Whilst I am not advocating this approach as a sensible training method, I do wonder whether the combination of real need and concentrated effort provided me with a better and quicker understanding than some of the alternatives.

So, given that my introduction was not the best, I return to the eternal question of “how do you start?” Again from personal reflection I chose to learn as many tools as possible. My strategy was that theory could wait and tools were anyway far more interesting. This may be a personal trait, pareto, data analysis, visual management, 5C were all things that I could get me head around and teeth into. The philosophy of continuous improvement was something rather more ethereal   and besides, sounded rather like “consultants speak” and not for a civil engineer like myself.

The focus on tools seemed to work for me, I tried things out, some worked and some didn’t. I learnt a few more tools and slowly progressed from there. In time I came to consider in more detail the philosophy, the mindset change required, the organization transformation that needs to happen to fully implement lean. These are crucial but much more difficult to tackle from a complete novice standpoint. For what its worth, I now value both.

So for me, what is important for a start into lean construction?  The boldness to have a go; the willingness to learn new tricks and a bit of dedication to see things through. I suppose the same is true of any new venture and I can only hope that my new son has all three attributes in spades.