Lean Construction - Term Paper Example

 «Lean Construction» TABLE OF CONTENTS 1.0 INTRODUCTION ...................................................................................... 3 2.0 LEAN CONSTRUCTION ....................................................................... 5 2.1 LEAN PRODUCTION ....................................................................... 5 2.2 LEAN CONSTRUCTION AND CONSTRUCTION INDUSTRY..... 8 2.3 EGAN REPORT .................................................................................. 9 2.4 INCULCATING A LEAN APPROACH IN CONSTRUCTION........... 10 3.0 CONCLUSION .......................................................................................... 12 References ......................................................................................................... 14 1.0 INTRODUCTION Lean Construction has its moorings in ‘Lean Manufacturing’. Construction is an industry with diverse facets and avenues. It involves the management of definite and small projects on one hand, and the accomplishment of unwieldy, complicated and dynamic structures on the other. In the projects and substructures that are definite and can be accurately planned, it is profitable to incorporate the lean strategies practised by the manufacturing industry. This not only makes way for the introduction of much needed economies, but also allows for some kind of standardization in the somewhat amorphous projects. There is no denying the fact that the construction industry has been envisaging for a long time the incorporation of lean project delivery within its ambit of expertise. Sadly, this concept has taken a bit of an extra time to gain grounds within the industry under consideration. On the contrary, lean manufacturing procedures have worked wonders for the manufacturing industry. Some of the leading brands like GE, Toyota and American Express have managed to work low costs and enhanced productivity by towing lean strategies (Carreira 2004). Lean manufacturing has allowed them to not only survive, but to work wonders in the contemporary times marked by challenges and constraints. Undeniably, construction industry, over the years, did manage to come out with some unique tools like CPM (Critical Path Method), budget tracking procedures and Gantt Charts, which aid the planning and organization of big projects (Hardin 2009). Yet, the crux of the matter is that the modern construction projects happen to be much fast paced and hence, more than ever vulnerable to change and readjustments. This alteration in the contemporary construction industry demands the adoption of commensurately dynamic techniques of management. Hurdles like cost overruns and delayed schedules mar the construction industry almost as much today, as they did in the past. Propitiously, a significant number of construction professionals have begin to try lean construction techniques, in the planning, management and execution of projects, which are somewhat complex and daunting. In the real estate business, the customers today intend to pay for value and not waste. Wastes can creep into into the construction business in a plethora of ways, be it the uncalled for or substandard materials, faulty designs, shoddy inventory processing and management practices, delays, unnecessary and not required hiring and shifting of professionals, not called for movement of materials and machines, etc (Faloon 2005). In the construction industry, lean construction is essentially about building value while cutting on or possibly mitigating waste (Faloon 2005). It is about doing away with waste, wasteful procedures and wasteful practices. In the end, lean construction techniques do not intend to replace the already existing tools in the construction industry. In fact, they are more about introducing the much needed commonsensicality into the construction business. Lean construction tools are something that can be readily picked up by the constriction professionals and they can use them to augment their expertise and skills to eliminate waste. The primary objective of lean construction is to accomplish goals as per the charted quality and safety standards, in the least possible time and by incurring the minimally possible costs. Lean construction has been found to create a far better work environment. It also dilutes the possibility of conflicts at the planning and job sites, ushering in a far better cooperation and coordination in all the aspects of construction. Lean construction especially streamlines the short term planning processes. For good, lean construction has received a formal approval and recognition in the construction industry. 2.0 LEAN CONSTRUCTION As already said, lean construction has its origins in lean manufacturing. So it will be quiet worthwhile to have an insight into the basics of lean production. 2.1 LEAN PRODUCTION Lean production was a concept that was developed by a Japanese engineer Ohno, who worked for Toyota (Womack et al. 1991). The term ‘lean’ was coined by a research team that analyzed the waste minimizing aspects of Toyota’s manufacturing system (Womack et al. 1991). While envisaging lean production, Ohno focused on Toyota’s production system in its entirety, rather than merely zeroing down on worker productivity or machine productivity. In fact, in doing so, Ohno intended to build on the methods of Henry Ford, who always stressed on taking any production process as on big and desirably unobstructed whole (Womack et al. 1991). However, Ohno intended to differ from Mr. Ford in the sense that he aspired to manufacture customized and customer driven products, instead of coming out with a standardized production system (Womack et al. 1991). While doing so, the fundamental objective culled out by Ohno was the curtailment of waste in the manufacturing of customized products for specific customers, intended to be delivered right in time and without being bothered by the maintenance of a bulky lot of inventories. Here, Ohno defined waste in a customer specific context, as being the inability to meet the requirements of a customer (Womack et al. 1991). In doing so, he concentrated on the overall delivery system of Toyota. The standard of perfection envisaged by Ohno shunned the American approach of stressing on mere cost minimization (Womack et al. 1991). Ohno’s standard was rather multi-dimensional and perpetually open to change and improvement (Womack et al. 1991). Consequently, the system designed by Ohno was revolutionary that it introduced many unheard of practices at Toyota, while eliminating the exiting counter-productive norms. Such steps included, an efficient coordination of inventory movement, empowering of workers at all the phases in the production line, decentralization of shop floor management, enhanced cooperation and coordination with component suppliers, coming up with clear objectives, and declaring improvement to be a lifelong process (Womack et al. 1991). The result was an immense improvement in the productivity at Toyota, with a significant fall in the levels of waste. The salient features of the lean production system developed by Toyota, which has direct and favourable ramifications for the construction industry, are: People: The lean production system at Toyota does not consider the customer and workers as passive pawns or mere statistics (Ohno & Bodek 1988). This system is based on a genuine respect for the people and their needs, expectations and aspirations. Every person, be it a worker or a customer is considered as a vital link in the production chain. The workers are actively encouraged to cooperate and coordinate with each other in the big challenge of creating value for the customer. Every single person involved is extended the due authority and privilege needed to accomplish this pivotal task. Value: In the Toyota lean production strategy, the value is defined exclusively in the context of the customer (Ohno & Bodek 1988). Now, the value handed over to a customer is oft inversely proportional to the wastage incurred by the manufacturing team. As the companies are to inevitably pass on the cost of production to the customer, so a high level of wastage means that the customer has to pay more for a good or service having lesser value. Therefore, the sacred task before an ideal supply chain is to extend maximum value to a customer at a minimal price. This definitely makes astute commonsense and the recipe for a thriving business. Value Streams: Lean production lays a more then average emphasis on taking the overall supply chain as a unified system (Ohno & Bodek 1988). The job of the production manager is not to manage a segregated group of substructures constituting a chain, but to exercise one’s helicopter vision to have a holistic view of the complete production landscape. Any flaw or deficiency in a single link in the value stream has the capacity to percolate down the whole system. Thus, lean production is about understanding and managing the value stream as a unified whole. Perfection: The hallmark of a lean production system is that it never considers itself to be perfect or fool proof (Ohno & Bodek 1988). Virtually, this makes really good business sense. The markets and consumer preferences are not something static and stagnant, but rather the entities, which are always vulnerable to shifts and change. So to speak are the production procedures and the concerned management skills. So a lean production system is always on its tows, to respond to the alterations in the customer preferences, production technologies and management theories. At the same time it is immensely sensitive to the emergence of new flaws and lacunas within the existing value chain. Smooth Flow: A great deal of wastage has often to do with the irregularities and obstructions seeping into the value chain (Ohno & Bodek 1988). Any glitch in the smooth flow of materials and data in the value stream does have the capacity to jeopardize the predictability and reliability of a value stream. So the essential objective of a production team is always to unclog the smooth flow of materials, information and processes within a system. Customer Pull: In a lean production stream, the customer is the primary stakeholder. Therefore it is imperative to look to it that the movement of materials and information and the tuning of production processes respond directly and promptly to the demand exhibited by the customer (Ohno & Bodek 1988). Customer comes first and if a supply chain tries to push materials and information, being oblivious of the demand pulls, it is bound to invite wastage and inefficiencies. In fact, a value stream losses the very reason to exist, if it ignores the customer who is the end receiver of the created value. In addition, lean production also includes several other incumbent values like inculcating discipline and order in the systems and sensitizing the workers to regard customer satisfaction as the ultimate mission and reward. It also highlights the need to assess employee performance, not in terms of the magnitude of production, but on the basis the net value being extended to the customer. 2.2 LEAN CONSTRUCTION AND CONSTRUCTION INDUSTRY Even today, professionals engaged in the construction industry seem averse to acknowledging the fact that the lean production principles developed by Toyota and already being practised by reputed manufacturing firms, could perhaps be applicable to the construction business as well. Yet, the crux of the matter is that the construction industry is eventually supposed to manufacture products that are of value to the end customers. It is perhaps more true in the construction business, then in any other enterprise. Also, be it the construction industry or the manufacturing industry, the logistics and supply chain challenges faced by both are more or less the same (Ballard & Howell 1997). Ultimately, it all comes down to assuring just the right material and workers, in just the right proportions, at the right place and as per the proposed time frame (Hollingworth 2009). Irregularities and glitches in that context are bound to create problems and cause wastage, as much in the construction industry, as in the manufacturing sector. The end result in both the scenarios is the depletion of value being offered to the prospective customer. Many a construction professionals active in the sales side of the business are more than aware of this fact. In fact, construction professionals are already using the production strategies like just-in-time and right-size batching (Hollingworth 2009). Such techniques can not only make the construction business more efficient and competitive, but can assure enhanced value delivery to the customer. 2.3 EGAN REPORT It is not a wonder that the Egan Report submitted to the Deputy Prime Minister John Prescott in 1998, regarding the scope for improving the quality and efficiency of the UK construction industry, minced no words in declaring that,” continuous and sustained improvement is achievable if we focus all our efforts on delivering the values that our customers need, and if we are prepared to challenge the waste and poor quality arising from our existing structures and working practices (p. 4).” Egan Report was indeed an eye opener for the UK construction industry, that was pathetically stymied by the conventional ways of thinking and working, in which the procedures and obsolete values superseded the customer aspirations and needs. In his report, Sir John Egan culled out some key requisites, which ought to set pace and direction for the UK construction industry. These five fundamental drivers were, a leadership committed to change, a sincere focus on the customer aspirations, a close knit integration of construction processes and teams, a firm commitment to quality and a people sensitive approach towards business (Egan 1998). Definitely, the UK construction industry has been gradually awakening to this novel approach towards business. Yet, after all is said and done, the hard fact is that the response of the construction industry has been not that unanimous and committed, as called for by the times. Rethinking Construction 5-4-7 Model (Hollingworth 2009) The busting of the housing bubble and the onset of economic slowdown will perhaps jolt the construction industry out of its complacent attitude. The contemporary lean times vie for a leaner construction industry, which is more sensitive to the prerogatives like value creation, customer satisfaction, efficiency and quality. There could be no more appropriate time to opt for this change than the current times. 2.4 INCULCATING A LEAN APPROACH IN CONSTRUCTION The lean approach can definitely be inculcated in the construction industry. The construction sector could certainly graduate to lean construction by opting for values and strategies aimed at eliminating waste and assessing and accruing the specific value of a product from the vantage point of the end customer. As in the manufacturing sector, the construction industry can certainly identify and demarcate the procedures, which create value for the customer and do away with all the dissipative and non value adding practices. Construction industry only stands to gain by assuring a smooth flow of value accruing processes in the overall construction ventures and by streamlining the interfaces between all such processes in the value stream. It does not require a more concentrated level of economic recession for the construction business to acknowledge that it pays to manage and execute construction activities spurred by the customer pull, rather than by being provoked by internal pressures and institutional compulsions. Perfection should be as much a perpetual ideal for the construction business as for any other sustainable business in the UK. It goes without saying that it is never too late to come out with and adapt to better and more efficient ways of doing things. There exists a scope for absorbing a lean perspective in almost all the aspects of construction business: The construction procedures need to be based on a clear understanding of and proper dissemination of project plans (Alarcon ed. 1997). More effort could be put in assuring multitasking and teamwork. Care should be taken to look to it that the workers are well motivated, appropriately empowered, trained and actively engaged in the process of value creation (Alarcon ed. 1997). Tools like improvement meetings and progress reports could usher in the much needed economies of scale (Alarcon ed. 1997) Another important aspect of the construction business that could go lean and could contribute maximum to the objective of value creation is the logistics and supply chain management. Transparency of costs, better management and administration of supply chains and apt integration of all the stakeholders associated with a project could metamorphose the value creation process into a continuous and integrated whole (Alarcon ed. 1997). A just-in-time approach towards the delivery of materials and equipment could obliterate the need for onsite warehousing facilities and double-handling (Alarcon ed. 1997). The fences between partners should become less rigid with the objective of making optimal contribution to a construction venture. Benchmarking could become an ideal tool to identify the best, most efficient and optimally effective ways of production (Alarcon ed. 1997). This could really boost the overall output in the construction business. A stress on the assembly of stable project programs and the proper analysis of the involved critical paths could minimize obstructions and discontinuities marring the projects (Alarcon ed. 1997). Risk management could certainly help to better manage and assuage the risks cropping up during the complete lifetime of any construction project. Such strategies assure that in any construction venture, the work proceeds in a streamlined and unified flow, while continually adding value to the product being constructed. This also facilitates the calculation of the standard time required for the constituent tasks and does away with the need for halting at any point in the construction process (Alarcon ed. 1997). The need, ability and the potential on the part of a construction firm to do with the optimal levels of materials and equipment enables it to spend more effort and resources in pushing up quality and cutting on time and costs (Alarcon ed. 1997). 3.0 CONCLUSION Lean construction is primarily about the application of a more logical, flexible and sensitive approach to construction management. This definitely cuts on costs and enhances productivity and efficiency. However, the cardinal and fundamental objective of all the efficiencies and economies achieved by lean construction is to accentuate performance and hence value for the end customer at all the levels in any project. Last but not the last, there still remains much to be done to facilitate the influx of lean approaches, tools, procedures and values in the construction industry. Total Words: 3,021 References Alarcon, Luis (ed.) 1997, Lean Construction, London, Taylor & Francis. Ballard, G & Howell, G 1997, ‘Shielding Production: An Essential Step in Production Control’, Journal of Construction Engineering and Management, Vol. 124, no. 1, pp. 11-17. Carreira, Bill 2004, Lean Manufacturing that Works, New York, AMACOM. Egan, John 1998, Rethinking Construction, The Report of the Construction Task Force to the Deputy Prime Minister, John Prescott, on the Scope for Improving the Quality and Efficiency of UK Construction, viewed 23 October 2010, Faloon, Kelly 2005, ‘CCA Members Think Lean’, 1 November, Plumbing and Mechanical, HighBeam Research, viewed 21 October 2010, Hardin, Brad 2009, BIM and Construction Management: Proven Tools, Methods and Workflows, Toronto, Sybex. Hollingworth, Paul 2009, What is Lean Construction?, 4GM Consulting, viewed 22 October 2010, Ohno, Taiichi & Bodek, Norman 1988, Toyota Production System: Beyond Large-Scale Production, New York, Productivity Press. Womack, JP, Jones, DT & Ross, D 1991, The Machine that Changed the World: The Story of Lean Production, New York, Harper Perennial. Read More