Lean construction

Developed by Anton Badman

The construction industry is known for working in projects, and those projects are today complex, uncertain and quick (CUQ). The industry is also known for having lower productivity and higher wastes than other industries. Lean construction thinking started in the middle of 1990 as a way to handle these CUQ-projects. Lean production is well known within manufacturing industries to increase productivity and reduce wastes, but the lean production thinking cannot directly be applied to the construction industry. The reason is that there is a list of factors that differentiates the construction industry from manufacturing industries, e.g. duration of projects, the nature (repetitive or one-of-a-kind), etc.

There are two different interpretations of lean construction. (1) Lean Construction is about how Lean Production methods can be applied to construction, and (2) Lean Construction is a new, theory-based methodology for construction inspired of Lean Production. The second theory is the most common interpretation and also major interpretation used within the International Group for Lean Construction.

Lean Construction is based on three views in production theory, Transformation, Flow and Value (TFV). These three views do not compete with each other but are rather complementary. All systems that pursue the TFV goals are in a way lean systems, but some are systems are better than others.

Development history

The first signs of lean thinking in the construction industry go back to the 1890s. Frank Gilbreth saw potentials in how to apply manufacturing approaches into construction in order to improve speed and labor efficiency. He saw opportunities in how to reduce what in lean thinking in called wastes. Gilbreth developed a body of knowledge that is considered to be a part of the body of knowledge that formed the field of industrial engineering.

The construction industry had a slower productivity growth than other industries in the twentieth century. Historically the industry had build on the Master Builder concept were one entity had responsibility for both design and construction. During the twentieth century the industry converted from Master Building concept to be more fragmented. Designers developed contracts that reduced their construction responsibility, which led to more costly and counterproductive behaviors due to adversarial relations and mistrust. Studies from the 1990s and 2000s showed that the time spent productively were very low and the value-adding time even lower, thus there is much room for improvement.

In the early 1990s Lauri Koskela looked, like Gilbreth did hundred years earlier, to the manufacturing industry for solutions and directions for the construction industry. Koskela specifically looked at Toyota's successful production system (TPS) and lean production and stated that the most successful manufacture methods where based on the Just In Time (JIT) concept . Furthermore, Koskela introduced the Transformation, Flow and Value (TFV) theory that is derived from earlier theories regarding production.

Koskelas work is the foundation of lean construction, and resulted in a conference in Helsinki, Finland 1993 where the expression "Lean Construction" was decided and the International Group for Lean Construction (IGLC) was founded. Subsequently Glenn Ballard and Greg Howell co-founded the Lean Construction Institute (LCI) in 1997. Studies performed by members from both IGLC and LCI led to Ballard's development of The Last Planner System (LPS) and The Lean Project Delivery System (LPDS).

Definitions of Lean Construction

Lean construction is derived from the success of lean thinking within manufacturing industries. There are two slightly different main interpretations of lean construction, see figure 1. The first interpretation, as mentioned above, is about the application of lean production methods to construction. The second interpretation, on the other hand, views lean production as inspiration to the development of a new theory-based methodology for the construction industry.

Figure 1: The relationship between the two main interpretations of lean construction. The figure is based on a figure in Gao & Low (2014).

These two interpretations are shown in two different definitions of lean construction. The first definition is from Koskela et al. (2002, pg. 211): "Lean construction is a way to design production systems to minimize waste of materials, time, and effort in order to generate maximum possible amount of value." This definition shows that lean construction endeavors for the same goals as lean production, which corresponds to the first interpretation.

On the other hand, The Lean Construction Institute defines lean construction as: "Lean Design and Construction is a production management-based approach to project delivery /.../ Lean Construction extends from the objectives of a lean production system - maximize value and minimize waste - to specific techniques, and applies them in a new project delivery process." This shows that LCI's definition correspond to the first interpretation. It has the same objectives as lean production and applies the techniques into construction.

A New Theory of Production

Transformation, Flow and Value generation (TFV) model is a new theory of production. The model is the cornerstone of lean construction and it is a conceptualization of three theories of production used in the twentieth century; Transformation, Flow and Value generation theories of production. Each of the three theories has introduced their own methods, tools and templates for production. The TFV model is based on the view that Transformation, Flow and Value generation are not competing alternative theories, but rather complement each other.

Transformation theory of production

The transformation view of production is the dominant view of production and has its roots in economics. The economist Michael Porter's theory of the value chain is and approach that substantiates the transformation view. There are three principles in the transformation model that according to Koskela (2000) are most important:

1. Production can be divided into sub-processes and tasks and allocate them to specific activities or workstations.
2. The cost can be minimized for each sub-process in order to minimize overall costs.
3. The value of the output is directly associated with the input. The output value can be raised by better (more costly) inputs.

The transformation view does not recognize the other value-adding activities within production and only focuses on the transformation itself.

Flow theory of production

The flow view was first introduced by Gilbreth in 1922 and practiced by Henry Ford. However the flow theory did not adhere until the 1980s with the JIT and lean production movement. The two main principles in the flow theory according to Koskela (2000) are:

1. Reduce the non-value-adding activities (waste) in production.
2. Reduce the lead times and variability in the production processes. Lead-time is the total time it takes for a piece inside the production process e.g. waiting, moving and processing time. The variability is the process-time variability (e.g. variability in process time at a workstation) and the flow variability (e.g. variability of arriving jobs to a workstation).

A third principle can be added to the list. It is a set of principles including simplicity (e.g. reduce number of parts and steps in material and information flows) and increase flexibility and transparency in the production processes.

Value generation theory of production

The value generation view of production arose simultaneously with the flow theory as a critique to the transformation concept. As the transformation view focuses on the internal production processes the value generation view focuses more on the customers' needs. The overall principles of the value generation concept is according to Koskela (2000):

1. Capture all customer requirements.
2. The customer requirements are available in all phases of production (e.g. design solutions and production plans).
3. The deliverables are relevant to all different customers roles.
4. Ensure that the production system is capable of producing the required products.

Transformation, Flow and Value generation theory

Each theory within the TFV model focuses on specific aspect of the production phenomenon. When they are all integrated into the TFV model, they together strive for the traditional objectives manufacturing businesses strives for; cost, time and quality.

1. The transformation theory strives for the objective of reducing costs through minimizing the costs for each sub-process.
2. The flow theory strives for the objective of reducing time through minimizing the non-value-adding activities in the processes.
3. The Value generation theory strives for the objective of increasing the quality of the product through focusing on the customer requirements.

The integration of the three theories is showed in the table 1 below.

Table 1: TFV model of production. The table is based on a table in Koskela (2002).
	Transformation theory	Flow theory	Value generation theory
Conceptualization of production:	As a transformation of inputs into outputs	As a flow of material, composed of transformation, inspection, moving and waiting	As a process where value for the customer is created through fulfillment of his/her requirements
Main principle:	Getting production realized efficiently	Elimination of waste (non-value-adding activities)	Elimination of value loss (achieved value in relation to best possible value)
Methods and practices:	Work breakdown structure, MRP, organizational responsibility chart	Continuous flow, pull production control, continuous improvement	Methods for requirement capture, quality function deployment
Practical contribution:	Taking care of what has to be done	Making sure that unnecessary things are done as little as possible	Taking care that customer requirements are met in the best possible manner
Suggested name of practical application of the view:	Task management	Flow management	Value management

Major concept

The main concept of lean construction is to change some of the fundamental methods in traditional project delivery systems. Some research studies indicate that, using traditional project delivery, only around 54% or the work in a weekly schedule is completed within time. A lean project delivery system can raise reliability.

There are several different systems designed for lean project delivery and developed as trademarks. These lean delivery systems are designed in similar ways and are fulfilling the TFV goals through better planning, reducing wastes and include downstream stakeholders earlier in the project process.

Examples of lean delivery systems are:

• Lean Project Delivery System (LPDS) developed by Lean Construction Institute. An introduction to this tool follows below.
• Integrated Project Delivery (IPD) developed and trademarked by Westbrook Air Conditioning and Pluming or Orlando.
• Integrated Lean Project Delivery (ILPD) developed and trademarked by The Boldt Company .

Lean Project Delivery System

Figure 2: The Lean Project Delivery System (LPDS) with the relationship between the five phases and the elements of each phase. Based on a figure in Koskela (2002)

The Lean Project Delivery System (LPDS) is a trademark of the Lean Construction Institute developed in the beginning of 2000s of Glenn Ballard. Projects are defined in terms of phases. The LPDS points out the importance of the relationships between the phases and the involvement stakeholders in each phase . The overlapping triangles in Figure 2 represent the five different phases; project definition, lean design, lean supply, lean assembly and use. There are two modules that are embedded in the five phases and extends through the whole project time; Product control and work structuring. A summary of the phases follows:

• Project definition: The project definition phase includes three elements: purpose, design criteria, and design concept(s). The role of this first step is to align and find the customer and stockholder values and needs. All the elements in this first phase is influencing each other, so there is an importance of good communication between the stakeholders. This phase should include representatives from all different stages in the facility's life-cycle; from the production team that will design and build the facility to the end user and stakeholders . This differs from other project definition phases which traditionally only includes the architect and the client.

• Lean design: The alignment of the elements in the project definition allows the start of the lean design phase. This phase includes the elements: design criteria(s), design process, and product design. The relationships between the elements are similar with the project definition in the sense that they are developed simultaneously and require good communication between stakeholders. It is important that the project team is observant of opportunities to increase the value for the customer and expanding the purpose of the facility. If the project allows this opportunity, the project needs to go back to the project definition in order to update the purposes and design criteria. Traditional design phases have the tendency to narrow the design phase by focus on one single solution to early in the project with the opportunity for a faster design phase but the threat of rework. To lower the risks of rework, the lean design phase should be ended at the last responsible moment streamlining the work and supply chains.

• Lean supply: The lean supply phase includes the three elements: product design, detailed engineering, and fabrication and logistics. The relationship between these three elements is iterative and continuously adjusted.
• Lean assembly: The lean assembly phase includes the three elements: fabrication and logistics, installation, and commissioning. This phase starts when the first material and labor is delivered to the site and ends in the commissioning element where the keys is handed over to the client.

• Use: The use phase includes the three elements: commissioning, operation and maintenance, and alternation and decommissioning. The elements in this phase are expected and designed for in the previous phases. This last phase of the LPDS is not a part of the project since the facility is delivered during the commissioning phase. However, the project duration expands until the facility is operating to targeted performance.

Last Planner System (LPS)

The Last planner is associated with The Lean Project Delivery System. The Last Planner System uses lean methods in order to increase the project control. LPS decentralizes decisions and allows the crew responsible for a task to plan and schedule it. As result LPS gives a chance to best match material and labor recourses with downstream demand. The principles are:

• Planning construction projects are based on forecasts, which have a tendency to often go wrong.
• The planning gets more detailed the closer a task gets.
• The planning should be done together with the crew performing the task.
• Collectively work to remove constraints
• Reliable promises must to be given by construction team.
• Treat plan failures as opportunities for learning.

The LPS is based on different levels of planning, see Figure 3. There are three to four levels of planning dependent of the projects requirements:

Figure 3: The Last Planner System process flow. Based on a figure in Ballard (2000)

1. The master pull schedule: An overview of the major phases in the project and the milestones for these phases. Traditional master schedules are often included in the contractor's bid and often optimistic in the timeframes.
2. The look-ahead schedule: The look-ahead schedule is an update of the phase plan and it is used for work flow control. For typically construction tasks this spans around 6-8 weeks. The look-ahead schedule is common in traditional construction practices but is more comprehensive in the LPS and serves several functions e.g. shape the sequence and rate of workflow, match the capacity with the work flow, detailed methods for work execution, break down master scheduled activities and update schedules of higher level.
3. The weekly work plan (WWP): The weekly work plan provides detailed work plan for each phase. It is weekly updated and based on discussion between different disciplines depending on the complexity of the project. The WWP also includes planning buffer for future work.
4. A daily plan (If this is required): The daily plan is especially needed in more complex projects and fast moving projects where the daily plan is a more detailed version of the WWP and does not only plan the activities of the day but also time of the day. The last planner is responsible for this highest level of planning. It can be the foreman or other professional. The daily/weekly planning schedule determines the next days specific work assignments. The reason with this production control is to shield production from upstream uncertainty and to avoid wastes. Percent Planned, Complete (PPC) is used to measure the weekly accomplishment and LPS uses weekly meetings to evaluate the performance and a root cause analysis is carried out to find the reasons for underperformance and improve the performance for upcoming weeks.

Communication and collaboration between different disciplines is essential for the LPS since many different stakeholders are involved and affected by the scheduled assignments.

LPDS summary

LPDS is designed and structured with principles and techniques in order to pursue the goals of the TFV model. Such techniques are e.g. involving stakeholders from the whole project life-cycle earlier in the project, last responsible moment thinking to prevent reworks, aligning stakeholder interests to increase the end value for the customer and carefully plan buffers to make them more responsive and agile.

The table 2 below summarizes the Lean Project Delivery System by comparing it to a traditional delivery system.

Table 2: Comparison of a traditional and lean project delivery system. The table is based on a table in Koskela (2002)
LPDS	Traditional
Focus is on the production system	Focus is on transactions and contracts
TFV goals	T goals
Downstream players are involved in upstream decisions	Decisions are made sequentially by specialists and "thrown over the wall"
Product and process are designed together	Product design is completed, then process design begins
All product life-cycle stages are considered in design	Not all product life-cycle stages are considered in design
Activities are performed at the last responsible moment	Activities are performed as soon as possible
Systematic efforts are made to reduce supply chain lead times	Separate organizations link together through the market, and take what the market offers
Learning is incorporated into project, firm, and supply chain management	Learning occurs sporadically
Stakeholder interests are aligned	Stakeholder interests are not aligned
Buffers are sized and located to perform their function of absorbing system variability	Participants build up large inventories to protect their own interests

Discussion

Lean construction thinking is relatively new and gained international academic interest in the middle of 1990s. Most of the literature is positive to these new methods, and some critics argue that there exists a too narrow and positive perspective, without reflecting over the criticism. It is clear that there among Lean construction-theorists circulates thoughts that the biggest problems occur when Lean construction is not met or implemented satisfactory. There are also critics towards the construction industry for being slow and conservative in their mind-set.

Criticism of Lean construction

There are several issues highlighted in the critics of Lean Construction, e.g.:

• The human costs of Lean Construction. If the construction industry focusing on reducing the waste without considering the human resource management implications, a side effect can be that companies will have a difficult time to attract new intelligent professionals to the industry.

• The theorists are taking for granted that lean production is a "good thing" without a critical view. The debate on lean construction is based on very one-sided interpretations. There is an absence of critical reflections of lean thinking among management academicians. There is a need for a broader perspective in the lean construction debate in order to further develop the ideas.

• The roots in lean productions high-volume manufacturing and should be constrained to high-volume and site focused construction instead one-off projects.The theory of lean production is focusing on the material flow and transformation of materials into components in the factories. This is only appropriate for large-scale manufacturing and not for construction projects since they are designed and built once for a specific location.

Lean construction advocates answers that the critics have misunderstood lean construction. Some advocates mean that it is not lean construction if it does not work.

Further development

Lean construction is still under development, and in order to fully see the strengths and weaknesses, the theory needs to be applied to more real construction projects. Companies have to be more open-minded and willing to change the culture within the construction industry in order to increase the productivity and lower the wastes. Furthermore, the debate has to be more neutralized and listen to the critics to further develop the methods and make companies willing to implement lean construction thinking.