Introduction to Lean Construction©
Janette Keiser, PE, JD1
1. What is Lean Construction?
Lean Construction is about adding value to your customer through the elimination of waste and
continuous improvement of your business operations. Routinely, projects are late, over-budget or fail in
some way to satisfy the client. The application of Lean Construction principles changes this. Projects
using Lean Construction principles are completed on time, at budget and fully satisfy the client. Projects
using Lean Construction are more profitable than projects where traditional methods are used.
Lean Construction was developed through the best thinking of several 20th century thought leaders and
industrial practitioners, including:
a. Henry Ford, the father of the modern assembly line. Mr. Ford develop a production assembly
process that enabled his factory to systematically produce automobiles faster than what was
being done in craft plants where cars were made one-by-one.
b. Mr. Taiichi Ohno, who took the Ford assembly line processes back to Japan and made them
even more efficient by developing processes to eliminate waste, such as the 5S program and
application of continuous improvement processes.
c. Dr. William Edwards Deming who developed Total Quality Management processes into an
international movement.
d. Dr. Glenn Ballard and Gregg Howell, PE, MSCE, two university professors and construction
industry practitioners, who invented the Last Planner System™, which evolved traditional critical
path network methods into practical applications for planning and monitoring field construction
work.
2. Why do we need Lean Construction?
There are a variety of reasons why traditional construction processes need to be improved with the
application of Lean Construction processes. First, traditional construction processes breed waste.2 For
example, in traditional manufacturing, the work flow includes:

1
Value-added activities 62%
Copyright 2010 Janette Keiser
These statistics were quoted by Dennis Sowards, Quality Support Services, in his July 14, 2010 presentation
Overview of Lean Construction – Building Knowledge in Design and Construction. Mr. Sowards attributed the data
to the Construction Industry Institute.
2


Support activities
Waste
12%
26%
Only a little over half of the efforts involved in traditional manufacturing procuresses constitute value!
The situation is even worse in traditional construction processes where the work flow includes:



Value-added activities 10%
Support activities
33%
Waste
57%
Clearly, the construction industry needs to improve its operations to reduce waste and increase the
value it brings to its work.
Second, traditional organizations have experienced a decrease in productivity over a period of forty
years. In the United States from 1964 to 2003, non-farm labor productivity in the United States
increased by more than double whereas construction productivity for the same time period decreased
by at least 25%3 (computed by comparing a constant value of contracts with the number of work hours
of hourly workers).
Third, traditional contract methods threaten quality. We see examples of this in every segment of the
construction industry. For example:

In 2010, a highway project built by the Washington Department of Transportation experienced
over $800,000 of waste when an east ramp and a west ramp, which were supposed to meet and
be joined into one continuous alignment, were off by 16 feet.

Also in 2010, a project involving the construction of piers for a new bridge experienced $1.5 to
$2 million of waste when the construction team discovered one of the new bridge piers would
be driven directly into a major sewer line if the pier was installed as designed. The manholes for
this sewer were visible on the surface and the sewer line was shown on the as-builts. Despite
these facts, the discrepancy was not discovered until construction had already commenced.

In 2001, a 27-story office, retail and condominium building was constructed in downtown
Seattle at the cost of $32 million. Less than ten years later, the City officials and building owner
determine that the building’s structural capacity has been compromised by the improper
application of the spray-on fireproofing. The city building department ordered the building to
be demolished, a $32 million waste, not including the additional millions of dollars wasted by
demolition costs, attorney fees, lost rents, lost opportunity and damages paid to building
tenants who had leased space on the retail and residential floors.
Fourth, traditional contracts defy commercial reality. It is a fact of commercial reality that a party to a
contract only performs well when it is in her best interests to do so. Most contracts use a system of risk
3
Reported by U.S. Department of Commerce, Bureau of Labor Statistics
allocation where one party or the other bears the burden of a risk. Typically, if any of the risks actually
happen, the party to whom the risk was allocated pays the costs and if the party doesn’t have the
financial wherewithal to weather this storm, the viability of the entire company could be put at risk.
Clearly, a system that mitigates this risk would offer value to the industry.
Next, competition in this economy is stiff, often cut-throat. Not only are there more bidders now than
ever because there are fewer jobs to bid on, but there are new players in every construction market
segments. For example, legions of residential contractors moved from the vanished residential market
to the public works market. Contractors are taking bidding on jobs at cost or even below cost, to get a
job. This makes it hard for a hard-working company to compete fairly to get jobs and to make a profit
on jobs that it does win.
Next, the work force is shifting. The traditional labor force is aging out and a new generation of
construction workers is moving in. This creates personnel issues. On one hand, the younger workers
have different expectations of their work environment. On the other hand, there are more and more
workers for whom English is a second language. Managing this diverse work force is challenging under
any conditions.
Further, today’s construction projects are more and more complicated. New technology and new tools
are being developed and utilized to keep up with the increasing architectural and engineering
complexity of today’s construction projects. For example, it is now common place to utilize Building
Information Modeling (“BIM”) technology to lay out mechanical systems in vertical construction. Often,
this is the only way the builders can be sure that all the systems will fit into a given space. Plus, there is
an increased attention on safety and environmental compliance. These issues are governed by a
complex net of local, state and federal rules and regulations. Projects are frequently multi-jurisdictional
these days, either because they are so large in scope or cover such a large geographical area that no one
agency can pay for or manage the project. Finally, the sheer urban density of many of today’s projects
makes them more complicated as they have to work around existing infrastructure and development.
For all these reasons, we need Lean Construction to eliminate waste and enable us to build projects
more cost effectively, more safely and more efficiently.
3. What are the benefits of Lean Construction?
The best way to appreciate the benefits of Lean Construction is to look at case studies where the
principles have actually been used. A classic example involves two buildings constructed by Baker
Concrete Construction (“Baker”)4. Baker introduced Lean Construction principles into the company by
training a number of project managers and superintendents in Lean methods and referring to this team
as a “Special Forces” team that would be employed on designated projects. As it happened, Baker got
the perfect opportunity to demonstrate the effectiveness of Lean methods. It was issued a contract to
design and build a building using pre-cast panels and a high degree of mechanical and electrical work. It
4
This case study was presented at a meeting of the Cascadia Chapter of the Lean Construction Institute on October
5, 2010, by David MacNeel, LEED AP, Operations Manager, Baker Concrete Construction.
did not employ Lean methods on that building. A few months later, the owner awarded Baker another
contract for an identical building adjacent to the first one. Baker dispatched a project manager and
superintendent who had been trained as part of the Special Forces team.
This team started employing Lean Construction methods into its project and continued using the
methods until the project was completed. Then, Baker compared the metrics of the building upon
which Lean methods had been employed with the metrics of the building which did not use Lean
methods. The contrast was remarkable. The building that used Lean principles achieved:





67% increase in safety performance;
19% lower duration to complete the project;
12% higher productivity;
28% lower job costs; and
68% reduced overtime at the end of the job to finish up the punch list and complete re-work.
These accomplishments are significant! They are clearly enough to make the difference between a
profitable job and an unprofitable job. Over time, they can clearly make the difference between
keeping a construction company in the black and seeing it go into the red.
4. What are the Basic Concepts of Lean Construction?
Lean Construction is more than a philosophy or a state of mind; it is a system that utilizes specific
processes, which increase value and reduce waste. Some of these processes have evolved from the
manufacturing industry and some of them originated specifically within the construction industry.
Either way, they have proven track records, whether used in combination or one at a time. Following is
a brief description of the basic concepts which comprise Lean Construction and tools which can be used
to implement each concept. Some of the methods are intuitive and some of them are not. The good
news is that there is now a cottage industry of consultants who can provide training and coaching to
help companies learn these tools. Many major construction companies have engaged consultants to get
them started and then have developed in-house training programs.
A. Waste vs. Value. The basic over-reaching principle of Lean Construction is to eliminate waste
and create value.
What is waste? Taiichi Ohno identified the following distinct types of waste:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
Over production
Waiting
Inventory
Moving materials, tools and equipment from place to place.
Hunting for stuff
Re-work
Processing
Underutilized talent
Each one of these acts, failures to act or circumstances creates waste, which impedes the
efficiency with which a project is build. Each one of these elements of waste detracts from
value and costs the project in time, money or effort.
What is value? Value is what the customer looks for in a project or a transaction and it may not
have anything to do with the effort it actually takes to build the project. For example, in order
to build a house, you have to order materials, wait for their delivery and when they are
delivered, incorporate them into the house’s construction. The owner is probably happy to pay
for the actual incorporation, but would be less than happy about paying for the time spent
waiting for the de livery. The waiting does not add value. The customer does not want to pay
for this. Smart contractors will work hard to reduce the time spent waiting. Most projects have
a lot of this activity that does not add value, and instead constitutes waste.
In order to adopt Lean Construction principles, companies must understand what customers
value and focus on those efforts. One tool, which can be used for accomplishing this, is called
Value Stream Mapping. It involves analyzing the steps and information inputs that are required
to deliver a product so that delays, inefficiencies and other waste can be identified. This tool
helps create process improvement through the elimination of waste.
A tool which can be used to identify waste is the simple process of taking a Gemba Walk.
Gemba is the Japanese word for waste. A Gemba Walk is a deliberate walk around the worksite
to consciously look for waste – excess inventory here or disorganized workstations there. Both
constitute waste and are easy to correct.
B. The 5 S Plan. Another basic concept of Lean Construction is the application of the 5 S plan to
decrease waste and add value. The 5 S Plan, a development of Taiichi Ohno’s, is a standardized
methodology of organizing the workplace. It includes the following elements, which all start
with the letter “S”:
i.
Sort – sort through a target area and sort through the stuff. Pull out anything that you
do not need there. If you aren’t going to use it in the next 30 days, move it out of the
immediate work area.
ii.
Set in Order – have a place for everything and put everything in its place.
iii.
Shine – clean and inspect items. Look for safety hazards or anything that could cause a
breakdown and fix it. Everybody participates. Clean the jobsite. Keep tools and
equipment clean and prepped for use. Remove dunnage and crating promptly.
iv.
Standardize – have guidelines, policies or rules. Follow the rules and enforce them.
Develop cleaning schedules and cleanliness standards to maintain the first 3 S’s.
Maximize prefab prior to placement in the batch area.
v.
Sustain – keep the effort going. Share lessons learned. Reward and recognize successes.
Review the workplace regularly. Make it a habit. Expect to continually evolve and
improve the system.
C. Work Flow. Another basic concept of Lean Construction is the concept of continuous work flow.
The concept of work flow is based the standard industrial engineering principle, which provides
that the reliability and predictability of an operating or production system is more important
than the speed at which the system operates in achieving productivity. For example, at Boeing,
the airplane production system once operated on a “batch” basis. This meant that one fuselage
would come into the plant and would stay in one place while the assembly workers put it
together. This system allowed Boeing to produce one airplane every 30 days. Then, Boeing reengineered its plant to more of a “work flow” system. A fuselage would come into the plant, be
placed into a slowly moving line and as the fuselage “flowed” down the line the assembly
workers would install the necessary parts and equipment. The parts they needed would flow to
the assembly site by material stock workers as the assembly workers needed them. This “work
flow” system allowed Boeing to produce one airplane almost every day, a tremendous increase
in productivity.
This concept of “work flow” can be translated to the construction industry through effective
scheduling and work planning. The increases in productivity can be just as dramatic.
D. Last Planner System™. A tool which has been developed by Greg Howell5 and Dr. Glenn Ballard
6
to facilitate work flow on construction projects is the Last Planner System™. This is a
scheduling system that goes beyond critical path methods and focuses on “pull planning” to
establish the work flow. With “pull planning” all the stakeholders to a particular element of
work are collected in a room to discuss how their work will be coordinated. The “last planner” is
the person responsible for the delivery of the end product. In the “pull planning” process, the
last planner identifies what efforts it needs from the other stakeholders, in order to deliver the
end product. For example, if the end product is a finished kitchen, the last planner might be the
cabinet installer. The cabinet installer would identify the predecessor activities that must be
completed before the cabinets can be installed. For instance, the sheetrock must be done
before the cabinets can be installed so the cabinet installer would identify this work as a need.
Then, the sheetrock installer would identify what it needs before it can finish its work and so on.
In this manner, a work schedule is built in reverse, from end product to each predecessor
activity, which must be completed before the end product can be achieved, and where the
people who will be performing the work are integrated into the work plan process.
This is markedly different from a traditional critical path scheduling process where the prime
contractor develops the schedule, often in isolation from the trade subcontractors who will be
performing the work.
5
Gregory A. Howell, P.E., MSCE is the Association of General Contractors Visiting Professor in Construction
Management at the University of New Mexico. He is co-founder of the Lean Construction Institute.
6
H. Glenn Ballard, Ph.D. is an associate adjunct professor at the College of Engineering, U.C. Berkeley, who
researches and lecture on Lean Construction and related topics. He is co-founder of the Lean Construction
Institute.
One primary benefit of the Last Planner™ system is that it facilitates, in fact, demands,
collaboration among the people who will be performing the work. The dialogue generated
during a “pull planning” session is powerful because it enables the various team members to
identify problems early and work together to find solutions that will be cost effective for
everyone. This system helps the team think, plan and act as a team, instead of a collection of
companies who have come together by commercial coincidence to work on a particular project.
Once the initial “pull planning” session is conducted, the team engages in regular mini-meetings,
say 15 minutes, on a daily basis to monitor the work and make adjustments when required.
Construction personnel, such as job superintendents, who have been part of this process, say
they will never go back to doing it the “old way”. Implementing a “pull planning” system into a
project is tricky because it requires a new mindset. But, again, there are consultant
practitioners who can help companies get started on individual projects as well as organize
company-wide initiatives.
E. Reliable Promises. Another benefit of the Last Planner System™ is that the “pull planning”
method of scheduling work flow builds accountability and trust between team members. This is
because during a “pull planning” session, the various team members are required to think
through the promises they make to other team members so that only “reliable promises” are
offered and accepted. A “reliable promise” is a promise where
i.
ii.
iii.
iv.
v.
The conditions of satisfaction are clear to both parties
The performer is known to be competent and has the right tools.
The performer has estimated and blocked out the time necessary.
The performer is sincere and is authorized to commit to the promise.
Regardless of what the future holds, the performer will make good on the promise or
accept the consequences.7
There is a process for eliciting promises that are reliable and measuring whether the promises
are actually kept. This process involves analyzing whether the promise is realistic and whether
there are any barriers to keeping the promise. This process is taught as part of the Last
Planner™ system.
F. The 5 Whys Analysis to ensure continuous improvement. Another basic concept of Lean
Construction is the practice of continuous improvement. This involves analyzing breakdowns in
the system, which cause defects, failed promises and other performance failures and remedies
those breakdowns. Processes have been developed to help teams conduct the analysis, identify
remedies and execute sustainable change that will improve the process. A key process is the “5
7
These five elements of a “reliable promise”, as described by Hal Macomber, principal of Lean Project Consulting,
Inc., and self-proclaimed Project Reformer, in his paper Securing Reliable Promises on Projects, A Guide to
Developing a New Practice. © 2001, 2004.
Whys analysis” of failures. In this process, the question “why” is asked five times in different
contexts to understand why promises were broken, why defects occurred and why failures were
experienced. The point is to understand why failure occurred so it can be prevented from
happening again.
G. Cultural Change. While the basic principles and practices of Lean Construction can be applied in
different ways in different organizations, one thing is clear - introducing and applying Lean
Construction any organization, large or small, requires a cultural change if the principles and
practices are to become sustainable. Change is often perceived as a 4-letter word. Change isn’t
easy, but it is necessary. Dr. W. Edwards Deming, one of the century’s most influential
proponents and teachers of organizational change for purposes of adding value to industrial
processes said, “It is not necessary to change. Survival is not mandatory.” that is, organizations
that fail to change put their own survival at risk.
Any cultural change requires the presence of several key factors, which if they are missing, will
mean the chances of successful, sustainable cultural change are zero to none.
i.
Leadership is crucial. If the executive leadership is not fully, 100% committed, even
passionate about making and sustaining any kind of organizational change, it will not
succeed. Further, it can’t be commitment in name only. Organizations have
personalities just like people and as a general rule they are pretty smart “people”. They
can sense when the leaders don’t “walk the talk” of a new initiative or when a new idea
is the “flavor of the month”. Anything but complete, candid, and transparent
commitment will be met with resistance, backsliding and even scorn.
ii.
Leaders must be effective “agents of change”. It is not enough for the leaders to be
committed to change; they must have the capacity to effectively lead the change. There
are best practices, which experience has shown can help achieve and sustain long term
change. The leaders need to understand these principles and be able to effectively
employ them. This doesn’t mean the leaders can’t have help. Quite the contrary, most
effective organizational change initiatives are facilitated by consultants or other people
who are outside the organization’s mainstream. However, the leader needs to
recognize when to bring in outside help and how to find and utilize outside help
effectively.
iii.
Organizations must become “learning cultures”. The personality of the organization
must become open, receptive and welcoming to change. The processes for teaching
and practicing change must be institutionalized within the organization. Individuals who
authentically learn, practice and become proficient with change must be rewarded and
those who resist or even sabotage change must be re-educated, replaced or encouraged
to self-select out.
iv.
Workers must be able to deliver “bad news” without fear of retribution. Learning
cultures must be authentic and not afraid to identify and share bad news. This is
because bad news can only be addressed and converted into positive outcomes if it gets
into the open. Yet, many organizations don’t hear about bad news because their
people are afraid they will be blamed and suffer some loss if they bring bad news
forward. Individuals must feel that they can delivery bad news without fear of being
blamed.
H. Advocates. Lean Construction is actively taught, promoted and utilized by some of the most
prominent and influential players in the construction industry. These advocates span the
regional, national and international construction market. Representative examples of
prominent advocates include:
8
9
i.
The Association of General Contractors (“AGC”) has created a Lean Construction Forum8
to teach and serve as an advocate for lean construction principles.
ii.
Sellen Construction is a regional general contractor in the Pacific Northwest, which is
utilizing Lean Construction principles on health care projects and which has initiated
training programs to teach Lean Construction principles to its employees.
iii.
Turner Construction, is a national general contractor, introduced the Last Planner
System™ on one of its large projects, the Miami Intermodal Center, when the project
was already 30% into construction. The firm estimates that before using the Last
Planner System, the project team was achieving an average labor cost of $23,000 per
month. After implementing the Last Planner System, they were achieving an average
labor cost of $13,000 per month. This is a dramatic turn-around, which could easily
mean the difference between a profitable job and an unprofitable one. Turner
Construction has institutionalized a Lean Construction training program into its own
organization.
iv.
Skanska, a global general construction firm that builds heavy civil and vertical
construction projects, has adopted Lean Construction in some of its operations in the
United States.
v.
The Lean Construction Institute (“LCI”)9 is an international, non-profit organization
devoted to the advocacy, training and practice of lean construction principles. The LCI
recruits members and sponsors to support its activities, which includes research,
collecting case studies, development of resources and annual meetings, where
practitioners, academicians and advocates gather to share information and strategies.
See the AGC’s Lean Construction Forum website at www.agcleanforum.org.
The website for the Lean Construction Institute is www.leanconstruction.org.
Further, the LCI has chapters in over 35 states and the number is continually growing.
The individual chapters offer training and support advocacy of Lean Construction
principles. Many of the trainings are co-produced by other members of the construction
industry, such as the Architects Institute of American, the Construction Management
Association of American, the Construction Users Round Table, etc.
vi.
The LCI even has a program designed to address the special needs and interests of
owners, the Lean in the Public Sector (“LIPSI”) chapter, which has international
participation from Lean practitioners in Finland, Germany, Australia and other countries.
vii.
The entire construction industry in Finland, reported at the December 8 -10, 2010,
meeting of LIPSI, has adopted an industry-wide initiative to go Lean! That’s
commitment, vision and leadership.
Indeed, the broach reach of advocates for Lean Construction demonstrates the broad appeal of
an initiative that promotes efficiency, reduces waste and increases profitability. These players,
the general contractors, architects, engineers and other industry representatives are not in the
business for their health or good looks, but to make money as well as improve their ability to
demonstrate and deliver value. You can be sure they would not be remotely interested in Lean
Construction principles, let alone advocating and teaching the principles to their own employees
if they didn’t think so doing would help them make more money or otherwise add value. That is
perhaps the best testament to the initiative’s potential.
Conclusion:
There have been many programs and initiatives over the years that have promised to make the
construction industry more efficient, more user-friendly and more profitable. Most of these initiatives
come and go or are imposed by government regulation, without any real hope of achieving positive
outcomes. However, Lean Construction is different.
First, it was born out of frustration and dissatisfaction with the status quo of inefficiency and waste.
Further, the current economic climate demands that to survive, let alone thrive, companies must
become more competitive. These factors mean there was is strong motive for change.
Second, many of the basic principles of Lean Construction evolved from proven principles utilized for
many years in the manufacturing industry. These principles are not flashes in the pan. They have a long
track record of success.
Third, there is a growing record of success by prominent industry players and a growing movement to
expand on this record by institutionalizing Lean Construction into organizations that are not only
regional, but national and even international in scope.
Finally, support for Lean Construction principles is growing and has become international in scope. This
growing body of knowledge and advocacy is crossing industry, geographical and political sectors become
multi-disciplinary and multi-cultural in its application.
Clearly, Lean Construction as a movement is gaining ground. It’s not a quick or easy solution, but it is
effective and can be sustained within any construction organization if introduced and maintained as an
element of organizational growth and change. Further, Lean Construction means and methods do not
need to be introduced to a project at the inception to achieve positive outcomes; Lean tools can be
introduced at any point along the project’s timeline to increase value and decrease waste.