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Principles And Methods of Lean Construction

Written by Marc Guberti

Marc Guberti is a Certified Personal Finance Counselor who has been a finance freelance writer
for five years. He has covered personal finance, investing, banking, credit cards, business
financing, and other topics.
Marc’s work has appeared in US News & World Report, USA Today, Investor Place, and other
publications. He graduated from Fordham University with a finance degree and resides in
Scarsdale, New York.
When he’s not writing, Marc enjoys spending time with the family and watching movies with
them (mostly from the 1930s and 40s). Marc is an avid runner who aims to run over 100
marathons in his lifetime.

Updated May 29, 2023​

7 min. read​

lean construction

A construction project provides a valuable asset. Some entrepreneurs hire contractors to build commercial and residential properties from the ground up. Unfortunately, construction projects can get expensive in a hurry and exceed cost estimates. These projects require substantial time and money as it is, and wasting both of those resources is unfavorable for any business owner. There are many opportunities for cash to fall through the cracks. A contractor may buy too many materials and sit on a large inventory. In addition, miscommunications between multiple parties can stall progress and extend deadlines. Those extended deadlines prevent construction companies from completing a project and having the resources to serve the next client.

The lean approach has gained momentum in the construction industry. This method reduces waste and increases value. It also increases productivity and leads to quicker turnarounds.

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What Is Lean Construction?

Lean construction simplifies each stage of the construction process and benefits all parties. The methodology originated in the 1990s with Glenn Ballard and Greg Howell leading the charge with their Lean Construction Institute. Lean construction is viewed as an upgraded, alternative approach to construction that leaves the dysfunctional, archaic model behind. Lean construction draws inspiration from the assembly line model Henry Ford used to speed up car production. Lean construction focuses on maximizing productivity and having minimum waste by providing the exact amount of materials within their timeframes.

Lean construction is a people-driven effort. The general contractor, subcontractors, project owner, and workers meet to discuss roles, responsibilities, and deadlines. Getting everyone on the same page about what must be done will remove bottlenecks in the construction process. Everyone approaches the project as a team and clearly understands how to achieve each project milestone. As a result, there’s less ambiguity or room for misinterpretation.

Construction projects have many teams that perform various tasks. Miscommunications can hurt efficiency and increase total costs. Instead of having people work with an outdated system, lean construction turns the project into an assembly line of sorts. A team must complete its part of the project before the next group of workers can fulfill their roles. Therefore, every deadline hinges on the current task’s completion.

The Benefits of Lean Construction

Lean construction offers several advantages, but not just for the contractor. Workers, project owners, and architects will also benefit from this approach. We have highlighted some benefits of lean construction below.

Reduce Overall Project Cost

Some contractors spend too much on materials and make multiple orders. These actions lead to several instances of unnecessary transport and shipping, which increase costs without providing additional value. When everyone is on the same page, you can purchase the required materials in fewer orders and save on shipping. Construction projects have narrow profit margins already, and wasting money puts even more pressure on those margins. You also won’t waste money on materials your client doesn’t want to use. If you buy the wrong materials, you will either have to store them, get a refund, throw them away, or hope another client wants those materials.

Getting everyone on the same page about materials and other costs will speed up the project, lowering the amount you pay to workers without reducing their hourly wages. Workers can work on other projects sooner instead of staying stuck with the same construction.

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Lessen Construction Time

No one enjoys construction delays. Workers can’t explore new opportunities, construction companies lose profits, and clients get upset. Conversations between contractors and customers can get tense during slowdowns. Lean construction establishes each step of the project and conveys these details to workers. Everyone knows what they have to do, and each task has established procedures and deadlines. This process creates more synergy and leads to shorter construction times.

Enhanced Safety

A safe atmosphere keeps workers safe and preserves productivity. Contractors often prioritize any safety measure that makes workers feel more comfortable at their jobs. They know the consequences of inadequate safety measures. Poor communication can lead to significant injuries because workers are unaware of the dangers. A worker can suffer a lifelong injury and file a lawsuit against your company. It’s best to avoid that scenario, and a lean approach minimizes injury risk. The lean construction method cultivates communication between workers and helps them detect issues. Workers will be happier to work with you since you prioritize their safety. If workers do not feel safe, they may quit in the middle of the project, resulting in delays as the contractor looks for new workers.

Improved Quality

Construction projects have many moving parts, and a single miscommunication can hurt the project’s quality. For example, a project team may do its own thing without consulting other teams and inadvertently slow down the project. Lean construction gets workers to engage with each other and move together with each step. When everyone works as a team, the project will come out better and reduce conflicts. It’s easier for a project to go through continuous improvements when teams are on the same page.

Increase Productivity

When everyone works as a team, fewer bottlenecks hold up production. Construction teams know what they must do and how their work connects with other teams. The project owner will provide their specifications before construction starts, leading to less friction.

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Increased Profits and Turnovers

Spending less on materials and increasing worker productivity strengthens your bottom line. You can transition from one project to the next with less delay. These dynamics can help you gain market share and get more client gigs. You’ll increase margins on each project and get more work.

The Drawbacks of Lean Construction

Lean construction presents several advantages if done correctly. Unfortunately, most systems have weaknesses, and lean construction is no exception. We’ll discuss some drawbacks of lean construction, so you understand both perspectives.

Everyone Needs to Be on Board

Lean construction puts everyone on the same page. Project owners, architects, contractors, and workers know the plan. This dynamic creates more synergy, but not everyone may want to commit to the initial meetings. The upfront time is worth it, but conflicting schedules with too many key players can turn meetings into a nightmare. Construction firms that want to apply lean construction practices also need to get the project owner on board, which can be challenging. The project owner may not have enough time for lean construction and may want little to no involvement with the planning. They may prefer to have you handle everything and provide vague details. Scenarios like these can put a damper on lean construction efforts.

Management Guidance Is Crucial

A great construction management team can successfully initiate a lean construction effort. However, not every executive knows lean construction principles. As a result, they may forget important details or fail to communicate with the other groups. You can use resources like the Lean Construction Institute to become familiar with lean methodology and how to design a strategy for your company. Effective leadership is a prerequisite for every successful lean construction model.

Training For the System Could Take Time

Lean construction requires a different approach from the conventional method. Some workers and project owners may not have the patience to learn the new system. Workers may prefer to find work with another client in the construction sector than learn about lean practices. They may prefer a traditional approach and look for a client who provides it. If you force this methodology on construction teams, it will take time for them to master it. The learning phases will reduce productivity in the short term and increase your expenses. While the outlook can get better in the long term, some projects don’t need as much work. While a lean approach is more practical for longer projects, some contractors believe it’s better to avoid complicating a short project. A conventional approach may be better for those types of projects if most people on the team do not understand the lean construction methodology.

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You Could Experience Slowdowns with Other Projects

Getting every team member on board with the lean construction method can slow down progress with other projects and push deadlines further. This scenario usually plays out if you have multiple team members involved with multiple projects. Teams have to divert their attention from other projects to attend initial lean construction meetings to get on the same page. You don’t want to upset multiple clients to master the lean methodology with a new client, especially if the current clients provide your company with a steady stream of work. While construction companies can balance lean construction for a new project with checking off punch list items for other projects, it’s good to keep this risk in mind.

Frustrated Workers

The lean methodology increases productivity and helps construction companies handle more work. However, greater productivity and focus on deadlines often fall on the laborers. A model that emphasizes speed and efficiency can add more stress to workers. A rigorous focus on profit margins has slowed down worker wage growth even as productivity skyrockets. Workers may get more frustrated with tight deadlines and strict systems without adequate pay bumps and may look for another construction company for work.

What Are the Principles of Lean Construction?

Lean construction can increase cash flow and productivity, but you must know the principles. We have outlined the principles of lean construction below.

1. Determine What the Client’s Values Are

Value is in the eye of the beholder, and the beholder is your client. Ask them about their goals for the construction so you can provide a great result. Knowing what clients value will direct your efforts and can result in recurring work if the client likes what you provide.

2. Create a Value Stream

A value stream is a list of objectives that the client values. Contractors create this value stream and determine the most effective ways to deliver for the client. Showing the value stream to all teams involved with the project keeps everyone in the loop and increases the likelihood of delivering a great project for the client.

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3. Reduce/Eliminate Waste

Waste increases your costs and delays projects. Most construction projects have some wasted materials and unnecessary costs, but creating a value stream also helps you identify and minimize waste. A lean construction approach gives you a more concrete definition of waste. Anything that does not add value to a client detracts from the construction project. If you remove waste from production systems, you can lower costs across the project.

4. Streamline Process Workflow

Lean construction boosts productivity by getting every team member on the same page. Synergies streamline processes and lead to quicker construction times. Contractors should monitor lean construction efforts to make sure everything is going smoothly. Visiting the site often helps contractors assess progress, look for bottlenecks, and address issues with workflow optimizations.

5. Implement Pull Planning and Scheduling

Lean construction focuses on one step at a time. The construction project does not advance to the next task until the current task gets completed, just like an assembly line. Pull planning and scheduling create this structure. You can reverse engineer the construction process and work backward from the deadline. This strategy allows project management teams to identify the order of tasks and assign deadlines for each item.

6. Continuously Improve the System

Any system can become more efficient and cost-effective. Contractors can monitor productivity and cash flow. They can focus on changes to these key metrics and provide feedback to construction teams. You can take lessons from each project and apply them to future clients. Project management teams will discover what works and pitfalls to avoid with every lean construction project they complete.

Best Practices for Lean Construction Implementation

Are you excited about improving your cash flow and completing projects sooner? We offer several strategies to implement lean construction so you get those benefits.

Establish Strong Relationships

Lean construction is a team effort. Therefore, you’ll have to build strong relationships with project owners, architects, and workers. Any weak relationships can sabotage the lean construction method and lead to frustrations. Building strong relationships from the beginning will minimize issues in the workplace. You can also get loyal workers who work with you on multiple projects. Some clients may have additional work available after you complete the first project with them.

Strong relationships from the beginning give all parties clarity on what the client wants. Knowing what the client values will minimize waste and increase efficiency across all teams.

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Set Project Goals and Objectives

Goals and objectives give everyone a way to measure progress. Construction teams can monitor if they are on pace, ahead of schedule, or falling behind. Approaching deadlines typically increase productivity, but a single deadline for the project’s completion can hurt productivity. Setting several mini-milestones makes deadlines more frequent and helps everyone stay focused during long construction projects.

Commit To Project Success

A construction project is a significant undertaking. Lean construction adds more effort since you have to get everyone involved. However, this methodology can increase cash flow and productivity, two critical metrics for any construction. Contractors shouldn’t leave everything to the workers and project owners. Instead, they should orchestrate the construction and exceed the client’s expectations.

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