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14
The foundations of lean
construction
Lauri Koskela*, Greg Howell†, Glenn Ballard† and Iris Tommelein‡
Editorial comment – Chapters 14 and 15
The creation of value in building and construction projects has a particularly strong place
in the lean construction philosophy that lean construction is based upon. ‘Lean’ is a way
to design production systems to minimize waste of materials, time, and effort in order to
generate the maximum possible amount of value. This chapter and Chapter 15 are an
introduction to the ideas and techniques of lean construction. These chapters do not give
detailed instructions for implementing lean construction, but they give a comprehensive
overview of the philosophy and practice of lean as its applies to construction. Chapter 14
provides an overview of lean construction as a theory-based approach to project
management, which is compared to current project management, and outlines the lean-
based project delivery system and its implementation. Chapter 15 describes several tools
and techniques that support this new approach.
This chapter starts with a discussion of a theory of production. Our understanding of
systems of production and associated production theory and related tools can be classified
into the transformation, flow, and value concepts. Lean production attempts to integrate
these three concepts of production. The authors argue that current project management
attempts to manage by scheduling, cost and output measures, but these are often not
effective. By contrast, lean construction attempts to manage the value created by all the
work processes used between project conception and delivery. Next, the phases of the
Lean Project Delivery System
1
are explained, and how the inter-relationships between
these phases can be managed. The chapter finishes with a discussion on organizational
change and culture.
* VTT Building and Transport, Finland
† Lean Construction Institute
‡ University of California, Berkeley
Design and Construction: Building in Value212
Chapter 15 looks at the areas of production management, lean design, lean supply, and
lean assembly. This is a thorough introduction to some of the techniques that distinguish
lean construction from traditional project management. Importantly, the Last Planner
1
system of production control is clearly explained and the three components of this system
are outlined. The Last Planner is one of the core ideas in lean construction. This is
followed by a discussion that shows how the philosophy of value generation and waste
reduction can be applied to design. The section on lean supply shows how lean thinking
brings together the product design, detailed engineering, and fabrication and logistics
aspects of construction projects. Finally, the tools and techniques used in addition to Last
Planner for lean assembly are described.
14.1 Introduction
Since the mid-1990s lean construction has emerged as a new concept, both in the
discipline of construction management and the practical sphere of construction. There are
two slightly differing interpretations of lean construction. One interpretation holds that the
question is about the application of the methods of lean production to construction
2
. In
contrast, the other interpretation views lean production as a theoretical inspiration for the
formulation of a new, theory-based methodology for construction, called lean construc-
tion. The latter interpretation has been dominant in the work of the International Group for
Lean Construction, founded in 1993.
Here, the view of lean construction as a novel theory-based approach to construction is
adopted. This does not mean, however, that the view of lean construction as a kit of
methods is totally rejected; rather, methods and tools from lean production are introduced
when justified.
14.2 Theoretical considerations
Let us first clarify the basic issues. What do we do with a theory of production? What do
we require from it?
14.2.1 What is a theory of production?
An explicit theory of production will serve various functions (Koskela, 2000). A theory
provides an explanation of observed behaviour and it thereby contributes to under-
standing. A theory provides a prediction of future behaviour. On the basis of the theory,
tools for analysing, designing and controlling can be built. A theory, when shared,
provides a common language or framework, through which the co-operation of people in
collective undertakings (such as a project or a firm) is facilitated and enabled. A theory
gives direction in pinpointing the sources of further progress. A theory can be seen as a
condensed piece of knowledge: it empowers novices to do the things that formerly only
The foundations of lean construction 213
experts could do. It is thus instrumental in learning. Once a theory has been made explicit,
it is possible to constantly test its validity. Innovative practices can be transferred to other
settings by first abstracting a theory from that practice and then applying it in target
conditions.
The primary characteristic of a theory of production is that it should be prescriptive: it
should reveal how action contributes to the goals set for production. On the most general
level, there are three possible actions:
design of the production system,
control of the production system in order to realize the production intended, and
improvement of the production system.
Production has three kinds of goal. First, there is the goal of getting intended products
produced in general (this may seem so self-evident that it is often not explicitly
mentioned). Second, there are goals related to the characteristics of the production itself,
such as cost minimization and level of utilization (internal goals). Third, there are goals
related to the needs of the customer, such as quality, dependability and flexibility (external
goals). Furthermore, the theory of production should cover all essential areas of
production, especially production proper and product design.
From the point of view of practice of production management, the significance of the
theory is crucial; the application of the theory should lead to improved performance.
Conversely, the lack of the application of the theory should result in inferior performance.
Here is the power and significance of a theory from a practical point of view: it provides
an ultimate benchmark for practice.
14.2.2 What theories regarding production do we have?
What have scientists forwarded as theories? What theories have actually been used in
practice? Throughout the twentieth century, the transformation view of production has
been dominant. In the transformation view, production is conceptualized as a
transformation of inputs to outputs. There are a number of principles by which production
is managed. These principles suggest, for example, decomposing the total transformation
hierarchically into smaller transformations, called tasks, and minimizing the cost of each
task independently of the others. The conventional template of production has been based
on this transformation view, as well as the doctrine of operations management.
The transformation view has its intellectual origins in economics, where it has remained
unchallenged to this day. The popular value chain theory, proposed by Porter (1985), is
one approach embodying the transformation view. A production theory based directly on
the original view on production in economics has been proposed by a group of scholars
led by Wortmann (1992). However, this foundation of production is an idealization, and
in complex production settings the associated idealization error becomes unacceptably
large. The transformation view of production has two main deficiencies: first, it fails to
recognize that there are phenomena in production other than transformations, and second,
it fails to recognize that it is not the transformation itself that makes the output valuable,
but, instead, that there is value in having the output conform to the customer’s
requirements. The transformation view is instrumental in discovering which tasks are
Design and Construction: Building in Value214
needed in a production undertaking and in getting them realized, however, it is not
especially helpful in figuring out how to avoid wasting resources or how to ensure that
customer requirements are met in the best possible manner. Production managed in the
conventional manner therefore tends to become inefficient and ineffective.
The early framework of industrial engineering introduced another view on production,
namely that of production as flow. The flow view of production, first described in
scientific terms by Gilbreth and Gilbreth (1922), has provided the basis for just-in-time
(JIT) and lean production. This view was translated into practice by Henry Ford, however,
his implementation was misunderstood. The flow view of production was further
developed only from the 1940s onwards in Japan, first as part of war production and then
in automobile manufacturing at Toyota.
The flow view is embodied in ‘lean production,’ a term coined in the 1980s by
researcher John Krafcik to characterize Toyota’s manufacturing practices. In the flow
view, the basic thrust is to eliminate waste from flow processes. Thus, such principles as
lead time reduction, variability reduction, and simplification are promoted. In a
breakthrough book, Hopp and Spearman (1996) show that by means of queuing theory,
various insights that have been used as heuristics in the framework of JIT can be
mathematically proven.
A third view on production was articulated in the 1930s, namely that of production as
value generation. In the value generation view, the basic goal is to reach the best possible
value from the point of the customer. The value generation view was initiated by Shewhart
(1931). It was further refined in the framework of the quality movement but also in other
circles. Principles related to rigorous requirements analysis and systematized flowdown of
requirements
3
, for example, are forwarded. Cook (1997) recently presented a synthesis of
a production theory based on this view.
Thus, there are three major views on production. Each of them has introduced practical
methods, tools, and production templates. Nevertheless, except for a few isolated
endeavours, these views – as candidate theories of production – have raised little interest
in the discipline of operations management. As stated earlier, there has not been any
explicit theory of production. Consequently, the important functions of a theory, as
outlined, have not been realized either from the viewpoint of research or from the
viewpoint of practice.
These three views do not present alternative, competing theories of production, but
rather theories that are partial and complementary. What is needed is a production theory
and related tools that fully integrate the transformation, flow, and value concepts. As a first
step towards such integration, we can conceptualize production simultaneously from these
three points of view: transformation, flow, and value. A number of first principles
stemming from each view can be induced from practice or derived from theory. An
overview of this integrated view, called the TFV theory of production, is presented in
Table 14.1. These three conceptualizations remain partial, however, the ultimate goal
should be to create a unified conceptualization of production instead.
The crucial contribution of the TFV theory of production lies in calling attention to
modelling, structuring, controlling, and improving production from these three points of
view combined. In production management, management needs arising from the three
views should be integrated and balanced. In practice, the domains of management
corresponding to the three views may be called task management, flow management, and
value management. The constituents of the TFV theory of production are not new,
The foundations of lean construction 215
however, the TFV theory supports the new insight, that there are three fundamental
phenomena in production that should be managed simultaneously.
14.3 Why conventional construction project
management fails
Conventional project management in construction is inadequate because it does not rest on
a TFV theoretical framework (Johnston and Brennan, 1996; Howell and Koskela, 2000;
Koskela and Howell, 2001). From the first moments, construction projects are managed
today by breaking them into pieces or activities, estimating the time and money to
complete each, applying the critical-path method (CPM) to identify a logical order, and
then either contracting externally or assigning internally to establish responsibility. In
either case the pieces or activities are treated much the same. Project managers use the
schedule to determine when each activity should start and push for work to begin on the
earliest start date. Control begins with tracking and rests on the thermostat model
4
. Project
controls determine if each activity and the total project are within their cost and schedule
limits. Action is taken either to speed or re-sequence activities if delays threaten required
completion. In many cases, additional workers are mobilized to speed completion but this
then reduces productivity. Hard choices are made and risks shifted among participating
organizations depending on commercial terms and other factors. While the project
manager is struggling to achieve project objectives, those responsible for each activity
work towards assuring or improving their estimated performance.
Why is it that this approach, which sounds reasonable, so often fails in practice? From
the lean construction perspective, current practice rests on a defective model of the
Table 14.1 TFV theory of production (Koskela, 2000)
Transformation view Flow view Value generation view
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 fulfilment 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
Design and Construction: Building in Value216
project, the work involved, and its control. Simply put, current project management
attempts to manage activities by centrally applied scheduling and to control them using
output measures. It fails even in the attempt to manage activities and misses entirely the
management of work flow and the creation and delivery of value.
Projects today are complex, uncertain, and quick (CUQ) (Shenhar and Laufer, 1995).
The pressure for ever-shorter durations will always be with us. Complexity and
uncertainty arise from multiple contending and changing demands of clients, the
market place and technology. The pressure for speed adds to the burden. In this
dynamic environment, activities are rarely linked together in simple sequential chains;
rather work within and between tasks is linked to work in others by shared resources
and/or depends on work underway in others.
Co-ordinating work on CUQ projects cannot be assured even with highly detailed CPM
schedules. These schedules portray the project as a series of activities and ignore the flow
of work within and between them. The reliable release of work from one crew to the next
is assumed or ignored. Project managers who rely on these schedules struggle with
uncertainty but rarely see it arising within the project from their reliance on project level
scheduling and control of activities (Tommelein et al., 1999).
Controlling by tracking activity completion and cost fails to assure reliable work flow
(Howell and Ballard, 1996) because this type of control rests on the thermostat model
applied to output measures. The thermostat model triggers when a variance is detected and
it assumes that there are direct links to the cause of the variance. If the room temperature
is above the set point, the thermostat turns off the furnace. Output measures based on
estimated expenditures of work hours and duration are not linked to the ‘furnace’ on a
project. At best, variances on a project trigger some investigation by supervisors but this
is often aimed at justifying why the standard is incorrect for the circumstance. Given the
circumstance, there is often little that supervisors can do to increase the production rate
and/or reduce costs in the face of unpredictable release from upstream and poor co-
ordination with adjacent crews or design squads.
Too often, steps taken by one supervisor to improve performance of the activity in his
charge reduce total project performance by further reducing the reliable release of work
to the next team. For example, this happens when crews choose to install the easier work
first in order to improve their performance numbers; pipefitters call this ‘showpipe’. Here
we see a deeper problem in the way projects are managed: the attempt to optimize each
activity inevitably leads to sub-optimal outcomes for the project. Despite efforts to build
teamwork (e.g., through partnering) commercial contracts and cost/schedule controls lead
to adversarial relations as managers responsible for interacting activities struggle to
advance their interests by optimizing their activity with little concern for the problems this
causes others. The business objectives of project-based producers and the client seem
inevitably opposed as the project manager tries to complete the project.
Value to the client in this situation is understood as meeting the original design within
cost, schedule, and quality limits – change is the enemy. Current project management
certainly tries to deliver value to the client present at the beginning of the project. In the
CUQ world, delivering value means increasing the ability of the customer at the end of the
project to achieve their purposes. Circumstances change quickly when projects are CUQ,
so completing a project that does not increase capability within schedule and budget limits
set at the beginning is of little use. Change is certainly difficult to manage with current
techniques that push for early decisions and local optimization.
The foundations of lean construction 217
The failures of current project management help define the requirements for a new
approach. This new approach must rest on the expanded TFV foundation. In practice this
means the management system must optimize performance at the project level in a
complex and uncertain setting, always pressed for speed.
14.4 Lean project delivery in construction
The phrase ‘project delivery system’ has traditionally been used to indicate the contractual
structure of the project, e.g., design–bid –build or design–build. ‘Delivery’ in this context
is understood to be a type of transaction and a key question is how to structure the
transaction. Design–build is seen as a means for providing a client with a single
contracting entity with which to interact, as opposed to holding contracts with multiple
players and thus inheriting the task and risk of co-ordinating their actions. By contrast, the
lean construction community understands ‘delivery’ in terms of the actual work processes
used to move a facility from concept to customer (Ballard and Zabelle, 2000a, b).
In the realm of construction, delivery involves designing and making capital facilities
– buildings, bridges, factories, and so on. Construction differs from other types of project-
based production systems by the type of products it produces, the differentiating
characteristic of which is that they eventually become rooted in place. Construction’s
products share with airplanes and ships the characteristic that, in the process of assembly,
they become too large to move through workstations, so workstations must be moved
through the products. Consequently, buildings, airplanes, and ships are made using fixed
position manufacturing. Unlike airplanes and ships, however, buildings and bridges are
rooted in place and are designed for a specific location, often both technically and
aesthetically.
Traditional project delivery systems pursue the ‘task’ of project delivery and neglect
both value maximization and waste minimization. This approach confuses the ‘task’
view with managing the project. A lean project delivery system is one that is
structured, controlled, and improved in pursuit of all three goals, i.e., the transforma-
tion/flow/value goals proposed by Koskela (2000). While techniques are important, and
such techniques as ‘kanban’
5
have become identified with lean production systems, all
systems that pursue the TFV goals are, in principle, lean delivery systems, though
some will be ‘leaner’ than others. Since it is impossible to achieve simultaneously the
elements of the lean ideal (which is to provide a unique product to each customer, in
zero time, with nothing in stores or any other kind of waste), techniques will come and
go, but the goals will be pursued perpetually. The lean project delivery system
6
, as
currently conceived, incorporates many elements from advanced practice in construc-
tion today. However, they are integrated into a complete delivery system, rather than
occurring in isolation. In addition, many similarities between lean and traditional
practice prove, on examination, to be superficial. For example, design–build modes of
structuring contractual relations might seem to share with the lean system character-
istics such as cross-functional teams and integrated design of product and process.
Design–build as such has nothing, however, to do with how things are designed and
built, only with how a client procures its capital facilities. Design–build modes of
delivery only pursue the transformation goal of production systems, and do not as such
pursue the value or flow goals.
Post Occupancy Evaluation
design
criteria
design
process
detailed
engineering installation
needs and
values
design
concept(s)
product
design
fabrication
and logistics
testing and
turnover
project definition
work flow control Product Control production unit cost
Work Structuring
lean design lean supply lean assembly
Design and Construction: Building in Value218
14.4.1 Lean Project Delivery System (LPDS
1
) Model
Projects have long been understood in terms of phases, e.g., pre-design, design,
procurement, and installation. One of the key differences between traditional and lean
project delivery concerns the relationship between phases and the participants in each
phase. The model in Figure 14.1 represents those phases in overlapping triangles, the first
of which is Project Definition, which has the job of generating and aligning customer and
stakeholder values, design concepts, and design criteria. Those three elements are
determined recursively. In other words, each may influence the other, so a conversation is
necessary among the various stakeholders. Typically, like a good conversation, every
person leaves with a different and better understanding than they brought with them.
Traditionally, project definition has been done by the architect (or engineer, for non-
building projects) working alone with the client. In Lean Project Definition, representa-
tives of every stage in the life cycle of the facility are involved, including members of the
production team that is to design and build it.
Alignment of values, concepts, and criteria allows transition to the Lean Design phase,
in which a similar conversation occurs, this time dedicated to developing and aligning
product and process design at the level of functional systems. During this phase, the
project team stays alert for opportunities to increase value. Consequently, the project may
revert to Project Definition. Further, design decisions are systematically deferred to allow
more time for developing and exploring alternatives. By contrast, traditional design
Figure 14.1 Triads of the Lean Project Delivery System (LPDS).
The foundations of lean construction 219
management is characterized by demands for a freeze of design and by a tendency to
narrow a set of alternatives to a single selection very quickly. Although done in the name
of speed (and often abetted by limited design fees), this causes rework and turmoil, as a
design decision made by one specialist conflicts with the design criteria of another. The
‘set-based’ strategy employed in Lean Design allows interdependent specialists to move
forward within the limits of the set of alternatives currently under consideration.
Obviously, time is rarely unlimited on construction projects, so selection from alternatives
must eventually be made. The practice in lean design is to select those alternatives at the
last responsible moment, which is a function of the lead time required for realizing each
alternative. Reducing those lead times by restructuring and streamlining supply chains
allows later selection so that more time can be invested in designing and value
generation.
The transition to detailed engineering occurs once the product and process design for a
specific system has been completed and released for detailing, fabrication, and delivery.
At least the latter two functions occur repetitively over the life of a project, hence the
model shows Fabrication and Logistics as the hinge between Supply and Assembly.
Assembly completes when the client has beneficial use of the facility, which typically
occurs after commissioning and start-up. The management of production throughout the
project is indicated by the horizontal bars labelled Production Control and Work
Structuring, and the systematic use of feedback loops between supplier and customer
processes is symbolized by the inclusion of post-occupancy evaluations.
14.4.2 How is the LPDS structured, controlled and improved for
achieving the TFV goals?
Management of a production system consists of structuring the system to achieve its goals,
controlling the system for goal achievement during execution, and improving both
structure and control during execution and between projects (Koskela, 2000). Projects are
structured to pursue the TFV goals by the application of many principles and techniques.
Ballard et al. (2001) present a more fully developed hierarchy of ends and means.
Techniques include:
involving downstream players in upstream decisions
deferring commitments to the last responsible moment
aligning the interests of participants, e.g., so that it is always in the interest of the
producer to maximize value for the customer
selecting, sizing, and locating buffers to absorb variability and match the value of time
versus cost for each customer.
The essence of traditional project control is in monitoring actual performance, comparing
it to planned or intended performance, and identifying negative variances on which
management should act. In other words, it is like trying to steer a car by looking in the rear
view mirror. Lean production control is achieved through a systematic process for making
assignments ready to be performed, combined with explicit commitment by people at the
production level to what work will be released to their ‘customer’ processes in the next
plan period, which is typically 1 week, and ongoing identification and action on root
causes for plan failures.
Learning Loops
purposes design
concept(s)
design
criteria
process
design
detailed
engineering installation
product
design
fabrication
and logistics
commission-
ing
operations
and mainten-
ance
alteration
and decom-
missioning
project definition
Product Control
Work Structuring
lean design lean supply lean assembly use
Design and Construction: Building in Value220
Improvement is accomplished between projects primarily through post-occupancy
evaluations, which examine both product and process. To what extent was design and
construction based on a correct determination of customer and stakeholder values? To
what extent was the facility designed and delivered so as to allow realization of customer
and stakeholder purposes?
Within projects, improvement is closely linked to control. For example, the Last
Planner system of production control
7
tracks plan reliability through its Percent Plan
Complete measurement and also identifies reasons for plan failure so they can be acted
upon (Ballard and Howell, 1998).
14.4.3 Linking the LPDS Upstream and Downstream
The starting point for project delivery varies widely. Clients with on-going capital
facilities programs typically perform a business analysis and feasibility assessment prior
to engaging a delivery team. In other cases, analysis and feasibility may occur only after
engaging the team. Generally, it has been found to be preferable for the delivery team to
be involved earlier in business analysis and feasibility assessment. When a team is
engaged after those functions have been performed, the first task should be to review
previous planning, so they can at least thoroughly understand the business case of the
client, and may be able to make valuable contributions regarding alternative possibilities,
previously unconsidered options, the cost or time of options, and so on.
The Lean Project Delivery System produces a facility for a customer to use. Customer
use can be represented by a fifth triad, containing Commissioning, Operations and
Figure 14.2 Triads of Lean Project Delivery System plus Facility Use.
The foundations of lean construction 221
Maintenance, Alteration and Decommissioning, all of which are anticipated in the
previous phases (Figure 14.2).
The hand-off from the delivery team to the operations and maintenance team is
typically done during commissioning and start-up of the facility. However, strictly
speaking, hand-off occurs once the facility is operating to targeted performance.
Consequently, that ramp up time should be included in measurements of project duration,
and also be included in efforts to reduce project duration.
14.4.4 Summary of the LPDS
The comparison of LPDS to more traditional systems shows that this new approach is a
radical departure from current practice (Table 14.2).
14.5 Implementation
Implementing this approach in existing organizations or with people schooled in current
practice is hardly automatic. Lean-based project management requires changes in
individual behaviour and larger organizational development efforts to overcome the ways
current practice contradicts the new. Implementing Lean Construction requires the
progressive application of a new way to design project-based production systems. The
change required is both conceptual and practical. Changing long-held ways of thinking
Table 14.2 Comparison of traditional and lean project delivery systems
Lean Traditional
Focus is on the production system Focus is on transactions and contracts
TFV goal T goal
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
Design and Construction: Building in Value222
and acting is hard but rewarding work. Changing procedures, techniques and corporate
systems is the easy part; changing minds is the real challenge. The lean literature, books
like ‘Lean Thinking’ (Womack and Jones, 1996) are full of stories about companies and
people making the transition. Urgency, leadership, focus, structure, discipline, and
trajectory themes are apparent in both these stories and in construction and some patterns
can now be perceived.
14.5.1 Urgency
Companies that are more likely to implement lean processes will view themselves as being
in the business of execution of production (or services). This is in contrast to companies
that see themselves as being in the business of brokering projects by contracting work
from others, while minimizing their own involvement in the actual execution of the work.
Among these companies, declining performance creates the urgency for action. Fear
seems a better stimulus than greed for driving change. In any case, the leadership of a
company going lean must first explain why this change is needed so that people
understand the context for the effort.
14.5.2 Leadership
While a steady purpose must be communicated, transformational leadership requires
getting change started and sustaining it. Perhaps the best metaphor is teaching a child to
ride a bicycle; lectures and explanations help but the only place to learn is in the saddle,
so demonstrating the new behaviour and causing action, getting people involved in doing
different things, is vital. Continuing with the bike metaphor, leaders must expect some
falls and scraped knees. Leaders often miss the fact that others throughout the organization
have been trying for some time to ride the bike and have been criticized for both their
effort and mistakes by those holding fast to current practice. Leadership becomes a matter
of putting new people in the saddle and finding and encouraging those already trying the
ideas on their own. Catching people doing it right, praising them and rewarding them,
builds credibility and confidence that this is more than another passing fad.
14.5.3 Focus
Making quality assignments by applying the Last Planner System of Production Control
is the place to start. This system brings real change at all levels, produces measurable
results, and once in place leads to wider change in the way projects are designed, supplied
and controlled. Pilot projects can be established to both prove the ideas in practice and to
make apparent the differences between the new and current practices. These projects
should not be seen as experiments or tests because people will sense that the commitment
to lean is not yet firm. One caution: companies often incorporate some ideas and practices
from lean into their current planning and management approach – the result is better
performance and a reduced sense of urgency. The company then claims they are ‘doing it’
even though no real change has occurred.
The foundations of lean construction 223
While there are many differences between the lean approach and current practice, an
important implementation milestone occurs when the project organization shifts from only
measuring the performance of each activity (the task view) to actively improving the
predictable release of work from one specialist to the next (the flow view). Since planning
at the assignment level is what finally causes work to be done, the ability of the planning
system to predict, indeed cause, a certain time when specific tasks will be completed can
be measured
8
This milestone matters because it indicates that the organization, by the
controls it employs, is shifting from trying to optimize the performance of each activity
to optimizing at the project level.
14.5.4 Structure
Kotter (1996) speaks of developing and expanding the ‘guiding coalition’ as a key to
transformation. In construction companies we see more or less formal steering committees
made of executives, key training and coaching staff, and leaders from throughout the
company. These groups plan and carry out the implementation activities, develop
materials and collect and tell success stories. This forum is also where contradictions
between lean and current practice are identified and resolved.
14.5.5 Discipline
Lean is not a programmatic patch or a one-time problem to solve. It is a different way to
think and act that must be learned through disciplined practice. Keep at it and keep the
effort to perform better against the lean ideal visible. Some companies attempt to manage
the transformation on their own or with only modest help. Training is required but it alone
is insufficient to assure success. Significant coaching is also required; this means having
people work on projects with the management team to assure the system is installed and
running. Project managers and superintendents are not the kind of people who ask for help
so the coaches need to be proactive and engaged.
14.5.6 Trajectory
Most companies start with pilot implementation of the Last Planner System. This
system is designed to assure the reliable release of work from one station to the next.
It is not uncommon for those leading this effort to come to the startling realization of
the power of this idea, as in ‘This reliability stuff is really important’. (This is an
interesting moment, much like when a child realizes the tremendous freedom, speed,
and range made possible by learning to pedal a bike.) In construction, this realization
usually means that the practitioner understands that new levels of performance are
really possible and that changes in design, supply, assembly and control will lead to
even better results.
Two models of organizational change are now apparent. The first is the more classic,
larger organizational change model that includes developing vision and values, aligning
interests, re-examining practices, and taking first steps. These efforts involve multiple
Design and Construction: Building in Value224
activities on many fronts. They stress immediate action, getting people on the bike, in
parallel with other efforts. Another model for change is emerging and, while it is relatively
new, it appears to offer great promise. This approach implements the Last Planner System
in conjunction with focus and training on making and keeping reliable promises
(Winograd and Flores, 1986). These skills provide an immediate link between the design
of the planning system and the human and organizational issues required for its
implementation. Just as the focus on reliable work flow creates a line for continuous
action linked to improved system performance against the lean ideal, the pressure for
making and keeping reliable promises progressively reveals contradictory organizational
policies and practices. This is not to suggest that a company cannot successfully
implement lean construction without installing the Last Planner System and Reliable
Promises, but it does suggest that a more direct route to implementation may be more
effective.
14.6 Conclusion
Lean construction is still, to a considerable extent, ‘work-in-progress’. However, its
development to date supports two major claims: first, lean construction is based on a better
theory than conventional construction; second, lean construction is more effective than
conventional construction. Thus, lean construction is not just another specific approach to
construction, but rather a challenger of the conventional understanding and practice of
construction. In consequence, it is in the interest of every player in the construction sector
to assess this new thinking and practice.
The future development of lean construction will have two directions: breadth and
depth. On one hand, the seminal ideas of lean construction were related to the
management of site operations. After that, new methods were developed for supply chain
management, design management, cost management, and for total project delivery. This
process of increasing breadth will eventually lead to the situation where all issues of
construction project delivery have a methodical solution based on the new theoretical
framework.
On the other hand, this new theoretical framework is – and should be – constantly
moving, leading to increasing depth. Up until now, the main focus of theoretical
development has been on the theory of production and its application to the specific
characteristics of construction. Next, the theory of management and the theory of
communication need to be clarified and integrated into the existing body of theoretical
knowledge.
Among managerial sciences, the quest for a theory is not a phenomenon restricted to
construction management. Rather, a similar movement is emerging in the wider fields of
operations research and management science (Saaty, 1998). The characterization of a shift
of focus, from individual problems to a theory of the system where the problems are
embedded, presented in this wider context is perfectly adequate also regarding
construction management (Saaty, 1998):
After more than a half century of tinkering with and solving problems, we need to
characterize the system underlying our activity, classify, and generalize its
problems.
The foundations of lean construction 225
Endnotes
1¯ean Project Delivery System (LPDS) and Last Planner are both Trademarks.
2 This conception is common especially in the UK. The attacks by Green (1999) on lean
construction seem to address this ‘tool cocktail’ conception.
3 Flowdown of requirements refers to the stagewise decomposition and conversion of
high level requirements to requirements for part design, fabrication and assembly.
4 In the thermostat model (Hofstede, 1978), there is a standard of performance, and
performance is measured at the output of the controlled process. The possible variance
between the standard and the measured value is used for correcting the process so that
the standard can be reached.
5 The Japanese word ‘kanban’ means card or sign board. In the Toyota production
system, cards are often used for controlling the flow of materials through the factory.
The basic concept is that a supplier or the warehouse only delivers components to the
production line as and when they are needed eliminating the need for storage in the
production area. Supply points along the production line only forward desired
components when they receive a card and an empty container, indicating that more parts
are needed in the production line (Hopp and Spearman, 1996; Olson, 2001).
6 See Ballard (2000).
7 The Last Planner system is described in detail in Chapter 15.
8 The test question to determine if the organization is serious about managing work flow
is: ‘Are you measuring the performance of your planning system with PPC (Percent
Plan Complete) and acting on reasons?’ Even here we occasionally find companies who
use the terms but modify the measurement criteria to measure the amount of work
completed rather than the ability of the planning system to assure release of work from
one crew to the next. The focus should remain on doing it right. Both these methods are
presented in more detail in Chapter 15.
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