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FMI’s “2012 Productivity Survey” examines lean construction and its implications on the electrical construction industr
Lean construction’s foundation stems from the automotive manufacturing sector. Known as the “Toyota Production System,” experts carefully analyzed every aspect of the production cycle — from how materials were stocked to how the fabricators interacted with the finished product. By its strictest definition, “lean” is the continuous elimination of waste driven by customer satisfaction. Combined with six sigma — another methodology for improving effectiveness and efficiency — lean aims to drive out waste of all forms, including, but not limited to, the following:
- Defects — construction not completed to specifications the first time.
- Overproduction — construction that is faster, sooner, or more than required.
- Waiting — time lost when people, materials, or equipment are kept waiting.
- Nonutilized talent — wasted potential when the people doing the work are not consulted for improvements to the methodology.
- Transportation — poor handling of materials and equipment around a site.
- Inventory — excess materials not needed.
- Motion — movement of personnel and equipment that does not add value.
- Extra processing — doing more than the specified requirements to transform the raw materials into the finished product.
Experts have long viewed the construction industry as simply an extension of the manufacturing process, making lean methodologies applicable to any trade. Excitement and intrigue about lean practices have contractors at a fever pitch. However, the overall concept of process improvement is far from new. FMI’s “2012 Productivity Survey” recently examined lean construction and its implications on the industry. Figure 2 illustrates that an overwhelming 42% of survey respondents felt that lean is more or less management best practices rehomogenized under a new heading.
As you examine the connectivity between such management philosophies as lean, TQM, and six sigma, it is easy to see many of the same figures leaving their indelible mark. Regardless of the packaging, it is important to recognize that the processes and tools for driving out waste, poor quality, and inefficiency provide results. Six sigma’s DMAIC (define, measure, analyze, improve, and control) methodology, which helps consultants and organizations alike develop solutions, is a timeless foundation for any best practice development. Elimination of “labor waste” greatly affects contractors and their customers.
While perceptions of lean construction may vary, translation to bottom-line growth is apparent. Figure 3 shows that 77% of survey respondents saw some level of productivity enhancement as a result of their lean initiatives.
For electrical contractors that achieve a net income as low as 2% to 3%, a 5% to 10% improvement in labor productivity has the ability to double the bottom line. While businesses appear far too concerned about top-line growth, productivity
improvements impact the more important aspect of the income statement.
As discussed previously, the challenges of lean lie not with the tools themselves, but in the deeply ingrained behaviors associated with the status quo. For instance, short interval planning tools, or “last planners” in lean terminology, are important proactive devices to help field managers allocate resources and set measurable goals. The benefit is clear — better planning eliminates emergencies and reduces costs associated with overtime, quick shipping, rework, etc. However, adoption of a new planning system across a contingent of managers and supervisors is not easy. Without strict accountability metrics from senior management, the planning tools simply become another sheet of paper.
Skepticism of new doctrines like the lean concept does not originate from disbelief in the tools or process but rather in the inability of an organization to change simple human behavior. Superintendents and managers need to see how new tools and processes will reduce costs over the long term, while changing their habits in the short term. Just as one needs to change a car’s oil on a long journey, businesses need to incorporate new systems on theirs. It is incumbent on construction firms in this new era to create sustainable models that allow their personnel to construct projects as efficiently as possible. Whether you call that lean, six sigma, or TQM is irrelevant.