What is Lean Construction?

Professor Lauri Koskela School of the Built Environment University of Salford

Lauri Koskela 2008 2009

Contents
What is lean production?
Why y has it been so difficult to decode?

What is lean construction?

How H i is it diff different? t?

Issues of implementation p

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What is lean production?

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Car manufacturing in North America

Guardian 14.11.2008
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The question
Why does the Toyota Production System (TPS) ( )p perform better than conventional methods of production in car manufacturing?

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Toyota production system

(Fujimoto 1999)

1. Routinized manufacturing capability

static & routine dynamic y & routine dynamic & non non-routine routine

2. Routinized learning capability 3. Evolutionary learning capability

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Routinized manufacturing capability

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The seven wastes

Overproduction Correction Material movement Processing Inventory Waiting Motion

Flow of materials

Human action

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The conventional big idea of production

Transformation

Input p

Production

Output

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Decomposition
Materials, labor, machines Production Production process process

Products

Subprocess A

Subprocess B

Powerful assumption: decomposed subprocesses are mutually independent! Thus, the whole production effort can be integrated in an additive manner: by minimizing the costs of each department, function, section, and work station the total costs will be minimized minimized.
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In manufacturing, manufacturing the T idea leads

to buffering for creating (relative) p between workstations, , ie., , independence material piles which ensure that each work station can keep a high utilization rate and seem always busy to big batches for f minimizing the set-up time

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Sou ce Source: Schonberger (1996) World Class manufacturing: The Next Decade.

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Inventory y turn rate is connected to efficiency!

Note: Commitment measures inventory in days, an inverse concept in comparison to in entor t inventory turn. rn (Holmstrm: Realizing the productivity potential of speed, speed 1995)

Car manufacturing

Radio, tv and communications equipment

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Source: Schonberger (1996) World Class manufacturing: The Next Decade.

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US Manufacturing performance 1950 - 2000

The more intensively the T idea is implemented, the more decline in performance!

Figure from: Schonberger. 1996. World Class Manufacturing: The Next Decade.

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The transformation model model

is a heroic idealization that may lead to counterproductive results results, such as excessive work-in-progress, which hi h b by d decreasing i visibility i ibilit and d rapid id feedback, tends to reduce performance further equalling eq alling to a vicious icio s circle circle.

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The big idea of lean

Production happens in a timeline Regarding the timeline of a piece of material, there are good stages (processing) and bad stages (rework (rework, waiting, inspection) Let us eliminate the bad stages (also called waste) before making good stages even better
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Moving

Waiting

Processing A

Inspection

Moving

Waiting

Processing B

Inspection

Scrap

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In manufacturing, the F idea translated into...

Just-in-Time (JIT)
Reduction of transfer through g p production cells and appropriate layout Elimination of (separate) inspection Reduction of waiting through small lots and pull production control

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Fl Flow view i
Concept: Production is a flow, composed of transformation and other phenomena: inspection, moving, waiting First principle: Elimination of nontransformation phenomena (waste) Further principles: Time compression, variability i bilit reduction, d ti etc. t

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Why time compression?

Waste W t time Waste time Waste time Processing ti time Processing time Processing time Processing time Time

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Time compression compression

leads to enforced improvement and innovation in
Production system design Production control

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Routinized learning capability

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Scientific method
(Sh (Shewhart h t & Deming D i 1939): 1939) It may b be helpful h l f lt to think of the three steps in the mass production process as steps in the scientific method. In this sense, specification, production, and inspection correspond respectively to making a hypothesis, carrying out an experiment experiment, and testing the hypothesis. These three steps constitute a dynamic scientific process of acquiring knowledge. Spear and Bowen (1999): whenever Toyota defines a specification, it is establishing sets of hypotheses that can be tested. Thus, the scientific method is followed followed.
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Interlocking methods for learning

Interlocking set of methods and tools
Scientific experimentation p Standardization Visual management: explicit/direct representation of the standards in the workplace

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Evolutionary learning capability

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Constantly evolving
Recent examples
A3 Monozukuri

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A3
A3 (An A3 size standard paper) is used to visually explain problem solving processes, typically for kaizen events. It should h ld flow fl as a story, t explaining l i i the th PDCA steps t of f problem bl solving. l i It also keeps the visual record of past problem solving efforts.

Heading Plan Do

Check

Act

Footnotes

Adapted from Lean Manufacturing Advisor, September 2005: Volume 7, Number 4

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Source: http://www.shmula.com/wordpress/wp-content/images/shmula-5s-fishbone.png Lauri Koskela 2009

Monozukuri
monozukuri k i means h having i th the spirit i it t to produce d excellent products and the ability to constantly improve a production system and process. process. (JETRO) Monozukuri is a term used since the late 1990s to identify the cultural heritage that Japanese manufacturers have developed since the industrial revolution revolution. (Arai, (Arai MEMA) Similar to martial arts such as karate and bujyutsu, monozukuri requires continuous practice, effort, improvement and patience to master a skill or create a new skill to outperform others (Arai, others. (Arai MEMA)
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Hitachi
Executive Officers [Effective January 1, 2007] [(b) Promotion/ (c) Change of Position] Etsuhiko Shoyama Chairman

Kazuo Furukawa Michiharu Nakamura

President, General Manager of Supervisory Office for MONOZUKURI Executive Vice President and Executive Officer, in charge of Research & Development, Business Incubation, Hitachi Group Chief Innovation Officer and Hitachi Group Chief Technology Officer Executive Vice President and Executive Officer, General Manager g of Compliance Division, in charge of Corporate Planning & Development, Legal & Corporate Communications, Management Audit, Procurement

Takashi Hatchoji

Takashi Executive Vice President and Executive Officer, Chief Hitachi Group Miyoshi Headquarters, in charge of Business Development and Finance Lauri Koskela2009 2008 Lauri Koskela

TPS/Lean production
1 Leads to better products, 1. products more efficient production, production thanks to a more valid concept of production 2. Built-in continuous improvement p 3. Constantly evolving Lean production is a theory-based theory based, but practice-driven practice driven innovation Increasingly applied in Western manufacturing, but understanding d t di and di implementation l t ti i in th the W West tl lag behind in comparison to Japan The neglect of theory has slowed down the diffusion of lean manufacturing in the West for 15 20 years Focus on the transformation of mass manufacturing into lean manufacturing
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What is lean construction?

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The many uses of decomposition in construction

Work Breakdown Structure p Gantt chart: the total duration is decomposed with regard to individual work packages and tasks
Decision rule: If each task keeps its start and end date, the whole project is completed in schedule

Budget: The total cost is decomposed with regard g to individual work p packages g and tasks
Decision rule: If each task is kept within its budgeted cost, the whole project is completed in budget
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Applicability of lean production to construction?

Can the TPS be applied pp in construction? Two views
There are no hindrances in transferring methods and practices from car manufacturing to construction (example: Egan report in the UK) Construction is fundamentally different from car manufacturing, and requires a reinterpretation p of the theory y( (IGLC) )
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Lean manufacturing vs. vs lean construction

Lean manufacturing

Lean construction

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Task of three weeks in the construction schedule... schedule

Predicted, average output

Outpu ut

Week 1

Week 2

Week 3 Time

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What happens in construction reality!

Problems occurring during the task Problems related to starting the task Problems related to completing the task

Output

Week 1

Week 2

Week 3

Time

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Critical path network: A task is started after the completion of the preceding task in the network (end-start (end start relationship)
Preceding task
(In site practice: A task should be started when the master schedule indicates that)

Task

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Last Planner: A task is started when all prerequisites at t hand h d

Preceding task

Other inputs

Task

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Preconditions P diti f for a construction task

Construction design Components and materials Workers Equipment Space p Connecting works External conditions Task

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Assembly tasks
Consider a task with one week duration, with ith seven prerequisites/input i it /i t fl flows Let us assume that the reliability y of each input flow is 95 % during one week The probability of having no deviation in any input flow during the week, when starting and carrying out the task, is , 7 = 0,70. , 0,95
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Solution: Solution : making-do making do

Congestion, out-of-sequence work, p stops p and starts, , inability y to do multiple detailed planning in advance, obstruction due to stocks of materials materials, trying to cope without the most suitable equipment for the task (due lack of planning and preparation), interruptions due to lack of materials, tools or instruction, overtime, g of the crew. oversizing
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Making do Making-do
M Making-do ki d as a waste t refers f to t a situation it ti where h a task is started without all its standard inputs, or the execution of a task is continued although the availability of at least one standard input has ceased. ceased The term input refers not only to materials, but to all other inputs such as machinery machinery, tools tools, personnel, external conditions, instructions etc. Making-do do is equivalent to negative buffering buffering, Making i.e. the waiting time for a part is negative

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In construction, the impacts of T are partly different

A Acquiring ii d design i b by l lowest t cost tl leads d t to erosion i of ff fees and corner-cutting in design work Subcontracting, Subcontracting often multilayered multilayered, leads to contract management, instead of production management Procurement of components p by y competitive p bidding g robs time from prefabrication These phenomena lead to the increase of unreliability of task inputs inputs, and further to the waste of making making-do: do: working without all standard inputs at hand, in an improvised p manner Making-do is the major waste to address in construction!

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Features of Last Planner: recreating the ideal shape of a task

Look ahead planning Making ready Continuous improvement Phase planning Checking task completion & Finding causes Conversation and commitment co t e t

Outpu ut

Week 1

Week 2

Week 3 Time

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Graa y Montero Perus biggest contractor

Budgeted and realized margin in the first 9 projects where LP in use

45%

35%

Budgeted B d t d Margin M i in i total: t t l $ 6,200,000 6 200 000 Realized Margin in total: $ 9,200,000

25%

% 15%

5% Project 2 Project 3 Project 4 Project 8 Project 9 Project 1 Project 5 Project 6 Project 7

-5%

-15% Bid Margin g Actual Margin g

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A contractor in Finland reports p on using g Last Planner: Antti Husso: Last Planner not only facilitates one's own work, but especially improves the productivity on site.

http://www leanconstruction org/ http://www.leanconstruction.org/

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Lean Construction
Ends
Elimination of making-do g Lead time reduction (inventories, buffering)

Means M
Last Planner system of production control Practices and methods in lean production, when applicable pp

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Conclusion
F For one-of-a-kind f ki d production d ti and d construction, we need theory-based development of lean manufacturing concepts do not cover all that is needed (although we increasingly find that manufacturing concepts are applicable in construction)

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Issues of implementation

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Where Should Change Start?

Gi Given that th t construction t ti cannot t be b changed h d overnight, i ht where should change start? Mainstream approach:
from owners if only the owner Most often: upstream decisions and stages of construction, contractual and organizational forms from supply chain reorganisation

Rather/also the focus should be on: operational p design, g , prefabrication and site production processes where the end product is created Lean L principles i i l can b be used d everywhere, h even i in a point i t wise way but the results are increasingly better, the gg the area of application pp bigger
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Where should change start in a company?

F From the th top, t from f the th managing i director who should be a teacher and mentor on lean for his subordinates Likers Principle p 9 in The Toyota y Way y
Grow leaders who thoroughly understand the work, , live the philosophy, p p y, and teach it to others.

Examples: Graa y Montero (Peru), Hitachi (Japan)

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Thank You!
Questions? Comments?

Lauri Koskela 2008 2009