c696 Lean Building

CIRIA C696 London, 2011

Build Lean

Transforming constructionusing Lean Thinking

Adrian Terry and Stuart Smith

Classic House, 174–180 Old Street, London EC1V 9BPTEL: 020 7549 3300 FAX: 020 7253 0523EMAIL: [email protected] WEBSITE: www.ciria.org

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Build Lean. Transforming construction using Lean Thinking

Terry, A, Smith, S

CIRIA

C696 © CIRIA 2011 RP926 ISBN: 978-0-86017-696-1

British Library Cataloguing in Publication Data

A catalogue record is available for this book from the British Library

Published by CIRIA, Classic House, 174–180 Old Street, London, EC1V 9BP, UK

This publication is designed to provide accurate and authoritative information on the subject matter covered. It is sold and/ordistributed with the understanding that neither the authors nor the publisher is thereby engaged in rendering a specific legal orany other professional service. While every effort has been made to ensure the accuracy and completeness of the publication, nowarranty or fitness is provided or implied, and the authors and publisher shall have neither liability nor responsibility to anyperson or entity with respect to any loss or damage arising from its use.

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, includingphotocopying and recording, without the written permission of the copyright holder, application for which should be addressedto the publisher. Such written permission must also be obtained before any part of this publication is stored in a retrieval systemof any nature.

If you would like to reproduce any of the figures, text or technical information from this or any other CIRIA publication for usein other documents or publications, please contact the Publishing Department for more details on copyright terms and chargesat: [email protected] or tel: 020 7549 3300.

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Keywords

Lean construction, change management, construction process, improvement, innovation,knowledge management, productivity, supply chain

Reader interest

Supply chain businessimprovement, projectmanagement

Classification

Availability Unrestricted

Content Advice/guidance, case study

Status Committee-guided

User Business improvement managers, seniormanagement, Lean champions, HR and skillsmanagers

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In Never waste a crisis Constructing Excellence challenged suppliers to “take the lead”, focusing onend client value and business outcomes for a facility. They recommended starting with “propercollaborative working including integrated lean processes”.

Having worked in companies that have done this, I have observed the difficulties that both clients,designers and builders of facilities have had in applying Lean Thinking to the world ofconstruction. When I was asked to chair this project I saw it as an opportunity to approach thechallenge from a different angle. The steering group concluded that we did not need another guideto the myriad of Lean Six Sigma tools. Rather we need insight as to how the change to a Leanculture could be achieved within a construction business: a guide for senior managers that couldhelp them to see their world in a different way. We set out to achieve this.

We have adopted a narrative style in which our Lean champion takes us along his journey, sharinglearning on the way. We hope that you will empathise with the characters in the book. Its purpose isto help you consider how lean thinking could be applied and implemented across yourorganisation.

We anticipate that readers will wish to look at different aspects in more detail. So we have includeda comprehensive list of references to explore Lean further based upon your own context andneeds. Through determining a Lean path for your organisation, we anticipate that both clients andsuppliers shall enjoy improved value and business outcomes, responding to the challenge fromConstructing Excellence.

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Foreword

Nigel Fraser

Head of Systems and Standards, BAA Capital Programmes, Chair, CIRIA’s Construction Productivity Network

Chair, CIRIA RP926 Lean construction

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Acknowledgements

Creating Steve’s story has demanded the harnessing of the collective learning of many organisationsand people involved in advancing Lean in the construction sector. Its preparation has been anenjoyable, hard journey of collective learning in itself. There have been many direct and indirectcontributions and we are most grateful for all of them.

Authors

The drafting team was a partnership between Bourton Group Ltd and The Advanced Problem-Solving Partnership, which comprised:

Project steering group

The project was guided by a steering group comprising:

David Adamson Sellafield Ltd

Barry Blackwell Department for Business Innovation and Skills

Chloe Chen Highways Agency

Nigel Fraser (chairman) BAA

Alan Hodges BAM Nuttall

Malcolm Horner University of Dundee

Sally Keil Morgan Sindall

Stephen Pearson Mott MacDonald

Stuart Smith Bourton Group Ltd

Brian Swain Rubicon Wigzell/Lean Construction Institute

Andrew Wingrove Highways Agency

Stephen Underwood Kier

Paul Underwood Morgan Sindall/PwC

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Bourton Group:

Keith Bennett

Keith Bissett

Lesley Fleming

Martin Green

Mike Notman

Stuart Smith (lead author)

Tim Washington

The Advanced Problem Solving Partnership:

Lise Moen

Adrian Terry (lead author)

David Thomas

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CIRIA project managers

CIRIA’s projects managers for the project were Owen Jenkins and Gillian Wadams.

The earlier consultation phases of the project were co-ordinated for CIRIA by Bill Healy and SusanSteensma.

Case studies

All the case studies, presented are real and drawn from the experiences of the contributors andother verifiable sources including:

Project funders

Editorial

Editorial review and additional content was provided by the steering group together with ScottIsaksen, Creative Problem-Solving Group, David Porteous, Independent Journalist, and ClareDrake, CIRIA.

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6ix consulting

The Advanced Problem-Solving Partnership

BAA

BAM Nuttall

Bourton Group

BRE

Constructing Excellence

Costains Ltd

Gatwick Airport

The Lean Construction Institute

Highways Agency

NHS estates

Shepherd Construction

Tesco Stores Ltd

BAA

BAM Nuttall

BIS Department for Business Innovation & Skills

Bourton Group Ltd

Buildoffsite

CIRIA Core Members

Highways Agency

Morgan Sindall

Sellafield Ltd

University of Dundee

Scottish Construction Centre/European Regional Development Fund

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Contents

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iv

Getting the most from your reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xi

Prologue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiii

Part 1 Lean in a construction context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Chapter 1 Wrestling with the basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Five principles of Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

What the customer values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Focus on the value (creation) stream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

At the “pull” of the customer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Perfection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Chapter 2 Customer focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Next customer principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Voice of the customer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

A need for good clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Determining value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

References and further reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Chapter 3 Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19Cost cutting versus waste reduction? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Price reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21


Chapter 4 Look deeply into the system for the solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23Exploring process? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Understanding the system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

Variation, overburden and unevenness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

Simplification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29


Chapter 5 Lean in construction – seriously? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31Critiques of Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Lean construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

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A learning system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37


Chapter 6 The case for Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39A view from the sharp end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40

Consulting, design and support areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

Business cost and quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

Embracing innovation and winning work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44

People are at the heart of Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45

Summing up the case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47


Part 2 Implementing Lean in a construction organisation . . . . . . . . . . . . . . . . . . . . . . . .51

Chapter 7 A pathway to Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53Success factors for the transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54

Strategy – a pathway to Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

A holistic approach to managing the transformation . . . . . . . . . . . . . . . . . . . . . . . . . . .55

Aligning effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

Taking stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61


Chapter 8 Creating the right context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63A right context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

A climate for Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64

Character of an effective Lean climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66

Sponsorship – legitimising Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

A climate for collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69


Chapter 9 Aligning effort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75Governing Lean deployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75

Learning to learn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

Policy deployment – aligning improvement to business strategy . . . . . . . . . . . . . . . . . .79

Co-ordinated “projects” in improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83

Standardised work, knowledge management and transfer . . . . . . . . . . . . . . . . . . . . . .84


Part 3 Using Lean to maintain an edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87

Chapter 10 Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89References and further reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92

Chapter 11 Create capacity – deployment teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93Lean facilitators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97

Counting the cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98


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Chapter 12 Learning to see waste and value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101Exploring the value stream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101

Process improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103

Data-driven problem solving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105

References and further reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107

Chapter 13 Measurement matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109The dangers of measurement misalignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109

Measure for improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111

To secure engagement – be willing to identify and share the gains . . . . . . . . . . . . . . .113


Chapter 14 Routine Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119An increasing rate of learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119

Daily Lean meetings (DLMs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121

Visual management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122


Epilogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .125

Appendices

A1 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127

A2 Assessment matrix. The 20 keys of construction Lean leadership . . . . . . . . . . . . . . . . . .133Key 1 Lean awareness/understanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134

Key 2 Role of champions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134

Key 3 Lean commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134

Key 4 Lean problem solving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135

Key 5 Lean direction/governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135

Key 6 Lean communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135

Key 7 Leadership visual management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136

Key 8 Benefits tracking and management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136

Key 9 Lean capability building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136

Key 10 Customer/client focus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137

Key 11 Motivating others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137

Key 12 Understanding key processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137

Key 13 Delegation/empowerment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138

Key 14 Setting expectations and following up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138

Key 15 Conflict management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138

Key 16 Lean planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139

Key 17 Lean priority setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139

Key 18 Team building/personal development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139

Key 19 Lean managerial courage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140

Key 20 Developing collaborative relationships and partnerships . . . . . . . . . . . . . . . .140

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A3 The A3 Problem solving worksheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141A3.1 Identify value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .142

A3.2 Create pull . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144

A3.3 Supply chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .146

A3.4 Capturing benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148

A3.5 Climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150

A3.6 Alignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152

A3.7 Identifying improvement projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154

A3.8 Measure to see and learn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .156

A3.9 Value and waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .158

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You will go on a journey as it is experienced by Steve, a senior leader in a fictional businesswithin the construction industry.

There is no single, prescriptive way of adopting Lean nor, in fact, an agreed definition of whatconstitutes Lean in a construction context. Steve’s journey draws on several real case studies fromacross the industry. These are identified by the case study symbol:

Where gaps exist, experience and solid theory are used, looking always for their applicability to theconstruction setting.

It is deliberate that Steve’s company type is left open to interpretation. You may assume that Steveworks in a different type of business from yours. If so, we encourage you to look again at thejourney and ask “does this apply here?” In the majority of cases, we believe that the principles andreported learning does. We want to reach out to the widest possible audience so have kept ourterms of reference, thinking, tools, pathways etc as generic as possible by focusing on the principlesthey elucidate. Contexts, methods and actual application may differ but principles do not.

As Steve learns how to implement Lean within his business, you will also gain invaluable lessons inhow Lean can be better applied in the construction industry, and perhaps beyond.

We believe that Lean has answers to the real challenges faced by the construction industry todayand tomorrow. This guide falls broadly into three parts:

Part 1: Lean in a construction context

This sets out the key Lean principles, how they are relevant to construction at the project andorganisational level, and concludes with a consideration of the business case.

Part 2: Deploying Lean in a construction organisation

This focuses on deploying Lean across the organisation. It considers issues such as improvementstrategy, deployment tactics, creating the right context for sustainable success and securingalignment.

Part 3: Using Lean to maintain an edge

This examines the leadership and team approaches needed to diffuse and secure Lean throughoutthe organisation. It also considers benefits realisation and measurement systems.

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Getting the most from your reading

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Appendix A3: The A3 Problem solving worksheets

These worksheets develop some of the concepts introduced in the text in more detail. Relevantsheets are identified in the references and further reading section of each chapter

At its heart, Lean is a way of thinking and perceiving the purpose of work, the way work isorganised and the way it is conducted. We aim to get you thinking and encourage you to go on thejourney with Steve, and hope that you will choose, as Confucius once said, to:

“Start the long journey with a first single step”

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“Yes, put him through.” Steve had been waiting for this call. His company needed the contract.His evening was about to be taken up with finalising next quarter’s forecast and he could do withsome good news.

A little while later, he put the phone down with a sigh. It was the same old story. The client couldno longer go ahead with the scheme. “A lack of resources, change of policy direction and cost-cutting,” he had said. Yet another unsuccessful bid and £275k down the drain. The bid strike ratewas dropping and the business development costs growing – exponentially it seemed.

If it carried on, the next step was to make cuts in overheads yet again, slim the operations to theminimum and hold on until things picked up. His forecast would not make very pleasant reading.He worked out his frustrations that evening at the gym. At least it kept him away from the doctorand fit for the future.

The following morning, he sat at his desk looking at the mountains of paperwork shouting forattention. Two reports were on top of the pile on his desk. Both described road tunnelrefurbishment projects of similar size and scope. Both projects delivered successfully. Certainly theyhad not gone completely without incident but on the whole both were well managed. Each hadused integrated project partnership delivery teams and, because the client was the same, the samecontracts within the same framework.

Yet one had significantly outperformed the other and delivered over £5.75m of savings againsttarget cost, nearly 6.5 per cent of the total budget. The project had also been delivered to aprogramme that was 13 weeks shorter. What made the difference?

They used an integrated project delivery partnership approach for all projects and it worked well.Each team consisted of representatives from the client, the main contractors, engineering andenvironmental consultants and cost consultants. All organisations involved in the two projects hadconsiderable previous experience in efficiency and the construction change agenda.

The majority of team members had transferred from one project to the other, so there had been anopportunity to transfer learning from one project to the other, but it still didn’t explain thedifference in performance. Both projects used the usual construction management tools: workbreakdown, critical path analysis, earned value management. Why was there was such a differencein performance?

He flicked through the report and stopped at a section entitled “Lean Thinking”.

“For the second project, the original team had been joined by a manager who had previous experience ofLean construction. He encouraged the team to explore Lean Thinking approaches throughout the project.

The team had been receptive to this, and this had transformed their approach and performance.”

Prologue

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Like most of his peers, Steve had been around long enough and attended the usual industryconferences to grasp the basics of Lean and, whenever possible, used this to his advantage when itsuited his needs. The concept of delivering efficiently, along with business improvement, was onethat he espoused and worked hard at – when he got the chance. Construction is a client-ledindustry, isn’t it? Isn’t it all about good project management? And surely what the clients want theyget?

He continued to scan the document and his eyes were drawn to a section containing a series ofbullet points.

“The main areas where the project differs from the more traditional approaches usually adopted by ourprojects are the following:

� we revisited, with the client, their priorities for the project, understanding their perception of value.This caused us to realign our own thinking on how the project could be delivered

� using Lean principles we systematically identified waste in all stages of the project, from planning,through to design and construction

� as well as striving to deliver the various project elements as efficiently as possible, we placedconsiderable emphasis on looking at how the various processes related to each other and how the projectas a whole could be delivered more efficiently

� linked to the above, we planned work to take greater account of the readiness and capacity of upstreamactivities using what is known in Lean terms as ‘pull’

� we invested time in avoiding problems, tackling bottlenecks and deploying resources accordingly

� we engaged in regular structured meetings to clarify priorities, focus on client value and solveproblems.”

As he read, he found himself doodling:

Maybe there is something beyond standardconstruction management and valueengineering, he thought?

The savings were of a scale that exceeded thoseexpected of a repeatable project, even with thesame team. However, this was just one project.He had seen many of them before. Someprojects just went well. The team chemistry andother factors just gelled and the whole thingworked. In a way, it “sang”.

“I see you’ve found the tunnel project reports.”It was Michael, the CEO, who was on one of hisregular tours of the office “I read it with greatinterest.”

“Sounds like the team did a fantastic job,” Steve replied “A one-off?”

“Unless we do something about it, sadly yes,” Michael replied. “Pass me the report. There wassomething…” Michael flicked to the end of the document.

Work hard toclearly identify

and understandclient needs

Examine andstabilise theprocesses in

place to deliverthat value

Identify andeliminate

waste

Improve the flowof work in those

processes

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“Have a read. If we could get all our projects to perform like this your quarterly reports wouldmake better reading.” He smiled faintly, and left.

Steve slowly read the section while what Michael wanted started to sink in.

In delivering the project the team developed a new attitude of mind, a philosophy and a way of thinking thatmade them look again at the way they did their business and delivered value to the client…

…construction practitioners and supply chain members believe that Lean construction is another jargon orreinvention of the wheel being intertwined with continuous improvement, value engineering andinnovation. Fundamentally, this is due to a lack of understanding of the potential benefits of Leanconstruction at a process, project and even an organisational level.

Greater communication of this is needed. … Finally, it must be led from the top.”

As Steve put down the report, he thought “I’ve been given a leadership challenge.” And of the kindthat could give him a seat on the board.

He picked up his pen and wrote a question, as was his habit. It focused his mind on the core of thechallenge.

There was only one way to find out.

Can I help create a genuinely Lean construction firm so that we get sustainable market-leadingperformance and efficiency?

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Part 1Lean in a

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Wrestling with the basics

Five principles of LeanSeveral weeks passed. Realising his knowledge was somewhat superficial Steve had snatched

some time in the evenings and while travelling to do some introductory reading. He took time outof his hectic schedule to talk at some length to the two project team members involved in the tworoad tunnel projects that had started him down this route.

Steve was familiar with The machine that changed the world1, which was considered a seminal work onLean. Womack and Jones,2 later considered how Toyota’s and other car manufacturers’ Leanproduction approaches applied in other industries. This had led to the introduction of the fiveprinciples of Lean and the term “Lean Thinking”2 to differentiate from pure production activities.Steve drew a simple diagram on the whiteboard.

Womack and Jones2 claimed that, in contrast to comparable systems, Lean delivered:

“half the human effort, half the physical space, half the investment tools, half the engineering hours and half the lead time to develop new products.”

Could he adopt these principles within his business context? Was there scope for these kinds ofsavings to be achieved in construction?

Perfection

Pull

Flow

Value stream

Value

1


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Steve knew now that Latham3 claimed that 30 per cent could be saved and Egan4 suggested specifictargets in the order of 10–20 per cent year-on-year improvement. Recently from direct experiencehe had found that these seemed likely. He knew too that BRE SMARTWaste5 claimed that 30–50per cent of construction materials thrown away were, in fact, unused. “Yes,” he concluded, “it doesseem likely that the same scale of savings could be achieved.”

He knew that Lean applied far beyond manufacturing. However, Steve noted what Michael hadadded in one of their many conversations over the past weeks: “It is not just about optimising whathappens on site, but about considering the entire design and construction process as well as allsupporting business processes.”

In the more successful “Lean” project, the team had a pre-agreed “target cost” contract with shared“pain–gain” clauses. This was now quite a common approach. What was unique about Lean was theincreased cash flow and project profitability one gained that was reinvested in more improvementto find new and better ways of working.

His reading had identified several ways or principles of how to adopt Lean. Womack and Jonesillustrated the five principles of Lean Thinking and others, such as Liker6 and Seddon7, identifiedalternative principles that characterised Lean organisations and Lean service. Interestingly, hefound that the five principles identified by Womack and Jones were all widely accepted, so hedecided he would focus on these for now.

He admitted to himself, he would need to really get under the skin of how these principles could beapplied in his world of multiple projects delivered to multiple clients, with widely differentcombinations of needs, fragmented supply chains and variable complexity.

He stood up and looked at the five concentric circles he had drawn on the whiteboard. He decidedto explore each principle further and see if, and how, it might apply to construction.

“I will need to ask someone else to take over some of my day-to-day work if I am to achieveanything,” he said to himself. Michael had given him the mandate but would he give him thenecessary time and space to develop things further? Still, there was more to find out before heasked.

What the customer valuesIn business, Steve knew that many understand “value” as a purely financial concept. He had oftenwrestled with this in internal discussions when he argued that value is entirely in the eyes of thecustomer. Value is about a customer receiving exactly what they want, when they want it and for theprice they are willing to pay.

Value to a customer wasn’t a cost-accounting perspective and was only delivered when the clientused the product for the purposes for which it was intended. Steve understood this clearly as itreflected his project management mindset.

Just take the hospital rebuilding project that he had been involved in earlier in his career. Awarethat timescale was vital to the client, they had decided to try to be “Lean”, which led them to usingan offsite manufacturer to rebuild and replace the existing structure. The whole project had beencarefully planned to meet the tight deadlines, with delivery of the structural elements organised tominimise impact on the roads in the congested city location. When he proudly described these plansat the regular monthly lunchtime briefings, he would state that it could potentially shave months offthe programme.


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However, when Steve later visited the actual site it was in chaos: lorries carrying the structuralelements were backed up, obstructing the road and access to the site. The hospital managers weredesperately seeking ways to get their patients in and out. Steve was horrified, and discovered thatthe foundations had been laid too high so the structure produced offsite didn’t fit. They wereforced to break out the foundations and redo the work so that they were at the correct level. Infocusing so much on the time, the importance of adhering to tight tolerances had been overlooked.The careful plans were in tatters and disruption to the client’s operations – the very thing theyvalued – was extensive. It was a painful and humiliating lesson to learn.

Focus on the value (creation) streamSteve understood that the “value stream” was the journey from the client’s original need or concept,through design and construction to use, servicing and eventually disposal. The journey includeddeveloping the specification, the design stage, and the process of transforming raw materials orcomponents into subassemblies and structures.

The Lean approach was centred on gaining a deep understanding of what the customer needed.Then finding ways to deliver it at a price the customer could afford. In fact, thinking about it, herecognised that despite the obvious differences the core processes of manufacturing andconstruction were in fact very similar involving:

Perhaps, Lean was closer to his situation than he had first thought? He acknowledged that whole-life value was difficult to “see” even in simple construction projects. And the complexity of mostmajor projects was such that the value stream was invisible to most: they had no way of knowing ifwhat they were doing was directly and measurably creating value for the client.

However, he knew that Lean Thinking encouraged differentiation between activities that genuinelyadded value and those that did not, ie waste.

Work in projects was mostly sequential, with the designers handing over to the constructors, theconstructors handing over to the client and then the client handing over to the end user. It was rarethat the constructors took real interest in how the facilities management would be handled and soseldom closed the loop back to the designers. He remembered a scheme where the mechanical andelectrical system had been built into a basement from which it could not be removed or replacedbecause the access pathways were too small.

Having a focus on end-to-end creation of value by all parties involved was a really significant shift inperspective, he thought. In his company, like so many others, he worked to his financial plan, andoften this conflicted with others in the business – let alone those outside it. In the past, he had infact actively encouraged each part to win while the whole lost out. He started to think of all the time

ConceptDetaileddesign

Prototyping Building Servicing Disposal


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and energy he spent on internal arguments, finding ways to work around the system or simplytrying to survive within it. “What a huge waste!”, he said out loud.

It dawned on him how Lean required a fundamentally different way of thinking about work andthe way it is designed, specified and completed. He was now acutely aware of the waste generatedwithin and between the individual steps in the process, and how common it was for him and othersto have to stop and sort those problems out as they arose, work that only gave short-term or one-offgains.

The idea of the value stream actually meant that doing so frequently caused further problems. Asthere was little regard to what was happening up or down stream, let alone elsewhere in thebusiness. There was little appreciation for the whole system or, indeed, the longer term.

Naturally, Steve didn’t create waste on purpose. He was just trying to do his job, but his approach todate had left him largely blind to these effects. How many others were thinking and acting in thesame way and missing the opportunity as a consequence?

FlowSteve remembered vividly a senior management team tour a few years ago at a major airportterminal that was undergoing refurbishment. “Where are all the people?”, the chief executive askedthe project manager. “I expected to see more people to get this job done quickly.” The CEO’sperspective was the usual way of understanding how work is done, namely more people meansmore activity and a swifter move to completion.

The project manager was used to this and calmly asked if he could talk through his particularapproach. They gathered in the onsite project office where he spoke at length about how they hadlevelled the “flow” of work across the project, and how they had looked at the whole and plannedwork on the counterintuitive basis of smoothing, and at times actually slowing, the “flow” ofresources, information and people on or around the construction project. The team had put mucheffort into planning the timing and co-ordination of all the work.

The project manager said that if they did put more people on the job, it would actually slowprogress while increasing cost. The chief executive was sceptical but took on board what the projectmanager said and, in the end, he did get what he valued: work completed within a strict timescale.

How does flow apply to the design function? Steve pondered. The flow here was information, oftenin the form of drawings produced to a schedule, and the information was then pushed out by thedesign team leader. Change control was focused on scope and payment. In a desire to be helpfulthe design team often took pragmatic decisions to selectively release information as early as possible.

He knew how the individual disciplines that made up the value creation stream worked in silos andhow it was often a feat of considerable dexterity to integrate the various production schedules.

“Good! I think I’m beginning to see things more clearly now,” he thought. He stopped for a coffee.

At the “pull” of the customerWhen he got back to his office, he wanted to examine the principle of “pull” further. Work was tobe “pulled” by the next process, ie those upstream from those downstream. This led to a situationwhere only what the client demanded was produced one “piece” at a time. It was a way ofmanaging “backwards” from the end. It meant organising systems and processes to design anddeliver value as the customer defined it and “pulled” it.


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But wasn’t that what project management was all about? There, you start with defining scope, timeand cost constraints, and plan back by task and activity to the beginning of the project. Steve knewthat this was true of the overall outcome of the project. Experience had shown that it was less likelyto happen as you progressed down the supply chain.

He only had to take a trip out to one of his sites to see piles of materials waiting to be used andlabour often involved in fixing problems that had arisen elsewhere. How much of that activity wasactually value-adding when viewed from the client’s perspective?

Project plans perfectly described the task durations and dependencies. They set start, duration andcompletion times for activities, and his teams managed the project by review of progress againstthese. He began to see that although projects were planned from the end – each step was invariablymanaged forwards.

It was as if the project manager were pushing the whole project towards completion. The urge tostart a task early often ruled, in a misconceived helpfulness to provide as much time as possible foreach following task, rather than being governed by whether the next step had the capacity toreceive it. The principle of “pull” meant finding the right timing so that each stage worked atoptimum capacity and the whole was synchronised to deliver smoothly at maximum efficiency.

Steve remembered a site where he had found several pallet loads of fire doors stacked up, some ofwhich had been damaged by movement, and seeing two static cranes nearby. Being ahead ofschedule on previous stages, the curtain-walling team had pushed their work programme, with theintent of saving time and money. This had inadvertently prevented the fire doors from being slungon to the correct floors by the cranes as planned, resulting in extra costs that more than outweighedany savings.

Pull-based systems allow work to the next stage based on the speed of the whole value stream,whether project or business activity, to be smoothed. Within a system as a whole, key constraints orbottlenecks often arise at particular stages, just as traffic flow is adversely affected by an accident. Inpull-based systems, the team are vigilant about identifying those constraints and finding ways toovercome them – before they arise.

This was something that push-based systems could help with, and Steve concluded that acombination of push and pull systems would be needed. Balancing these systems explained whydetailed collaborative planning was so essential to Lean. The advantage of having suppliers andpartners knowing not only what and when things need to be prepared and delivered but why,seemed clear enough. Through collaborative planning they could help identify constraints andbottlenecks and help manage the overall pull and flow. This built shared understanding of theireffect on the overall project and enabled suppliers and partners to synchronise the rhythm of theirwork.

Steve also knew that a high degree of trust was required. How can this be created when everyonehas different drivers and mindsets? The construction environment was not conducive to this,particularly since contracts and internal company drivers were seldom aligned.

Trust isn’t built in a day. If it is to remain as people change it has to be a feature of the way of doingthings. Not a small task, but he knew that long-term supply chain integration would help. On itsown it was insufficient, though.

“OK,” he thought, “Lean is a way of thinking across the whole value stream and not a series of adhoc one-off improvement events. So far, so good. Now what?”


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Perfection“Wouldn’t we all like to be there?”, Steve thought. “What might ‘perfection’ look like from acustomer perspective?” Ideally the customer would like exactly what they wanted, for nothing, rightnow. He wrote down a short form that he had seen somewhere:

The goal of perfection kept everyone’s eyes sharply focused on improving value across the wholevalue stream. This was not the case with isolated or siloed improvement efforts. What would histeam say if he asked them how focused they were on achieving “perfection”?

Some bright spark would surely respond with a “you’re joking, right”? He very much doubted thatthey would reply “…that the right people were always doing the right thing right at the right time”.

It dawned on Steve, how much his own growing understanding of Lean had already changed hisview of value, and how a genuine understanding of value led to a genuine understanding of whatwasn’t of value. He turned again to the five principles of Lean Thinking, beginning to see moreclearly now how they applied to construction.

“Perfection – continually striving to do better. Now I do like the sound of that!”, thought Steve.

Refe

renc

es a

nd fu

rthe

r rea

ding 1 WOMACK, J, JONES, D and ROOS, D (1981) The machine the changed the world – the story of Lean production,

HarperCollins, London (ISBN: 978-0-06097-417-6)

2 WOMACK, J and JONES, D (2003) Lean Thinking – banish waste and create wealth in your organisation, new edition, FreePress, Simon and Schuster, UK Ltd, London (ISBN: 978-0-74323-164-0)

3 LATHAM, M et al (1994) Constructing the team: Final report of the Government/industry review of procurement andcontractual arrangements in the UK construction industry HMSO, Department of the Environment, London (ISBN:978-0-11752-994-6)

4 EGAN, J et al (1998) Rethinking construction, The report of the Construction Task Force to the Deputy Prime Minister,John Prescott, on the scope for improving the quality and efficiency of UK construction, Department of Trade andIndustry, London (ISBN: 978-1-85112-094-9)

5 BRE SMARTWaste: <www.smartwaste.co.uk/>

6 LIKER, J (2004) The Toyota Way: 14 management principles from the world’s greatest manufacturer, reissued edition, McGraw-Hill Professional, UK (ISBN: 978-0-07139-231-0)

7 SEDDON, J (2003) Freedom from command and control, Vanguard Consulting Ltd, Buckingham, UK (ISBN: 978-0-95461-830-8)

Value: understanding what the client wants in terms of time, cost, quality.

Value stream: identifying the hierarchy of processes required to deliver what the client wants, butrecognising that individual steps may, or may not, add value.

Flow: looking at the process steps holistically, understanding dependencies, balancing resources andplanning work to avoid delays, rework etc particularly at interfaces.

Pull: recognising that each step is not just an end in itself, but an input to the next stage, which needs tobe delivered at the right time, quantity and quality.

Perfection: continuously striving to be better.

Free–Perfect–Now


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Customer focus

2

Over his morning coffee the next day Steve was still pondering the idea of learning to focus onvalue to the client and not to do anything else. The immediate barrier was obvious and it was one thathe and others had wrestled with throughout his lengthy career: how to define “customer” and “value”.

Steve ran through the various functions with direct client contact. We have “key accounts” teamswhose task it is to understand and service their strategic clients better. We regularly measurecustomer perception and track “relative perception strength”. It was considered to be market-leading, and it involved conducting in-depth interviews with people across client organisations. Theresults went to the board and were cascaded throughout the organisation. It had a noticeable effecton those who were close to particular clients. It had less of an effect in terms of actually changingworking practices and core behaviours on projects than they anticipated and hoped for.

We also have a marketing and bid team supporting their bid leaders. They invest in improving theirbid process to bring about more client focus and creativity. Yet, all too often, their starting pointremained the built-in assumptions contained in the Invitation to Tender (ITT).

And did they really find out what mattered most to their clients? Or did they simply respond to theITT? Steve now understood that he had always assumed that at the heart of customers’requirements was a simple “cost–quality–time” triangle.1

But had they asked them and really listened to the customer with the intent to do somethingradically different? Did they even really know who the customer was? In one of his books he hadcome across: “Lean is premised on developing a clear understanding of who the customer is andwhat they value”.2

In the long tortuous supply chains of the construction sector, that was often not so clear. Stevedecided to get some clarity into his thinking and his language. Let’s start with “who is a client andwho is a customer?”, he thought. Leafing through his notes he realised that, by and large, he hadalready answered this question. So:

If truly understanding the clients or external customers was problematic at times, Steve waspainfully aware that understanding and servicing the “internal” or supply chain customer was alien.

People simply didn’t see their colleagues, or worse yet suppliers, as customers who made deliveringvalue possible. He thought of the frequent battles between different budget holders, or between

The customer is the next person in the value stream.

The client is the recipient at the end of the value chain who ultimately funds the project. The client maywork on behalf of the end user who ultimately uses the asset.


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designers and project managers. These fights delivered little value from a client perspective yet costboth time and money. Yet, he thought, wasn’t this part of the waste? How can we align our efforts tovalue, and avoid tripping over each other?

Next customer principleSurely to go Lean meant everyone getting a sharper customer focus. This might be allied to astrategically planned and executed move up the “value chain”3,4 so they could influence decisionswhen they made the difference – in the earliest stages. Doing so, they could become trustedadvisors, helping their clients realise their business goals. There was a win-win in that. It meantthinking of ways of starting relationships with clients and suppliers at earlier stages and extensivelyworking with them to determine what value was needed and how to deliver it.

Why did it so readily go wrong? It seemed imponderable but Steve decided that rather than try tounderstand it from his perspective it would be a good idea to get a client’s view. The frequent jobcycling in the sector was such that he had contacts in many clients who had previously worked foror with him. Maybe a few calls would produce some new insights?

When he put down the phone after the last call to his contacts, he almost regretted it. The feedback,though gently and quietly stated, was shaming. All his contacts stated that barriers5,6,7 included thefact that many people saw themselves as the professionals who knew best what was required. Theyfocused largely on the technical solution rather than deeply exploring the business needs of theclients.

At the extreme, some simply didn’t listen to what informed clients were suggesting at all or, if theydid, gave it only scant attention just to be seen to be doing the right thing. Some reported that thistype of “game playing” sometimes got so bad that it seemed to be a core skill.

One of his contacts worked for a national housebuilder who retold a story all too typical. Thisparticular organisation had undertaken an investigation because among owners of new houses theyhad both an apparent high level of customer satisfaction – ratings of up to 96 per cent – and yetrising numbers of home-owner complaints. There was an average of two complaints per house,resulting in visits by the after-sales team to rectify problems. It didn’t make sense.

An examination of the occupier satisfaction forms showed that they were completed by new owners,generally within 10 days of moving in. The questions were based around the customer answering“yes” or “no” to a range of specific questions, with a comments section for anything else. Paretoanalysis revealed that the majority of complaints were about doors and poor fitting. The commentssections identified problems with the doors but the satisfaction reports were only based on analysisof the yes/no answers. When the questions were rephrased, adding specific questions about doors,the satisfaction levels dropped to as low as 50 per cent.

The after-sales team regularly sent out a fitter to a house where a new home owner hadcomplained, to inspect and, if necessary, re-hang the incorrectly fitted doors. It took the fitter anaverage of an hour including travel, preparation and clean-up at an average cost of £15 per door.As they were building 5000 houses a year and rectifying up to 10 000 doors it was £150k perannum straight off the bottom line.

In the business review that followed, it was discovered that the joiners had been given a standardwork time of eight minutes to hang a door, which included making the recess in the door jamb forthe hinge. The joiners were all skilled craftsmen and measured the jamb and cut the recess by rulerand eye – the way they had always done it. The problem was that the doors coming from the


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manufacturer had the hinges pre-fitted and neither the factory nor the joiners were using any formof jig or fixture (let alone the same measure). As a result, one out of every two or three doors didnot fit properly and the joiners did not have enough time to prepare or rectify any problems, sothey left them for the after-sales team to sort out – when the occupier complained.

The Lean answer was to solve the problem at its root cause by standardising the door hinge fitting andremoving the failure by eliminating the need for onsite rebating of the hinge. If a process could be“error proofed”, it would be more likely to withstand the variation that individual workers will cause.

The failure in customer value was everywhere. As a consequence, the client and end users all lostout because:

� the manufacturers hadn’t identified the fitters as the customer

� the fitters hadn’t identified the manufacturers as customers

� the after-sales team hadn’t identified the fitters or manufacturers as customers

� the business managers hadn’t identified the shareholders as the customers

� none of them had really focused on the end user/occupier – they were all just doing their bit inisolation.

It was clear to Steve that every time there was a variation from defined value (in terms of time, costor quality) there was hassle and it cost someone time and money. Focusing on the real andperceived needs of the customer, and aligning the activities of all involved behind it, would lead to a“right first time” approach.

Could “flow” of people, materials and processes be set up to deliver exactly what the customer – thenext person in the value chain – requires? Could the whole team be focused on delivering what theclient wants and needs and nothing else? Could this “customer value focus” flow through the entirevalue chain and within the whole business?

From his client conversations he knew that it wasn’t just one-sided though. Often, many importantdecisions had been taken by the client and/or end user, even long before any of his design teamsstarted work on a project. Much of the work of the marketing, key account and bid teams focusedon identifying new opportunities and responding to invitation to tenders that already containedmany assumptions.

Voice of the customerHow could they shift the focus of the client to openly discuss and review their wants and needs too?How could they translate that customer focus into a “voice” that communicated clearly andexplicitly the critical outputs that they had to deliver?

We need a method of identifying and prioritising customers’ needs and wants. He felt that it shouldinclude a combination of qualitative and quantitative research techniques, to help identify unmetneeds, both articulated and unarticulated. He explored this a little more and found successful“voice of the customer” initiatives8–15 included:

� clearly defined business objectives and focus

� measurements to determine whether an idea is worth pursuing

� a suitable balance of qualitative and quantitative research methodologies to uncover andprioritise needs, both stated and latent

� the capabilities to develop and deliver these needs with no waste.


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Something was missing though. It became clear to Steve that their clients were often just as badwhen it came to developing an understanding of what their end users valued, and this was reflectedin the prescription of a solution in the Invitation to Tender (ITT). This constrains the level ofinnovation or efficiency that we as a supplier can provide to the end user. In some cases, the clientwas only able to say what they didn’t want when it had been created. And rework was frequent as aresult. All a waste!

The design team and commercial advisors too play a crucial role here. They have considerableinfluence and responsibility in helping clients clarify their wants and needs. He went off to seePeter, his design team leader. Peter had strong views on the topic that he wrote up and sent to himover the weekend:

The role is clear. The designer and commercial advisor provide the bridge between the client and theconstructor. To be the bridge, a solid grasp not only of what to build but also of how to build it is a must. Whenwe are working with clients, we capture, translate and secure the client’s requirements as clearly and simply aspossible, often helping the client and any end users to differentiate between wants and needs as well as helpingthe client focus on their customers’ and end users’ perspective of value. Often we are the custodians of the voiceof the customer.

Production and construction requirements are often missed or simply misunderstood, separated as we arebetween design and construction. This is a source of waste, as is poor consideration of constructability. Therecent moves towards integrating design and construction teams and processes are having a positive effect withreductions in lead times of around two-thirds. Yet my feeling is that there is a long way to go before we are allexpert consultants and quality is reliably improving by the same margins. It seems possible though. Converselyease of construction that reduces customer value is also wasteful. Building the processes in the design office toachieve this means that knowledge sharing and corporate learning has to be systematic and progress far beyondreliance on individual experience.

The commercial team needs to align its own and its client’s thinking to ensure that decisions taken support aLean approach, looking at the totality of cost and opportunities for waste removal globally or cumulativelyrather than supporting and guiding suboptimal decisions that appear to save money only to waste it in the longrun. They need to distinguish between today’s value – what the customer is willing to pay for today – fromfuture value, and to help clients make informed tradeoffs, and establish ways for savings or other benefits tobe passed on to the right actors in the process and ultimately to the client. This means that “wasted” time indeeply understanding client and end user needs may not in fact be wasteful. How the direct costs of suchactivities are structured can properly be determined once a Lean philosophy has been adopted.

So the design and commercial processes, tools and mindsets are also ripe domains for a Lean approach.Considerable work has been undertaken in design for manufacture and assembly (DFMA)16 and designingout waste to landfill17, so what about a Lean design for construction approach? This would need to preciselydefine needs and wants, translating these into specifications and processes that can be built with error proofingand nil waste, communicating these consistently throughout. Technology and tools may help but fundamentallyit’s a mindset issue. We need to see ourselves as vital to the Lean agenda not above it.

Steve emailed Peter back thanking him for sharing his views so candidly.

A need for good clients“So what makes a good customer?” It seemed to be a logical question that went beyond anyrelationship issues or payment terms and conditions. Does the client know how to articulate theirneeds and wants, early enough and clearly enough, to support Lean? It was something that he hadoften thought about. What were the characteristics that he needed to cultivate to improve clientship?


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The following afternoon, Steve called a friend who he knew had been working on this question.Matt worked in the R&D department of a large multinational. “Hi, Matt here” came the strains ofthe US accent at the other end. After a brief catch-up, Steve asked Matt if he could send him anyinformation or guidance about good clientship and how this could drive improvement. “Let me jotdown a few thoughts and I’ll email them to you,” he said.

In his message, Matt wrote “I don’t think I’ll get into too much trouble if I let you into a fewsecrets…

We adopted this idea of the voice of the customer but we extended it a little. In every decision taking session orworkshop where we are deciding on how to deliver value, we try to make sure that the real client is present. Ifthey can’t be – and in the kind of work we do they often can’t – we find someone from our side who is as closeto their mindset as possible, someone from, say, the key account team who has worked with them for a long time.Then we ensure that they have the following attributes and display these characteristics18,19:

� they have a clear understanding of the desired goals and “content” of the outcome. They can act as thevoice and mind of the customer in decisions about shape, form, function and fitness for purpose

� they are genuinely interested in the client and the end user’s needs, hopes and desires

� they are aware of the decisions needed at each stage of the process. They are willing to learn andunderstand the processes needed to get to the goals at a level of detail to help guide the team, and not totell them what to do and how to do it

� they are willing to assume responsibility for their decisions. It’s no good having someone making majordecisions when they can’t carry the can

� they are willing to take deliberate decisions, frequently under the guidance and with the support of thewider team, but they shape the direction the team moves in

� they are open to new thoughts and insights. They don’t have closed minds about the path to be travelledor how things need to be achieved. Instead, they are willing to explore new and sometimes radical ideas

� they have good people skills and personal integrity. The team has to trust them and engage effectivelywith them.

The list isn’t comprehensive but may give you some clues.

More than some, Steve thought, as he emailed Matt back thanking him. Perhaps, it would be betterfor clients to issue “requests for information”, as they did in some other sectors.

Requests for information were calls for suggestions, recommendations and best thinking that theclient could use to aid their decision making before any tender action had started. It provided anopportunity for potential suppliers to provide innovative approaches. It could always be covered bya non-disclosure agreement if necessary, he thought. For his firm, it provided the chance to build astronger reputation and deeper understanding of the client and the opportunity for the client toreceive greater value. It could be mutually beneficial in the longer term.

Determining value20

Customers could only ever give Steve part of the formula for success. However, from a deliveryperspective the earlier that value was defined the better. Information modelling and managementapproaches had a part to play here, he thought.

Clients are primarily focused on their own business and their own needs. They may have well-developed views on the processes or activities that will take place in the facility they are


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commissioning, but they are often not experts in how to articulate these in the form of aconstruction brief. Having said that there are some expert construction clients around.

The industry was forever blaming the client. To end this blame game, Steve felt he needed a way totruly help his clients articulate their conscious and subconscious needs in reliable, repeatable waysthat built shared understanding of what value was and how it was to be delivered.

One of his contacts had pointed him at a possible solution. It was a model that helped classify andarticulate customer requirements, called the Kano model,21 which he looked up online.22 Itidentified relevant characteristics as being basic (assumed), performance (specified) and delighters.Sometimes, customers are explicit about what they value (spoken) and sometimes it is taken forgranted (unspoken).

Considering the Kano idea, Steve recognised that getting value right was about staying above theperformance curve on the model. He perceived it as a dynamic relationship between getting theprocess and the product right. This required people to be constantly aware of where they were onthe curve and to have strong clientship to provide a clear voice of the customer throughout.

Steve recalled a case study that he had heard about a few years ago. Without a partner or frameworkagreement in place, a project collaboration team was put together to design and construct a liftingfootbridge. Traditional tender arrangements were used by the client yet this didn’t stand in the wayof the team innovating. The team kept focus on the client’s needs, building on the basics andemphasising the delighters and performance aspects to deliver end user value and innovation.


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For example, the client’s initial designs involved in situ structural concrete. The team recognisedthat a consistent quality and finish were likely to be delighters for this landmark project. So toimprove the quality of the finished product they manufactured the concrete bridge modules offsiteunder factory conditions. This involved the specialist supplier adopting a next-customer approachand reconfiguring their workflow and processes delivering exactly the right modules to the teamson site at the right time to the right specification. It also led to simplified health and safety, speedand efficiency of the overall project, helping reduce the overall cost by over 20 per cent, yetmaintaining quality and programme.

Steve looked at the Kano model anew now that he could relate it to his experience. In the firstinstance, it seemed that here was a way to link value, quality and innovation to produce uniqueinsights into what clients really value. If taking a look at the operations from a worker’s perspectivewas a wake-up call, and then what would it look like when he looked at it from a client perspectivewith his fresh Lean eyes?

He summarised his thoughts:

It was all beginning to make sense.

However, a callout that evening brought the reality of the present back to him. He had to go to oneof the projects in the retail division, a major store refurbishment. In theory, it was a low-risk projectand they had a “pain–gain–share” agreement with the client.

Steve’s company was the main contractor and project manager and was responsible for the planningand management of the whole job. The plan was simple: to replace the suspended ceiling andimprove the M&E services. A team of 20 was allocated to the job and protective film was to be usedto protect stock. Work was well planned and sequenced.

Steve had gone to the site to find everyone hanging about, on double time, doing nothing. Therewas no protective film, so work could not progress. The project manager wasn’t too perturbed.When Steve spoke to him, he revealed that because his performance and fees were based on cost-plus, this delay actually worked in favour of his income on the overall project.

To the client, however, store non-availability cost about £500k per week. Also, delays like thislowered footfall and encouraged customers to try competitors. He was furious, and given the factthat Steve was there, decided to vent that frustration on him. Steve had a heated exchange with hisproject manager.

The client’s business needs were understood but the system often works against this actually beingdelivered. They hadn’t followed the next-customer principle. But surely there were two participants

� be rigorous in seeking out customer needs – identify and use a range of tools to help

� so far as possible, work upstream and collaboratively throughout

� invest the time in everyone gaining the core skills to get beyond a basic understanding and “take it asgiven” perspective to deeply understand customer needs: basics, performance and delighters

� work on the next-customer principle – no matter where this happened in the supply chain

� encourage these behaviours by creating the right environment for it to flourish

� there is a common misconception that high levels of quality cost money – in fact the opposite is truebecause poor quality costs money and quality comes free.


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in the process: the supplier and the customer? He had already explored the supplier’s role oflooking up, down and around to gather a deeper understanding of basics, performance criteria anddelighters. Then there was the client’s role of working hard to understand their stakeholder needsand articulate these clearly at the right decision points to smooth the workflows. Rework andmistakes would result if these protocols weren’t followed. It appeared that they needed to have aprocess to induct or train their clients so that they could help deliver what they wanted.

If he managed to get the next-customer principle embedded consistently, it would be a good start,he thought. Yet in most situations the “project team” might comprise many different people frommany different organisations all seeking to serve the “client”. Frequently, perspectives on what valuewas, or how best to achieve this, did not always align. He now knew that this was accomplished inLean by understanding and mapping and defining value at specific points as the project developed.At specific decision points, as late as possible in the process, each value decision had to agree andfirmly fix what matters. Clearly, this could only be accomplished collaboratively.

The alternative side of creating value was eliminating waste. Steve knew that this was what Leanhad become associated with, and now realised that Lean was much more than that. However, it stillbore examination.


Build Lean 17

Refe

renc

es a

nd fu

rthe

r rea

ding 1 PROJECT MANAGEMENT INSTITUTE (2008) A guide to the project management body of knowledge, fourth edition, Project

Management Institute, USA (ISBN: 978-1-93389-051-7)

2 PRODUCTIVITY PRESS DEVELOPMENT TEAM (2005) The Lean office – collected practices and cases, ProductivityPress, Taylor and Francis Group, London (ISBN: 978-1-56327-316-2)

3 FELLER, A, SHUNK, D and CALLARMAN, T (March 2006) Value chains vs supply chains Business Process Trends(BPTrends), USA

4 PORTER, M (2004) Competitive advantage: creating and sustaining superior performance, first edition, The Free Press, Simonand Shuster, New York (ISBN: 978-0-68484-146-5

5 WOLSTENHOLME, A et al (2009) Never waste a good crisis. A review of progress since rethinking construction and thoughts forour future, Constructing Excellence, London. Go to:<www.constructingexcellence.org.uk/pdf/Wolstenholme_Report_Oct_2009.pdf>

6 SAXON, R (2005) Be valuable. A guide to creating value in the built environment, Constructing Excellence, London. Go to:<www.saxoncbe.com/be-valuable.pdf>

7 HOLTI, R, NICOLINI, D and SMALLEY, M (1999) Building down barriers. Prime contractor handbook of supply chainmanagement, Sections 1 and 2, HMSO, London. Go to: <www.mod.uk/NR/rdonlyres/B935410C-ACA9-4F1E-B4BC-FCF91D202B93/0/supplychainhandbook.pdf>

8 BIRKINSHAW, J, BESSANT, J and DELBRIDGE, R (Spring 2007) “Finding, forming and performing: Creatingnetworks for discontinuous innovation”, California Management Review, Haas School of Business, University ofCalifornia, Berkeley, USA, pp 67–84. Go to: <www.london.edu/facultyandresearch/research/docs/SIM48.pdf>

9 HARRINGTON, R J and TJAN, A K (March 2008) “Transforming strategy one customer at a time”, Harvard BusinessReview, 12, Harvard Business School Press, Harvard Business School, USA, pp 62–72

10 NAMBISAN, S and NAMBISAN, P (Spring 2008) “How to profit from a better virtual customer environment”, MITSloan Management Review, Massachusetts Institute of Technology, USA, pp 53–61

11 SEYBOLD, P (2006) Outside innovation: How your customers will co-design your company’s future, HarperCollins, London(ISBN: 978-0-06113-590-3)

12 ULWICK, A (January 2002) “Turn customer input into innovation”, Harvard Business Review, Vol 80, No 1, HarvardBusiness School Press, Harvard Business School, USA, pp91–97

13 ULWICK, A (2005) What customers want: Using outcome-driven innovation to create breakthrough products and services,McGraw-Hill Professional, USA (ISBN: 978-0-07140-867-7)

14 YANG, K (2007) Voice of the customer capture and analysis, first edition, McGraw-Hill Professional, USA (ISBN: 978-0-07146-544-1)

15 ZALTMAN, G (2003) How customers think: essential insights into the mind of the market, Harvard Business School Press,Harvard Business School, USA (ISBN: 978-1-57851-826-5)

16 HOMES AND COMMUNITIES AGENCY (2006, 2010) Designed for manufacture. Lessons learnt 1 (2006) and 2 (2010),Homes and Communities Agency, London. Go to: <www.designformanufacture.info/images/DfM%20pub%20-%20page%20by%20page.pdf> and <www.homesandcommunities.co.uk/public/documents/DfM_LL2.pdf>

17 DAVIS LANGDON (no date) Designing out waste: a design team guide for buildings, WRAP (Waste and Resources ActionProgramme), Oxon, UK. Go to <www.wrap.org.uk>

18 ISAKSEN, S and TIDD, J (2006) Meeting the innovation challenge – Leadership for transformation and growth, John Wileyand Sons Ltd, West Sussex (ISBN: 978-0-47001-499-8)

19 BICHENO, J (2008) The Lean toolbox for service systems, first edition, PICSIE Books, PICSIE Associates,Buckinghamshire, UK (ISBN: 978-0-95412-444-1)

20 KANO, N, NOBUHIKU, S, FUMIO, T and SHINICHI, T (April 1984) “Attractive and must be quality” (in Japanese),Journal of the Japanese Society for Quality Control (JSQC), Japan, Vol 14, No 2, pp 39–48

21 WOODLEY, E G (2009) “The Kano Model: critical to quality characteristics and VOC”, Process Excellence Network,IQPC, UK. Go to: <www.SixsigmaIQ.com>

Appendix A3: The A3 Problem solving worksheetsA3.1 Identify value

A3.2 Create pull


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