What is Lean Construction?

Professor Lauri Koskela

School of the Built Environment
University of Salford
© Lauri Koskela 2008
2009
 Contents
• What is lean production?
– Whyy has it been so difficult to decode?
• What is lean construction?
– How
H iis it diff
different?
t?
• Issues of implementation
p

© Lauri Koskela 2009

 What is lean production?

© Lauri Koskela 2009

 Car manufacturing in North America

Guardian 14.11.2008
© Lauri Koskela 2009
 The question
Why does the Toyota Production System
((TPS)) p
perform better than conventional
methods of production in car manufacturing?

© Lauri Koskela 2009

 Toyota production system
(Fujimoto 1999)

1. Routinized manufacturing capability

• static & routine
2. Routinized learning capability
• dynamic
y & routine
3. Evolutionary learning capability
• dynamic & non
non-routine
routine

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 Routinized manufacturing capability

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 The seven wastes
• Overproduction
• Correction
Flow of
• Material movement materials

• Processing
• Inventory
• Waiting Human
• Motion action

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 The conventional big idea of
production

Transformation

Input
p Production Output

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 Decomposition

Materials,
labor, Production
Production
process Products
machines process

Subprocess Subprocess
A 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.

© Lauri Koskela 2009

 In manufacturing,
manufacturing the T idea leads
• to buffering for creating (relative)
p
independence between workstations,, ie.,,
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

© Lauri Koskela 2009

Sou ce
Source:
Schonberger (1996)
World Class manufacturing:
The Next Decade.
© Lauri Koskela 2009
Inventoryy turn rate Car manufacturing
is connected to
efficiency!
Note: Commitment measures
inventory in days, an inverse
concept in comparison to
in entor tturn.
inventory rn

(Holmström: Realizing Radio, tv and

the productivity
potential of speed,
speed communications
1995) equipment

© Lauri Koskela 2008

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

© Lauri Koskela 2009

 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.

© Lauri Koskela 2009

 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.

© Lauri Koskela 2009

 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

© Lauri Koskela 2009

 Moving Waiting Proces- Inspec- Moving Waiting Proces- Inspec-
tion tion
sing A sing B

Scrap

© Lauri Koskela 2009

 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

© Lauri Koskela 2009

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

© Lauri Koskela 2009

 Why time compression?

Waste
W t
time

Waste
time

Waste
time

Processing Processing Processing Processing

ti
time time time 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

© Lauri Koskela 2009

 Scientific method
• (Sh
(Shewhart
h t & Deming
D i 1939):
1939) “It may b be helpful
h l f l tto
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.”
© Lauri Koskela 2009
 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 off 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

© Lauri Koskela 2009

Source: http://www.shmula.com/wordpress/wp-content/images/shmula-5s-fishbone.png
© Lauri Koskela 2009
 Monozukuri
• ““monozukurik i means h having
i ththe spirit
i it tto 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)
© Lauri Koskela 2009
 Hitachi
Executive Officers [Effective January 1, 2007] [(b) Promotion/ (c) Change of
Position]
Etsuhiko Chairman
Shoyama

Kazuo President,
Furukawa General Manager of Supervisory Office for MONOZUKURI

Michiharu Executive Vice President and Executive Officer, in charge of

Nakamura Research & Development, Business Incubation, Hitachi Group Chief
Innovation Officer and Hitachi Group Chief Technology Officer

Takashi Executive Vice President and Executive Officer, General Manager

g of
Hatchoji Compliance Division, in charge of Corporate Planning &
Development, Legal & Corporate Communications, Management
Audit, Procurement
Takashi Executive Vice President and Executive Officer, Chief Hitachi Group
Miyoshi
© Lauri
© Lauri Koskela2009
Koskela
Headquarters, in charge of Business Development and Finance
2008
 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 d iimplementation
l t ti iin th
the W
Westt llag
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
© Lauri Koskela 2009
 What is lean construction?

© Lauri Koskela 2009

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

© Lauri Koskela 2009

 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))

© Lauri Koskela 2009

 Lean manufacturing vs.
vs lean construction

Lean manufacturing Lean construction

© Lauri Koskela 2009

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

Predicted, average output

ut
Outpu

Week 1 Week 2 Week 3

Time

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 What happens in construction reality!
Problems occurring
during the task
Problems related Problems related
to starting the task to completing the
task
Output

Time
Week 1 Week 2 Week 3

© Lauri Koskela 2009

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

Task

© Lauri Koskela 2009

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

Preceding
task

Other Task
inputs

© Lauri Koskela 2009

 Preconditions
P diti ffor a
construction task
Construction design

Components and materials

Workers
Task
Equipment

Space
p

Connecting works

External conditions

© Lauri Koskela 2009

 “Assembly” tasks
• Consider a task with one week duration,
with
ith seven prerequisites/input
i it /i t flflows
• 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 ,
© Lauri Koskela 2009
 “Solution”:
Solution : making-do
making do
• Congestion, out-of-sequence work,
p stops
multiple p and starts,, inability
y to do
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,
oversizingg of the crew.
© Lauri Koskela 2009
 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
Making-dodo is equivalent to negative buffering
buffering,
i.e. the waiting time for a part is negative

© Lauri Koskela 2009

 In construction, the impacts of T
are partly different
• A
Acquiring
ii ddesign
i b by llowestt costt lleads
d tto erosion
i off ffees
and corner-cutting in design work
• Subcontracting,
Subcontracting often multilayered
multilayered, leads to contract
management, instead of production management
• Procurement of components
p byy competitive
p biddingg 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!

© Lauri Koskela 2009

 Features of Last Planner:
recreating the ideal shape of a task
Look ahead Checking task
planning Continuous Phase completion &
improvement planning Finding causes

Making Conversation and

ready commitment
co t e t
ut
Outpu

Week 1 Week 2 Week 3

Time

© Lauri Koskela 2009

 Graña y Montero – Peru’s 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

© Lauri Koskela 2009

 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/

© Lauri Koskela 2009

 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

© Lauri Koskela 2009

 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)

© Lauri Koskela 2009

 Issues of implementation

© Lauri Koskela 2009

 Where Should Change Start?
• Gi
Given that
th t construction
t ti cannott 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 usedd everywhere,
h even iin a point
i t
wise way – but the results are increasingly better, the
gg the area of application
bigger pp

© Lauri Koskela 2009

 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
• Liker’s 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: Graña y Montero (Peru),
Hitachi (Japan)

© Lauri Koskela 2009

 Thank You!

Questions?
Comments?

© Lauri Koskela 2008

2009