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Historical development
Lauri Koskela, in 1992, challenged the construction management community to consider
the inadequacies of the time-cost-quality tradeoff paradigm.[2] Another paradigm-breaking
anomaly was that observed by Ballard (1994[3]), Ballard and Howell (1994a[4] and 1994b),
and Howell (1998). Analysis of project plan failures indicated that "normally only about
50% of the tasks on weekly work plans are completed by the end of the plan week" and that
constructors could mitigate most of the problems through "active management of
variability, starting with the structuring of the project (temporary production system) and
continuing through its operation and improvement," (Ballard and Howell 2003[5]).
Evidence from research and observations indicated that the conceptual models of
Construction Management and the tools it utilizes (work breakdown structure, critical path
method, and earned value management) fail to deliver projects 'on-time, at budget, and at
desired quality' (Abdelhamid 2004). With recurring negative experiences on projects,
evidenced by endemic quality problems and rising litigation, it became evident that the
governing principles of construction management needed revisiting. One comment
published by the CMAA, in its Sixth Annual Survey of Owners (2006), pointed to concern
about work methods and the cost of waste:
"While the cost of steel and cement are making headlines, the less publicized failures in the
management of construction projects can be disastrous. Listen carefully to the message in
this comment. We are not talking about just materials, methods, equipment, or contract
documents. We are talking about how we work to deliver successful capital projects and
how we manage the costs of inefficiency."[6]
A new paradigm
Koskela (2000)[7] argued that the mismatch between the conceptual models and observed
reality underscored the lack of robustness in the existing constructs and signaled the need
for a theory of production in construction. Koskela then used the ideal production system
embodied in the Toyota Production System to develop a more overarching production
management paradigm for project-based production systems where production is
conceptualized in three complementary ways, namely, as a Transformation (T), as a Flow
(F), and as Value generation (V).
Transformation is the production of inputs into outputs.[7]
Flow can be defined as "Movement that is smooth and uninterrupted, as in the 'flow
of work from one crew to the next' or the flow of value at the Pull of the
customer."[8]
Value is "What the Customer is actually paying for the project to produce and
install."[8]
Koskela and Howell (2002) also presented a review of existing management theory
specifically as related to the planning, execution, and control paradigms in project-based
production systems. Both conceptualizations provide a solid intellectual foundation of lean
construction as evident from both research and practice (Abdelhamid 2004).
Recognizing that construction sites reflect prototypical behavior of complex and chaotic
systems, especially in the flow of both material and information on and off site, Bertelsen
(2003a and 2003b) suggested that construction should be modeled using chaos and complex
systems theory. Bertelsen (2003b) specifically argued that construction could and should be
understood in three complimentary ways:
As a social system
"One can think of lean construction in a way similar to mesoeconomics. Lean construction
draws upon the principles of project-level management and upon the principles that govern
production-level management. Lean construction recognizes that any successful project
undertaking will inevitably involve the interaction between project and production
management." (Abdelhamid 2007)
Lean construction supplements traditional construction management approaches with
(Abdelhamid 2007): (1) two critical and necessary dimensions for successful capital project
delivery by requiring the deliberate consideration of material and information flow and
value generation in a production system; and (2) different project and production
management (planning-execution-control) paradigms.
While lean construction is identical to lean production in spirit, it is different in how it was
conceived as well as how it is practiced. There is a view that "adaptation" of Lean
Manufacturing/Production forms the basis of Lean Construction. The view of Lauri
Koskela, Greg Howell, and Glenn Ballard is very different, with the origin of lean
construction arising mainly from the need for a production theory in construction and
anomalies that were observed in the reliability of weekly production planning.
Getting work to flow reliably and predictably on a construction site requires the impeccable
alignment of the entire supply chain responsible for constructed facilities such that value is
maximized and waste is minimized. With such a broad scope, it is fair to say that tools
found in Lean Manufacturing and Lean Production, as practiced by Toyota and others, have
been adapted to be used in the fulfillment of Lean construction principles. TQM, SPC, sixsigma, have all found their way into lean construction. Similarly, tools and methods found
in other areas, such as in social science and business, are used where they are applicable.
The tools and methods in construction management, such as CPM and work breakdown
structure, etc., are also utilized in lean construction implementations. The three unique tools
and methods that were specifically conceived for lean construction are the Last Planner
System, Target Value Design, and the Lean Project Delivery System.
If the tool, method, and/or technique will assist in fulfilling the aims of lean construction, it
is considered a part of the toolkit available for use. A sampling of these tools includes: BIM
(Lean Design), A3, process design (Lean Design), offsite fabrication and JIT (Lean
Supply), value chain mapping (Lean Assembly), visual site (Lean Assembly); 5S (Lean
Assembly), daily crew huddles (Lean Assembly).
The common spirit flows from shared principles:
The differences in detail flow from a recognition that construction is a project based
production where the product is generally a prototype.[citation needed]
The priority for all construction work is to:
1. Keep work flowing so that the crews are always productive installing product
2. Reduce inventory of material and tools and
3. Reduce costs[9]
While lean constructions main tool for making design and construction processes more
predictable is the Last Planner System (see below) and derivatives of it, other lean tools
already proven in manufacturing have been adapted to the construction industry with equal
success. These include: 5S, Kanban, Kaizen events, quick setup/changeover, Poka Yoke,
visual control and 5 Whys (Mastroianni and Abdelhamid 2003, Salem et al. 2005[10]).
ConsensusDocs300 is a derivative of IFoA. ConsensusDocs offers contracts on TriParty Agreement for Integrated Project Delivery, Building Information Modeling
(BIM) Addendum, and Green Building Addendum projects.
In Australia, the Lean Construction Institute has collaborated with the Alliancing
Association of Australasia (AAA) around the topics of alliancing agreements and
collaborative contracts.[18]
Other papers explain Integrated Project Delivery (IPD) and IFoA.[13][14] PPC2000, IFoA and
'alliancing agreements' were among the topics discussed at the 'Lean in the Public Sector'
(LIPS) conference held in 2009.[19]
and detailed process-based toolset was published in 2000 as the 'Building Down Barriers
Handbook of Supply Chain Management-The Essentials'. The project demonstrated very
clearly that lean thinking would only deliver major performance improvements if the
construction sector learned from the extensive experience of other business sectors. Lean
thinking must become the way that all the firms in the design and construction supply chain
co-operate with each other at a strategic level that over-arches individual projects. In the
aerospace sector, these long-term supply-side relationships are called a 'Virtual Company',
in other business sectors they are called an 'Extended Lean Enterprise'.
The UK 'Building Down Barriers Handbook of Supply Chain Management-The Essentials'
states that: 'The commercial core of supply chain management is setting up long-term
relationships based on improving the value of what the supply chain delivers, improving
quality and reducing underlying costs through taking out waste and inefficiency. This is the
opposite of 'business as usual' in the construction sector, where people do things on project
after project in the same old inefficient ways, forcing each other to give up profits and
overhead recovery in order to deliver at what seems the market price. What results is a fight
over who keeps any of the meagre margins that result from each project, or attempts to
recoup 'negative margins' through 'claims', The last thing that receives time or energy in this
desperate, project-by-project gladiatorial battle for survival is consideration of how to
reduce underlying costs or improve quality'.