UNIT I

Introduction
Introduction and overview of the construction project management - Review of Project
Management & Productivity Measurement Systems - Productivity in Construction - Daily
Progress Report-The state of the industry with respect to its management practices -construction
project phases - The problems with current construction management techniques.

1.1 Construction Project Management

Construction project management involves directing and organizing each part of the project life
cycle, from ideation to completion. It’s a holistic practice with the goal of delivering projects on
time and under budget. Construction project management is a complex discipline that requires
addressing many important concerns, including cost control, scheduling, procurement, and risk
assessment. Project managers interact with all team members involved in a construction project,
from architects to owners to contractors

Who’s Responsible for Construction Project Management?

Construction project management involves team members from financial planners and C-suite
executives to contractors, engineers, on-the-ground crew members, and others. None are as
critical to the process, however, as the project manager. The role of project manager may be
filled by a contractor, an owner who handles projects in-house, or even a dedicated construction
manager.

The project manager’s goal is to ensure the entire construction process goes smoothly and
according to plan. They’re responsible for maintaining a tight schedule, staying within budget,
allocating resources, avoiding scope creep, and ensuring quality. They assess risks in real time
and keep stakeholders informed. By centralizing information and streamlining communication,
the project manager enables efficient processes that otherwise wouldn’t be possible.

5 Stages of Construction Projects

Understanding the five major stages of construction projects is a must for successfully managing
them.

1. Planning and Development

Determining whether to pursue a project is the first and most important part of the construction
process. Halting projects after they’ve begun is costly, and the further they progress, the greater
the potential losses become. Feasibility studies, capital budgeting, pro-con lists, and extensive
input from stakeholders are staples of this stage.

2. Design

Once you’ve decided on a project, it’s time for the creative juices to start flowing. The design
phase involves developing everything from the basic concept of the project to detailed blueprints
that show the final design. Your design will evolve from initial sketches to finished drawings and
specifications, but each iteration should meet the project’s requirements while keeping the
timeline in mind and costs under control.

Once the design is finalized and approved, it’s time to move on to the preconstruction phase.

3. Preconstruction

Preconstruction involves creating a roadmap that will guide you through the construction
process. It’s about building a game plan for the project that shows everyone what they need to
do, when they need to do it, how they should accomplish it, and what it should cost. If all parties
stick to the plan and execute their roles to perfection, they’ll deliver the project on time, to
standard, and within budget.

Presconstruction involves a wide variety of critical tasks. Here are a few of the most important:

• Define and allocate resources.

• Set up mini-budgets.
• Create timelines and deadlines.
• Distribute tasks.

Map out work and operations through work breakdown structures (WBS), organization
breakdown structures (OBS), and other tools.

Risk assessment and contingency planning are also a major part of preconstruction. Things rarely
go just as planned during a construction project — often due to factors outside your control — so
project managers and stakeholders must prepare for things going awry. The more proactive you
are, the less time, money, and resources you’ll lose trying to get back on track if and when
hiccups occur.

4. Procurement

Procurement encompasses sourcing, purchasing, and transporting the materials and services you
need to complete a project. Procurement and supply chain managers should provide input in the
planning stages to keep unexpected cost overruns to a minimum during this stage. Even so, some
volatility is inevitable, as prices are subject to shifts in the market. You should account for this
risk to the extent possible through robust preconstruction planning.
There are benefits and drawbacks to sourcing materials from local, regional, or global markets.
Local procurement may take less time, but it may come at a greater cost, while less expensive
materials shipped over long distances may be more subject to delays and supply chain
interruptions. Engage in thorough research so you can choose the right options to meet budgetary
requirements and stay on schedule.

Choosing when to perform procurement is another major decision. Rather than completing
procurement before the construction project begins, you can obtain the resources you need as the
project progresses to meet evolving requirements. While this strategy provides additional
flexibility, reduces holding costs, and preserves liquidity, it risks delayed shipments or shortages
that may slow the entire project. It also exposes you to potential price increases. Whatever
approach you choose, try to align purchase orders with your construction plan and have
contingencies in place to preserve your budget and schedule as circumstances change.

5. Construction

You’ve made your plan, everyone knows what their jobs are, and you have the resources you
need to get started. Now construction can commence. All your preparation and planning pays off
in this stage, helping the construction process move along smoothly and finish successfully.
Even the most thorough plans can’t anticipate every hiccup along the way, of course, so regular
monitoring and evaluation of progress during this phase is vital for staying on course.

When you have to make adjustments due to new circumstances or goals, change management
comes into play. Project managers must adapt as needed while remaining within the parameters
of the project’s plan. Look for a change management solution that can help analyze the impact of
changes and minimize their impact on the project.

What is productivity in construction?

In construction, productivity describes how efficiently a business works. To measure

productivity, construction companies closely monitor progress and assess the amount of labor
they can typically complete in a given time period.

Because productivity is directly tied to profitability, many businesses invest in production

tracking tools and develop strategies to optimize their processes and increase work output.

How to measure construction productivity

There are many different ways to measure productivity in the construction industry. No matter
what method you use, the goal of production tracking in construction is to determine whether or
not your team is working at a cost-effective and time-efficient rate.
To start, construction companies will look closely at the following metrics:

• Costs
• Labor input
• Material input
• Capital input
• Energy input
• Indirect costs

After recording all costs, work hours, and use of resources in a set time period, the business will
compare these numbers against work completed to determine their level of productivity. They
will likely combine several different data points for a more comprehensive assessment according
to how the business operates.

For example, an electrical contractor may find that, on average, their team takes 65 work hours
to rewire each 1200 square ft. of a building. They can then determine if any issues are impacting
this number and implement strategies to resolve them. Later, they can conduct another
assessment to see if those numbers have changed.

Businesses can track productivity on micro and macro levels, meaning they may focus solely on
one project at a time, or even one stage of a single construction project. Or, they may measure
productivity across multiple projects at once.

The productivity problem in the construction industry

The construction industry historically struggles with productivity.

A 2023 report by the University of Chicago’s Becker Friedman Institute for Economics found
that, despite overall economic growth, construction productivity has been in decline for the past
several decades.

The report states that while the U.S. economy in general has seen an increase of value added per
each full-time (or equivalent) employee, construction has experienced the opposite. Since 1950
through 2019, the amount of value provided by each full-time worker in construction has steadily
decreased.

It can be difficult to determine the actual productivity levels of construction companies as a

whole, because there are so many different ways to measure value and efficiency. The Bureau of
Labor Statistics describes the difficulty of assessing productivity across the entire industry. A
2022 report on the Bureau's website states, “The main challenge to measuring output is that
construction projects differ widely in characteristics and features.”
However, the Becker Friedman Institute is confident the statistics are clear. They write, “The
productivity struggle within the construction sector is real, and not a result of measurement
error.” And, many businesses see the statistics in action.

Productivity is not a new problem for contractors. In 2017, McKinsey Global Institute released a
report with similar findings, stating that gross value added per each hour worked in construction
had declined even as value per hour worked in other industries like manufacturing was rising.

But, despite the discouraging numbers, there is hope. MGI’s report offered solutions for
reworking industry frameworks and managing risks that affect productivity.

Because productivity itself and the way you measure it will differ greatly from business to
business, construction companies need to look inward to assess their individual issues and reach
resolutions.

Factors affecting construction productivity.

Many internal and external factors affect construction productivity. Any type of delay or change
in scope may negatively impact the project budget or schedule.

Some of the most common factors affecting construction productivity are:

• Safety violations
• Quality issues
• Supply chain delays
• Poor weather conditions
• Labor shortages
• Job complexity

Safety violations

A safer jobsite is a more productive jobsite. When the work area is clean, clear, and free of
hazards, your crew can work more efficiently with less interruptions.

Establish and enforce good safety practices to improve productivity and help your team focus on
project-related tasks.

Quality issues

Rework is another common reason for delays in construction. Miscommunications, design errors,
and other often preventable mistakes lead to quality concerns that need to be resolved before the
project can be completed.

You can reduce the likelihood of rework by proactively monitoring for these issues.
Supply chain delays

You may not always get the materials and equipment you need on time. Supply chain issues can
be unpredictable.

When materials aren’t available for a specific task, other dependent tasks may also be delayed.
It’s important to track your resources.

Poor weather conditions

Extreme weather conditions can prevent work from proceeding as scheduled.

Depending on the location of the project and the time of year, you may need to build time for
weather concerns into the work schedule.

Labor shortages

There is currently an industry-wide labor shortage in construction. If you’re short-staffed, you

may not be able to work as efficiently as you could normally.

The exact skills, experience, and qualifications of your crew will also affect productivity.

Job complexity

Certain projects are more inherently risky than others. Productivity is more difficult to predict
when the job is especially large, complex, or dangerous.

Assessing the risk level of a job will help you determine whether or not you should expect a
change in your average productivity levels.

How to improve construction productivity

With all the factors that impact how efficiently you work, improving—and even maintaining—
productivity in construction can be difficult.

These tips will help you mitigate risk factors and make sure your team stays as productive as
possible.

• Be thorough in the planning and design stages

• Provide adequate training to employees
• Focus on safety
• Follow best supply chain management practices
• Use construction productivity software

1. Be thorough in the planning and design stages

Investing extra time in the pre-construction phase of a project is one of the best ways to prevent
inefficiencies later on.

Creating a project budget and schedule are critical tasks that require great attention to detail. Use
historical data to plan projects as accurately as possible based on your team’s past performance.

You should also make sure to review all designs thoroughly before the construction phase begins
to catch errors that could lead to disputes or quality issues.

2. Provide adequate training to employees

Every business uses different processes. Without adequate training, your employees may fail to
adopt optimized workflows, creating unintentional roadblocks.

Make sure your employees fully understand the procedures you use for completing work,
monitoring safety, and communicating in the field. Empower them to implement the strategies
you’ve created from the top down.

3. Focus on safety

When employees feel safe and protected on the jobsite, they can focus on completing the work
that’s assigned to them without having to worry about potential accidents. When you prioritize
safety, you’ll also reduce the risk of violations that cause significant delays to the project
schedule.

Keep safety policies top of mind by giving your employees access to checklists, observations,
and toolbox talks that cover relevant topics.

4. Follow best supply chain management practices

While supply chain issues aren’t always under your control, you can prepare for them by
following best practices.

Get familiar with common resource management challenges, like inventory miscounts, and
research ways to work around them. Track material use closely and place orders for new supplies
well in advance if you think you may run out in the middle of an active project.

Plan ahead when scheduling tasks to avoid delays and develop good working relationships with
your suppliers.

5. Use construction productivity software

Construction productivity software helps businesses better track material use, log work hours,
and communicate jobsite progress than using pen and paper. With more accurate insights, you
can pinpoint areas for improvement and plan bids that accurately reflect your capabilities.
What is a daily progress report in construction?

Every day is a new day on a construction site and those who are involved need to be kept in the
loop of what has occurred. One of the easiest ways to do that is by filing a daily progress report.

These reports can include basic information on what was completed that day and they can also be
filled with little tidbits that include issues that occurred or accidents that happened.

Daily progress reports must be filled out with accuracy so that there is a smooth flow of
communication that can be referred back to in case of liability issues or legal disputes in the
future.

However, progress reports might also come with a lot of admin work for project managers
depending on the tools they are using in their projects. It’s not an exaggeration to say that project
managers use up to 40% of their days on writing reports, jumping from one meeting to another,
and chasing people around the site for updates.

It doesn’t take much to understand that working under such circumstances can have a direct
impact on the progress reporting process and cause a lot of stress and frustration to both the
project manager and their teams.

That being said, a paradigm shift is required in the way construction teams communicate and
connect. But for that to happen digitalisation and standardisation should be seen as priorities.

What should a daily progress report include?

While there are many disputes over what should and should not be included in a daily progress
report, we have created a list of items that we think should be on each one. Like that, you
facilitate the connection between the boardroom and the field and help everyone involved stay on
the same page.

In a nutshell, these are the 10 items that should be included on each and every daily progress
report:

Date: The date when the daily progress report is being written and submitted.

Weather conditions: An overview of the weather conditions on the site.

Jobsite conditions: An overview of the site conditions.

Resource availability: Information about the workers, equipment, and materials that might be
needed that day.

Status on the performed work: Feedback about the work that was performed that day and the
current status of the project.
Work disruptions or delays: Any disruptions or delays that may have affected the work that
was completed that day.

Inventory checklist: A list of all inventory items and the upcoming material needs.

Risk overview: Any potential risks that may affect future workdays.

Accident report: A detailed explanation of any accidents that might have occurred on site that
day.

Additional comments and notes: Any additional comments or notes that seem to have an impact
on the development of the project. 3 steps to writing a progress report without drowning in
admin work

By now, it’s clear that reporting progress in construction requires a lot of effort and an eye for
detail. On the bright side, things could be done much more quickly and more efficiently with the
right tools and strategy in place.

How to reduce admin work and endless meetings in construction

After all, the main pillars of success for any construction project are the following: people, tools,
processes. Get these three right and everything will eventually work out.

Where should you begin, though, this transformational journey? Well, there is no need to worry
anymore about that. Here are the three main steps you need to follow to eliminate admin work
from your progress reporting:

1. Automate your reporting process

Many project managers rely still on pen and paper in order to share progress on their lookaheads,
report on the latest checks, and verify whether all activities linked to the checks are addressed as
they should. This approach paves the way for frequent interruptions, downtime, and in some
cases disputes.

Add also COVID-19 into the mix and you get the picture why construction needs to come up
with a new normal and go digital with progress reporting.

With the right tools and processes, reporting on the latest site updates should not take more than
three clicks. All project teams will have the information they need the moment they need it so
that they can make smart decisions quickly and avoid becoming a bottleneck during the reporting
process.

2. Use digital tools that are built for construction

The automation of the progress reporting process is the first step against excessive admin
workload but it’s not enough on its own. Using the right digital solutions to ensure real-time
reporting and the connection between the master schedule and the 3-6 week lookahead planning
is the next and possibly most decisive step.

Free ebook: Why you can’t run complex construction projects with WhatsApp and Excel

Many project managers rely on tools like WhatsApp and Excel for their daily progress reporting
thinking that they are good enough for the job they are asked to perform. Unfortunately, that’s a
very dangerous path to take.

These tools might be perfect for our personal lives but they can’t support complex projects and
ensure that the latest version of the construction programme reflects reality. On the contrary, they
encourage siloed communication as the data shared through them lacks the connection to both
the master and short-term schedule leading to miscommunication and serious mistakes.

3. Standardise your systems and processes

Many think that every construction project is a completely different universe with different goals
and strategies. But that’s not correct. Regardless of the project’s type, 80% of all construction
processes are always the same and are supported by the same dependencies.

That being said, it makes great sense for every project manager to standardise their systems and
processes so that there is less room for error. Project teams will always know what they are
supposed to do and in what way.

Simply put, this will drastically reduce the amount of time spent on back and forths between the
site and the office and will give project managers peace of mind. Accountability will also be
increased as it will be easier for stakeholders to locate the source of a mistake and take the right
actions.

Again, the use of the right tools is vital. Only digital solutions that are designed for the
construction industry can support such initiatives in the long run.

Current State of the Construction Industry

Traditional Management Practices:

Fragmentation: The construction industry often suffers from fragmentation, where various
stakeholders (owners, contractors, subcontractors, suppliers) work in silos. This leads to poor
communication and coordination, resulting in delays and cost overruns.

Project Delivery Methods: Traditional methods like Design-Bid-Build (DBB) are still
prevalent. These methods can lead to adversarial relationships and inefficiencies due to the
separation of design and construction phases.
Risk Management: Risk is typically managed through extensive contracts and legal
frameworks, often leading to disputes and litigation.

Adoption of Lean Construction:

Lean Principles: Increasing adoption of Lean principles focuses on eliminating waste,

improving workflow, and enhancing value delivery to the client. Practices like Last Planner
System, Just-In-Time delivery, and continuous improvement (Kaizen) are becoming more
common.

Collaborative Approach: Emphasis on collaboration and integration among project

stakeholders to improve communication, coordination, and problem-solving.

Building Information Modelling (BIM):

Digital Transformation: BIM is transforming project planning, design, and construction by

providing a digital representation of the physical and functional characteristics of a facility. It
enhances collaboration, reduces errors, and improves decision-making.

Lifecycle Management: BIM supports the entire lifecycle of a project, from design and
construction to operation and maintenance.

Integrated Project Delivery (IPD):

Integrated Teams: IPD promotes the early involvement of all project stakeholders (owners,
designers, contractors) to foster a collaborative environment.

Shared Risk and Reward: Contracts in IPD are structured to share risks and rewards among
stakeholders, aligning their interests towards the project's success.

Sustainability:

Green Building Practices: Increasing focus on sustainability and green building practices.
Certifications like LEED (Leadership in Energy and Environmental Design) are becoming
standard.

Sustainable Materials: Use of sustainable and energy-efficient materials and methods is on the
rise, driven by regulatory requirements and market demand.

Technological Innovations:

Automation and Robotics: Implementation of robotics, drones, and automated machinery to

improve efficiency and safety on construction sites.

Data Analytics: Use of big data and analytics to optimize project management, resource
allocation, and predictive maintenance.
Challenges and Barriers:

Resistance to Change: Despite the benefits, there is resistance to adopting new practices and
technologies due to cultural inertia and lack of skilled workforce.

Training and Education: Need for ongoing training and education to equip the workforce with
the necessary skills to leverage new technologies and methodologies.

Cost and Investment: Initial investment in technology and training can be high, posing a barrier
for smaller firms.

Construction Project Phases

Now that you know the major stages of a construction project, let’s take a look at how
construction management fits in. These construction management processes are the key to
keeping a project running smoothly from start to finish.

1. Ideation and Research

Ideation is part of front-end loading (FEL), the planning and design portion of the project life
cycle. It’s when every detail of a project is scrutinized by stakeholders to see if it aligns with
your company’s current and future portfolio of projects. The proposed project must make sense
in terms of ROI, applicable regulations, integration with existing projects, risk, and other factors.

During this process, ideas are refined into project proposals through rigorous research and data-
driven analysis. Capital budgeting, feasibility studies, brainstorming, and financial breakdowns
are just some of the practices involved at this phase. While considering the project, actively
solicit input from as many team members as possible to ensure that it comprehensively aligns
with your organization’s portfolio.

One of the primary goals of ideation is ensuring a steady stream of high value projects while
keeping risk at a manageable level. A project that has the potential for a significant ROI but
comes with major risks may not fit in with a portfolio of safe, stable investments. Even if it does,
it will require greater attention and maintenance throughout the project life cycle.

2. Define and Plan the Project

Once you’ve settled on a project, it’s time to flesh out the details to prevent scope creep and keep
your team aligned once the project begins. Important details that should be addressed at this
stage include the project’s scope, a feasible timeline, required resources, a reasonable and
accurate budget, and key performance indicators (KPIs). Inviting feedback from as many
relevant team members as possible during this phase should again be a priority, together with
determining what personnel the project will require.

3. Determine Roles
With the many parties involved in any construction project, you need to clearly define the role of
each. This clarifies everyone’s responsibilities, enables you to hold team members accountable,
and prevents confusion and delays. When all team members know their role in the project and
how to accomplish their tasks, redundancies disappear and tasks don’t slip through the cracks.

4. Finalize and Execute Construction Plans

Before actual construction kicks off, project managers should meet with the appropriate
stakeholders to review the plan and ensure everyone is on the same page. While there’s a good
chance you’ll have to deal with unexpected difficulties and changes as the project progresses,
failing to obtain explicit buy-in before construction begins all but guarantees that you’ll face
additional challenges along the way.

Once construction begins, project managers must do everything they can to keep the process
coordinated and efficient. This means rigorously measuring and tracking progress. Relevant and
comprehensive KPIs updated in real time — which around 56% of project managers don’t have
— provide invaluable insight into the performance and status of the project. Selecting the right
KPIs is critical, as they provide a way to efficiently monitor the project at a glance and see if it’s
going off track. With data on the current status of your budget, procurement, and other key
aspects of the project, you can draw the insights you need to control costs and meet deadlines.

The problems with current construction management techniques

Construction project management involves its share of challenges. Here are some of the most
common and some tips on how to overcome them.

Communication and document management

Maintaining lines of communication between everyone on a construction project isn’t easy. And
keeping an accessible, accurate repository of all project documents can be even more difficult.
But the risks that come with poor communication and document management are too large to
ignore.

From change orders to ongoing procurement, a miscommunication that delays just one critical
process can bring the entire project to a halt, lead to cost overruns, or cause conflict between
parties. Avoid the challenges of attempting to manage communication through email, chat,
phone, and other channels with a software solution that centralizes information and
communication in a single platform.

Together with facilitating frequent communication, project managers are responsible for
document management. Contractors, insurance companies, owners, and other parties need a
single source of truth they can rely on. You can start creating a winning document management
process by examining your organization’s current document management system, centralizing
existing documents, standardizing processes, and taking advantage of a document management
solution with the features you need.

Estimating

The complexity and importance of estimating costs, necessary resources, and timeline in
construction can’t be stressed enough. Even a minor error in estimation can lead to a loss on a
project given the tight margins in the construction industry. A significant margin of error when
estimating the cost of a large-scale project, like constructing a power plant, could even lead to
the project being shut down midway, with a huge amount of sunk costs. While price fluctuations,
currency drops, material shortages, and other factors can make estimation an inexact science at
best, there are forecasting tools available to help you consider all these variables and make your
estimates as accurate as possible.

Siloed data

When data is decentralized and hard to access, miscommunication runs rampant and projects
rarely go according to plan. Data silos can affect cost control, the project’s timeline, risk
assessment, and more. If your contractor is waiting on information that’s already available or
decides to push through without it, you’re going to either face delays or be forced to cross your
fingers and hope for the best.

To break down data silos, adopt a data management solution that makes centralizing and
integrating relevant information easy. The best tools connect all your systems and let your team
quickly access data no matter where it lives.

Lack of real-time data for risk assessment and change management

Sharing data across your team doesn’t matter if the information is out of date. Construction
projects are, by their nature, works-in-progress, so you need real-time data to stay on top of new
developments and address challenges as they arise. Again, the right software solution is the
answer. The platform you choose should make diving into the data easy with up-to-date
dashboards and reports while providing the tools you need to visualize workflows and see the
impact of your decisions.
 UNIT-2

Introduction to lean management - Toyota’s management principle-Evolution of lean in

construction industry - Production theories in construction –Lean construction value - Value in
construction - Target value design - Lean project delivery system- Forms of waste in construction
industry - Waste Elimination.

2.1 Introduction to lean management

Lean management is a way of managing a company or institution. The goal is to

ensure continuous improvement by making small changes in processes and delivering
value to customers. An issue people run into when presenting such topics is making
them engaging and easy for the audience to digest. Using customized graphics can
help audiences relate to the material and retain the information.

Lean management is a business methodology that's designed to increase quality

and efficiency by eliminating wasted resources like time, money, and effort. It also is
sometimes referred to as lean production or lean manufacturing. The idea is to
produce only the best and most valuable services or products for customers and
clients at the right price.

Principles of Lean Management

Lean management revolves around these core principles: defining value, mapping
stream value, creating flow, establishing pull, and pursuing perfection.
• Defining Value

This principle identifies the value of a product or service from the customer’s
perspective. Rotating Solutions highlights the importance of creating and
focusing on a timeline for the production process, including delivery. This can
include detailing crucial requirements, price points, expectations, and other
essential information

• Mapping Stream Value

This principle is also known as waste mapping. It examines all steps of any given
business process to determine which unnecessary actions and resources can be
eliminated to maximize efficiency
 • Creating Flow

This principle focuses on attaining efficiency and speed, as well as ensuring that
multiple operational tasks are completed as quickly and smoothly as possible
without sacrificing quality

• Establishing Pull

Create a flow in which there are just enough materials and resources to create
the required products on time and in a continuous fashion.

• Pursuing Perfection

Really, this means making sure that the other four principles occur continuously
and Consistently. Make sure all employees are also on board with the ultimate lean
mission.

Benefits of Lean Management

Companies that apply lean management methodologies typically have one goal
in mind: continuous improvement. By implementing these lean principles, they often
reach this goal by saving time and therefore money. They also can improve customer
satisfaction rates, which can lead to increased revenue from referrals and repeat
business.

2.2 Toyota’s management principle

Summary of the 14 Toyota Way Principles

Principle 1. Base your management decisions on a long-term philosophy, even at the

expense of short-term financial goals.
■ Have a philosophical sense of purpose that supersedes any short-term decision making. Work,
grow, and align the whole organization toward a common purpose that is bigger than making
money. Understand your place in the history of the company and work to bring the company to
the next level. Your philosophical mission is the foundation for all the other principles.
■ Generate value for the customer, society, and the economy—it is your starting point. Evaluate
every function in the company in terms of its ability to achieve this.
■ Be responsible. Strive to decide your own fate. Act with self-reliance and trust in your own
abilities. Accept responsibility for your conduct and maintain and improve the skills that enable
you to produce added value.
Principle 2. Create a continuous process flow to bring problems to the surface.
■ Redesign work processes to achieve high value-added, continuous flow. Strive to cut back to
zero the amount of time that any work project is sitting idle or waiting for someone to work on it.
■ Create flow to move material and information fast as well as to link processes and people
together so that problems surface right away.
■ Make flow evident throughout your organizational culture. It is the key to a true continuous
improvement process and to developing people.

Principle 3. Use “pull” systems to avoid overproduction.

■ Provide your downline customers in the production process with what they want, when they
want it, and in the amount they want. Material replenishment initiated by consumption is the
basic principle of just-intime.
■ Minimize your work in process and warehousing of inventory by stocking small amounts of
each product and frequently restocking based on what the customer actually takes away.
■ Be responsive to the day-by-day shifts in customer demand rather than relying on computer
schedules and systems to track wasteful inventory.

Principle 4. Level out the workload (heijunka). (Work like the tortoise, not the hare.)
■ Eliminating waste is just one-third of the equation for making lean successful. Eliminating
overburden to people and equipment and eliminating unevenness in the production schedule are
just as important—yet generally not understood at companies attempting to implement lean
principles.
■ Work to level out the workload of all manufacturing and service processes as an alternative to
the stop/start approach of working on projects in batches that is typical at most companies.

Principle 5. Build a culture of stopping to fix problems, to get quality right the first time.
■ Quality for the customer drives your value proposition.
■ Use all the modern quality assurance methods available.
■ Build into your equipment the capability of detecting problems and stopping itself. Develop a
visual system to alert team or project leaders that a machine or process needs assistance. Jidoka
(machines with human intelligence) is the foundation for “building in” quality.
■ Build into your organization support systems to quickly solve problems and put in place
countermeasures.
■ Build into your culture the philosophy of stopping or slowing down to get quality right the first
time to enhance productivity in the long run.

Principle 6. Standardized tasks and processes are the foundation for continuous
improvement and employee empowerment.
■ Use stable, repeatable methods everywhere to maintain the predictability, regular timing, and
regular output of your processes. It is the foundation for flow and pull.
■ Capture the accumulated learning about a process up to a point in time by standardizing
today’s best practices. Allow creative and individual expression to improve upon the standard;
then incorporate it into the new standard so that when a person moves on you can hand off the
learning to the next person.

Principle 7. Use visual control so no problems are hidden.

■ Use simple visual indicators to help people determine immediately whether they are in a
standard condition or deviating from it.
■ Avoid using a computer screen when it moves the worker’s focus away from the workplace.
■ Design simple visual systems at the place where the work is done, to support flow and pull.
■ Reduce your reports to one piece of paper whenever possible, even for your most important
financial decisions.

Principle 8. Use only reliable, thoroughly tested technology that serves your people and
processes.
■ Use technology to support people, not to replace people. Often it is best to work out a process
manually before adding technology to support the process.
■ New technology is often unreliable and difficult to standardize and therefore endangers “flow.”
A proven process that works generally takes precedence over new and untested technology.
■ Conduct actual tests before adopting new technology in business processes, manufacturing
systems, or products.
■ Reject or modify technologies that conflict with your culture or that might disrupt stability,
reliability, and predictability.
■ Nevertheless, encourage your people to consider new technologies when looking into new
approaches to work. Quickly implement a thoroughly considered technology if it has been
proven in trials and it can improve flow in your processes.

Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and
teach it to others.
■ Grow leaders from within, rather than buying them from outside the organization.
■ Do not view the leader’s job as simply accomplishing tasks and having good people skills.
Leaders must be role models of the company’s philosophy and way of doing business.
■ A good leader must understand the daily work in great detail so he or she can be the best
teacher of your company’s philosophy.

Principle 10. Develop exceptional people and teams who follow your company’s
philosophy.
■ Create a strong, stable culture in which company values and beliefs are widely shared and
lived out over a period of many years.
■ Train exceptional individuals and teams to work within the corporate philosophy to achieve
exceptional results. Work very hard to reinforce the culture continually.
■ Use cross-functional teams to improve quality and productivity and enhance flow by solving
difficult technical problems. Empowerment occurs when people use the company’s tools to
improve the company.
■ Make an ongoing effort to teach individuals how to work together as teams toward common
goals. Teamwork is something that has to be earned.

Principle 11. Respect your extended network of partners and suppliers by challenging them
and helping them improve.
■ Have respect for your partners and suppliers and treat them as an extension of your business.
■ Challenge your outside business partners to grow and develop. It shows that you value them.
Set challenging targets and assist your partners in achieving them.

Principle 12. Go and see for yourself to thoroughly understand the situation
(genchi genbutsu).
■ Solve problems and improve processes by going to the source and personally observing and
verifying data rather than theorizing on the basis of what other people or the computer screen tell
you.
■ Think and speak based on personally verified data.
■ Even high-level managers and executives should go and see things for themselves, so they will
have more than a superficial understanding of the situation.

Principle 13. Make decisions slowly by consensus, thoroughly considering all options;
implement decisions rapidly (nemawashi).
■ Do not pick a single direction and go down that one path until you have thoroughly considered
alternatives. When you have picked, move quickly and continuosly down the path.
■ Nemawashi is the process of discussing problems and potential solutions with all of those
affected, to collect their ideas and get agreement on a path forward. This consensus process,
though time-consuming, helps broaden the search for solutions, and once a decision is made, the
stage is set for rapid implementation.

Principle 14. Become a learning organization through relentless reflection (hansei) and
continuous improvement (kaizen).
■ Once you have established a stable process, use continuous improvement tools to determine
the root cause of inefficiencies and apply effective countermeasures.
■ Design processes that require almost no inventory. This will make wasted time and resources
visible for all to see. Once waste is exposed, have employees use a continuous improvement
process (kaizen) to eliminate it.
■ Protect the organizational knowledge base by developing stable personnel, slow promotion,
and very careful succession systems.

2.3 Evolution of Lean in Construction industry

Toyota was the first – or at least the most notable –organisation to bring “lean principles” into
the limelight. In the 1970s, Toyota created a focus on eliminating waste to improve customer
value in the automotive industry. The small Japanese automaker grew to be the world’s largest
by adopting seven waste reduction principles in its production manufacturing and preserving
value with less work. The philosophy of focusing on waste elimination was expanded to include
improved efficiency by optimising workflows and came to be known as “lean manufacturing.”
Today, lean manufacturing is practised by most of the major manufacturing companies
worldwide and has greatly influenced other industries to adopt “lean” policies, including the
construction industry. This said, the term “lean construction” was adopted nearly 20 years ago
and is still trying to gain momentum in the construction mainstream.

Looking back at the evolution of the construction paradigm, the original key points of attention
were cost and schedule. The primary goal was to get projects done fast and cheap, often at the
expense of one or the other. As times changed, however, regulatory, and humanitarian pressures
made safety a new project driver, escalating the safety of workers and efficient processes to top
priority. It was thought that this shift would bring extra costs and delays. However as new safety
standards were implemented, contractors saw a reduction in accidents, lower insurance costs, and
a decline in workers’ compensation, with productivity back to previous levels and later
increasing. Owner operators and contractors realised that safety mitigation was an added
investment in time, money, and resources, but it also saved time and money. Enforcement was a
smart idea because it produced a great return on the investment required: It had value. The same
was true for quality. Poor quality caused customer dissatisfaction through rework, delays, and
cost overruns. Investments in quality assurance programmes, people, systems, and controls
improved workflows and added value.

Lean construction is a new paradigm in construction planning that uses lean concepts that
approach value rather than cost, and efficiency rather than schedule.

Lean construction value - Value in construction

“The concept of value is probably the most difficult to approach in the new way of managing
construction projects” (Bertelsen and Koskela 2004:6). Since the early 1960’s, the construction
industry has recognized the importance of the concept of Value to achieve successful results and
customer satisfaction “The goal of any building project is to deliver value to the client
organisation, and in order to do so the building project and its processes must be of value to all
project participants. Thus the understanding of value in building is an important part of building
management.” (Wandahl 2005:21). Although the construction industry has seen continued
improvement many opportunities for a step change remain: “the industry still continues to under-
perform, generally due to a continued lack of design and construction process integration, a lack
of focus on quality and customer value, poor contractual relationships and a general lack of
understanding as to why poor performance continues, or how improvements might be achieved.

LT applied to construction projects delivers continuous improvement across the entire process by
understanding and delivering Value for the customer and will improve current performance. At
present the focus of LT in the construction industry has not been fully extended beyond the on-
site project delivery, thus there is an important opportunity to expand Lean Construction
experience to early stages of a project, where the biggest opportunities to add Value are
generated.

The concept of Value in construction has been mainly focused on its objective nature. More
recent theories and management tools applied to construction projects have arisen and recognised
the importance of the subjective nature of Value. Current design practices have been oriented to
create and deliver Value from the customer’s perspective and theories such as VM, Lean Design
Management, Customer Value Management etc. give a relevant role to the participation of main
stakeholders from the beginning, action which is considered one of the most important task to
deliver Value and satisfy customer needs. As an example of the last, Christoffersen (2003)
underlined two main Value characteristics which recognised the subjective and dynamic nature
of Value:

1. The perception of value is individual and personal, and is therefore subjective. Indeed,
agreement of an objective best value for a group will differ from the individuals’ perception of
value, and

2. Value will change over time. The difficulty of identifying a global definition of Value is
evident from the literature. The lack of ability to identify a common definition means that current
theories and management tools define Value according to their own interests. Thus Value is
delivered according to each author’s perspectives and mainly focused on the delivery of Value at
project level

Target Value Design

Target Value Design (TVD), refers to the application of Target Costing (TC) to the delivery of
projects in the Architecture-Engineering-Construction (AEC) industry. This design method
radically differs from what has become the traditional way of designing and making products.
Rather than treating cost as an outcome of wasteful design-estimate-rework cycles, TVD is a
method that makes customer constraints (on cost, time, location, and others) drivers for design in
pursuit of value delivery.

TVD relies on such practices as:

Involve Key Participants Early in the Project

Getting the right people at the right time. Involving downstream players such as contractors,
fabricators, and specialty trade partners in the validation and design process when their input can
have the most impact.
1. Collaborate, Really Collaborate

Co-location, Building Information Model (BIM), Integrated Project Delivery (IPD), and Big-
Room meetings all promote collaboration. The Target Value Design team members work closely
with each other to find innovative ways of saving cost without compromising scope, schedule, or
quality.

2. Develop Goals Collaboratively

Working with the owner, the team first tries to understand the customer’s purpose for the project
and what is valuable to him. The team jointly develops a mission statement and the goals for the
project. Design is steered towards the owner’s value and aligns ends, means, and constraints.

3. Pursue Continuous Improvement

“Lowering the river to reveal the rocks” -Taiichi Ohno. The Target Value Design team sets
stretched goals to spur innovation. Learning coupled with relentless reflection and the pursuit of
the ideal allows for continuous improvement.

4. Steering Design to a Target Value

Setting an allowable cost based on the value or worth of the project to the owner. Working
together, the design and construction tries to find innovation that can lower costs without
compromising on scope or quality.

Lean Project Delivery

Traditional construction project delivery models produce numerous problems within the
industry. Rework and waste totals are high, resulting in 70% of projects to be delivered late and
73% of projects delivered over-budget. This leads to ever-shrinking profit margins and
dissatisfaction among owners, of whom only 9% say they are achieving a high level of
excellence in project performance.

Traditional project delivery models also lead to hundreds of thousands of injuries in construction
projects each year. Lean project delivery aims to transform the built environment into a place
where everyone from trade partners to project managers thrive.

At its core, Lean in project delivery is a mindset geared towards creating a culture of respect and
continuous improvement with the aim of generating maximum value for customers and
stakeholders by identifying value and eliminating waste in processes.

Lean Project Delivery is an organized implementation of Lean principles and tools combined to
allow a team to operate in unison to create flow. While many people think that Lean can only be
achieved through using the Integrated Project Delivery model, Lean concepts can be applied to
any form of project delivery model to generate better outcomes for stakeholders.
Lean delivery aims to solve these problems within the design and construction industry. By using
a Lean operating system, designers and builders are able to deliver projects on-time and within
their budgets, minimize waste and rework, improve safety, and achieve higher levels of customer
satisfaction.

Benefits of Lean Project Delivery

Designers and builders who implement Lean methods see a huge improvement in project
outcomes due to a boost in innovation. Projects that utilize Lean concepts also see a decrease in
waste and injuries, among other benefits. Ultimately, the project team is the lifeblood and
foundation of a Lean project. Without the right people in place, it’s impossible to create the
proper work processes for Lean methods to take hold.

Lean Project Delivery in Construction

There are some ways in which Lean Project Delivery methods can be added to the construction
phase.

Last Planner System (LPS) – Just like designers, building teams can use the Last Planner System
for optimal project planning to generate flow in the project’s processes.

5S – A disciplined approach to maintaining order in the workplace, using visual controls, to

eliminate waste. The 5S words are Sort, Set in Order, Shine/Sweep, Standardize and Self-
Discipline/Sustain.

A3 Thinking – In an industry where problems seem to arise out of nowhere, A3 thinking is a

method of decision making which values the opinions of all stakeholders.

The Forms of Waste

Taiichi Ohno, creator of the Toyota Production System, defined seven types
of muda (waste) [13]:

1. Waste of overproduction
2. Waste of time on hand (waiting)
3. Waste in transportation
4. Waste of processing itself
5. Waste of stock on hand (inventory)
6. Waste of movement
7. Waste of making defective products

1. Overproduction
Overproduction is producing more – and earlier – than needed. It is producing “just-
in-case“ instead of ”just-in-time“. Ohno considers this the worst type of waste, which
contributes to and helps hide other forms of waste [14]. Typically, we associate this
waste with production in large batches, which creates costly inventory, increases
waiting time, requires unnecessary transportation, and hides quality problems.

2. Waiting

Waiting prevents flow. A product is waiting when we do not work on it. A typical
case is waiting in queues for the next step in the operation.

3. Transportation

The movement of products, materials or people between processes is a waste if it is

not directly associated with value-adding activities. Besides transportation costs,
excessive movement can cause damaged or lost products or materials, delays and
stress, and may require additional space and equipment.

4. Over-processing (waste of processing itself)

Over-processing is adding more features to a product than the customer will use or
requires. These features do not add value but cost more and take longer. It also refers
to using high-capacity equipment that can create bottlenecks and extend lead time.

5. Inventory

Inventory of raw material, work-in-progress and finished goods generates

warehousing, depreciation, shrinkage, insurance and lost opportunity costs. Inventory
impedes the rapid identification of quality problems and extends the lead time.

6. Motion (waste of movement)

This waste occurs when employees or equipment unnecessarily move within a

workspace. A typical example is looking for and reaching for a tool. Waste of
movement is a productivity, quality, health and safety issue.

7. Defects

We associate this waste with the cost of poor quality, which has many
components, from rework to lost business.

Waste elimination principles of lean construction

Lean construction has become relevant in modern construction management education, research,
and practice. LC sees that the supply chain fragmentations are caused by the conventional
‘Transformation’ model, providing more emphasis on ‘Flow’ and ‘Value’ concepts. LC project
management refers to managing temporary production systems structured to deliver the product
with maximised value and minimised waste. Akin to lean production, LC methods, tools, and
techniques are built on lean principles but with adaptations to the construction context. Among
lean principles, waste is addressed directly and indirectly in the five principles: ' reduce the lead
time’, ‘reduce variability’, ‘simplify’, ‘increase flexibility and ‘increase transparency’. That can
be summarised into four direct principles: ‘reduce cycle time’, ‘reduce variability’, ‘continuous
improvement’, and ‘increase transparency, as shown in Figure. With the corresponding goal of
each principle related theories and potential methods. Even a partial application of these
principles can hold disruptive benefits of waste elimination across the construction supply chain.