Lean construction efficiencies stand as strong contributors to better productivity and greater profitability. But it takes a certain mindset to pull it off and to have the greatest level of success.
By Carla Williams
Though not all sources agree, Construction’s productivity is often cited as lagging behind other industries. But, regardless of construction’s place in the productivity rankings, there are good reasons for harnessing the benefits of lean construction efficiencies.
Productivity and efficiency are directly linked, but the effects of poor efficiency are easier to measure. For example, European studies have shown a 25% to 50% waste in coordinating labor, and in managing, moving, and installing materials. In the U.S. it’s not uncommon for workers to spend up to 30% of their time waiting for instructions, equipment or materials. However, there is a way to stop the waste while improving construction productivity. And, that starts by harnessing lean construction efficiencies.
What Is Lean Construction?
Lean construction is about maximizing value and minimizing waste throughout the entire construction process. That creates numerous efficiencies because so many people are involved. Everyone involved in a construction project, including contractors, suppliers, architects, engineers, and owners focus on efficiency while maintaining quality. Lean construction challenges the idea that quality must be sacrificed for time and cost.
To understand lean construction, you have to understand how waste most commonly occurs during a construction project. Some examples of common construction industry waste are defects, overproduction, excess materials, time spent waiting for materials, over processing, and not using, or under-using talent. By better planning in these areas, you boost efficiency, saving time and money.
[If you’ve ever been curious about the waste within your own operations, one place to start is with your overhead. There is good reason to get very specific about accounting for job costs that are often simply dumped into “Overhead.” Using a job cost accounting system, even for a short while, that tracks your costs to the activity they benefitted, will enlighten you in ways you never considered. Read more, right here at CI in this recently updated post.]
Why Should you Care?
You would think that with waste as high and productivity as low as they are, more construction workers would be actively seeking solutions to these inefficiencies. Unfortunately, it seems that is not the case. According to a 2013 McGraw Hill Construction Report, 55% of contractors who are not familiar with lean construction say the construction industry is efficient. Of the contractors who are familiar with lean practices, only 14% find the construction industry efficient. This research suggests that a large portion of contractors are unaware of the fact that efficiency needs improvement.
The benefits of lean construction efficiencies are also supported by this study. More than three quarters of lean practitioners surveyed found that they increased their productivity, and almost two thirds reported being more profitable. More so than productivity or profits, however, it seems that competitiveness is the greatest benefit of lean construction. The lean construction efficiencies gained during scheduling allow firms to perform better in project bidding.
Taking the First Steps
The most important aspect of lean construction is communicating and collaborating with everyone involved in a project. It is simple enough to understand, but actually accomplishing it takes dedication to getting everyone you work with on board.
If you want to increase the bottom line of your construction business it is time to stop putting all your focus on productivity and start looking at efficiency. By adopting lean construction practices, you can be more efficient, more productive, and in turn, more profitable.
About the Author
Carla Williams works at the Williams Brothers Corporation of America.