FCCISL and Asian Institute of Excellence promote ‘Lean construction’

The first ever Lean Construction Workshop was held at the recent Constructor Exhibition at the BMICH on 28 August. It was coordinated by the Federation of Chambers and Commerce, Sri Lanka, together with the National Construction Association, the Young Constructors Forum and delivered by the Asian Institute of Excellence. It was titled ‘Bid Lower than your Competitors’.

Sri Lanka’s lack of competitiveness

Today Sri Lanka stands only half way in World Economic Foum Rankings competitiveness Index, at 68th place out of 140 countries. This ranking broadly also applies to industry in general and covers the construction sector. In the construction industry, projects run into millions of rupees, if not dollars. Construction industry plays a major role in the Sri Lankan national economy, contributing 6.8% to the GDP and showed a growth rate of 20.2 % in 2014-15. Increasing the productivity of this sector will lead to a great cost savings for the industry as well as the society. In addition, it will enable Sri Lankan contractors to compete with international firms such as Malaysian, Singaporean, Indian, etc.

40-60% wastage in construction

According to the research undertaken in the USA, 40-60% of resources in building a project are wasted for reasons such as poorly coordinated design, change orders and rework, delays and cost overruns, claims and litigation, poor documents, etc. This leads to frustrated owners and tight profit margins or even losses. However, if companies use Lean Tools they can maximise value, minimise waste and enhance productivity. 

The conference addressed myths about Lean such as the concepts that is was only for large companies, only for the manufacturing sector, needs a lot of time, is cumbersome, one needs to invest a lot, pay large amounts to consultants, and that it is only used in the west. The AIE pointed out that Lean helped identify critical issues in the Value chain, is very efficient, can be used also for the SME sector, its returns can be from 4-10 multiples of the cost, that it can be used in agriculture, industry and services, its basics can be learnt by all staff quickly , can be applied on a daily basis, is an active philosophy and finally that Lean is not ISO – a compliance process. 

Lean wastes in construction

The Lean Theory centres around ‘waste’ or ‘Muda’ as a separate concept and the intelligent measurement of waste. Generally, in construction, one generally associates ‘waste’ with the amount of material that goes to landfill, but in ‘Muda’, which is the Japanese word for ‘waste’, it is defined more broadly. Tackling waste is key to achieving Lean construction.

It was pointed out that in the construction sector, Lean Wastes are start delays, long approval processes, idle time, machine breakdowns, transport delays, work defects, damaged material and late work delivery. This may not be obvious for many contractors who see these factors as the norm rather than the exception. 

According to ‘Lean’ the value that the client is paying for is that of delivering and installing the building within the time frame stipulated. This is what represents ‘value’ to them. They are not paying for the construction company and the staff, its departments etc. Lean specifically seeks out isolating and maximising the value added in all the activities undertaken by the construction company. Lean is one of the key tools in the Operational Excellence toolkit, which includes other concepts such as Six Sigma, TPM, TQM, TPS, Poke Yoke, Gemba, Kaizen, etc. 

Lean construction enables the contractor organisation to deliver client value, reduce waste, andimprove the flow of work. Additional important tools that are used by international companies include Integrated Project Delivery and Building Information Management. 

IPD and BIM as additional tools

Integrated Project Delivery (IPD) is a delivery system that seeks to align interests, objectives and practices, even in a single business, through a team-based approach. The primary team members include the architect, key technical consultants as well as a general contractor and key subcontractors. The IPD system is a process where all disciplines in a construction project work as one firm, creating faster delivery times, lower costs, no litigation and a more enjoyable process for the entire team – including the owner. It solves problems such as low productivity and waste, time overruns, quality issues, and conflicts during construction among the key stakeholders of owner, architect and contractor. 

Building Information Modeling (BIM) is an intelligent 3D model-based process that equips architecture, engineering, and construction professionals with the insight and tools to more efficiently plan, design, construct, and manage buildings and infrastructure.BIM is technology that supports the delivery of projects in a more collaborative and integrative way. 

Significant savings obtained at initial stages

Key areas where Lean thinking has contributed has been first at the design stage and in the project inception process. The process of design is a major cost in all construction projects. Variations in design due to errors are a major source of cost. This can be avoided by understanding exactly what the customer wants. Inefficiencies in taking an erroneous design forward to build, multiply, thus incurring waste and cost. Mis-communication across a project, any delays in the design process, with either designers delivering late or waiting for the work of others, further contributes to expenditure. Lean is a means of avoiding these issues.

Improvements of over 50%  with Lean 

According to a study by the Lean Construction Institute, USA, traditional projects have an average success rate of 54% in completing their weekly work plans. But the use of IPD (Integrated Project Delivery for Public and Private Owners) and Lean increases that percentage to between 85% and 100%. Improved project workflow, resulting in maintaining schedules and eliminating waste, are the significant outcomes of this process.The application of Lean in Construction has led to the following quantifiable changes: significant (50% or better) reduction in work injuries, elimination of rampant waste, improved quality, completed on time or ahead of schedule, and significant cost savings (up to 20%).

Lean is relatively new to the SAARC region, but has been around since the 1920s commencing with Ford and then popularised by the Toyota Production System. Today there are various Lean Institutes in the USA, UK, Denmark, France, Russia and India. They share information and experience through academic forums, workshops and Summits. 

Sri Lankan construction sector needs to be more competitive

The stage is set for a major transformation of the Sri Lankan construction industry through Lean and other operational excellence tools. Whilst these tools cannot directly address issues such as labour shortages, high steel prices, delays in government approvals, etc, it can enable maximisation of productivity of all scarce resources within the organisation, drive down costs, improve profitability and improve time lines. These operational excellence tools are already being used in India and most of the developed countries and in the Asean region. The Sri Lankan construction sector should not be left behind as otherwise they will literally lose the business.