Many of us in the construction industry have long regarded with envy the lean production methods adopted so successfully by the world’s best manufacturers.
But lean techniques, which dramatically improve efficiency and reduce waste, have so far proved difficult to emulate in construction – because of the large and frequently fragmented supply chain involved in delivering a major project.
Too often, the construction sector has used lean ad hoc, or as a bolt-on to an existing way of working. Occasionally, it has even been relegated to a “get out of jail” card played by clients seeking to turn around an underperforming aspect of their project.
While lean can add value in all these cases, its ability to make a decisive difference is constrained if it is deployed in this way. Used right, it has the power to be nothing less than a game-changer, both for clients and the supply chain.
A case in point was the pioneering model used for the delivery of Heathrow’s Terminal 5. It drew heavily on lean thinking and showed the technique’s vast potential.
That potential will make lean increasingly indispensable in the short-term as the industry grapples with a likely post-referendum increase in tender price competition, and in the long-term as we work towards the efficiency goals set out by Construction 2025.
But what needs to change to enable the construction industry to unlock lean’s full potential?
Part of the bigger picture
For a start the industry needs to view lean as more than just a successful management technique. Instead it should be seen as part of a seismic shift in the way clients interact with their suppliers.
This wider change needs to begin with the supply chain, and be based on a rethink of the contractual relationship between client and contractors.
Ultimately the goal should be to improve the supply chain dynamic – and to replace traditional, adversarial relationships in which the key metric is price alone with more collaborative, value-driven relationships in which goals and rewards are shared between client and suppliers.
A good example of such an integrated approach – in which lean techniques are deployed as part of a collaborative, transparent supply chain – is that adopted by Anglian Water.
It contracts directly with its 400 “Tier 2” suppliers in the delivery of a £2bn infrastructure programme in a lean-based model that is set to inspire others to follow suit.
Learning from manufacturing
We should also be wary of viewing lean’s success in manufacturing with rose-tinted spectacles.
While the technique traces its roots back to the visionary industrialist Henry Ford and was later perfected by the global carmaker Toyota, manufacturers have frequently had to learn the hard way what works and what does not.
The principles of applying lean thinking to manufacturing are essentially the same as those needed to apply it successfully to construction.
Both industries have a tendency to adversarial supply chain relationships, in which clients occasionally become so narrowly focused on driving down suppliers’ prices that the working relationship can become prone to disputes and costly inefficiencies – thus negating any savings made on the baseline cost.
The most sophisticated manufacturing sector exponents of lean don’t just apply the technique to the supply chain. The manufacturers who reap the greatest benefits from lean are those who apply it across their operations and build their own capability in order to drive sustainable results.
This is the approach favoured by the lean consultancy Suiko, which was recently acquired by Turner & Townsend and has delivered efficiencies for global and household-name brands including Coca-Cola, Nestle and Pizza Hut as well as several leading construction contractors.
Suiko’s lean specialists design and implement strategies that help their clients achieve operational excellence both in their supply chain and across their own organisations too.
Getting buy-in across the board
Britain’s larger contractors have already proved receptive to the waste-reducing, efficiency-boosting benefits that lean management offers.
But to deliver the industry-wide step-change of which it is so clearly capable, lean must be championed by clients as much as contractors.
Clients must make the running, and insist that lean be used not merely as a quick-fix solution for single issues, but rather be embedded into their capital programmes from the start of delivery right through to operation.
With the fallout of the Brexit vote already pointing towards a period of investor caution and material cost inflation, the need for greater efficiency in the construction industry has never been greater.
Yet with UK Government figures revealing in April that levels of productivity in construction have improved by barely 1.4 percent in the past two decades, best practice has only taken the industry so far.
Lean’s hour has arrived – and Turner & Townsend believes that the insights and efficiencies it offers must now play a key role not just in delivering better outcomes for individual clients, but also in driving greater productivity across the industry.
The addition of Suiko’s world-class lean expertise to our team is a statement of intent. We are determined that lean should shape the way capital programmes are set up and delivered in future.
But for all lean’s strengths, its expanded use must be part of a broader evolution in the industry – and a move towards truly transparent, collaborative and value-driven supply chain relationships.