Lean thinking: principles, value and waste

Lean thinking began on the factory floors of Toyota in the decades after the Second World War, where engineers such as Taiichi Ohno built a production system that made more cars with less labour, inventory and space than the mass-production plants of North America. BUS-230 lesson 11 describes the Toyota Production System in a manufacturing setting: just-in-time, kanban, set-up reduction, error-proofing and value stream mapping. This lesson does not repeat that material. It asks what the same ideas mean when the product is a building, the factory moves to the site and the workers belong to a dozen different companies.

From lean production to lean construction

The term lean production was popularized in 1990 by the book The Machine That Changed the World, based on MIT research comparing car plants. In 1992 the Finnish researcher Lauri Koskela published an influential report arguing that construction had been managed almost entirely as a series of conversions, in which inputs such as concrete and labour are turned into outputs such as walls, and that it had ignored the flows between conversions: moving, waiting, inspecting and reworking. He proposed a view of production as three things at once: transformation of inputs into outputs, flow of work and materials through time, and generation of value for the customer. Traditional project management, with its focus on activities and their costs, handles the first well and the other two badly. Lean construction was born from the attempt to manage all three.

The five lean principles

James Womack and Daniel Jones summarized lean thinking in five principles in their 1996 book Lean Thinking. They translate well to construction, with some adjustment.

The principles are deceptively simple. Specifying value sounds obvious, but many projects are built to a design that nobody checked against how the building will actually be used. Making value flow sounds easy, but construction schedules are full of batches: all the framing on all floors, then all the rough-in, then all the board. Pull sounds natural, but most sites push: materials arrive when the supplier can ship them, and trades start when their contracts say they should, whether or not the area is ready.

Value and waste

In lean terms, an activity adds value if it transforms the product in a way the customer cares about, is done right the first time and is something the customer would willingly pay for. Installing a window adds value. Carrying the window from the laydown area to the floor is necessary but adds no value: the customer would be just as happy if it appeared at the opening by magic. Re-installing the window because it was set at the wrong height adds negative value, since it consumes resources and delays the project.

The middle category is important. Material handling, set-up, safety meetings and inspections cannot simply be eliminated. Lean asks whether they can be reduced: by delivering materials to the floor where they will be installed, by prefabricating so that fewer set-ups happen in the field, or by building quality in so that fewer inspections find defects. Safety work is never treated as waste to be cut; a lean site aims to make safe work the easy and normal way of working.

The eight wastes on a construction site

Toyota identified seven wastes, and an eighth, unused human potential, was added later. The acronym TIMWOODS is a common memory aid: transportation, inventory, motion, waiting, overproduction, overprocessing, defects and skills. Each has clear construction examples.

Overproduction deserves special attention because it looks like progress. A framing crew that races ahead of the board crew appears productive, but the extra framed area sits idle, gets damaged, blocks other trades and hides the fact that the downstream trade is the real constraint. In lean thinking, producing more than the next step can use is a waste even when every individual crew is busy. The goal is a steady, balanced flow, not maximum local output.

Value from the owner's point of view

Lean begins with value, and value is defined by the customer. On a construction project there are several customers: the owner who pays, the users who occupy the building, the operators who maintain it and the community around it. Their needs may conflict. A lean design process tries to understand them early, through user interviews, mock-ups and conditions of satisfaction, and to set a target cost and design to it, an approach called target value design that CON-340 introduced in the context of integrated project delivery. The construction team also has internal customers: each trade is the customer of the trade before it. A drywall finisher's customer is the painter, who needs a flat, clean, properly sanded surface ready on the day promised.

Respect for people

Toyota described its system as resting on two pillars: continuous improvement and respect for people. In construction, respect for people means more than politeness. It means asking the forepersons and tradespeople who do the work how it should be planned, because they know what their crews need. It means making safety a condition of work rather than a target to be traded off. It means stable relationships with trade partners rather than shopping every package to the lowest bidder. And it means that problems are treated as opportunities to improve the system, not as occasions to blame individuals. Lean tools used without respect for people, for example a percent-plan-complete chart used to punish trades, quickly turn into a new way of pushing harder and lose their value.

Common misunderstandings of lean

Lean is often misunderstood. It is not a cost-cutting program, although it usually lowers cost. It is not about working faster, although work often gets done sooner. It is not a set of tools, although it uses many. It is not something that can be installed by a consultant in a week. And it is not only for large contractors: small firms often adopt lean planning more easily because their decision chains are short. The test of whether a site is lean is not whether it has sticky notes on the wall but whether work flows, promises are kept and the team gets better every week.

# Classifying observed activities into value-adding, necessary and waste
observations = [("hanging board", "VA"), ("cutting board", "VA"), ("carrying board", "NNVA"),
                ("waiting for hoist", "W"), ("taping joints", "VA"), ("searching for screws", "W"),
                ("setting up scaffold", "NNVA"), ("re-hanging damaged board", "W"),
                ("toolbox talk", "NNVA"), ("hanging board", "VA"), ("walking to gang box", "W"),
                ("hanging board", "VA")]
labels = {"VA": "value-adding", "NNVA": "necessary non-value-adding", "W": "waste"}
from collections import Counter
c = Counter(k for _, k in observations)
n = len(observations)
for k in ("VA", "NNVA", "W"):
    print(f"{labels[k]:<28}{c[k]:>3}  {c[k] / n:.0%}")

value-adding                  5  42%
necessary non-value-adding    3  25%
waste                         4  33%

Even a small set of observations, sorted into the three categories, starts useful conversations: why are crews searching for screws, and why was board damaged? Lesson 10 shows how to run a proper work-sampling study with enough observations to draw conclusions.