CIRIA, C728

London, 2013

Implementing Lean
in construction
a Lean guide for client organisations

Gerry Chick, Building Research Establishment Ltd and

Collaborative Improvement Ltd Alliance

Feedback
CIRIA and the project steering group welcome your
feedback on the documents in the Lean series.
However, before reading this guide, and without reference
to the contents list, please write down five areas or specific
questions that you are hoping the guide will help you with.
We invite you to list these points, and the extent to which
they have been covered, in the Lean questionnaire, which
can be found at: www.ciria.org/service/lean
Implementing Lean in construction: a Lean guide for client organisations

Chick, G

CIRIA

C728 © CIRIA 2013 RP978 ISBN: 978-0-86017-730-2

British Library Cataloguing in Publication Data

A catalogue record is available for this book from the British Library

Keywords
Lean construction, change management, construction process, improvement, innovation, knowledge
management, productivity, supply chain

Reader interest Classification

Supply chain business improvement, Availability Unrestricted
project management Content Advice/guidance
Status Committee-guided
User Business improvement managers, senior management,
Lean champions, HR and skills managers

Published by CIRIA, Classic House, 174–180 Old Street, London, EC1V 9BP, UK

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ii CIRIA, C728
 Why read this guide?
Within the built environment, building and infrastructure clients like you are the key link between the
end users and those that formulate the design and carry out the construction on site. Most involved
in our industry now seem to accept that waste in construction processes and communications remains
annoyingly persistent despite the best efforts of many over the last two decades.

Regrettably, our public buildings and infrastructure still costs more than they should. As clients it
is surely our responsibility to demand better, and then to contribute to improving matters.

‘Lean’ is a simple, intuitive way to remove waste of all kinds from everything we do. When we
work collaboratively for improvement we can together change our industry. However, this will
only happen if you, the client, demand that it should. Reading this guide is a first step on that
road to better, more cost effective, quicker, safer, more sustainable and more enjoyable ways of
constructing our built environment.

This guide has been authored and reviewed by individuals who have worked with some of the
UK’s leading client organisations in terms of delivering Lean solutions within their supply chains.
Accordingly, this guide uniquely explains the principles behind ‘Lean’ and describes how to put
them into practice from a client’s perspective.

Chapter 1 of this guide provides you with a description of the principles of Lean, with Chapter
2 giving an overview of Lean practices. Both chapters are couched in terms specific to you, the
building and infrastructure client and/or developer. Chapter 3 guides you through a six step
practical guide to Lean implementation and is intended for use by both large organisations funding
a succession of projects every year or developers that might be commissioning a single project.

Background to topic
In 1995 Lord Latham identified the high level of waste within the UK’s building and construction
industry. Shortly after Sir John Egan identified a way forward (Egan, 1998). Despite all the
activity that has occurred since, many of us still find it hard to sustain improvements and carry
forward the progress we make. Others are still to commence their Lean journey. The UK
Government is now asking for a 20 per cent saving on the building and infrastructure work that
they commission and the current economic climate demands that we get more for less if we are to
survive. These factors seem to be providing a stimulus for many of us to revisit the potential that
Lean has for improving our industry. This guide is aimed at helping commissioning clients gain a
better understanding of the principles of Lean and then guiding them through the practices from
a client’s perspective.

CIRIA Lean guides

This guide is one of a series of publications and, together with an overview document, can be
found at: www.ciria.org/service/lean
C725 Lean and BIM (Dave, B, Koskela, L, Kiviniemi, A, Owen, R, Tzortzopoulos, P)
C726 Lean and sustainability (Corfe, C)
C727 Lean benefits realisation management (Smith, S)
C728 Lean client’s guide (Chick, G)
C729 Selecting a Lean consultant (Fraser, N)
C730 Lean tools – an introduction (O’Connor, R and Swain, B)

Implementing Lean in construction:

a Lean guide for client organisations iii
 Acknowledgements
This guide was written by BRE and Collaborative Improvement Ltd under contract to CIRIA.

Project steering group

Terry Stocks (chairman) Ministry of Justice
David Adamson Sellafield Ltd
Chloe Chen Highways Agency
Jai Dalal Morgan Sindall
Colin Evison BAM Nuttall
Lynne Hamilton Anglian Water
Bill Heyes Kier
Alan Hodges BAM Nuttall/Construction Skills
Owen Jenkins CIRIA
Jonathan Morris Skanska
Ian Rehnard Interserve

Author team
Gerry Chick BRE/Collaborative improvement
Claire Corfe BRE CLIP
Bhargav Dave University of Salford
Nigel Fraser West One Management Consulting
Arto Kiviniemi University of Salford
Lauri Koskela University of Salford
Richard O’Connor Transform Business Ltd
Robert Owen Institute for Future Environment
Stuart Smith Bourton Group
Brian Swain Brian Swain Ltd
Patricia Tzortzopoulos University of Salford

Lead author
Gerry Chick
Gerry is a civil engineer by profession and spent much of his career working for BAA plc in
various capacities. BAA plc were then the world’s largest airport group that developed and
operated airports in the UK and abroad. As such they were one of the UK’s major building and
infrastructure clients.

For the past 20 years Gerry’s passion for eliminating waste has focused upon working
collaboratively with consultants, contractors and suppliers within BAA’s multiple supply chains to
improve the manner in which they worked together through adopting a Lean philosophy. This
approach generated multi-million pound savings for BAA plc while at the same time improving
the quality, delivery time, health and safety, sustainability and reliability of their construction
projects and improved profitability for their supply chain.

Gerry left BAA plc in 2010 and is now a director with Collaborative Improvement Limited, a
private company with the purpose of helping the building and construction industry increase the
value they bring to their customers and end users.

Funders
BIS, BAM Nuttall, Construction Skills, Highways Agency, Sellafield Ltd, Skanska

iv CIRIA, C728
 Contents
Why read this guide? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Background to topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Case studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

1 Lean principles for the building and infrastructure client . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Why does Lean matter to me, the client? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Great expectations – Lean consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 Waste is so much more than wasted materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.4 Understanding Lean basics: why value doesn’t equate to cost and why it is not the same
as cost or price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 Lean assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.6 Final thoughts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

2 Lean practice for the building and infrastructure client – a roadmap . . . . . . . . . . . . . . . . . . . . 11

2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Lean is possible for all client organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 Lean client leadership – seven top tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4 Four critical success factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.4.1 Success factor 1: behaviour and culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.4.2 Success factor 2: commercial considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.4.3 Success factor 3: contracts matter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.4.4 Success factor 4: simple and appropriate tools and techniques. Learn to be
present . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.5 Six-steps to implementation – a framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

3 Six-steps to implementation – the detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.2 Step one: establishing the basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3 Step two: acquisition for improved performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.4 Step three: creating a collaborative team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.5 Step four: Lean implementation on-site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.7 Step five: multiple projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.8 Step six: supplier performance and relationship management for sustained success . . . . 42

References and further reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Boxes
Box 1.1 Why you should read this guide: a sector perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Box 1.2 The seven wastes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Box 1.3 Seven Deadly Diseases and True North Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Box 3.1 The Velodrome, London . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Implementing Lean in construction:

a Lean guide for client organisations v
Box 3.2 Lean Maturity Assessment Toolkit, Highways Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Box 3.3 Anglian Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Box 3.4 Knowledge sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Box 3.5 Pareto analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Case studies
Case study 2.1 Reducing waste using Lean tools, Wolverhampton University and NG Bailey . . . . . . . . 15
Case study 3.1 Collaborative working . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Figures
Figure 1.1 Progressive application through the project life cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Figure 2.1 BAA plc Performance Improvement Toolkit 1995–2010 . . . . . . . . . . . . . . . . . . . . . . . . . 13
Figure 2.2 Employing Lean tools such as observation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 3.1 Use of off-site manufacturing – standard product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Figure 3.2 Teamwork – adopting a collaborative approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Figure 3.3 Root cause analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Figure 3.4 Supplier positioning matrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Tables
Table 1.1 11 things that make the building and infrastructure industry unique . . . . . . . . . . . . . . . . 6
Table 1.2 Why organisations have different characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 1.3 Five components of Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 2.1 Where to find maximum returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 3.1 Benefits from supplier relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Table 3.2 Skills, competencies and behaviours for managing suppliers . . . . . . . . . . . . . . . . . . . . . 44

vi CIRIA, C728
 1

Lean principles for the building

and infrastructure client
1.1 WHY DOES LEAN MATTER TO ME, the client?
Building and infrastructure clients have an important responsibility to society to ensure that the
work that they commission is designed and constructed in a manner that minimises cost, delivery
time and accidents, while at the same time ensuring maximum build quality and sustainability.

Whether or not your client organisation chooses to be ‘Lean’, it has an important role in
spearheading a Lean approach, with the accompanying cultural change, to ensure that the supply
chains it funds work collaboratively and in a way that ensures improved performance.

Lean working breaks the stereotypical view that reductions in cost will compromise quality and
programme delivery. Collaborative Lean improvement methodologies correctly adapted and
applied will lead to improvements in:

XX cost
XX programme delivery
XX health and safety
XX quality
XX environmental impact
XX social responsibility
XX employee work satisfaction.

If your client organisation doesn’t initiate these changes, who else do you think will?

In his report, Sir John Egan (1998) quoted research that suggested that up to 30 per cent of
construction is rework, labour is used at only 40 to 60 per cent of potential efficiency, accidents
can account for three to six per cent of total project costs, and at least 10 per cent of materials are
wasted. Guidance by Woolstenhome (2009) reports some progress, including safety, productivity
and predictability, but acknowledges that there is still much to be done. However, many of us will
know of projects where performance is much poorer. There is no room for complacency.

Client organisations are rarely the end users of the buildings and infrastructure that they
commission and it is ultimately these end users or taxpayers who normally foot the bill. The case
for considering Lean is compelling, whether your perspective is financial, social or simply if you
are in the position of having to do more for less.

Implementing Lean in construction:

a Lean guide for client organisations 1
 Public sector clients: budget cutbacks are now forcing

guide: a sector perspective

you to seek cost savings in all your activities, including

Box 1.1 Why you should read this

construction. While the current economic climate is
providing an acute driver, arguably, the potential has been
there all along.
Private sector clients: consumers can no longer endure
frequent price rises. There is more pressure than ever
to reduce your operating overheads. Construction spend
is an obvious area of potential saving. Using Lean can
help you achieve this and achieve greater value for your
business from every pound spent.
Tier 1 contractors: most companies prefer to work for
Lean clients that appreciate the difference between value
and costs. Being Lean means that you can better serve
your client and, in turn, build a stronger supply chain.

Any Lean intervention or transformation, whether it is for your organisation, a project that
your organisation has commissioned or your organisation’s building and infrastructure supply
chain across many projects, requires appropriate leadership. Leadership styles differ from one
organisation to another, however in terms of helping to facilitate Lean practices your client
organisation can help in two ways.

What your organisation does when it commissions and manages building and infrastructure
projects will have a major influence on this. Different organisations show different forms of ‘Lean
leadership’.

Firstly, some clients feel that it sufficient to choose providers that present the lowest compliant cost
at tender, arguing that the market will then ensure that their providers are the Leanest or they
would not be the lowest cost option. While this argument might have a simplistic appeal it is often
found wanting within the building and infrastructure industry for many reasons.

Clients that rely on this mechanism need to be very certain of their requirements when going to
tender. Many are not and make changes after design and/or construction has started, which often
leads to unmanageable and unplanned claims for increases in cost and time. If clients rely on this
mechanism they are unlikely to have a true understanding of the cost of their projects in terms of
the individual components of their specifications and they will certainly have no understanding
of the magnitude or cost of waste of their projects. Lastly, cheapest definitely does not equate to
waste free and fixed price contracts have no incentive for the contractor to identify waste that has
been ‘designed in’.

Secondly, clients adopting a more proactive methodology range in approach. Some like to ensure
that their designers, contractors and suppliers are fully trained in Lean practices either by
providing training themselves or requiring it is undertaken by external suppliers. Some agree
project and/or ongoing improvement targets that may or may not be contractual. Some require
visibility of Lean performance on a self-reporting basis.

For example on appropriate projects, Heathrow Airport Limited issue a Design for
Manufacturing, Assembly and Commissioning (DfMA+C) brief, which is a contractual
requirement. The principal contractor is then required to provide a DfMA+C strategy. An
intervention regime is then managed by the client throughout the project life cycle and is checked
against technical and design performance standards with the principal contractor being ‘pushed’
to clearly identify and realise all respective benefits.

This approach is illustrated in Figure 1.1.

2 CIRIA, C728
Figure 1.1 Progressive application through the project life cycle (courtesy Richard Kelly, Heathrow Airport)

As well as what is done by your client organisation its culture and the resultant behaviours
displayed by your colleagues can also provide Lean leadership. These are covered later in Sections
1.6 and 2.4 of this guide and in the assessment matrix illustrated in Terry and Smith (2011).

The manner in which your organisation commissions its design is also important. Your client
organisation will have commissioned the design for each facility it builds or constructs. By
demanding that the design is carried out to enable waste to be minimised during construction
you, the client, demonstrate Lean leadership which can make a considerable difference.

In addition to the DfMA+C process, the 13 things that all clients should do to enable Lean
construction on site are:

Section

1 Concurrent engineering 3.2

2 Standardisation 3.6

3 Simplicity 2.4.3, 3.5

4 Building Information Modelling (BIM) 3.5

5 Performance specifications 3.5

6 Off-site manufacture 3.5

7 Knowledge of what is available off the shelf

8 Shared active learning 3.8

10 Knowledge of what manufacturers would be able to change at no additional cost

11 Encourage or require designers to apply Lean to their design processes 3.2, 3.4

12 Ease of build 3.5

13 Whole life costs

We will revisit these points in Chapter 2 of the guide.

Similarly, project programming needs to be viewed differently.

Traditionally your client organisation might have established a target completion date with only
limited information. When budget costs are also fixed on the same basis difficulties can occur.

Implementing Lean in construction:

a Lean guide for client organisations 3
To incorporating Lean principles the customer’s/end user’s view of value must be fully understood
and not simply assumed. It is then possible to understand how value will be delivered in design
and in manufacturing, material supply and on-site assembly. Programming needs to allow for
flow so that information, deliveries to site and on-site assembly are carried out when, and only
when they are needed to meet the desired end date. Obviously as the programme progresses
systems should be established to facilitate continuous improvement.

Traditionally each part of the project process is usually run sequentially with one stage finishing
before the next starts. For Lean to work programming should break elements down into smaller
chunks and allow some sections of processes to run in parallel. For example, it might well be
necessary to carry out some of the detailed design before the completion of the conceptual phase
or some of the off-site manufacture and fabrication may need to be carried out before completion
of the detailed engineering design.

To allow this to happen, your client organisation may need to approach procurement in a less
traditional way than usual to allow for concurrent engineering of the project as this requires input
from contractors and subcontractors before the detailed design is completed. This will also allow a
realistic programme to be established through a series of collaborative planning workshops, which
will also ensure that delivery can be achieved in a shorter time than might have otherwise been
possible.

Clients should be wary when offered proprietary Lean planning solutions but rather work to
apply fundamental Lean principles to their own circumstances remembering always that waste
elimination is the priority for Lean success.

Attacking waste does not only mean saving on capital costs. It will also:

XX improve quality
XX reduce time spent on site
XX reduce accidents
XX enhance sustainability
XX increase the work satisfaction of all involved.

As we’ve said, after all, you are the client, so if you don’t insist on collaborative improved performance
from your supply chain leading to less wasteful, Leaner projects, who else is going to bother?

1.2 GREAT EXPECTATIONS – LEAN CONSULTANTS

Lean transformations are always a big ask for any client organisation as they use valuable
resources in terms of time, commitment and cost and require a degree of faith upfront before
results have been obtained. So it is only fair that many clients challenge the appropriateness
of using tools and techniques developed for use in manufacturing within building and
infrastructure environments. It is important that this is clarified before progressing further to
describe the principles of Lean and waste elimination.

Whatever assurances you receive from a Lean consultant, Lean tools and techniques seldom
work as well in construction as they do in manufacturing unless they are suitably modified. It
is certainly true that waste is waste, in whichever industry it is found, and that the underlying
principles still hold good. The difference comes in how these principles are applied, and how
the resultant tools and techniques have accordingly been adapted, not only within a particular
industry, but within a particular organisation within that industry.

Every industry has different characteristics. This first needs to be experienced by anyone wishing
to provide Lean advice at any level. Once this has been done it needs to be taken into account

4 CIRIA, C728
when designing Lean interventions or transformations. The contents of Table 1.1 need to be
thoroughly understood through practice rather than scholarship.

Every organisation has different characteristics. This is often called its culture. Culture represents
the beliefs, ideologies, policies and practices of an organisation. It gives the employees a sense
of direction and also controls the way they behave with each other. Some of the more important
characteristics that will make your organisation’s culture (or ‘that’s the way we do things around
here’) different to others, and that are most relevant to client organisations wishing to embrace
Lean, are listed as follows and summarised in Table 1.2.

It is hoped that these tables confirm your

Toyota drew on the work of Deming (2000) in
view of the uniqueness of our industry and developing the Toyota Production System (Liker, 2004).
your organisation.
Toyota is perhaps the only organisation whose trainers
and coaches will implore you not to copy them. Rather
The remainder of this guide is written with they will advise you to take away what you have learnt
this in mind and you are urged to read it with and then adapt it wisely to suit your own working
environment because you are the experts in how your
the same perspective. organisation and industry works.
The whole concept of ‘Lean’ resulted from observing
Also, when seeking Lean advice, find Toyota and other companies that had copied them.
somebody (the person that you are going to Toyota don’t seem to use the term. We will make
be working with is more important than the frequent references to Toyota not in the belief that
we in construction should copy them. Why ever would
organisation they work for) who: we? They mass produce cars using a manufacturing
process. In fact, Toyota also has a construction arm.
XX has extensive experience of working We, for the most, construct one-off, bespoke
within building and infrastructure building and infrastructure projects. There are many
organisations in traditional roles key differences although we should endeavour to
understand the underlying principles of what Toyota do
XX can show you a portfolio of Lean and then adapt them to the construction environment
interventions and transformations that and, to a lesser extent, how our own companies work.
they have personally facilitated
XX has a proven track record of coaching and mentoring all levels of people from board
members to operatives within a building and infrastructure organisation
XX has received Lean training from a manufacturer (rather than a training organisation) with a
recognised Lean track record and further training specific to our industry
XX is prepared to spend time getting to know your organisation
XX does not try to convince you that you require a standard solution such as Six Sigma or Lean
Six Sigma.

See Fraser, 2013.

Implementing Lean in construction:

a Lean guide for client organisations 5
Table 1.1 11 things that make the building and infrastructure industry unique

An on-site construction or assembly process requires those adding value to work by moving over what they are
making whereas during a manufacturing process the product being made usually moves through various work
stations where value is added.
Part, and in some cases all, of the work is affected by weather, causing discomfort, stoppages and making
consistency more difficult than within a controlled environment.
Organisations of projects and project teams
Building and infrastructure work has traditionally been managed and accounted for on a project-by-project basis
making learning and evaluating improvement from one project to the next more difficult than in manufacturing.
Project organisation makes retaining the same workforce challenging. So learning is more difficult to capture and
pass on. Most manufacturing organisations have a much more stable workforce and consequently don’t have to
accommodate these limiting conditions.
Contractors and sub-contractors typically hire and reward project managers, site managers and foremen for their
ability to fire-fight when things don’t go according to plan rather than to make the plan correct in the first place.
This is the opposite of what is required in a Lean culture and creates much of the waste we pay for on our projects.
Contractors and sub-contractors still employ a ‘craft’ approach to work with operatives carrying out tasks in the
manner they feel most appropriate. A Lean approach requires standard work to be employed by both operatives
and management where jobs (rather than individuals) have a standard way of being done that is followed.
Clients, contractors and sub-contractors within the building and infrastructure industry are frequently looking
for quick fixes rather than longer term sustaining Lean transformations. Whereas Lean tools and techniques can
help with the former, the true benefits and rewards can only be obtained with a longer term outlook. This must
emanate from each client.

Clients are increasingly outsourcing expertise that were traditionally in-house. This includes design, architecture,
cost management and quantity surveying, project management, site supervision and inspection and health and
safety and sustainability expertise. Without continuity of work, individuals from these suppliers will inevitably
need to be trained in Lean principles for each project and will not have the same knowledge of your organisation’s
culture as would be if your own staff were doing the same work.

Culture

The industry has always been, and continues to be, largely adversarial in nature.
In general the workforce in construction is less familiar with being asked to contribute intellectually to the
planning or detailing of tasks than production line employees.
A that’s the way we’ve always done it (TTWWADI) culture is endemic within construction. While there are signs
that this is changing, many in the sector seem far less ready, willing or able to change than their counterparts in
successful manufacturing organisations.

6 CIRIA, C728
Table 1.2 Why organisations have different characteristics

The business

The nature of the business.

The business’s goals and objectives: the strategies and objectives designed to achieve results are a contributor.

Values and reporting structures

Reporting structure: whether the structure is tiered or flat.

How the organisation handles its employees: how free individuals are to make decisions and participate in
strategy planning leads to employee loyalty, for example.
The physical environment: the space the organisation occupies, with common areas being particularly important.

Work place: also relates to home life balance.

Values: the beliefs at the centre of the culture.

Heroes: the people that embody the values.

Rites and rituals: interactions and routines that mean something symbolically.
Stability: when staff and workers feel stable in what they are doing, there is a much greater tendency for
individuals to be enthusiastic with regard to Lean involvement.
Internal and external communications

The cultural network: the informal communication network that brings informal power.

Language and communication: both in terms of internal and external communications.

Clients and external parties: these make demands on the company and often dictate how responses are made.

Resulting behaviours and approaches

Innovation and risk-taking: organisations that are very prudent will often find change and improvement challenging
as some degree of risk-taking is essential to move on.
Attention to detail: where too much importance is placed on this there is a tendency to struggle with the big
picture, creativity and idea generation.
Outcome orientation: an emphasis on what is to be achieved rather than on micro management is a key to Lean
success.
People orientation: it’s people that collaborate, not organisations, and so again this is key to collaborative
improvement.
Team orientation: working in a team is another key element to improving collaboratively, so this is also extremely
important.
Individuals working within the organisation and their attitudes, mentalities, perceptions and interests.
Aggressiveness: this type of culture was endemic in our industry of old and is still widespread. Failure to change
will severely limit Lean success.
The industry remains male dominated (in some organisations more than others) that can result in a macho approach

Implementing Lean in construction:

a Lean guide for client organisations 7
1.3 WASTE IS SO MUCH MORE THAN WASTED
MATERIALS
Waste can take many forms, including: unnecessary cost, reduced quality, increased project
delivery time, more accidents, doing more damage to the environment and a reduction in
satisfaction at work. Lean practices can address these, although before it is possible to do anything
about waste, it is necessary to understand its origins.

Consider other departments within your own client organisation that provide you with
information or a service, for example, finance, procurement or human resources. If you now
think of yourself as their customer for everything that you receive from them, you should find
little difficulty in identifying your own examples of each of the wastes listed in Table 1.3. Also,
building and infrastructure related examples are provided for each. Taiichi Ohno, Toyota’s chief
engineer, was probably the first to formalise various categories of waste. These categories have
become known as the ‘seven wastes’ (or MUDAs, to quote the Japanese terminology). An eighth is
often added, as shown in the box:

Table 1.3 The seven wastes (from Terry and Smith 2011)

T
‹‹moving work-in-process from place to place etc
Transportation ‹‹deliveringequipment, incomplete orders
‹‹moving to and from storage.

‹‹excess raw material, WIP or finished goods causing longer lead times, obsolescence,

I
damaged goods, transportation/ storage costs and delays etc
Inventory ‹‹large site stores of materials
‹‹poor stock management
‹‹too much material compromising workspace.

M
‹‹unnecessary movement of people and equipment that does not add value, including
walking between different work places etc
Motion
‹‹walking between workplace and welfare facilities, manual paperwork processing
‹‹movement of materials and drawing information.

O
‹‹workersunable to do value-creating work, and capacity bottlenecks
‹‹waiting
time between processes or for capacity to take the next step
Waiting
‹‹documents awaiting updating or processing
‹‹equipment downtime.

‹‹producing items earlier than needed or beyond specification

O
‹‹producing more than is needed
Over-production ‹‹larger than necessary excavations, orders placed for same materials with different suppliers
‹‹generating waste through overstaffing, storage and transportation costs
‹‹can be physical or information that is produced.

‹‹taking unnecessary steps

‹‹multiple plant movements

O
‹‹inefficient processing, especially due to poor design or work planning causing something
Over-processing unnecessary
‹‹providing higher quality products than necessary, and produced to standards beyond
specifications (BS)
‹‹work done to ‘fill the gaps’ rather than appear to be waiting, eg ‘waiting for instructions’.

D
‹‹production of defective work or corrections, snags, not meeting specifications first time etc
‹‹inspections to reduce/remove defects
Defects
‹‹wrong information on drawings
‹‹production of replacements – rework.

S
‹‹losingtime and ideas, skills improvements and learning opportunities etc
‹‹learningfrom one site not being used well on another
Skills misuse
‹‹people working one or two levels down from their true capability
‹‹mismanaged health and safety.

When your client organisation encourages, and engages with your architects, designers,
contractors and suppliers to focus on eliminating these wastes the benefits enable our building
and infrastructure industry to become more profitable. When the Lean tools necessary for the
removal of this waste are applied with appropriate commercial models, contractual forms and
collaborative, project centric behaviours ‘profitable construction’ can be truly achieved.

8 CIRIA, C728
Your supply chain will become more profitable without the need for you to pay any more and
your client organisation will benefit from lower costs, quicker delivery times, fewer on-site
accidents and near misses, fewer snags on each and every project, much greater cost and time
predictability, reduced material waste and fewer environmental impacts.

Your customers and end users will benefit from right first time delivery, at the time they require
handover and at an improved price.

This is because the philosophy and practices contained within this guide focus on the elimination
of waste, which we all pay for but benefits none of us.

1.4 UNDERSTANDING LEAN BASICS: WHY VALUE

DOESN’T EQUATE TO COST AND WHY IT IS NOT THE
SAME AS COST OR PRICE
As stated previously, Womack and Jones were the first to suggest the term ‘Lean’ for the way in
which Toyota, and others that have managed to copy them, work. They suggest that Lean has five
components that need to be achieved (see Table 1.4). It is important to note that value will rarely
coincide with the price paid for something, which is different to its cost.

Price = cost + overheads + profit. In seeking to eliminate waste it’s the cost of everything that is
useful to understand, rather than the actual price paid.

Value is not the same as price as the customer may value other things too. When did you go out
and buy the cheapest car you could find, irrespective of make or specification? Do you value
functionality or style? The end users of the projects that we build also value things about it that
they are prepared to pay more for.

When seeking contractors, consultants and suppliers for a project it is equally inconceivable why
any buyer would always choose the cheapest option that seems to meet the technical specification.
What does your organisation’s procurement team do? In seeking a Lean provider the culture of
the organisation and the experience of the individuals being offered are just two of the non-price
factors that are crucial to success on a collaborative Lean project (see also Fraser, 2013).

Table 1.4 Five components of Lean

Value: this must be defined by the customer. In construction, value-adding activities can be broadly defined as
those that transform materials and information into something that the customer would be prepared to pay for.
Non-value activities are those that do not. Everything described above as waste are non-value adding activities. A
further category includes activities that don’t add value and that cannot be avoided at the present. Checks carried
out for legal compliance are an example of the latter.
Value stream: the flow from raw materials to completed project. The value stream can be mapped between activities
that add value to expose waste. Value streams exist both on site and across company boundaries from all raw materials
being used on the project whether they arrive on site as a raw material (aggregate) or as a finished product (a lift).
Flow: in manufacturing the product flows through work stations or companies, each of which adds value. In
construction projects it can still represent the flow in or between companies until materials and products arrive
on site for assembly. Construction’s uniqueness is partly that it is then the workforce who tends to flow over the
project rather than the other way round. The construction programme can then flow in this sense.
Pull: all components and information are made and supplied at the necessary time to deliver the product or
service to the customer at exactly the time the customer wants it. Perhaps this has always been the goal in
construction rather than in manufacturing where mass production was pushed onto the customer. In construction
one of pull’s biggest enemies is excessive unexposed risk contingency.
Perfection: for both manufacturing and construction this represents an ‘ideal state’ that will never be achieved in
the field. Striving for it by continuously improving through collaboratively identifying and removing waste provides
the desired results.

Implementing Lean in construction:

a Lean guide for client organisations 9
1.5 LEAN ASSESSMENT
Various methodologies exist to help you understand where you as an organisation or your project
or supply chain are in terms of the Lean journey. Guidance by Smith and Terry (2011) features
one such model to help in the assessment of Lean leadership or Lean readiness. Another can be
found on the Highways Agency website.

1.6 FINAL THOUGHTS

Lean is as much about how you approach your role as a client, the management behaviours
you demonstrate and the behaviours you encourage within your supply chain as it is about
management systems and tools. There is no template for applying Lean and your approach will
depend on a variety of cultural, commercial and other considerations. We will consider these
further in Chapter 2.

In so doing, we have drawn on Demings Seven Deadly Diseases (Deming, 1998), which describe the
most serious barriers that management faces in its current management actions, and Toyota’s True
North Values (Liker, 2004) meaning that they are at the core of everything that they do. Further
details are provided in Box 1.2.

These provide a good place to start when developing you own approach for leading Lean building
and infrastructure supply chains.
Seven Deadly Diseases and True North Values

Deming’s Seven Deadly Diseases

1 Lack of constancy of purpose.
2 Emphasis on short-term profits.
3 Evaluation by performance, merit rating, or annual review of performance.
4 Mobility of management.
5 Running a company on visible figures alone.
6 Excessive medical costs.
7 Excessive costs of warranty, fueled by lawyers who work for contingency fees.

Toyota’s True North Values

1 Challenge.
2 Kaizen mind (everybody naturally sees continuously improving as being part of their role and a way of life).
3 Go and see (at the workface).
4 Teamwork.
Box 1.2

5 Respect for humanity.

10 CIRIA, C728
 2

Lean practice for the building and

infrastructure client – a roadmap
2.1 INTRODUCTION
In Chapter 2, we consider more closely how you can start planning and applying a Lean
approach. We do this by introducing:

1 Seven top tips: Section 2.3 introduces seven key factors that need to exist for your Lean
implementation to be successful.
2 Four critical success factors: Section 2.4 describes how behaviour and culture, commercial
considerations, contractual approaches and appropriate tools and techniques are important
to the success of your approach.
3 Six steps to implementation: Section 2.5 introduces a roadmap that you can adapt and
apply to your own circumstances.

Chapter 3 considers each of the steps of this framework in more detail.

2.2 LEAN IS POSSIBLE FOR ALL CLIENT ORGANISATIONS

Benefits can be gained from adopting a Lean approach whether your client organisation is
embarking upon its first building and infrastructure project or is a long established developer or
government department with a rolling programme of work.

However, the method for adopting a Lean approach to gain the maximum payback for the effort
employed may differ.

Lean initiatives can take the form of transformations or interventions. Transformations require
a holistic change in working whereas interventions tend to apply Lean methodology at a specific
point, typically where something is not going as well as planned. Accordingly transformations
tend to be more proactive whereas interventions are typically reactive.

Both transformations and interventions can be applied to a project, company or supply chain.
However, the commitment in time, cost and effort is much greater in the case of a supply chain
transformation than for a project intervention and the payback period may be longer in the
former case. As such clients with only one or few developments might rightly question the value
of this level of commitment preferring to work on a single project transformation or intervention.
Table 2.1 shows broadly where maximum returns might be found.

Implementing Lean in construction:

a Lean guide for client organisations 11
Table 2.1 Where to find maximum returns

Project Organisation Supply chain

Single development   

Intervention

Intermittent development   

Frequent development   
Continuous development   
Single development   
Transformation

Intermittent development   

Frequent development   
Continuous development   
Obviously there are all manner of shades of grey between these categories and generally the larger
the project is and the longer it runs for the greater will be the payback at a transformational level.

Whatever type or size of client your organisation is, the project level is always a good place to
start, and to learn, perhaps first with an intervention, when something has gone wrong, followed
by a whole or part project transformation.

2.3 LEAN CLIENT LEADERSHIP – Seven TOP TIPS

Based on our earlier references to Deming (2000), we have adapted these to form seven top
supply chain tips for building and infrastructure clients and these are provided as follows.

1 The requirement for Lean must emanate from the client and must be underpinned by
actions.
The client should clearly describe their philosophy and create a vision with aligned goals.
These must:
XX be shared with the supply chain for every project
XX be accompanied by clearly defined improvement expectations for the supply chain as a
whole
XX translated into agreed and realistic targets with strategically important first tier

contractors, consultants and suppliers.

Progress should then be jointly monitored.
2 Long-term consistency of purpose is vital for clients that wish to reap the full potential of
Lean.
This can be significantly undermined if there is an over-emphasis on short-term profits or
figures that can be manipulated in the short-term to the detriment of the more sustainable
long-term.
3 Organisational and personal performance should not be judged solely on financial
performance.
Worker and supplier potential will not be maximised if they are judged only on financial
criteria. Accordingly it is important to consider how things are done as well as what has
been achieved financially. Also, when constructing a balanced scorecard or other supplier or
project performance measuring and monitoring mechanism the quality of the relationship,
sustainability and health and safety need to be considered alongside cost, project
programme and quality. Also project programme and cost need to be considered in the

12 CIRIA, C728
 context of the level of waste within the project and performance of previous projects (if your
client organisation carries out multiple projects and comparative data exists) as well as being
viewed simply as a factor of predicted finish time and budgeted cost.
4 Improvements should be continuous in nature.
Using the plan-do-check-act cycle, or a derivative of it, all employees should be made
responsible for the quality of their own work. Supporting daily improvement as being
part of everybody’s job is a key contribution that every client can make and support with
appropriate questioning and encouragement on every site visit.
5 Alliances are important enablers particularly if developed on a range of criteria.
Mutually beneficial alliances with important contractors and consultants should be selected
not only on price but with quality, delivery time, health and safety, sustainability and culture
also being considered. Once these supply chain partners have been chosen a collaborative
working partnership should be developed to maximise the effectiveness of any Lean
initiative.
6 Clients should encourage appropriate management behaviours within their supply chains.
Clients should promote a supportive and facilitative approach to management and
supervision using techniques such as coaching. Controlling and purely directive approaches
should be discouraged. Similarly, such organisations should be encouraged to reward their
staff for their ability to plan projects on a ‘right first time’ basis rather than rewarding them
for fire-fighting when the plans they created in the first place go wrong. Clients need to
establish this by example in terms of how they behave towards such organisations.
7 Training, coaching, education and sharing knowledge is extremely important for Lean
initiatives.
Training needs to be at least in part carried out by doing by example at the work face.
Knowledge is always best shared at the point of application, and is best achieved by
encouragement and coaching. Accordingly clients should do all they can to progress this
within their supply chains by, for example, encouraging cross-organisational knowledge
sharing at the work face and senior management walking the project at least daily with a
view to actively encouraging the disclosure of what has gone wrong (and also how it was
corrected) rather than limiting their interest to what went right. Self-development is also an
important commitment for Lean clients to make, as is being seen to ‘walk the talk’.

Figure 2.1 illustrates how these principles were applied by BAA.

Understand Understand: Decide on Gather data

overall targets and current situations specifics and plan and develop
success criteria future states your approach understanding

Review success The core

Demonstrate Implement/roll Establish root
and capture
results out process causes
learning

Generate ideas
Trial new ideas
and choose

Figure 2.1 BAA plc Performance Improvement Toolkit 1995–2010

Implementing Lean in construction:

a Lean guide for client organisations 13
2.4 FOUR CRITICAL SUCCESS FACTORS
Although important, Lean tools and techniques alone are unlikely to deliver Lean to its full
potential and must be supported by four other key factors. The importance of these together with
deploying Lean tools and techniques to their full potential are explained here:

XX Success factor 1: behaviour and culture

XX Success factor 2: commercial considerations
XX Success factor 3: contracts
XX Success factor 4: appropriate tools and techniques.

2.4.1 Success factor 1: behaviour and culture

This is the most important delineator of Lean success.

Top management buy-in, if only superficially, is a prerequisite: the more top management
demonstrate genuine commitment and support, the more likely it is that long-term improvements
are achieved in a self-sustaining manner. This is further helped when the same corporate and
framework leadership remain in place for the duration of a framework.

Spending time understanding what each party wants is important: better results are delivered,
whether at a project or a framework level, when a client organisation spends time with their
supply chain to fully understand what each wishes to achieve from the agreement.

Treating each framework agreement as a single ‘organisation’: bringing the management teams
together to develop an organisational model, mission, vision, values, agreed level of improvements
etc will produce better and more sustained results. Better results will be achieved if the next tier
of management from all parties is invited to develop the lower level strategy including the plan
for the first 12 months.

Inducting everybody is vital: Lean results will best be achieved where all members of both the
client and supplier teams are provided with an induction that addresses both the culture and the
techniques and tools that they might come across or be asked to use. Where this is the only Lean-
related training that will be received it should perhaps have a duration of one or two days for
supervisory and managerial staff (foremen and above) if it is to be fully effective. Cost and time
challenges might be encountered but any investment made here will be repaid many times over by
the later improvements of the results obtained.

Choosing and training Lean champions from framework partner organisations works best:
Lean champions are those who are given a more comprehensive training than most in terms of
both soft and hard skills and then are empowered to facilitate Lean working within their own
organisations. Better results are obtained where the:

XX champions are chosen jointly by the framework supplier and the client from the framework
supplier’s team
XX champions are provided with training by either the client or by the client together with an
advisor
XX champions are provided with training that has been very specifically tailored to the client
organisation’s project environment
XX client continued to support the champion community.

These Lean champions are then more likely to deliver better results than where specialist
consultants are brought in to carry out all the training or where the clients or the framework
supplier’s ‘head office’ or ‘group’ performance improvement or Lean specialists are used.

14 CIRIA, C728
Continuing the induction programme for new members of both client and supplier teams is
critical: failure to do this will soon result in cultural and technical ‘creep’. For example, if new
members are not inducted culturally, so they don’t adapt new behaviours more in-line with the
non-adversarial approach necessary for Lean to work, then cultural drift will occur over time.
As new members of the team begin to outnumber the old, there will quickly be a return to more
traditional confrontational behaviours and results will begin to decline.

Clients and client teams must take the lead in demonstrating the right behaviours: the client
has to be the first to demonstrate the behaviours necessary for collaborative improvement. If the
client, and just as importantly their consultants and managing contractors, fail to display the
necessary trust, blamelessness, facultative non-directorial leadership style, and are not willing to
share responsibility for both successes and failures, results will be limited and not be sustainable
over time. Clients and their representatives must also demonstrate informed risk-taking, project-
centric thinking (putting the success of the project before that of each individual organisation),
creativity, and a strong sense of fun and enjoyment for what they are doing if this is to be
reproduced throughout a project or framework agreement.

Case study 2.1 Reducing waste using Lean tools, Wolverhampton University and NG Bailey

Figure 2.2
Employing Lean tools
such as observation
Building client Wolverhampton University worked with mechanical and electrical contractor NG Bailey to reduce
waste through employing simple Lean tools such as observations and root cause analysis. Once some basic
training had been provided, workforce participation in the improvement project was encouraged with the
supervisors and workforce being invited to run the project. It was felt that they were best placed to understand
the processes that they used and were the real ‘experts’. All the analysis was carried out by the workforce and
ideas for improvement came from them too. The improvement work resulted in a 40 per cent improvement in
pipe fitting productivity with productivity for the job as a whole improving by 13.8 per cent.

2.4.2 Success factor 2: commercial considerations

Let’s be friends: alliance or partnering agreements or framework agreements should not be
mistaken for an easy ride necessitating little more than being friendly or having lots of joint team
building days out that have no direct relationship to the work in hand.

When this approach alone is used, any improvements made are likely to be very short-lived.
If nothing more is done, even where open book accounting is in place, prices are likely to rise
annually, quality might be reduced and accidents are likely to increase. This is simply because the
traditional methods of checks and balances had been removed without anything being put back to
replace them.

For example, ongoing checks on quality would stop without operatives being provided with
the infrastructure, training or management support necessary to ensure that quality was truly
perceived and treated as being each person’s responsibility.

Open book irrespective of risk allocation: if a client doesn’t understand the cost of the elements
of the work that they are commissioning, how can they decide whether or not they are obtaining

Implementing Lean in construction:

a Lean guide for client organisations 15
good value or where the most important areas to start any Lean transformation work are? Open
book doesn’t only represent being open about how much everything actually costs (without profit,
overheads, mark-ups, contributions to the centre, cross company charges and risk allocations)
as important as this is. It also represents complete openness with regards to defects, time spent,
environmental and social impact and the health and safety statistics (including near misses and
reported hazards) for each element of each and every project.

The purpose is not to expose the contractor, consultant or supplier so that their prices and profits
can be squeezed on the next job but rather to have clear sight of all the costs so that the cost of
waste can be identified and eliminated.

Understanding cost at an elemental level is vital for a client who commissions work of a similar
nature on an ongoing basis if they are to properly understand where savings have been made
over time. This is best done at the activity level. For example, while knowing the average cost of
constructing a road per metre is important in terms of high level budgeting, more needs to be
considered for a client to fully understand and monitor performance. Firstly, understanding the
overall costs of plant, labour and materials and then breaking that down further as necessary is
important to direct improvement activity in the right areas for best results. Then it is necessary
for the contractor to disclose how those costs are broken down with time by activity, and then
by sub-activity, each time by cost and time, noting any particular health and safety and quality
issues or significant environmental impacts. It is possible to build a picture over several projects to
determine whether or not genuine improvements have been achieved. In terms of providing cost
information at the tender stage, activity scheduling will provide a solid base.

Your client organisation should demand this level of detail irrespective of how the risk is
structured within the contract. This might seem a little contrary in the case of a lump sum
arrangement, for example. When a client enters into a framework agreement with one or more
contractors for a particular type of work, that client presumably wishes to see improvements in
costs over the life of the framework agreement, which could be as much as five or even 10 years.
At the point of tendering, although the client will know the relative costs for each tenderer, there
will be nothing to indicate how much waste is built into each submission. This can be ascertained
by measurement as time progresses and improvements can be made. It is then necessary to track a
direct relationship between these improvements and the effect this has on cost. While it is true to
say that in the case of a lump sum contract no benefit will accrue to the client on this project, they
will have a firm basis for achieving a lower fixed price on the next.

When several contractors or consultants have been appointed to carry out similar projects,
understanding costs to this level of detail also allows comparisons to be made in a far more useful
manner than simply understanding costs at project level. This is also a useful way of identifying
areas of best practice and sharing knowledge.

Targets are vital: when contractors are procured to carry out multiple projects over a long period,
improvements must be demanded by the client and these must be established as contractual
obligations through the use of output targets relating to outturn costs, quality, delivery time,
health and safety and environmental and social impact. Also, a client will almost certainly want to
agree enabling improvement targets such as:

XX an increase in the time spent on value added activities

XX the number of improvement initiatives undertaken in a set period.

These targets should be jointly agreed and be realistic. If improvement information is shared this
soon becomes a relatively simple and pain-free process. See also Smith (2013).

16 CIRIA, C728
2.4.3 Success factor 3: contracts matter
Having a contract form that is supportive of collaborative improvement is important if the results
of any Lean initiative are to be maximised. The following contract attributes should be considered
when considering the specific form to use.

Collaborative: as has been stated throughout this guide, collaboration is a vital constituent
of improvement and of successful Lean implementation of any kind. Historically, building
and infrastructure contracts have tended to be just the opposite and inadvertently encourage
adversarial behaviour. The NEC broke the mould and is truly collaborative in all its forms.
With 20 years of use and written by those in the industry the suite provides a tried and tested
collaborative contract form that can be used for consultants, contractors and suppliers. Other
collaborative contract forms have also recently become available such as PPC2000.

One size fits all: during a building or infrastructure project it is possible that a client will wish
to directly engage with contractors, consultants and suppliers. In collaborative arrangements
intended to promote improvement it can be highly advantageous to have a common contract form
for all. This promotes the feeling of equity, which is important as all parties must feel that they
are being treated fairly by the client. Also, it allows the client to manage all contracts on the same
basis, promoting simplicity and visibility, both of which are Lean attributes.

Commercial models that promote improvement: it is clearly important that any contract used
best supports commercial models that promote Lean and so are most likely to deliver improved
performance. Three of the most important of these attributes are:

XX target costs
XX shared rewards
XX activity schedules.

So, the contract form chosen should allow these options.

Overarching agreements: it is often desirable for a client to have an overarching agreement with
contractors, consultants and suppliers that are going to be working on a particular type of project.
Framework agreements such as that used for Terminal 5 at Heathrow, are frequently used to
accommodate this. This might initially be done directly to promote collaborative agreements or
may simply be used by a client to comply with EU procurement legislation where such applies. In
the latter case, clients may well later take the view that it is worth pursuing improvements as long-
term relationships might have been created. It is important that the chosen form of contract can
sit comfortably as part of such an agreement.

Proactive change management: traditional forms of contract seek to attribute fault rather than
promote early resolution of difficulties that frequently occur when changes are encountered
or asked for. It is important that the contract should lead the parties through a clear process
that promotes the appropriate actions at the work face to ensure that the work needed to
accommodate these changes is done quickly and cost-effectively.

Risk management: inappropriate management of risk is frequently an important source of waste in

building and infrastructure projects. This can be because risk is inappropriately placed with parties
that are not in a position to properly manage it or because elements are hidden in the form of
undeclared contingencies. A contract should be chosen that promotes the concept of risk sitting with
the party most able to manage it and risk being openly declared and visible to all parties.

Implementing Lean in construction:

a Lean guide for client organisations 17
2.4.4 Success factor 4: simple and appropriate tools and
techniques. Learn to be present
In trying to replicate Toyota in the west, far too much emphasis has been placed on the
importance of tools and techniques and far too little on how they are applied and the culture
and behaviours necessary to support them. This tendency is predictable as tools and techniques
are easy to introduce and, when they work correctly, produce the quickest and most tangible
results. When these tools are then deployed without the appropriate changes being made to an
organisation’s culture to promote behaviours supportive of the use of Lean tools and techniques,
inevitably improvements will be less pronounced than they otherwise would have been.

Using the simplest tool to do the task that

In terms of building and infrastructure projects there
is a very strong tendency to seek solutions long before required the least amount of adaption will
the root cause of the problem has been identified and provide the best results. Introducing these
properly understood. This is a significant challenge as through a fully coached methodology is
contractors tend to employ those best suited to fire-
fighting rather than those who are skilled at planning the most effective for both short- and long-
to allow Lean working or those who seek longer term term results. As has been said previously,
solutions to problems avoiding the wasteful replication
short-term success can be maximised, and
of errors that we see daily on our sites.
that intended for the longer term will be
However, as a general rule the best Lean tools are
usually the ones that make waste visible. Activity
most enduring, when such introduction
sampling (see O’Connor and Swain, 2013) is very forms part of a carefully introduced Lean
strong with respect to this, particularly if observers change management programme including
are chosen from a variety of positions and roles from
within the organisation being observed and your own. addressing cultural and behavioural issues.
Check to see if your organisation has a philosophy
for continuous improvement that could be used or A very important technique frequently
adapted for Lean work.
ignored in the west is the power of ‘mindful
observation’. This is very different to simply
going and having a look round – which we can all do! Observing mindfully requires intent,
patience and practice. Toyota use the term ‘go see’. When a trainee comes back from looking they
will ask them to do it repeatedly. The purpose of this is to help to develop the skill of seeing what
is really happening and not just what is assumed to be happening. Worse still, we in the west seem
desperate to report a solution and often jump to this as part of the observation without properly
investigating or understanding what the root cause might be. To observe mindfully it is important
to have as little else in your mind as possible to distract you (a technique used by many in eastern
cultures is meditation. Kornfield (2005) offers a useful guide to start practising with).

Activity sampling is particularly useful for identifying waste and for helping others learn how to
see it. Although there are more sophisticated tools available, Toyota’s five whys is the simplest and
most effective tool for identifying waste. Best Lean solutions are to be found when working with
a group of those who have direct experience of the process that is being considered. Facilitation
skills are essential and tools for idea generation and reaching agreement are important to master.
These are every bit as important as many of the more complicated methodologies that are
frequently peddled currently.

In terms of a process for improvement, the best starting place is a thorough understanding of
Deming’s PDCA cycle (Deming, 2000). See if some form of continuous improvement process has
already been established within your own organisation that can be used. If not, try to write one
for yourself that both uses Deming’s principles but also suits the cultural climate of your own
organisation.

This guide does not have the scope to explore the full range of tools available. Please see
O’Connor and Swain (2013).

18 CIRIA, C728
2.5 SIX-STEPS TO IMPLEMENTATION – A FRAMEWORK
The following six step framework provides an overview of how Lean can be introduced and
implemented specifically from a client’s perspective on building and infrastructure projects.

Having read Chapters 1 and 2, and using your knowledge of your own organisation, this should
help you plan your approach at a macro level.

However, for those wishing to explore these steps further, Chapter 3 of this guide provides the
detailed ‘how to’ walk through each step in the process.

Supplier
performance
Acquisition Creating a Lean
Establishing Multiple and relationship
for improved collaborative implementation
the basics projects management
performance team on site
for sustained
success

Six step framework

Implementing Lean in construction:

a Lean guide for client organisations 19
3

Six-steps to implementation –
the detail
3.1 Introduction
Having introduced the six step framework in Chapter 2, this part of the guide addresses the
practice in detail on a ‘how to’ basis. It suggests how you might implement the principles when
engaging with projects and/or organisations and/or supply chains that your organisation has
tasked to construct building and infrastructure work on your behalf.

This chapter follows the six step framework introduced in Chapter 2.

1 Establishing the basics.

2 Acquisition for improved performance.
3 Creating a collaborative team.
4 Lean implementation on site.
5 Multiple projects.
6 Supplier performance and relationship management for sustained success.

Each step comprises a quick guide page followed by a more detailed explanation on collaborative
Lean practice. Short case studies are also included to illustrate some of the points made.

Although the practical advice provided is specifically for client organisations wishing to engage
with, or create, Lean supply chains for their building and infrastructure work, others will also
benefit due to the general applicability of Lean practices.

20 CIRIA, C728
Step 1: establishing the basics

Who to involve
XX the customer and/or end user XX maintenance
XX procurement XX operations
XX commercial management XX Lean champion or other
XX project construction facilitator.

Key inputs Key actions

Clear understanding
of customer needs XX create the client team
and values
Data on existing
supply chain

XX understand value

Hints and tips

XX involve too many
rather than too XX establish criteria
few at this stage to avoid
alienation later in the
process
XX make sure you really
understand what XX how Lean are
customers and end users incumbent suppliers?
value. Go that extra mile
to understand.

XX choose an approach
Tools and Key outputs
techniques
Set of weighted
XX brainstorming generic criteria
XX reaching agreement Lean assessment of
XX begin to select the
Lean assessment tools existing supply chain
XX Lean team.
XX contract and commercial General approach to
modelling. be adopted

Implementing Lean in construction:

a Lean guide for client organisations 21
3.2 STEP 1: ESTABLISHING THE BASICS
1 Create the client team: most client organisations will have more than one individual
responsible for defining a project’s requirements. It is important to identify all those whose
views and opinions need to be considered throughout the project at the earliest possible
stage. The same is true if the intention is first to establish a Lean supply chain of contractors
and suppliers who will be used for a commissioning client’s building and infrastructure
requirements over a period of time. In large client organisations this can involve several
departments and individuals who will necessarily have different interests and concerns that
will need to be accounted for when choosing the right team of consultants, contractors and
suppliers. In many cases the number of individuals involved will be too great to include
them all in all the decisions that have to be made and accordingly a core, representative
team will need to be selected. While departments and individual roles will vary from one
client organisation to another it is important that the team has an understanding of:
XX customer/end user requirements in terms of the customer’s value preferences
XX the acquisition process including contract and commercial matters
XX project construction
XX building and/or infrastructure maintenance once the project(s) is complete
XX operating the facility
XX a facilitator, typically the Lean champion.

The advice of functional areas such as sustainability, quality and health and safety will also
be needed, although it is not usually necessary to include these in the core team. It is not
only important that the team truly represent the key areas of the client organisation as far
as establishing a Lean supply chain is concerned, but that it is perceived to be. Adopting a
Lean approach will inevitably mean change for the organisation and individual roles. For
these changes to take place smoothly and quickly buy-in is essential, and if elements of the
client organisation feel excluded this will not be forthcoming. Failing to recognise this at
the earliest opportunity will inevitably lead to difficulties later on. Typically departments or
individuals are omitted because they are perceived as being difficult or ‘stuck in their ways’.
Such issues need to be addressed initially by the Lean champion who may choose to provide
or recommend coaching on a one-to-one basis. Once the team has been chosen the Lean
champion may choose to hold a workshop to help the team understand their objectives and
priorities. This will probably also be the first time that the team has worked together as a
group and accordingly this session can be used to help the team begin to feel comfortable
with each other. Inevitably every team will go through a process of ‘forming, norming and
storming’ before they begin ‘performing’ (Tuckman, 1965) at their best. Although friction
with the team needs to be managed to ensure that matters don’t become personal, for
example, generally it should be considered to be a healthy and natural part of team growth.
The Velodrome, London

Courtesy Munkfishmonger
(go to: http://upload.wikimedia.org/wikipedia/commons/b/ba/London_Velopark_Panoramic_-_Feb_2012.jpg)

Before design started on the Velodrome for the London 2012 Olympics and Paralympics a team of top
cyclists were assembled to provide advice on their requirements for racing. This understanding of what
the users valued by the client, OCA and the designers, influenced the design of both the building and the
Box 3.1

track, even to the extent of the positioning of a toilet on the same level as the track for competitors’ use
immediately before racing.

2 Understand value: the first and arguably most important component of Lean is
understanding value from the customer’s or end user’s perspective.

22 CIRIA, C728
 It is important that client organisations do not view themselves as the arbiter of value
without reference to their customers or end users. Sometimes these are not one and the
same thing as far as a building and infrastructure client is concerned. For example, the
owner and operator of an airport will have airlines as immediate customers whereas the end
users are the travelling public. While it might be tempting for a client organisation to solely
rely on their immediate customer for advice regarding the end user’s needs, independent
checks are valuable as emphasis can be different. Where client organisations are in part
monopolies, former government bodies, utilities or nationalised industries, they may be
regulated by an agency established by the government. It is important that their priorities
are also fully understood, and they may well require the improvement that the Lean
initiative is being established to deliver. Shareholder expectations are also important to
define and understand. Any organisation will have several stakeholders all of whom cannot
be included. While it is important that their views are heard, this is best done through a
member of the team or when the team consults a functional area of the organisation. For
example, the department responsible for sustainability and corporate social responsibility
will be able to advise on the stance of relevant pressure groups. Where information is not
readily available it might be necessary to undertake some market research, perhaps in the
form of voice of the customer (VOC) exercises. This will also help when establishing more
detailed specification or quality function deployment (QFD). The latter was originally
developed by Akao and Mizuno in Japan in 1965 for use in manufacturing and is now more
widely used. It is an important element of design for Six Sigma and is included in ISO
9000:2000.
3 Establish criteria: the objective of this step is to establish the high level criteria that will be
used for selecting consultants, contractors and suppliers, evaluating their performance on
projects and on a project to project basis and to be able to determine performance of each
project as a whole. Often these sets of criteria are not linked and this will inevitably lead
to client dissatisfaction. Typically, price alone might be used at the acquisition stage and
then a raft of other criteria used for monitoring performance with a separate and different
evaluation being carried out for the project. While a QFD methodology can be used, serious
consideration should be given to using a methodology that might be more familiar to those
working on building and infrastructure projects. Such projects are frequently defined in
terms of cost, quality and time. Health and safety and sustainability also should be added.
Lastly, consideration should be given to including a factor to take into account a company’s
culture. There are many other factors that can be included too, but keeping things as simple
as possible often pays dividends. The relative importance of each factor from the customer’s
perspective then needs to be established. As the members of the team have different areas
of responsibility, it is these that they will often feel are the most important. Each criterion
can be weighted if a balanced scorecard approach is used. It is by far and away preferable
to reach consensus to determine these rather than just asking each team member to vote.
Reaching consensus inevitably requires discussion and compromise, which best facilitates
buy-in and involvement.
4 How Lean are incumbent suppliers? If you have an ongoing requirement to commission
building and/or infrastructure work, you may have consultants, contractors and suppliers
that you use on an ongoing basis and may wish to understand how Lean they already
are and how suitable they might be to participate in your Lean journey. Various Lean
assessment tools exist that will help you to determine this if you have no information to date
(see O’Connor and Swain, 2013).
If you have been collecting information to monitor an individual supplier’s performance or
project performance, these measurements will also help you inform your decision. It should
be noted that just because a particular supplier has no Lean experience they should not be
ruled out automatically if they are otherwise performing well. In this case the use of a Lean
readiness tool (see O’Connor and Swain, 2013) will help you assess how ready they are to
embark on such a journey and how likely they will be to succeed in terms of attitude and
culture. Although in this case it would be necessary to either train the supplier through an

Implementing Lean in construction:

a Lean guide for client organisations 23
 in-house programme or ask that the supplier receive training elsewhere. Often, this can
be preferable to re-sourcing as the latter will mean introducing a new, unknown supplier,
which is an expensive process and comes with all the usual difficulties associated with
introducing new suppliers to unfamiliar environments and working practices.
Box 3.2 Lean Maturity Assessment

The Highways Agency use their Lean Maturity Assessment Toolkit (HALMAT) so that
Toolkit, Highways Agency

members of their supply chain can determine how Lean they are on a self-assessment
basis. This covers:
XXstrategic use of Lean XXstandard work
XXLean leadership XXprocess control and quality
XXdelivering customer/client value XXplanning, design and construction
XXLean structure and behaviour XXmaintenance (of plant and equipment)
XXprocess flow XXsupporting infrastructure.
For more information go to: http://www.highways.gov.uk/

5 Choose an approach: now is a good time to decide who will manage your organisation’s or
project’s Lean transformation or Lean intervention. If you are already on a Lean journey
as a company (rather than a supply chain) it might well be possible to use Lean champions
that are already in place. This can either be done by using them directly or by obtaining
their assistance in choosing and training a Lean champion specifically for the task from
your building and infrastructure staff complement. Although initially potentially a little
slower in start-up time it brings the distinct advantage of having a champion who is fully
familiar with building and infrastructure projects. This is arguably harder to learn than
the Lean elements of the role. If your organisation has not yet begun to become Lean,
then the options available to you are to train an internal team member, only in this case
Lean training and supervision will need to be carried out by an external organisation,
or appoint a Lean consultant. If your organisation is doing anything other than a single
project intervention then outsourcing this vital role completely would seem to be a false
economy. Accordingly, if the latter route is chosen, it is imperative that the consultant
chosen is prepared to transfer their knowledge to selected members of your team. More
comprehensive guidance on how to select a Lean consultant can be found in Fraser (2013).
6 Begin to select the Lean team: this is the point at which a high level acquisition strategy
should be developed. Discussion of everything relevant to such a strategy is beyond the
scope of this guide. Accordingly, issues that need to be taken into account to procure
suppliers for Lean projects and ongoing transformations are addressed, ie the guide
describes what you should consider over and above matters that you would take into account
traditionally. The main differences are described here:
1 The order of procurement: architects, design engineers and cost consultants would
normally be procured before the main contractor and any specialist contractor,
which is generally logical because of the potential difficulties encountered in trying
to select a contractor when there is no design or specification to tender against.
However, the reason for wanting to depart from this in the case of design for Lean
construction is that:
XX the contractor’s expertise may well be necessary to produce the Leanest design

to participate in concurrent engineering

XX to assist with the practicalities involved in designing to allow for Lean on site

assembly
XX to consider the practicalities of off-site manufacture for some elements of the

works
XX to provide advice on the cost implications of various elements of the design and

decisions made by the client.

These can be achieved by employing the contractor as a consultant or by using an existing
framework contractor etc.

24 CIRIA, C728
2 The contract type: as described in Chapter 1 of this guide the contract type needs to
encourage collaborative working, whether or not to use a framework approach and, if so,
which suppliers to prioritise.
3 The commercial model: again this is described in Chapter 1 of this guide with some of the
key considerations being the use of an ‘open book’ approach:
XX whether improvement targets should be a contractual obligation
XX whether or not to adopt a shared approach to improvements achieved and/or cost
overruns
XX how to deal with defective work that occurs when a new approach or methodology is
being applied
XX how the Lean work will be financed
XX whether particular suppliers should be considered (eg their strategic importance) and
by who
XX how to track improvements across non-identical projects.

It is also necessary to decide how you will manage the selection process, the design and the
project management. This will affect the order of acquisition. Do you intend to use in-house
resources or are you going to hire in help? In the latter case, are you going to choose one
organisation for the whole task or several specialist teams? These decisions are important
as they will not only affect the order in which you acquire the consultants that you intend to
use, it will inevitably affect how successful your Lean efforts are too.
4 The selection process: this may need to be modified from that normally employed to
procure projects to permit the assessment of the Lean capabilities and potential of suppliers.
This is described in Step 2 (Section 3.3).

Implementing Lean in construction:

a Lean guide for client organisations 25
Step 2: acquisition for improved performance

Who to involve
XX maintenance
XX the customer and/or end user
XX operations
XX procurement
XX external experts in relevant areas
XX commercial management
XX Lean champion or other
XX project construction
facilitator.

Key inputs
Weighted generic
Key actions
criteria
Lean assessment XX check your
requirements
Market intelligence
Full set of needs and
specifications

XX look at the market

Hints and tips
XX don’t make Lean
experience a
prerequisite, rather ensure
the willingness to learn XX further develop a Lean
and collaborate procurement strategy
XX don’t be afraid to set
hurdles such as open book
XX ensure your contracts
have improvement targets.
XX do the buying

Tools and
techniques
XX finalise the
XX market contractual targets Key outputs
assessment matrix
Lean procurement
XX attendance at trade fairs strategy
and professional seminars
A Lean supply chain
XX cultural assessment as far as possible
questionnaires XX complete the
Agreed improvement
assessment days. procurement.
XX targets

26 CIRIA, C728
3.3 STEP 2: ACQUISITION FOR IMPROVED
PERFORMANCE
1 Check your requirements: being as sure as you can be with regard to your requirements will
reduce waste, cost and minimise delays later in the project or supply chain agreement. Extra
time spent now, ensuring your project requirements and selecting your suppliers, will always
pay dividends in the long run. It is often tempting to rush to market as soon as we believe
we know what we want. How many changes did your organisation originate during the last
project that they were involved in that didn’t add to the cost or increase delivery time? Are
you really sure that what you are proposing adds the maximum value to your customers and
end users? Would they agree? Are you sure? Have you checked with them or do you simply
think you know?
2 Look at the market: particularly if you feel that you are already behind time it is very
easy to assume that you are fully familiar with the marketplace without carrying out the
necessary research. It is worth bearing in mind too that this time round you are not only
seeking an architect but a Lean architect, not just a project management firm but a Lean
project management firm, and not just a contractor but one who can deliver improvements
throughout each project and from one project to the next. Studying the market can be
time-consuming, particularly if you intend to do more than a simple desk study, which
is usually advisable. Again spending time here will pay dividends later, both in terms of
saving time during the acquisition process as you will be able to more accurately define your
requirements and being more likely to procure the supply that best suits your particular
organisation and its needs. You might like to try:
XX attending trade fairs and asking questions of participants
XX attending, or at least seeing which organisations are speaking at, important Lean events
XX talking to existing suppliers
XX talking to other clients responsible for commissioning building and infrastructure
projects. Particularly worthy of consideration might be those that might be a little
further ahead in their Lean journey than your organisation is currently
XX attending seminars and conferences run by professional organisations such as ICE,
RIBA, IPM and RCS.

Events in the US have tended to overshadow those run in the UK. Of particular note is the annual
Box 3.3 Knowledge

conference run by the Association for Manufacturing Excellence in the USA (not the UK division).
sharing

Bearing in mind what it chooses to call itself, it is suprising that the Association covers every type of
industry imaginable. For example presentations from the RAF and the health service regarding their
Lean journeys have been available in recent years. It is one of few organisations remaining in the
world that is run by the members for the members, in a truly altruistic manner, with the simple desire
to share Lean knowledge. It is by far the most prestigious forum for Lean learning available anywhere
and the best source of Lean information.

3 Further develop a Lean procurement strategy: once you have completed the market
research you will be able to complete and finalise the development of your Lean
procurement strategy. You have already chosen your broad strategy headings and agreed
the relative importance of each. It is now time to look at each individual procurement and
consider how you are going to translate these into specific criteria for each supplier that
you need to acquire and how the weighting will be applied over the various stages of the
procurement process. Also remember that it is important to fully understand how you are
going to assess each stage not just for core competence but for Lean knowledge and practice
and culture too.
4 Do the buying: this guide is not intended to turn the reader into a procurement expert, so
if this is necessary it should be sought elsewhere. The importance of having the knowledge
and skill to understand and to select a culture that is right both for Lean and for your
own organisation cannot be understated. If your organisation doesn’t have the necessary
pre-requisite skills in-house, it is worth either acquiring them or buying in some help with

Implementing Lean in construction:

a Lean guide for client organisations 27
 this phase of the process. Such help would ideally be co-opted onto the core team for this
process step so the team comprises both internal and external expertise. For example, you
might want to run a Lean assessment day or need help with preparation of questionnaires.
Two final points to mention:
XX this process can be time consuming. Make sure you programme sufficient time. Rushing
to a solution is ill-advised
XX ensure that the key players who will be working with you attend all the selection

phases and insist on reselecting individuals if circumstances change. Make it clear that
members of the applicant company’s sales and marketing team will be excluded at all
stages should they be offered for attendance.
5 Finalise the contractual targets: now you have your Lean supply chain in place it is
necessary to transform your selection criteria into performance criteria that can be
measured year on year and throughout each project. These should be kept to a minimum
and should not include key operating indicators. It is useful to ensure that all contracts have
the ability to add targets annually to ensure they are ‘real’. It should be noted that a key
performance indicator (KPI) is what is measured, eg reportable accidents per million hours
worked, whereas a target is a quantifiable amount of what is being measured, eg reducing
reportable accidents to less than one for every million hours worked by the first anniversary
of this contract. Targets should always be Specific, Measureable, Achieveable, Realistic,
Timebound (SMART). To do this it is necessary to convert the key performance indicators
into hard targets that can be easily and visibly monitored on an ongoing basis. This should
be agreed collaboratively with the supplier and should not be in the form of an instruction
from the client if joint ownership is to be achieved. The benefits of achieving the targets
should be clear and clearly communicated.
6 Complete the procurement, announce the successful organisations and debrief those that
didn’t make it: although this sounds obvious it can be overlooked or its significance under-
estimated. All the organisations tendering will have diverted a good deal of time and money
into preparing the tenders and going through the various evaluation stages. It is important
to make a decision as soon as possible and let the successful organisations know while at the
same time arranging debriefing for those that were not selected. Please take particular care
when debriefing existing organisations that have not been re-selected as the effects on their
business can be profound. Avoid them getting to hear through the grapevine at all costs.

28 CIRIA, C728
Step 3: creating a collaborative team

Who to involve
XX top and middle management
XX Lean champions
from supplier organisations
XX everybody for cultural and
XX top and middle management
Lean inductions.
from your client organisation

Key inputs
Key actions
Lean procurement
strategy.
A Lean supply chain XX create the
as far as possible. agreements

Agreed improvement
targets

Hints and tips XX agree Lean

XX hold separate governance
workshops with
each major supplier
facilitated by somebody
external to establish what
they really want from
XX train Lean champions
working with you
XX be gentle with site
supervision in workshops,
they may be more
uncomfortable than you
realise. XX introduce the culture

Tools and
techniques
XX Lean and XX determine
cultural workshops Key outputs
improvement
XX separate and joint methodologies Joint alliance
facilitated workshops agreements.
XX Lean and soft skills Agreed governance.
training for Lean Trained champions.
champions
XX create the plan An outline
XX Gantt charts. improvement plan

Implementing Lean in construction:

a Lean guide for client organisations 29
3.4 STEP 3: CREATING A COLLABORATIVE TEAM
1 Create the agreements: although these agreements are usually informal and have a certain
symbolic nature they need to be treated as seriously as if they were formally recorded in
the contract. If the contract permits incorporating the document, this should be given
consideration as they are intended to provide the roadmap for future joint success.
Agreements should not be filed and left on a shelf, but rather should form the core of
the visual management system (O’Connor and Swain, 2013) used by all parties to the
agreement. The agreement can be at company or project level. In either case the purpose is
to describe what each party wishes to achieve and then to formally record how the parties
to the agreement intend to work together. An inter-company agreement will typically have
a statement of intent and desired outcomes from each party and then will focus on what the
parties have agreed jointly in terms of the purpose, mission, vision, values, key objectives,
governance (see point 2), strategy, systems, people, processes and organisation for working
together. The final area to be covered should be the first stages of tactical deployment and
areas for improvement. A project-centred agreement will be very similar although the focus
will be on the actual project. It will seek to describe what the end user or client’s customer
wishes to achieve from the project and key high-level areas for improvement focus such as
reducing the delivery time or accidents on site. The mission will also be in project terms.
In either case the agreement is likely to be
At the start of a major runway resurfacing project at developed through a series of facilitated
Heathrow, BAA plc held a project start-up workshop workshops. The first of these is likely to be
with key members of its supply chain extending
over several days. Part of the workshop focused on
run with senior members of each party to
understanding value from the customers’ perspective the agreement independently so that the
and from this the team developed the mission of facilitator can tease out all the underlying
being ‘the unseen workforce’ as customers wanted
uninterrupted use where permissible. This was even factors for each party wishing to participate
printed on all mugs used by site workers on the site and any fears they have. When done well,
to reinforce the message. The latter part focused this can more than pay for the cost of all the
on delivering improved value by reducing potential
disruption by shortening the project programme. workshops. The next step would normally be
Designers and contractors worked together and for these more senior members of each party
established that considerable improvement in time to come together to have the results of the
and cost could be achieved if a second blacktop paver
were deployed. However, this would only be possible individual workshops fed back, to resolve any
if a longer night working window could be achieved remaining issues and to develop the purpose,
than was currently permitted. Working with Heathrow’s
mission, vision, values and key objectives.
operations team uncovered that the root cause for the
length of the window was contingency as contractors These will set the tone of the agreement and
historically had not handed back the runway at agreed describe, in behavioural terms, what it will
times. On a trust basis the window was extended for
feel like to work as part of the agreement.
an hour, enabling the second paver to be deployed. On
the first night the hand-back was five minutes late. On These outcomes will then be fed to the
every subsequent night it was early. By understanding participants of the next workshop, comprising
what was of most value to their customers and end
users and focusing on that, the team completed
the middle managers from each party
the work at a reduced cost in two-thirds of the who will be fully deployed working on the
programmed time. agreement of project. Again, this workshop
should be managed with its purpose being to
disseminate the outcomes from the first workshops and to then develop the more detailed
and practical aspects of how those outcomes will be achieved. A final round of facilitated
workshops should then be held, with the participants being those working at a more tactical
level in the agreement or specific project. They will consider how everything has been
developed so far can be applied to the area that they work in or the specific discipline that
they are involved in. At the end of the process a full agreement will have been developed
in which all parties involved to date should have participated. This will have the obvious
benefits of not only capturing best knowledge, but also in creating the culture of involved
joint participation that is necessary if full, sustainable success from any Lean initiative or
transformation is to be achieved.

30 CIRIA, C728
2 Agree Lean governance: this is mentioned specifically because it is a particularly important
part of any agreement and can be easily overlooked. A person from each organisation
party to the agreement needs to be nominated as a principal contact and their main
responsibilities need to be clearly defined as far as the agreement is concerned. If an
executive of some kind, either for the project, a bilateral agreement or several agreements is
to be used, then its terms need to be clearly defined and its members stated. Any evaluation
procedure needs to be clearly specified as do the timescales for meeting. Typically, these
would be annually or six monthly for the executive and at least quarterly for the evaluation
teams. Consideration should also be given to the possible advantages of adopting a Lean co-
ordination team. It is important that it is stated in the governance document that discussion
in the evaluation meetings should be open if the client is to derive maximum benefit from
them. It is also important that evaluations should be two-way. Although this might initially
seem counter-intuitive to clients new to working collaboratively for improvement, the gains
to be made from promoting an open and honest dialogue cannot be understated. Lastly,
a resolution procedure should be included. This is an informal device intended to reduce
the risk of more formal contractual disputes arising and should contain a resolution ladder
where members from each team are identified who can be contacted when agreement
cannot be reached at a particular level of interchange.
3 Train Lean champions: once the Lean champions from the various supplier organisations
have been chosen, they need to be trained. The advantages to training being provided by
the client’s own Lean champions are discussed in Chapter 1 of this guide. It is important
that such training should address soft as well as the harder, more tangible skills needed for
Lean skill deployment and that the culture and values needed for the agreement should be
fully explored. The training should be participative in nature and might follow the form
of a period of classroom work being followed by each champion carrying an improvement
project within their own organisation that is supervised by the client’s Lean coach. A day can
then be allocated where prospective Lean champions come back to share their experiences
and present the results to a senior member of the client team.
4 Introduce the culture: in an ideal world all organisations that the client intends to
have collaborative improvement agreements with will be on board more or less at the
same time. This is seldom the case and in a single project scenario, where there are no
‘incumbent’ suppliers, it is usual that the various types of suppliers will be brought on
board at different stages even though this isn’t ideal from the perspective of achieving
the best Lean results. This means that training the Lean champions and providing
cultural assimilation sessions will need to be carried out over a period of time. In
the latter case the need is to help new members of the team learn and experience
the culture necessary for improving collaboratively through the adoption of Lean
techniques. The sessions are really intended to provide participants with a sense of ‘this
is what it feels like to work around here’ as well as what to expect to see and participate
in when invited to join an improvement team. All members of all organisations directly
involved or dealing with the agreement should attend in a controlled manner. This
attendance should be compulsory and should include staff at both managerial and
operative levels. Once the initial training is complete there will inevitably be staff churn.
Newcomers need to undergo the same cultural induction as the original members of the
agreement if cultural drift is to be avoided.
5 Determine improvement methodologies: at this stage in the agreement this is done at
high level and is intended to provide a broad outline of how the team intend to approach
improvement activities and where they might start. At this time the team will need to
consider whether to adopt a broad, shallow approach or tackle an opportunity in a deeper,
but narrow manner. At the beginning of a Lean transition the latter is often preferred as it
provides tangible results more quickly. Consideration also needs to be given as to whether
collaborative improvement activities will take place in the form of continuous improvement
initiatives or whether the technique of stopping work and using a rapid improvement event
should be considered. While a combination of the two is probably most effective, building

Implementing Lean in construction:

a Lean guide for client organisations 31
 and infrastructure projects seldom employ the latter because of the perceived disadvantage
of stopping work and losing time on the ‘programme’.
6 Create the plan: it sounds obvious to stress the importance of creating a specific Lean
transformation plan. While it is both obvious and important, it is frequently ignored. Clients
and contractors that spend months developing over-complicated and unintelligible project
programmes and plans will sometimes completely disregard the value of having any plan at
all for improvement activities, leaving all their Lean work to date to gather dust on rolled-
up flip charts or typed up and assigned to death by electronic filing. Both are enemies of
any organisation wishing to embrace Lean. Indeed, those who wish to succeed with their
Lean transformation should perhaps spend less time planning to deliver waste and more in
planning how to remove it!

32 CIRIA, C728
Step 4: Lean implementation on site

Who to involve
XX customers
XX architects
XX client’s design/specifying team
XX design engineers
XX contractors
XX interior designers
XX sub-contractors
XX project management.
XX suppliers

Key inputs
Key actions
Joint alliance
agreements
Agreed governance
Trained champions XX make full use of
An outline Building Information
improvement plan Modelling (BIM)

XX challenge the
Hints and tips concepts
XX don’t think of BIM
as a solution.
It’s a bit of software. The
solution comes with the
XX challenge the detail
willingness to collaborate
for the common good of
the project and a lot of
hard work.
XX hold project-specific
workshops

Tools and
techniques XX support the
XX BIM technical champions
and collaborative implementing the
workshops plan Key outputs
XX design challenge A Lean design concept
workshops A Lean detailed design
XX project start-up workshops An improvement plan
XX collect the results
XX Lean implementation tools and celebrate First round of project
XX champion support system. success. improvements

Implementing Lean in construction:

a Lean guide for client organisations 33
3.5 STEP 4: LEAN IMPLEMENTATION ON-SITE
1 Make full use of BIM: Building Information Modelling (BIM) is a digital representation of
physical and functional characteristics of a facility. A BIM is a shared knowledge resource
for information about a facility forming a reliable basis for decisions during its life cycle,
which is defined as existing from earliest conception to demolition (National BIM Standard,
United States NBIMS-USTM). BIM is discussed in more detail by Dave et al (2013) and
is mentioned here for completeness and to emphasise that the model produced will only
be as good as the willingness of those invited to participate to share information openly.
The right cultural climate is essential for this, which must encourage open challenge and
dialogue. Modelling systems such as BIM produce enormous opportunities for successful
waste elimination, but will not deliver success alone. This lies entirely in the hands of
the participants. Protectionism and adversaryism must be left behind. The model is best
developed over a series of facilitated workshops throughout the project where the facilitator
initially uses their expertise to help participants understand the concepts involved in
the actual model, and just as important as those necessary for working collaboratively to
improve and drive out waste throughout every stage of a project. If run skilfully, these
workshops also provide an ideal opportunity for team building. It should be noted that BIM
should permit virtual construction of a project before work starts on site with the obvious
potential to drive out waste of all varieties. Thinking about BIM as something to eliminate
service clashes is to hugely underestimate its potential as an aid to improving collaboratively.
Inputs from the main contractor, sub-contractors and suppliers are every bit as important
as those from designers and architects, and clients have a key role in both insisting that this
happens and then demanding the results in terms of benefits. Again attributing contractual
improvement targets to the modelling process should be seriously considered by the client
as big efficiencies with the consequential reduction in cost should be forthcoming from
designers as well as those building the project.
2 Challenge the concepts: part of the challenge described here will come at the inception
and feasibility stages of any project. Potentially this is where some of the biggest savings
can be made as it might be possible to think of the scheme in a way that is easier to build
or challenge the necessity of various elements of the project completely. To do this fully
it is necessary to have contributions from your customers and end users and contractors
and sub-contractors and suppliers where their activities have a major bearing on the
project. These inputs in conjunction with using BIM to its full potential will also highlight
opportunities for off-site pre-fabrication and pre-assembly. How the project is approached
at this stage can also greatly assist in permitting detailed design that best affords a Lean
approach. Everything must be up for constructive challenge by any party and all parties
must come to the table as genuine equals prepared to learn from each other’s skills and
experiences. It is up to you, the client, to set the right climate for this to happen, not only by
insistence, but by example too.
3 Challenge the detail: as in the concept and feasibility stages of any project the opportunities
for Lean improvement during the detailed design phase are often under-exploited. Having
a contractor on board (eg via an existing framework agreement or procuring the contractor
for the specific building or infrastructure work in question in advance of the detailed
design), will greatly assist in several ways:
XX enabling concurrent engineering
XX developing suitably market-driven performance specifications
XX identifying practical parts of the design suitable for off-site manufacture
XX ensuring that designs are cost effective in terms of keeping the number of components
that need to be specially manufactured, rather than are available from stock, to a
minimum.

It is recommended that, when choosing a suitable contractor, consideration is given to

applicants’ previous success in helping in this manner. Genuine contractors that do a
decent proportion of the construction with their own direct labour and that have good,

34 CIRIA, C728
 Clients Anglian Water worked with their

Anglian Water
supply chain and used off-site manufacturing
processes to create a chlorination station as a
standard product for all their sites.
This enabled:
XXreduced on-site construction activities
XXassured visual appearance and right first time
build quality
Box 3.4

XXreduced material waste and embodied carbon

XXreduced health and safety risks due to less
work on site
XXsimultaneously generated savings expected
to be greater than 20 per cent.

Figure 3.1
Use of off-site manufacturing
– standard product

ongoing relationships with suitable major sub-contractors and suppliers in the area of work
concerned, will usually be much better placed to give this advice than firms of construction
managers that do not carry out the construction work at all and are in effect another form
of consultant.
If you have chosen your architect, design engineers and interior designers wisely they will
be fully conversant with the concepts of Lean design and will be experienced in working
creatively with a ‘Lego kit’ of standard components rather than wishing to provide a design
that requires its components to be created as ‘one-offs’. Simplicity is often the best principle
to follow for the best Lean solution and design is no exception. If you want a signature
building there’s no need to abandon these Lean techniques to achieve it. Adopting a Lean
approach will significantly reduce your budget too.
It may be necessary to hold further workshops at the start of detailed design to support the
use of BIM, introduce the new members of the team to the culture and to ‘practise’ working
together.
4 Hold project-specific workshops: throughout the life of the design and construction of a
project it can be advantageous to hold project-specific workshops even if the consultants,
contractors and suppliers all have framework agreements and accordingly have gone
through several workshops to establish with your client organisation already. These project-
specific workshops are in some ways similar but have the project as the focus. Initially, a
similar format can be followed to that outlined previously. This time the purpose will be to
establish a clear, common understanding of the main reasons for constructing the project:
XX creating a project specific mission statement, vision and set of values
XX to construct project objectives, strategies programmes and plans
XX and to identify the most appropriate people, systems and structure for the project.

These workshops may well need to be carried out throughout the life of the project or at
the main points when new team members arrive on the project or when a particular project
phase ends and another begins. While some of the work will have already been completed,
the finished results will need to be shared with the new arrivals. Plans will inevitably be
different for the different phases of the project both in terms of content and focus and
adjustments may well need to be made. Individuals who are new to the project will also
need to have cultural inductions to ensure they both understand and are practised at
collaborative working for improved performance.
Two other important reasons for holding project-specific workshops are to provide:

Implementing Lean in construction:

a Lean guide for client organisations 35
 Teamwork: these workshops provide a suitable environment for practical team-building
without the necessity of having to take teams of people into the wilds to carry out
exercises that have little if anything to do with the project. A skilled facilitator with a
Lean construction-related background will be able to use the workshop to build teams as
effectively as an event geared specifically to team-building while at the same time helping
the team to produce tangible results that will aid project progress and improvement
in the most practical sense. An example of such a workshop is a collaborative planning
workshop (O’Connor and Swain, 2013). Although these are usually held at the beginning
of the construction phase, consideration should also be given at the beginning of concept
design and again at the start of detailed design. These workshops will then form the basis
for ongoing collaborative project management where supply chain members are brought
together on a weekly and daily basis to discuss plans for that time period. Case study 3.1
provides an example of a collaborative planning workshop.

Case study 3.1 Collaborative working

Figure 3.2
Teamwork – adopting a
collaborative approach
The discovery of an Anglo Saxon burial ground put the John Lewis Partnership’s (JLP) plan to open their new
store in Wallingford in jeopardy. Once the 200 bodies had been exhumed the project was nine weeks behind
schedule. The main contractor, the Pearce Group Ltd, visited all suppliers’ senior management, and then
invited their site teams to a series of collaborative workshops. This gave the team the opportunity to really think
about and understand every aspect of the project, before arriving on site. By looking in detail at the design
stage together during these workshops the combined team quickly realised where significant time and cost
savings could be made. The collaborative approach fostered a commitment to deliver the project programme,
and everyone worked as a team at every step. The whole team showed a willingness to continue learning and
applying ‘Lean construction’ techniques delivering the project to a delighted client with the original programme,
a saving of 16 per cent.

Improvement plan: it is important that the client understands the improvement process so that
they can be supportive on site visits by asking relevant questions. This is briefly described here
for this purpose. The Lean team should consider providing more senior members of the client
team who might be unfamiliar with the concepts of Lean and its application with ‘cheat sheets’
to prompt them to ask the right questions on site visits. One of the most positive effects that a
client can have to create the correct atmosphere for collaborative improvement is to ask ‘what has
gone wrong today and what have you done towards putting it right?’ rather than the traditional
inspection where everything is expected to be found perfect in terms of time and quality.
The best Lean results will always be obtained if a well thought-out, coherent plan is developed
and then deployed for a project. All too often engineers and project managers will use over-
sophisticated and accordingly ‘un-Lean’ planning tools to plan the actual project, but will
assume that improvement activities will simply happen. They won’t. It will be difficult enough
for the Lean champions to obtain sufficient time away from normal project activities even
with a plan. Without one, success will not be maximised. Again, on the limited occasions that
an improvement plan is formally developed, it is usually confined to the construction phase.
Missing the design phases will significantly limit the contribution that Lean solutions could
make to the project. As was stated earlier, improvement activities can either be planned on a
continuous basis or where rapid improvement techniques are deployed (O’Connor and Swain,
2013). The best practice is to look at each improvement project on a case by case basis rather
than trying to adopt one or other of these improvement techniques for the whole project.

36 CIRIA, C728
 There are a variety of alternative possibilities for creating an improvement plan, detailed
discussion of which is beyond the scope of this guide. However, as a general outline, there
will typically be four phases to the plan. The first will look at where the most benefit
might be achieved in terms of areas of focus and will typically use value stream mapping
(O’Connor and Swain, 2013), Pareto analysis and ease and effect analysis for the project as a
whole to identify areas, phases or work packages where time spent deploying Lean tools and
techniques are most likely to deliver the best results. Each opportunity will then need to be
addressed through continuous improvement or by holding a rapid improvement event. Once
waste has been identified for each opportunity and the root cause identified, the second
phase can begin. The PDCA cycle can form the basis for this.
Here creative solutions are sought particularly from those involved on the front line in the
areas in question. This work will again be managed by the Lean champion who should
involve the middle management of the area of work concerned if their alienation is to
be avoided. Although their participation is not strictly necessary in terms of creating the
ideas, they need to be involved in some way that neither leaves them feeling left out at the
periphery or that inhibits more junior members of the management team and workers on
the front line from participating. In construction, middle management will have typically
used a ‘command and control’ management style and they will need training and coaching
to encourage them to adopt a more facilitative, democratic approach. Once ideas have been
collected and fully discussed, the third phase can begin.
This involves drawing in the ideas together and choosing the one most likely to be
successful. The idea then needs to be fine-tuned and trialled. When the results of the trial
have been determined changes can be made and another trial held if success was not as
expected. If this second trial still does not produce the desired benefits, then the second
most liked idea can be tried and so on until the results wanted have been obtained.
The fourth phase is then to roll the new idea out to the rest of the area of the project in
question or the project in its entirety if appropriate. Here proper management of the people
issues resulting from change for all those involved in the change, even at the periphery, is
important. As in any change, people can easily make the change a success or a failure even
where the solution is a good one from a technical point of view. Like the improvement, the
introduction of the change needs a comprehensive plan.
5 Support the champions implementing the plan: the Lean champions will be leading and
facilitating the Lean improvement initiatives described in the previous point. They are likely
to be doing this full time or for a significant part of each day. It is very easy for them to
become isolated and feel abandoned, particularly if they are new to the role. They also may be
working away from their own companies. To limit the effects it is important for the client to do
all they can to assist in providing a Lean champion support network. This can range from:
XX providing a Lean champions’ website
XX taking an active interest in what the champions are doing
XX attending workshops when asked
XX providing Lean awards and acknowledging best practice in other ways
XX regular reliable feedback with regard to Lean improvement targets
XX establishing a Lean champions’ forum formally with the governance of the venture as a
whole and for each specific project
XX funding evening events where Lean champions lead some Lean work alongside a social
event

6 Collect the results and celebrate success: formally collecting the results and then showing
how they translate into tangible benefits can easily be overlooked or underplayed in the heat
of finishing a project. This is a mistake that sometimes cannot be rectified later as those
involved in the project will have dispersed (Smith, 2013). While this is beyond the scope of
this particular guide, readers may find the real examples helpful.
Once the results have been analysed and the benefits evaluated and communicated, then
please be sure to celebrate success with the whole team.

Implementing Lean in construction:

a Lean guide for client organisations 37
Step 5: multiple projects

Who to involve
XX strategic suppliers XX Lean champions

XX holders of historic cost, quality, XX improvement teams

delivery time, health and XX internal and external
safety and sustainability data customers and stakeholders.

Key inputs Key actions

Joint agreements
Agreed governance XX prioritise suppliers
Trained champions
Improvement plans
Lean designs
XX Pareto the impacts

Hints and tips

Don’t give up on
trying to collect XX choose projects for
historic data from old focus and allocate the
projects. It doesn’t have to work
be accurate to the last digit
although the QS will want it
to be. It’s tough because we
account project by project.
Make collection a routine in
the future. XX work with each project

Tools and XX share knowledge

techniques
XX value stream
mapping Key outputs

XX Pareto analysis Value stream maps of

XX collect results and impacts
XX data collection celebrate success.
Detailed annual
XX mindful site observation Improvement plan for all
XX knowledge sharing at the projects
point of delivery. Results

38 CIRIA, C728
3.7 STEP 5: MULTIPLE PROJECTS
1 Prioritise suppliers: in the situation where a client commissions several similar projects
over time, it is appropriate to consider first the consultants, contractors and suppliers
involved. For example, in general framework agreements will only be administered for
the most strategically important organisations in the supply chain, but even these can
be differentiated by considering spend and strategic importance. At the same time the
likely ease and effect of possible improvements can also be considered. Pareto analysis is
another useful tool to deploy for this purpose, allowing focus to be given to the top 20
per cent of the supply chain that represents 80 per cent of expenditure. Organisations
might not only be identified in terms of cost saving benefits. Accidents, environmental
impacts or quality could also be used if these were considered to be the major focus for
improvement activity. Organisations under consideration need not necessarily be first tier
as significant possibilities exist with those in the second, third or even fourth, depending
on improvement priorities.
2 Pareto the impacts: once the most important members of the supply chain have been
identified in the terms described in point 1, it is important to look at the effects they each
have and the waste that they generate across several projects. This task isn’t as easy as it
might sound as this information will be collected for each project and will then be filed – if
it exists at all. Once the information has been collected, Pareto analysis and value stream
mapping are both useful tools to discover areas of focus that can often be surprising.

To maximise blacktop laying efficiency, the Highways Agency worked with their supply chain to record delays.
Pareto analysis

They then used Pareto analysis to prioritise the process delays to focus on during the A1 Dishforth to Barton
Improvement Project.
This showed that
‘awaiting delivery’,
‘plant breakdown’ and
‘delay before start of
laying’ accounts for 70
Box 3.5

per cent of all recorded

delay. By changing the
supply method and
working time, paver
gang working hours
have been halved and
output doubled.

Figure 3.3
Identifying root causes

3 Choose projects for focus and allocate the work: the next step is to identify suitable projects
from those in your building and infrastructure pipeline to focus on what gives you the best
opportunity for improvement. It is preferable, particularly in the early stages of a Lean
transformation, to try to focus on projects that will produce the desired improvements easily
and quickly rather than try to engage everywhere simultaneously so that demonstrable
results can be obtained. The improvement tasks can then be given to the appropriate Lean
champions.
4 Work with each project: the improvement activities can then be carried out in the manner
described in step 4 on a project-by-project basis, although some improvement projects may
span several building and/or infrastructure projects.

Implementing Lean in construction:

a Lean guide for client organisations 39
5 Share knowledge: it is important that
BAA plc, the main contractor and the second
knowledge be shared not only as work tier contractor partner responsible for concrete
moves from one project to the next, but production, decided that it would be cost effective
to purchase a new concrete batcher to meet the
also within a project. This is always best
demands of their new concrete paving machine. When
carried out at the point of application the batcher arrived it was unable to produce concrete
or where the work is being carried out. at the rate that the manufacturer had claimed. As the
manufacturer was unable to help, a rapid improvement
However, this can be difficult as asking
event was organised. Online production was stopped
for help can be considered a sign of following observations and measurements. Root
weakness in construction’s competitive, causes for the problems were determined and
modifications made. This was done without any
male-dominated, environment. specialist mechanical knowledge as far as the batcher
Accordingly, this must be encouraged. was concerned. The end result was that when the
batcher came back into production it was able to
6 Collect results and celebrate success: deliver at a 130 per cent of its stated capacity.
in the same way as for a single project,
demonstrating success from project to
project in real terms should be a client’s main focus. Showing what the savings have been
from one project to the next is much more important in terms of demonstrating that waste
has been removed than showing savings against budget, unless the level of waste has been
forecast alongside the budget. This is simpler for clients who commission projects of a
similar nature over time. Where projects are less similar, but use some of the same elements,
a shopping basket approach can be adopted. Once the improvements have been identified it
is important to publicise them in terms of the benefits realised and then to celebrate success
in the same way as for a single project. Once waste has been identified and removed and real
saving have been made, clients might like to ensure that these saving are returned and are
not spent in some other way, for example to offset an area of overspend (see Smith, 2013).

40 CIRIA, C728
Step 6: s upplier performance and relationship management for
sustained success

Who to involve
XX Lean champions
XX joint executive
XX project managers
XX key supplier contacts
XX internal and external
XX key client contacts
customers for evaluation.

Key inputs
Key actions
Performance against
target
XX develop a strategy
Data from projects
Data from pan project
improvement
Initiatives
XX differentiate your
suppliers

Hints and tips

Although it’s in
everybody’s interests
for your Lean initiatives to
XX understand the costs
be successful, please avoid
and benefits
the temptation to join the
conspiracy of mediocrity
where clients blindly accept
the information provided by
managing consultants and
main contractors. Challenge XX choose the right
and then ‘go see’ for yourself! resource

Tools and
techniques
XX create balanced
XX balanced score scorecards for each
card supplier category Key outputs
XX supplier positioning matrix
Supplier and project
XX supplier preferencing balanced scorecard
matrix
RAG status and targets for
XX cost–benefit analysis for suppliers and projects
improvement activities XX awarding more work or
letting go. Supplier league
XX review meetings. tables

Implementing Lean in construction:

a Lean guide for client organisations 41
3.8 STEP 6: SUPPLIER PERFORMANCE AND
RELATIONSHIP MANAGEMENT FOR SUSTAINED
SUCCESS
1 Develop a strategy: whether your organisation commissions occasional projects or has
an ongoing requirement lasting several years and involving multiple projects, your
organisation’s ability to manage its supply chain appropriately will have a considerable
bearing on the success of your Lean interventions and transformations. This step is largely
concerned with how your organisation manages their suppliers (consultants, contractors and
suppliers) once they have been acquired.
Before each round of sourcing, or at least annually, it is advisable to develop a sourcing
strategy that, in part, will address how the performance of those suppliers, and your
relationships with them, will be managed. If this has not been done, then it is important
to address it before deployment on project(s). This is to maximise return on investment of
effort, skill and resource in managing suppliers that you expect to be part of your efforts
to Lean your supply chain as not all suppliers need to be managed in the same way. Each
will require a different approach that is dependent upon the importance of a particular
supplier to your organisation, the potential effect they could have on any Lean initiative,
the characteristics of the marketplace and the level of interest that each supplier has in your
organisation.
2 Differentiate your suppliers: although several methodologies exist to achieve this, a well-
tested approach is to differentiate suppliers within your supply chain, whether they have
a direct contractual relationship with you or not, into one of four types. This allows the
appropriate strategy to be developed and effort, skills and resources allocated where the
greatest value can be added in terms of your Lean efforts. The reason that this should
be considered before sourcing is that the relationship type selected will influence the
actual sourcing strategy. Once each category of supplier has been considered in terms
of how important they are to your organisation, they can be placed within a matrix that
plots business risk and/or Lean opportunity against expenditure. For Lean supply chains,
business risk should be considered in terms of quality, sustainability, health and safety,
delivery time and Lean potential as well as the more traditional financial risk. A typical
supplier positioning matrix is shown in Figure 3.4, which explains the relationship type or
management style that is appropriate to which type of supplier.

42 CIRIA, C728
 Secure supply Critical
This relationship type is defined by high levels of This relationship type is driven by a combination
business criticality where product and supplier of business criticality, where product and supplier
performance are key to BAA meeting its obligations performance are key to BAA meeting its obligations
to customers and other stakeholders. This is to customers and other stakeholders. This is
compounded by supply market complexity and high compounded by supply market complexity, few
cost and risk associated with change. However, alternative suppliers, and high cost and risk
spend is not high (typically less than 0.5% of total associated with change. Level of spend is high
third party) relative to business risk. (typically over 0.5% of total third party).
General characteristics for this relationship: General characteristics for this relationship:
XX relationship management at senior level XX relationship management at executive level
XX senior stakeholder interest and involvement XX senior stakeholder interest and involvement
XX collaborative working to reduce risk and ensure XX aligned strategic objectives and culture
supply continuity XX seeking mutual benefit beyond scope of existing
XX risk management approach – high level of agreements
contract and performance management XX focus on innovation
XX broad range of measures – operational and XX broad range of measures – operational and
relationship relationship
XX performance improvement XX continuous improvement
XX medium to long term contracts – typically 3 to XX frequent reviews and executive contact
5 years XX long-term contracts – typically 5 to 10 years.

Arm’s length Leverage

This relationship type is characterised by low level This relationship type relates closest to areas of
business criticality where any supplier failure would relatively low business criticality where any supplier
have minimal effect on BAA operations or business failure would not have a major effect on BAA
performance. Alternative suppliers are plentiful and operations or business performance.
cost and risk of change is low.
Criticality here is driven by the level of spend
Spend is also relatively low (typically less than 0.5% (typically over 0.5% of total third party). BAA spend
of total third party). is attractive to an open and competitive market.
General characteristics for this relationship: General characteristics for this relationship type:
XX operational management at a junior level XX relationship management at varying levels
XX focus on transactional efficiency XX open and honest, seeking to enhance value.
XX periodic market testing
XX infrequent reviews
XX simple contract/order management
XX short-term contracts.

Figure 3.4 Supplier positioning matrix

3 Understand the costs and benefits: the commitment required to support suppliers in
terms of Lean initiatives, whether that support comes from your client organisation, is
outsourced or comes from the supplier, should not be under-estimated. It will be important
to communicate both the required resource and effort to be invested in Lean initiatives and
likely potential benefits. From the benefits perspective some typical deliverables from each
of the relationship types are shown in Table 3.1.

Table 3.1 Benefits from supplier relationships

Secure supply Critical

‹‹zero supply problems ‹‹senior and strategic relationship
‹‹tight performance management ‹‹outstanding supplier performance
‹‹comprehensive risk management ‹‹value improvement year on year
‹‹contingency plan ‹‹innovation
‹‹detailed supplier management strategy and plan ‹‹clear relationship measures in place
in place ‹‹detailed management strategy and plan
‹‹significant potential for Lean initiatives. ‹‹very significant potential for Lean initiatives.

Arm’s length Leverage

‹‹well-organised data ‹‹excellent market analysis
‹‹low maintenance management ‹‹real time identification of opportunities
‹‹(5 to 10 per cent FTE) ‹‹high quality market and supplier analysis
‹‹small potential for Lean initiatives. ‹‹cost modelling
‹‹cost reduction year on year
‹‹significant potential for Lean initiatives.

Implementing Lean in construction:

a Lean guide for client organisations 43
4 Choose the right resource: once suppliers have been categorised as described in point
2, deploying the correct resource in terms of Lean champions and general supplier
management is critical. Different client organisations will approach the task differently,
some choosing to separate their Lean work from the more general aspects of managing
the relationship and performance that they have with each supplier, while others will wish
to combine both functions within a single role. This will also be dependent upon whether
your client organisation has chosen to outsource. Most effort should be placed where the
potential benefits are the greatest. Relevant mixes of skills, competencies and behaviours
required to manage suppliers in each category of supplier are shown in Table 3.2

Table 3.2 Skills, competencies and behaviours for managing suppliers

Secure supply Critical

‹‹risk analysis and management ‹‹excellent interpersonal skills
‹‹good business acumen ‹‹strategic thinker
‹‹market knowledge ‹‹senior credibility
‹‹performance management ‹‹good communicator
‹‹diplomacy. ‹‹strong team worker.

Arm’s length Leverage

‹‹creativity to simplify ‹‹very capable negotiator
‹‹customer service focus ‹‹commercially aware
‹‹process orientation ‹‹highly numerate
‹‹ability to delegate ‹‹assertive
‹‹open-mindedness. ‹‹market research skills.

Also, the following list highlights some of the soft skills necessary to be a successful Lean champion:

XX influencing XX energising
XX negotiation XX relationship building
XX giving and receiving feedback XX presentation skills
XX leadership XX measuring own performance
XX questioning XX measuring others’ performance
XX rapport building (body language, voice) XX identifying individual/team development
XX team working needs

XX coaching XX designing training and learning activities

XX facilitation XX developing individuals and teams

XX listening XX delivering training and learning

experiences
XX motivation
XX handling difficult people or situations
XX modelling good practice in others
XX meeting skills
XX building confidence in others
XX personal development planning
XX oral communication
XX setting and agreeing priorities.
XX process thinking

5 Create balanced scorecards for each supplier category: as described in Sections 2.3 and 3.2
a generic scorecard for each supplier category should have been developed before starting
the acquisition process. If for any reason it was not created then it is important to do it
now. This will provide general weightings between criteria that are important for supplier
performance. Examples are cost, quality, delivery time, health and safety, sustainability and
cultural fit. It is now necessary to translate these into balanced scorecards specific to each
supplier for each project that they are engaged with and then, where multiple projects exist,
feed these into a balanced scorecard for individual suppliers spanning several projects.
6 Awarding more work or letting go: the balanced scorecards can then be used to generate
performance improvement targets and review progress against these targets. This can be
done for a single project or for multiples of projects and for multiples of suppliers. Where

44 CIRIA, C728
 more than one supplier and/or more than one project is involved, league tables showing
performance can be constructed and fed back. Embarrassment can be avoided by only
showing a project or supplier where they are on the table with reference to an average and
top and bottom score. Other projects and/or suppliers are not named. League tables can
either be done showing total score or for each criterion. The latter is particularly useful as
projects and/or suppliers can see how they are doing in areas such as quality, health and
safety and sustainability individually. Where multiple suppliers are engaged for a single
category of work, the balanced scorecard methodology can be used for allocating work, with
the most work being given to the best performers. This is a more rounded way than simply
inviting tenders for each new project or assigning work on a basis of equal allocation.

Implementing Lean in construction:

a Lean guide for client organisations 45
 References and further reading
EGAN, J (1998) Rethinking construction, Report of the UK Construction Task Force, Constructing
Excellence, UK. Go to: www.constructingexcellence.org.uk/pdf/rethinking%20construction/
rethinking_construction_report.pdf

DEMING, W E (1998) W Edwards Deming’s fourteen points and seven deadly diseases of management.
Go to: www.endsoftheearth.com/Deming14Pts.htm

DEMING, W E (2000) The new economics for industry, government, education, second edition, MIT
Press, US (ISBN: 978-0 -262-54116-9)

FRASER, N (2013) Implementing Lean in construction: selecting a Lean consultant, C729, CIRIA,
London (ISBN: 978-0-86017-731-9). Go to: www.ciria.org/service/lean

INTERNATIONAL STANDARDS ORGANIZATION (ISO) 9000:2000 Quality management systems

– fundamentals and vocabulary

KORNFIELD, J (2005) Meditation for beginners, Bantam press, UK (ISBN: 978-0-55381-692-1)

LATHAM, M (1994) Constructing the team. “The Latham report”. Final report of the government/
industry review of procurement and contractual arrangements in the UK construction industry,
Department of the Environment, London (ISBN: 978-0-11752-994-6)

LIKER, J E (2004) The Toyota way: 14 management principles from the world’s greatest manufacturer,
McGraw-Hill Professional, New York (ISBN: 978-0-07139-231-0)

NBIMS-UKTM National BIM Standards US. Go to: www.nationalbimstandard.org/

TERRY, A and SMITH, S (2011) Build Lean. Transforming construction using Lean thinking, C696,
CIRIA, London (ISBN 978-0-86017-696-1). Go to: www.ciria.org

TUCKMAN, B W (1965) “Developmental sequence in small groups”, Psychol. Bull. 63, pp 384–
399, Naval Medical Research Institute, Bethesda, MD

WOOLSTENHOME, A (2009) Never waste a good crisis. A review of progress since Rethinking
Construction and thoughts for our future, Constructing Excellence, UK.
Go to: www.constructingexcellence.org.uk/pdf/Wolstenholme_Report_Oct_2009.pdf

46 CIRIA, C728