By: Robert J. Brewer, CPA, CCIFP, Partner and Architecture & Engineering Practice Leader
Much has been debated and written about Lean Construction over the last several years. This significant shift in how architects, engineers, developers, and contractors think about and manage project delivery represents a model that has the potential to completely change the dynamics in all industries involved. Many companies and business owners want to know more about Lean and determine whether using its principles will bring value to their company. Grassi & Co. has previously advocated for wider use of Lean Construction, as well as a stronger industry educational effort. In our opinion, Lean is not only an improved model for project delivery, but it is also likely to be the dominant model in the industry within a few years.
To review why Lean represents a potentially sizable change in how architects and engineers do business, consider the aspects of the traditional project delivery model versus a Lean project:
- Project stakeholders work mostly independently
- Stakeholders think in terms of what best serves their bottom line, rather than what best serves the project
- Practical concerns often make costly and time-consuming redesign necessary
- Involved parties focus on their piece of the project, rather than the project as a whole
- Focus is on the immediate set of tasks
- Relevant parties assembled at the project’s start
- Able to collaboratively advise and consult one another while designing and drafting the project
- Time and costs saved by setting realistic and enforceable schedules via significant up-front planning
- Stakeholders able to consider what will be best for the project overall
- Focus is on the overall flow of the project
Widespread adoption of Lean could radically change the dynamics of the industry for the better. With that goal in mind, in 1997, Glenn Ballard and Greg Howell formed the Lean Construction Institute (LCI) in La Jolla, CA. Seeking to “reform the management of production in design, engineering and construction for capital facilities” by maximizing value and minimizing waste, LCI developed the Lean Project Delivery System (LPDC), taking Lean principles more widely used in the manufacturing and distribution industry and applying them to construction. LPDC has been producing high-value results, primarily in western states, and some LCI members, like Sam Spata, Executive Vice President and COO of STV’s Building & Facilities Division, want to bring an LCI chapter to New York.
New York has a highly competitive market for architects, engineers, contractors, and developers, and Spata sees Lean as a way to help companies cut waste, provide more value for their clients, raise expectations of their services, and improve their competitive edge. “Lean is about changing the processes by which we work together,” Spata said. “Companies working on a single project may all have different client, business, and personal objectives. With Lean, companies can practically enhance their collaboration and look at each project as a network of commitments. This model improves reliability and provides more value for the client, and the more companies that utilize it, the better off the industry will be.”
With the economy still in recovery, it is crucial that companies deliver value to their clients in order to stay competitive. Spata considers the gap between client expectations and performance to be the critical issue that companies must address: “The recession has given us a new industry paradigm. As costs for development, design, and construction continue to rise, clients expect more and more value for their investment. If we continue to use the traditional model, the gap between project performance and client expectations will be more difficult to close. Companies have to exceed client expectations in all the ways that matter – cost, schedule, and quality. Lean provides a methodology for meeting and exceeding client expectations and putting companies in an improved position to navigate the new industry.”
Grassi & Co. proudly supports Spata’s efforts to raise Lean’s profile in the New York market. We also strongly recommend that business owners familiarize themselves with Lean in detail and consider how it could be used to improve the value they bring their clients. Contact your business advisor to discuss how Lean could help you cut waste, improve efficiency, and prepare yourself for the future of the industry.