Lean Manufacturing in the Construction Industry

Eric Sander
Senior Operations Consultant
I have recently had the pleasure of working with a young business owner who has discovered the potential of Lean Principles in an industry very much in need of improvement, the building trades. Shone Freeman is the owner of S. R. Freeman Inc., a small company that employs about 45 carpenters. The company frames upscale homes.
The home building process has not changed much during the last century. Although the materials, designs, and technologies in the homes represent the twenty-first century, the sticks and bricks generally go up the same way. In addition, anyone who has built a home has suffered the delays of scheduling independent tradesmen, bad weather, late deliveries of materials, and rework of the structure. According to industry sources, less than 40% of projects are completed on time. An Orlando Sentinel study indicated that 95% of homes they had inspected in 2001 had serious defects. Because of the boom in building and the lack of experienced and reliable tradesmen, the quality of the construction labor force is not up to the level it was at fifty years ago. As a result, we are still building homes with the same methods and uncoordinated processes with a labor force that is stretched and under-trained. The environment in which Shone must do business is no exception.
Fortunately, there are a few innovative builders who have learned the benefits of Lean Manufacturing and have begun to apply them to the construction business. Much of the improvement has been in collaborative scheduling with subcontractors. In a Dec. 2002 article in Lean Manufacturing Advisor, Gregory Howell of the Lean Construction Institute points out that through a “pull” type scheduling system, constructions projects can come in 10-30 percent under time and cost. Subcontractors are brought in as part of the scheduling team, and as a result, they are more focused on meeting their own commitments. In addition to cross functional collaboration, Boldt Construction from Milwaukee has also empowered their work teams on the job site to resolve issues rather than to go back to engineering or architecture. Through employing root cause analysis, they find the source of the problems and fix them quickly.
Through such efforts, construction companies applying Lean Principles have shown remarkable results. Boldt has experienced a 22% reduction in construction time with several projects coming in weeks and months ahead of schedule. Linbeck construction of Houston has had an 80-90% on-time completion rate, which is well ahead of the national average.
In a radical departure from construction on site, Bensonwood Homes of Walpole, New Hampshire, has begun assembling major wall and floor components of their custom homes in their shop. These sections are delivered and assembled on site to reduce the construction time and improve quality. This approach is common in Japan. Toyota Homes and Misawa Home prefabricate custom homes in their factory for onsite assembly. Tedd Benson has recognized the advantage of this approach and is attempting a new approach for custom homes in the US.
As a subcontractor in this disjointed home construction network, Shone Freeman is attempting to do the framing phase as efficiently as possible. He, too, has seen the benefits of applying Lean principles to his business and is attempting to challenge the status quo. Shone contacted Gemba Research, and we met with several members of his team. Their initial efforts were to reduce the waste of lost time on the job site. The team first implemented a schedule board, a communication tool that listed each crew member’s assignment and target completion time. The foreman would also encourage the crew to identify problems and list them on a Kaizen Newspaper. The board also provided space to list results of actual production hours against the plan. The schedule board has clarified responsibilities within the crew, given them the responsibility to identify and resolve problems, and given them feedback on the physical and financial progress of the job. In another effort to reduce waste, the crew centralized their supplies to a storage shelf in the center of the structure, which was located 30-40 yards away at the back of the property. This eliminated the waste of motion of making trips to the storage shed. To spread the learning, Freeman is rolling out these practices to all job sites, and bringing in his foremen for training in Lean Principles.
Freeman and his team have also recognized the need for standardization of work methods on the job site. To achieve this, he has developed a training program and conducts weekly training for his work crews on the fundamentals of house framing. In addition, to ensure the crews have learned and practice these fundamentals, they have developed a series of skills tests for the crew to demonstrate their ability to carry out standard work methods.
It has been encouraging to see a relatively small player in the construction business have the foresight to recognize the potential of Lean Principles in his industry. Like the large construction firms of Boldt and Linbeck, Shone Freeman is trying to make his framing business stand out in his area. The Lean Principles he is implementing will make his business even more efficient and reliable. The improved organization and productivity on the jobsite will set his business apart from others, and I am hopeful that his success will spur interest from his customers, the contractors who stand to benefit from Lean even more than Shone.
Eric Sander
Sr. Operations Consultant

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