Copyright © 2011 by Research Publishing Services. This paper seeks to show whether the implementation of the lean concept within the UK construction industry has an impact on the productivity rate of projects. 37 UK construction Project Directors and Project Managerswere surveyed and the result shows that the lean concept is making considerable headway in improving productivity of UK construction projects. There is a strong correlation between high leanness and high productivity rates on UK construction projects. The results also indicated that there is no significant difference between the application of the lean concept between the manufacturing and the construction industry

Fong, D

English

Naoum, S.

Whitworth, T.

Fong, D.

LSBU Research Open

Instructions for Preparing ManuscriptsAuthor 1, Author 2, and Author 3Modern Methods and Advances in Structural Engineering and Construction Cheung, S. O., Yazdani, S., Ghafoori, N., and Singh, A. (eds.)ISEC-6, Zürich, June 21–26, 2011IS THERE A RELATIONSHIP BETWEEN THE LEAN CONCEPT AND PRODUCTIVITY RATE OF CONSTRUCTION PROJECTS?SHAMIL NAOUM1, TIM WHITWORTH2 and DANIEL FONG3Department of the Built Environment, London South Bank University,103 Borough Road, London, United Kingdom.E-mail: 1 naoums@lsbu.ac.uk (​mailto:naoums@lsbu.ac.uk​)2 Tim.Whitworth@eu.bovislendlease.com (​mailto:Tim.Whitworth@eu.bovislendlease.com​)3 fongd@lsbu.ac.uk (​mailto:fongd@lsbu.ac.uk​)This paper seeks to show whether the implementation of the lean concept within the UK construction industry has an impact on the productivity rate of projects.  37 UK construction Project Directors and Project Managers were surveyed and the result shows that the lean concept is making considerable headway in improving productivity of UK construction projects.  There is a strong correlation between high leanness and high productivity rates on UK construction projects.  The results also indicated that there is no significant difference between the application of the lean concept between the manufacturing and the construction industry.Keywords: lean construction, productivity, key performance measurement.1	IntroductionThis research study is aimed to investigate the lean concept in the manufacturing and construction industries to establish whether the concept is comparable and to quantify lean initiatives and the impact it has on productivity.  The manufacturing industry focuses on managing flow; it puts management systems and processes into the spotlight along with varying production processes.  The Construction Industry on the other hand has a high percentage of projects which have long and complicated supply chains therefore many players typically are under pressure to hit market windows for productivity, and therefore are subject to multiple extensive process design changes motivated by the opportunity to make much more money than is lost through disruption of a particular project (Ballard et al. 2002, Koskela 2000).  However, through grouping related lean initiatives it may be easier to establish the strength of relationship specific factors or combinations of factors have on site productivity.  	In 1998, the UK government commissioned Sir John Egan to write a report ‘Rethinking Construction’ to review the state of the UK construction industry, which laid out ambitions for UK construction with particular reference to drawing on the experience of other industries that have previously undertaken radical change, improved rates of productivity and transformed organizations.  The report stated that ‘construction can learn from the successes of the manufacturing and service industry, but the project process has to be radically changed because it does not lead in terms of best value for money’ (Egan 1998).  The Rethinking Construction Agenda was designed to help the UK construction industry realize its potential to radically improve by implementing the alternative techniques used to improve the manufacturing industry.  Egan promoted the ‘lean thinking’ concept as best practice and a means to achieving targets set out as Key Performance Measurement including an increase in productivity by 10% each year for the next 5 years.  Additionally in Construction there has been much criticism since the publication of Rethinking Construction (1998), that there are not any performance reviews of lean thinking in the public domain (Green 1999, Jorgensen 2008).  The lean construction website only provides case studies on successful projects.   It is human nature to not trust techniques that claim to be 100% successful against the targets in which they are measured, and as with introducing any radical change to a process, project or object an element of failure is to be expected (Taj 2005).  Moreover, there is little evidence of a formula to establish how lean a system or project is, which makes it difficult to test relationships and impacts lean initiatives have on other variables (Taj 2008).  This investigation is based on an MSc dissertation by Whitworth (2009) which was set out to test the hypothesis that, “Construction Projects with a high degree of leanness also have a high ratio of productivity’.  	The findings of the research can be utilized in operations incorporated into lean thinking as proposed by Egan (1998).  A questionnaire is devised for a large sample that will establish the productivity output of a sample of projects and also establish the leanness in which it is carried out.  Inferential statistics will aim to prove a link between lean in the two industries and test a relationship between the two attributes of lean and productivity.   Following this, the future uses of this study and any developmental research that maybe necessary is explored.  2 	The Lean Construction and the Transfer of the Lean Concept from ManufacturingThe construction process involves the delivery of any type of facility or infrastructure to a customer including acquisition, design, construction and hand over of a project (Latham 1994).  However, in many cases an important difference in construction compared to other industries is that the end user of the product being delivered is not always the owner (Latham 1994).  The design is produced and the contractor executes it with the assistance of subcontractors and suppliers.  Traditionally the process is cost driven.  Each organization involved is responsible only for its input and domain of expertise, rarely are these boundaries crossed.  In general the relationship between contractors, sub-contractors and suppliers can be characterized by; Low transaction frequency based on interaction at bidding stage, uncertainty during the construction process due to each project requiring a new design and process, communication problems of limiting exchange of information and not respecting other organizations deadlines, win-lose relationship of trying to procure benefits from relationship often failing and finally poor quality/ late completion as a result from a lack of trust and commitment between trading partners (Latham 1994, Egan 1998).  Rethinking Construction highlights that there was a distinct dissatisfaction from the client with contractors’ performance in terms of keeping to budget and deadline; resolving defects; delivering a final product to the desired quality; coordinating teams; design and innovation; and finally providing value for money.  The author explored the factors believed to have been implemented in other industries as a means of pursuing improvement.  The five drivers that were identified were:  Committed Leadership; Focus on the Client; Integrated Processes and the Team around the Product; Quality Driven Agenda; and Commitment to People.  Since establishing these drivers, the report recommends that the industry needs to rethink the process through which it delivers its projects with the aim of achieving continuous improvement in its performance and products (Egan 1998).  Egan draws on the experiences of the automotive manufacturing industry as an example of good practice to be adopted by the UK construction industry.  The author received much criticism from the industry stating that construction is bespoke and nothing like the manufacturing industry, therefore it would not be possible to adopt the same practices (Ballard et al. 1998).  As well as recommending a lean project process Egan responds to criticisms of the industry of the term ‘repeat process’ where he highlights that there is a consensus within the construction industry that it is thought to differ from manufacturing as every product in construction is unique as opposed to the standardized component promoted in manufacturing by Ohno (1988) which seems to be key to implementing the lean process, this he does not agree with as research suggests that up to 80% of inputs into buildings are repeated and repair/ maintenance work is also repeated.  The parallel is not with building cars on the production line; it is with designing and planning the production of a new car model (Egan 1998).  This is an important issue particularly when comparing manufacturing to construction as with any cross sector comparison it is easy for skeptics to distinguish the obvious differences (Ballard 2000).  The Egan report sought radical changes to improve production within the UK construction industry using lean techniques as best practice to achieve this.  The effect of this report has seen a number of ‘Rethinking Construction’ demonstration projects which were drawn from the private, public and voluntary sectors through the Movement for Innovation (M4I), the Housing Forum, the Local Government Task Force, and the Central Government Task Force/ Government Clients Construction Panel.  This had a view to implement new processes on construction project delivery methods, to allow experimentation in ‘lean initiatives’.  The move away from traditional construction processes towards a more organized less adverse approach such as the techniques provided by lean should encourage an increased use of lean processes in the UK construction industry with an added bonus that implementing lean techniques comes at no extra cost to the organization.  The Egan Report recommended the use of ‘lean concept’.  However, it did not actively explain how lean could be implemented on UK construction sites in detail, but merely a program of sustained improvement of the construction process to eliminate waste and increase the value that it adds to the client was necessary and applying lean techniques have proved in other industries, to be the most successful way of achieving it.  The report echoes the early work of Womack and Jones, (1990) as a focus on implementation rather than monitoring lean.  3	The Research Methodology and Results The main aim of this research is to examine the relationship between the implementation of lean management initiatives and productivity on construction projects.  Data was collected on 37 randomly selected construction projects across commercial, residential, retail, industrial, health, and education sectors through project managers/directors who were members of the Chartered Institute of Building.  Respondents were asked to select answers for 37 questions, which translate into scoring of between zero (no leanness) and four (total leanness). The questions are grouped under nine areas of leanness identified by Taj (2008): project activities; team approach; processes; maintenance; layout; supply chain; start ups; quality; and schedule.  An average leanness in terms of percentage is calculated for each area and the final project leanness is assessed based on the average of leanness score for all nine areas, in the same way as computed by Taj (2008) in lean assessment.  Productivity related data for each project was collected from the same respondents in order to compute the productivity level for a project.  In this research, productivity is defined as the output quantity with respect to the input quantity, which is evaluated as the gross floor area (m2) constructed per week divided by the number of workers involved.  The leanness and productivity scores for all 37 projects are shown in Table 1 below.  Table 1.  Construction leanness scores and productivity data.Project	Leanness Score	Productivity	No.		(%)		(m2/man week)1	39.0	0.212	80.6	0.743	37.5	0.134	35.1	0.145	37.3	0.226	66.1	0.247	60.9	0.518	71.0	0.649	35.4	0.1010	60.4	0.5311	50.0	0.3312	79.9	1.2313	70.2	0.6314	38.8	0.2415	49.9	0.2216	80.0	0.8317	74.7	0.6118	44.7	0.31Table 1 (Continued)19	43.6	0.1320	39.7	0.2221	56.9	0.4422	28.0	0.2123	31.9	0.2024	39.9	0.2325	82.6	0.9426	53.4	0.4127	39.4	0.2128	42.3	0.2329	72.7	0.9130	91.6	1.2231	54.7	0.3032	11.0	0.0133	35.8	0.2234	25.3	0.1235	72.9	0.6236	86.0	0.8437	60.5	0.43Figure 1 presents the scatter plot of productivity and leanness for all 37 projects.  Pearson correlation analysis shows that there is a strong positive linear relationship between leanness and productivity with r = 0.91 (p<0.005).     Figure 1. Regression Analysis and Pearson Product Moment Correlation Coefficient.The result signifies a less than 0.5% probability that the relationship was due to a chance distribution of scores.  For the purpose of this study the research hypothesis of ‘Construction Projects with a high degree of leanness also have a high ratio of productivity’ is proven to be valid, and therefore the null hypothesis of ‘There is no significant relationship between the leanness results and productivity results’ can be rejected.Statistics of the 37 projects were compared to those derived from the manufacturing projects in Taj’s study (2008).  The leanness score for the 65 manufacturing projects in Taj’s research was averaged which yielded an average score of 55.3%.  This represents a moderate level of leanness overall for the manufacturing sector.  The expectation that the construction industry is not far behind is evident as a mean leanness score of 53.5%  is obtained from this study.  A two-tailed, independent-samples t-test was conducted on SPSS to test the hypothesis that there is no significant difference between the mean leanness scores of manufacturing and construction projects.  Levene’s test of equality of variances shows that F=16.6 is significant (p=0.000) and results from the ‘equal variances not assumed’ section are used in the comparison of means.  A t-value   of 0.49 at p=0.63 indicates there is no significant difference between the mean leanness score of construction projects surveyed in this research and that of the manufacturing projects in Taj’s study.  4	ConclusionThis paper is aimed at providing an insight into lean construction compared with the manufacturing industry.  It is also sought to find out whether lean construction is linked with the rate of productivity on site.  Whilst construction is heading in the same direction of focus as manufacturing, literature was more advanced in the manufacturing industry.  With the trend proving the same and no assessment tool available in the construction industry, the review highlighted that it is viable to transfer the same methodology.  In hindsight, more research needs to be carried out in the construction industry in order to investigate in more detail the key assessment areas of lean in construction rather than adapting manufacturing ones.  The research sample provided the study with a broad scope of project; size, type and cost, which resulted in varying degrees of productivity output.  The data proved conclusive that there is a strong relationship between a high lean implementation and high productivity on UK construction sites.  The results proved that the probability of a result being due to chance is less than 0.5%, which proves that there is a significant relationship between the two variables.ReferencesBallard, G. and Howell, G., Shielding Production: Essential Step to Production Control, Journal of Construction Engineering and Management, 124(1), 11-17, 1998.Ballard, G., Managing Work Flow on Design Projects: A Case Study, Engineering, Construction and Architectural Management, 9(3), 284-91, 2002.Egan, J., Rethinking Construction, Department of the Environment, Transportation and the Regions, London, 1998.Green, S. D., The Missing Arguments of Lean Construction, Construction Management and Economics, 17, 133-137, 1999.Jorgensen, B.  Lost in Transition: The Transfer of Lean Manufacturing to Construction, Engineering, Construction and Architectural Management, 15(4), 383-398, 2008.Koskela, L., An Exploration Towards a Production Theory and its Application to Construction, VTT Publications, Espoo, 2000.Latham, M., Constructing The Team: Final Report of the Government / Industry Review of Procurement and Contractual Arrangements in the UK Construction Industry,  HMSO, London, 1994. Ohno, T., The Toyota Production System: Beyond Large-Scale Production, Productivity Press, Portland, OR, 1988.Taj, S., Applying Lean Assessment Tools in Chinese High-tech Industries, Manufacturing Decision, 43(4), 628-643, 2005.Taj, S., Lean Manufacturing Performance in China: Assessment of 65 Manufacturing Plants, Journal of Manufacturing Technology Management, 19(2), 217-234, 2008.Whitworth, T., Transferring the Success of the Lean Theory: Quantifying the Relationship between Leanness and Productivity in the UK Construction Industry, MSc dissertation, London South Bank University, UK, 2009.Womack, J. P., Jones, D. T.  and Roos, D., The Machine that Changed the World: The Story of Lean Production, Harper Business, New York, NY, 1990.125

Is there a relationship between the lean concept and productivity rate of construction projects?

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Is there a relationship between the lean concept and productivity rate of construction projects?

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