LEAN Procurement for Construction Services

Different procurement methods have been developed and applied in the construction industry for improving performance, yet only a select few have consistently enabled superior outcomes.

The path forward for the Architecture, Engineering, Construction, Owner, and Operator sector is to move away failed traditional planning, procurement, and construction delivery methods that are confrontational, risks averse and lacking value, vision, verification and accountability.

Construction services procurement and project delivery that follow robust LEAN processes have been successfully adopted and deployed. With the proper focus upon change management, continuous education, improve owner leadership, and use of appropriate LEAN tools and services consistent delivery of quality on-demand repair, renovation, and construction services is not only possible, but can be the daily norm.

LEAN construction principles and implementation methods are far from complex. That said, it can be difficult to weed through the jargon and misconceptions. First, be aware that LEAN construction is not simply applying lean manufacturing concepts to construction. For example, Last Planner(TM), black belt, six sigma, kaizen, and similar terms are not LEAN construction procurement and delivery methods. Study of each can be helpful, however, only the following are proven LEAN procurement and construction delivery methods: 1.) Integrated Project Delivery, IPD, for major new construction, and 2.) Job Order Contracting, JOC, for repair, renovation, sustainability, maintenance, and “minor” new construction. To a lesser extent Alliance Contracting and other formats may also be capable of also consistently delivering best value, compliance, and financial transparency…if deployed correctly.

Similarly, IPD and JOC must also be developed and deployed appropriately to assure best value and compliance for all participants and stakeholders. Owner leadership, commitment, and a full, open partnership better owner procurement and facilities

With the appropriate combination of objectives, principles, techniques, tools, and training any owner can adopt and deploy LEAN Procurement and Construction Delivery. Research studies and case studies clearly indicate that long-term collaborative LEAN partnerships between owners, building users, and service providers drive best value, mutually beneficial outcomes, including consistent delivery of on-demand, quality, on-time, on-budget, projects to the satisfaction of all participants and stakeholders.

The following forms the basis of LEAN procurement and project delivery characteristics in concert with best management practices. Appropriate adoption enables early and ongoing collaboration and teamwork through design and construction partnerships from initial concept through project completion and beyond.

• Owner leadership and global oversight
• Focus upon mutually beneficial best value outcomes in alignment with all stakeholders
• Strong partnership and continuous interaction between owner procurement and technical (facilities management, engineering, DPW) teams
• Required initial and ongoing training
• Common data environment, inclusive of a locally researched unit price book organized by a standard data architecture
• Financial transparency
• Shared risk and reward
• Continuous improvement
• High emphasis upon culture
• Ongoing monitoring via key performance indicators (KPIs)
• Mutual trust and respect
• Leverage of on-site, local expertise as well as all team members
• Concurrent design
• Dynamic versus static environment
• Reduction of non-value-adding activities and variance
• Clear, simplified process workflows
• Written operations manual and/or execution guide as part of contract defining roles, responsibilities, deliverables, tools, term, values, and exception handling
• Leverage of collaborative technologies to assure program, project, estimate, document, and process control within a full transparent and verifiable environment
• Regular third-party audits and performance reviews
• Decentralized decision making with multi-tasking, multi-discipline, self-managing working groups
• Customer-focus, service-oriented culture
• Long-term mutually beneficial relationships and performance-based contracts
• Program versus project approach – optimize overall program versus every project

The path forward for the Architecture, Engineering, Construction, Owner, and Operator sector is to move away failed traditional planning, procurement, and construction delivery methods that are confrontational, risks averse and lacking value, vision, verification, and accountability. Value-centric procurement and construction delivery operational management methodologies and associated tools are readily available today.