What are the success factors for lean project delivery? The purpose of this post is to start a conversation on the subject. There are many examples of successful projects based on Lean/integrated project delivery – studies have identified benefits such as 10% or greater savings in project cost, and 5% or more reduction in schedules, yet adoption is still relatively low.
As net profits for the top 400 US construction firms are often 4% or less, profits could be increased by 10% or more through the application of lean methods, and costs to owners could be reduced equally as well. A 2014 study by McGraw Hill’s Engineering News Record identified that only 26% of the construction firms polled had implemented lean practices, and 37% were relatively unaware of them. Relatively few owners have required lean project delivery. Many owners, designers and contractors are wary of unfamiliar methods, having seen limited benefits from TQM and other initiatives.
In the USA, several healthcare organizations are aware of Lean/IPD, having seen the success experienced by Sutter Health in California. Sutter were early adopters of lean, as they complied with a State of California mandate to rectify and upgrade many of their facilities that were in serious need of repair. In adopting the lean philosophy, they contributed significantly to the development of lean by lessons learned through their projects.
A number of hospital systems such as UHS have adopted lean, but nationally, only a relatively small percentage of owners have initiated lean projects.
As reflected in the recent McGraw Hill (ENR) surveys, a growing number of contractors have begun to practice lean, or at least some elements of it. The problem is that the greatest success is derived when a project starts out as a lean endeavor, with the type of relational contract that enables lean behaviors.
The traditional forms of contract continue to promote isolationist attitudes in the project team, optimizing the productivity of their portions of the job, but sub-optimizing the overall project.
So – the owners are the ones that have to set the pace! How can they be encouraged to lead?
Let us keep this issue alive!