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Improving construction supply chain collaboration and performance: a lean construction pilot project
Per Erik Eriksson
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Article information:
To cite this document:
Per Erik Eriksson, (2010),"Improving construction supply chain collaboration and performance: a lean construction pilot project",
Supply Chain Management: An International Journal, Vol. 15 Iss 5 pp. 394 - 403
Permanent link to this document:
http://dx.doi.org/10.1108/13598541011068323
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Department of Business Administration and Management, Lulea University of Technology, Lulea, Sweden
Abstract
Purpose Improving construction supply chain collaboration and performance is central for achieving short-term business objectives as well as longterm competitive advantage. Lean thinking is an approach that has been adopted in many different industrial settings as a means for improving supply
chain performance. In the project-based construction industry, lean thinking has, however, not yet been widely adopted. The purpose of this paper is to
increase the understanding of how various aspects of lean thinking can be implemented in a construction project and how they affect supply chain
actors and their performance.
Design/methodology/approach Action research was performed in a case study of a lean construction pilot project. Empirical data were collected
through three surveys and follow-up workshops, document studies, and interviews of 12 project participants.
Findings The findings show that many of the lean-related aspects identified in the literature review were utilized in the pilot project. These aspects
have mostly focused on increasing the cooperation among supply chain actors, for which reason the pilot project is very similar to a partnering project.
Hence, much work remains in order to obtain full-fledged lean construction, but the pilot project may serve as a starting point for continuous
improvements and development of lean construction in future projects.
Research limitations/implications The research results are based on one empirical case study for which reasonable generalisations could be made,
albeit cautiously.
Practical implications The frame of reference can serve as an illustration of important aspects and core elements of lean construction and the case
study findings show how various lean related aspects can be implemented and how they affect supply chain actors and their performance in a
construction project context.
Originality/value The action research approach based on both qualitative and quantitative data collection in a lean construction pilot project
provides a valuable opportunity to study both the process of implementing lean construction and its outcomes.
Keywords Lean production, Construction industry, Partnership, Procurement, Supply chain management
Paper type Research paper
Introduction
Many authors highlight the importance of improved
construction supply chain performance in order to enhance
the actors achievement of both short-term business objectives
and long-term competitive advantage (Egan, 1998; Dubois
and Gadde, 2000; Riley and Clare-Brown, 2001). Lean
thinking, which is heavily influenced by the Toyota
Production System (Womack et al., 1990), has been widely
recognized and adopted by many other companies in the
automotive sector (Towill et al., 2000; Wee and Wu, 2009)
and in other manufacturing sectors with the purpose of
improving supply chain performance (Naylor et al., 1999;
Segerstedt, 1999). Recently it has been adopted by the
construction industry (i.e. lean construction) as a means of
supply chain improvement (Ballard and Howell, 2003; Green
and May, 2005; Jorgensen and Emmitt, 2009). The adoption
of innovative management practices, such as supply chain
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394
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Continuous improvements
A long-term perspective on continuous improvements (called
Kaizen in the Toyota Production System) is important in lean
construction (Green and May, 2005; Pheng and Fang, 2005;
Salem et al., 2006; Jorgensen and Emmitt, 2009) in order to
reduce waste and increase the efficiency of the construction
process over time. Long-term contracts (e.g. framework
agreements) are therefore an important aspect, reducing the
traditional short-term focus on cost reduction (Green and
May, 2005) and promote lasting improvements. By working
together on a series of projects the transfer of knowledge and
395
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Cooperative relationships
Cooperative relationships among the supply chain actors
(often referred to as partnering) are an important element of
lean construction (Naim and Barlow, 2003; Green and May,
2005; Jorgensen and Emmitt, 2008), facilitating the
integration of different actors competences and efforts in
joint problem-solving. Since traditional procurement and
governance forms are often criticized for producing waste,
long lead times, and adversarial relationships (Miller et al.,
2002; Elfving et al., 2005), they need to be changed into a
lean contracting approach (Toolanen, 2008).
Since subcontracting can account for most of the project
value and because project activities are totally interrelated, a
harmonization between main contractors and subcontractors
is important for partnering (Dubois and Gadde, 2000;
Humphreys et al., 2003) and for lean construction (Miller
et al., 2002). Accordingly, it is crucial to involve key
subcontractors in a broad partnering team, allowing all
important actors to contribute to the joint objectives
(Eriksson et al., 2007). Earlier research has, however, found
practical difficulties when trying to involve the wider supply
chain in lean construction initiatives (Jorgensen and Emmitt,
2009).
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Cooperative relationships
A broad partnering team was established, including Scania,
DynaMate, and the four contractors. Instead of letting the
construction contractor serve as main contractor with the
three other companies as subcontractors, DynaMate chose
equivalent contracts for all contractors, making them work
side by side as equals. The respondents argued that this
solution was very important for promoting cooperation and
teamwork. However, they thought that important consultants
(e.g. the architect and construction engineer) should also be
involved in the partnering team.
Seven collaborative tools were explicitly utilized in the
project:
.
Joint objectives were formulated in form of performance
indicators. The purpose of these indicators was not,
however, to enhance a team spirit but rather to measure
performance.
.
A collaboration agreement was attached to the formal
standardized contract in order to explicitly describe the
parties expectations and responsibilities in terms of
collaboration.
.
Two joint project offices were established: one on the site
for the contractors and one client office near the site for
the clients representative, DynaMates project leader, and
some additional staff. This made it possible for the client
representative to attend meetings instantly if some
question requiring his presence suddenly popped up,
resulting in increased customer focus.
.
The facilitator was responsible for the execution of three
surveys and three follow-up workshops. The respondents
agreed that these events were important for cooperation
and continuous improvements.
.
One teambuilding event, attended by approximately 40
participants, was held during the second half of the
project.
Continuous improvements
Scania does not have long-term contracts regarding
construction projects with the four contractors. However, all
contractors have framework agreements regarding more
continuous work involving maintenance and services.
Hence, they have deep knowledge about the customers
whole business and also a long-term commitment to deliver
satisfactory products. The respondents argued that these
framework agreements facilitated continuous improvements
and customer focus in the project although they were related
to other parts of the business.
Measurable performance indicators related to many
different improvement areas were adopted. They were first
formulated by Scania and DynaMate and then discussed and
approved by the contractors.
Special interest groups (SIGs) were not utilized. Although
many respondents considered SIGs to be a good idea for
enhancing commitment and knowledge transfer among
different trades, they raised the question whether SIGs can
cover their costs in a single project setting. The client
probably has to adopt a long-term perspective, reaping the
benefits of SIGs over a series of projects.
The amount of training was not greatly affected by lean
thinking. During the second workshop many respondents
expressed a demand for training and education related to
partnering and lean construction. As a result the action
researcher held a short lecture about partnering and lean
construction during the final workshop. It was also agreed
that in future projects lectures and discussions about these
concepts will be held continuously as parts of the workshops.
In order to facilitate suggestions from workers a suggestion
box was established. Workers were encouraged to hand in
formal written improvement suggestions to DynaMates
project leader. Scania had earmarked an amount of e10,000
for rewarding such suggestions (e500 per suggestion). In spite
of good intentions the suggestion box did not work
satisfactorily. The handling and follow-up of the suggestions
were not performed in a structured and continuous way due
to the project leaders overload of work. In the final workshop
it was agreed that the suggestion box should be a permanent
part of the agenda of construction meetings so that suggested
improvements are dealt with shortly after submission.
Furthermore, it was argued that the reward for good
suggestions should be in the form of teambuilding funds in
order to increase workers motivation for suggesting
improvements.
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Core elements
Waste reduction
Aspects
Lean stages
b
Housekeeping
Just in time deliveriesd
Joint IT toolsd
Pre-fabricationd
Process focus
Last plannere
Self controlc
Milestonesa
End customer focus Concurrent engineeringa
Limited bid invitationa
Soft parameters in bid evaluationa
Continuous
Long-term contractsb
improvements
Performance indicatorsa
Special interest groupse
Trainingc
Suggestions from workersc
Cooperative
Broad partnering teama
relationships
Collaborative toolsa
Gain share/pain sharea
System perspective Coherent procurement decisionsa
Large scope contractsc
Properly balanced objectivesb
Stage 1b
Stage 1d
Stage 3d
Stage 3d
Stage 3e
Stage 3c
Stage 1a
Stage 3a
Stages 2 3a
Stages 2 3a
Stages 2 3b
Stage 1a
Stage 3e
Stage 3c
Stage 3c
Stage 2a
Stage 2a
Stage 1a
Stage 3a
Stage 3c
Stage 3b
Notes: aAspects that were explicitly used to a large extent; baspects that
were implicitly used to a large extent; caspects that were explicitly used to
some extent; aaspects that were implicitly used to some extent; and
e
aspects that were not used at all
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Concluding discussion
This investigation started off by identifying 21 aspects and six
core elements of lean construction and how these are related
to three different stages of lean construction. Of these three
stages only the third can be judged as full-fledged lean
construction, whereas the second stage is similar to partnering
and the first stage is related to efficient project governance in
general.
The literature review findings then served as a frame of
reference in an action research based case study of a lean
construction pilot project. The findings show that this
particular project utilized a broad range of lean related
aspects, corresponding to the second stage of lean
construction, focusing on cooperation. Some aspects related
to the more sophisticated third stage were also utilized,
although there is a long way to go in order to reach such a fullfledged lean approach. Hence, one can argue that this
particular project had more similarities to a partnering project
than to a sophisticated lean construction project. This was
verified by the survey results indicating that the project
participants were more satisfied with aspects related to
401
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Corresponding author
Per Erik Eriksson can be contacted at: pererik.eriksson@ltu.se
403
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