Large scale construction projects suffer from cost and time overruns that are typically a symptom of productivity problems and directly affect overall industry profitability. As a result, methodologies have been developed to reduce the risk of overruns and improve project outcomes. A number of these methods are based upon Lean production principles that focus on identifying value, eliminating waste and creating a smooth flow of materials, information and work. The application of Lean to construction is based upon treating the construction site as a temporary production line and is referred to as Lean Construction.
Agile methods have been found to improve the reliability of project delivery in complex environments, by decomposing the scope into small manageable parts, then completing these parts in order of greatest value. Although Agile and Lean methods share many common values and principles, Agile methods have not been properly investigated as a means of reducing the overruns associated with large scale construction projects.
Time and cost overruns in large scale construction are very common. Studies suggest that between 70% and 90% of projects exceed the original planned cost and that the overrun commonly varies between 50% and 100% of budget. Some well known examples of significant project overruns include:
- Sydney Opera House - Final cost was 15 times more than originally planned
- Channel Tunnel - Final cost was 80% more than originally planned
- Boston Arterial Tunnel - Final cost was 196% more than originally planned
The causes of construction overruns have been investigated and the most common causes are listed below - excluding issues relating to commercial supply chain or changes in material or labour rates as these are difficult to control.
- Poor or incomplete design and documentation
- Client scope change during construction
- Mistakes during construction
- Delays in decision making or instructions
- Poor communication and information dissemination
- Poor planning and scheduling
- Labour skills, availability or disputes
- Incorrect material types or quantity
As a result the construction industry is facing declining productivity. Data published by the United States Bureau of Labor Statistics show that in the last 40 years, while non-farm productivity has increased by over 200 percent, productivity in the construction industry has actually declined. This is creating a crisis for the construction industry given the global demand for construction and the typical size of financial commitment and therefore risk involved.
Construction Compared to Manufacturing
When compared with manufacturing, the breakdown of time spent on value added and non-value added activities is significantly different. In construction studies suggest that construction labour spends around 57% of effort on non-value added activities compared with 26% within manufacturing. This suggests that the above causal factors such as materials, quality, change, and ineffective coordination are adversely affecting productivity.
This difference together with the benefits that Lean methods have delivered to the manufacturing industry has led researchers to consider how Lean principles and practices can be applied to construction.
Lean Construction is an adaption of Lean principles and practices to the design and execution of construction projects. Lean construction supplements traditional construction management approaches by focusing on:
- Creating material and information flows
- Maximising value generation
- Using plan, execute and control paradigms
Although Lean Construction shares many principles with Lean Production, it is different in how it is practiced.
- Optimisation of entire system through collaboration and systematic learning
- Continual improvement and pursuit of perfection involving everyone in the system
- Focus on delivering the value desired by the owner/client/end-user
- Creating flow though systematically eliminating obstacles to value creation and elimination of processes that create no value
- Creating pull production
- Construction projects are unique (one-of-a-kind) prototypes
- Multiple contractors/suppliers act under different commercial arrangements
- Construction environments are typically outdoors and/or difficult to control
- Communication challenges caused by teams being geographically separated adding complexity to sharing of information
These differences have meant that the take-up of Lean Construction as a paradigm is limited within the construction industry. Despite the differences and limited adoption, many of the key Lean practices are applicable to construction. Additionally, specialised methods such as the Last Planner System and WorkFace Planning have been developed to address the unique challenges of construction.
Last Planner System
The Last Planner System (also known as Collaborative Planning, Lean Planning, Pull Planning, Right to left planning or Short-term planning) is a method of controlling and providing certainty around materials, resources and dependencies at the work face by using a collaborative approach for pull scheduling.
The key practices of the Last Planner System include:
- Minimising work variability between tasks as a way of improving the labour utilisation
- Creating look-ahead plans that are based upon work tasks that can be completed without interruption, rework, or remobilisation
- Planning work on weekly basis through coordination meetings involving planners and supervisors
- Measuring progress by monitoring the actual completion of work and using weekly learning to improve work practices
While this approach addresses many of the problems causing cost and time overruns, the work practices have not been widely adopted. The reasons for this are manifold and include poor understanding, training and the availability of supporting systems.
WorkFace Planning was developed as a set of practices to support the execution of very large construction project and is compatible with the principles of Lean Construction.
Similar to the Last Planner System, WorkFace Planning involves the creation of small, well defined, field installation Work Packages that support the construction workforce. A typical Work Package supports one rotation (5 to 10 days) of a work crew and is based on activities that are extracted directly from the construction schedule/plan.
Complexity in Construction
Construction projects are not inherently complex, but because of the challenges encountered during execution they can become complex. This is because of changes in the design, availability of resources, materials, information and site access. As a result it is difficult to maintain an up-to-date work plan and plans rarely reflects the actual sequence in which tasks are completed. Consequently, the majority of construction tasks that are completed are based on tacit knowledge and improvisation at the operational level. This makes managing critical path activities by setting and following priorities very difficult.
Agile and Lean Compared
Although Agile originate in the software industry, it has been heavily influenced by Lean values and principles. Consequently, Agile and Lean share many fundamental values and principles that include focusing on quality, continuous improvement and empowered teams. However, Agile has been developed to help address the risks associated with complexity in project based work. In contrast, Lean attempts to eliminate change/variation by using control methods.
Agile and Lean differ in the area of work flow and change. In the case of work flow, Agile breaks the work in small pieces that are completed within time-box iterations. The purpose of the iterations is to ensure a regular cadence of plan-do-check-act occurs. This is actually very similar to the weekly plan, monitor and review cycle that is part of the Last Planner System.
Agile for Construction
Construction is often used as an example to explain the differences between software development and other work types. In these examples software development is considered to be a complex process that is sensitive to input variation, non-linear and not repeatable. Conversely, construction is explained as a simple linear process. While this is partly true and construction projects are not complex in the same way as software, they do share some similarities in the complexity that arises in field execution.
Agile methods have emerged as a means on minimising the risks of complexity and ensuring the greatest possible value can be delivered. The key principles and practices in Agile that help reduce risk associated with complexity are based on empirical control, continuous monitoring and heuristics. Apart from the differences in design, a majority of the Agile principles and practices that address complexity are directly applicable to construction project execution.
Artefact and Practice Analogies between Agile and Construction
Analogies between Agile and construction can be made in terms of artefacts and practices. The value in these comparisons is to identify similarities and understand differences leading to improved sharing of practices between industry disciplines.
The weekly work plan is similar in many ways to an iteration/sprint. It provides a framework for prioritising and planning work, measuring and monitoring progress, and capturing lessons learned for improvement. Within the weekly work plan the key practices of daily standup meetings, customer review/site inspection and retrospective/lessons learned are very similar.
The primary unit of work that is used for defining scope and measuring progress is the user story/work package. Here there are some differences in that a work package can be fully defined using WorkFace planning practices, unlike a user story that is typically used as the basis for a conversation between customer and team to clarify exact requirements.
Progress in an Agile project is measured using completed user stories, similarly construction progress can be measured by completion of work packages. Therefore it is possible to represent progress of a construction project in simple form like a burn down/up chart.
On the surface there are many obvious differences between large scale construction and software development. However, the complexity associated with the field execution of construction suggests that the application of Agile principles and practices may be helpful in improving productivity.
Lean manufacturing principles have already been applied to construction, but the uptake has been limited. Identifying similarities and differences between Agile and construction enables the reuse of ideas across disciplines and provides an opportunity to incorporate learning. Additionally, it provides a way of leveraging the practices developed in Agile and applying them to construction.