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Supply Chain Management: An International JournalImproving construction supply chain collaboration and performance: a lean construction pilot projectPer Erik Eriksson

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To cite this document:Per Erik Eriksson, (2010),"Improving construction supply chain collaboration and performance: a lean construction pilot projecSupply Chain Management: An International Journal, Vol. 15 Iss 5 pp. 394 - 403Permanent link to this document:http://dx.doi.org/10.1108/13598541011068323

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Anders Segerstedt, Thomas Olofsson, (2010),"Supply chains in the construction industry", Supply Chain Management: AnInternational Journal, Vol. 15 Iss 5 pp. 347-353 http://dx.doi.org/10.1108/13598541011068260

Andrew R.J. Dainty, Sarah J. Millett, Geoffrey H. Briscoe, (2001),"New perspectives on construction supply chain integration"Supply Chain Management: An International Journal, Vol. 6 Iss 4 pp. 163-173 http://dx.doi.org/10.1108/13598540110402700

Andrew Fearne, Nicholas Fowler, (2006),"Efficiency versus effectiveness in construction supply chains: the dangersof “lean” thinking in isolation", Supply Chain Management: An International Journal, Vol. 11 Iss 4 pp. 283-287 http://dx.doi.org/10.1108/13598540610671725

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Improving construction supply chaincollaboration and performance:a lean construction pilot project

Per Erik Eriksson

Department of Business Administration and Management, Lulea ˚ University of Technology, Lulea ˚ , Sweden

AbstractPurpose – Improving construction supply chain collaboration and performance is central for achieving short-term business objectives as well as long-term competitive advantage. Lean thinking is an approach that has been adopted in many different industrial settings as a means for improving supplychain performance. In the project-based construction industry, lean thinking has, however, not yet been widely adopted. The purpose of this paper is toincrease the understanding of how various aspects of lean thinking can be implemented in a construction project and how they affect supply chainactors and their performance.

Design/methodology/approach – Action research was performed in a case study of a lean construction pilot project. Empirical data were collectedthrough 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 aspectshave 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 continuousimprovements 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 casestudy findings show how various lean related aspects can be implemented and how they affect supply chain actors and their performance in aconstruction project context.Originality/value – The action research approach based on both qualitative and quantitative data collection in a lean construction pilot projectprovides 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

management and lean thinking, from a manufacturing context

(based on continuous processes and relationships) to the

discontinuous and project-based construction industry is,

however, problematic (Riley and Clare-Brown, 2001;

Wickramatillake et al., 2007; Hook and Stehn, 2008). Some

aspects of lean production may not be equally applicable in

construction, for which reason lean construction has to be

developed and modified to fit the project-based context

(Hook and Stehn, 2008; Mao and Zhang, 2008). In order to

learn more about how various aspects work in a construction

context, case studies involving lean construction

implementation therefore appear relevant.

The field of lean construction is relatively immature and

occasionally criticized for having an overriding positive biasbased on enthusiastic arguments in management books rather

than on scrutinizing unbiased theoretical reasoning in peer-

reviewed journals (Green, 1999, 2002; Green and May, 2005;

Fearne and Fowler, 2006; Jorgensen and Emmitt, 2008). In

the last few years, however, the amount of papers investigating

lean construction have increased, although from low levels.

T his paper uti lizes the scientific l iterature on lean

construction to develop a frame of reference on which the

analysis of case study findings is based. The purpose of this

paper is to increase the understanding of how various aspects

of lean thinking can be implemented in a construction project

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1359-8546.htm

Supply Chain Management: An International Journal

15/5 (2010) 394–403

q Emerald Group Publishing Limited [ISSN 1359-8546]

[DOI 10.1108/13598541011068323]

394



and how they aff ect supply chain actors and their

performance.

The core elements of lean construction

First, an investigation of important aspects and core elements

of lean construction seems pertinent in order to increase the

understanding of what lean construction really is about. Theliterature review presented below discusses how various

aspects of lean construction can be grouped into six core

elements.

Waste reduction

The most important core element of lean construction is

waste reduction (Green, 1999; Ballard and Howell, 2003;

Jorgensen and Emmitt, 2008; Mao and Zhang, 2008). A

central aspect of waste reduction is housekeeping, that is,

keeping the construction site well organized, clean and tidy

(Ballard et al., 2003; Salem et al., 2006). Workers should

therefore be encouraged to clean the job site once an activity

has been completed (Salem et al., 2006).

A related aspect, crucial for waste reduction in lean

construction, is efficient transportation and stockholding of

material, often termed just-in-time (JIT) delivery, (Fearne

and Fowler, 2006; Jorgensen and Emmitt, 2008; Mao and

Zhang, 2008). From a JIT perspective inventories are not

valuable and should be regarded as waste (Akintoye, 1995;

Salem et al., 2006). Through JIT, contractors strive to receive

smaller batches of material to the site when they need it in

order to reduce stockholding and double-handling of material

(Fearne and Fowler, 2006; Mao and Zhang, 2008).

Another aspect of waste reduction is information

technology (Ballard et al., 2003; Green and May, 2005).

Joint IT tools in the form of 3D-modelling allow detection

and correction of most errors prior to production (Ballard

et al., 2003; Woksepp and Olofsson, 2008). Joint IT tools,

enhancing integration among supply chain actors and theirtasks, therefore increase the chance of cost and schedule

success (O’Connor and Yang, 2004; Woksepp and Olofsson,

2008).

A fourth central aspect of waste reduction is off-site

manufacturing of components and units (Green and May,

2005). Pre-fabrication has many advantages similar to

manufacturing industries, such as reducing material waste,

shortening construction duration, improving work

environment, etc. Hence, increased pre-fabrication makes

lean construction more similar to lean production in

manufacturing industries.

Process focus in production planning and control

Approaching production management through a focus on

processes and flow of processes is a core element of lean

construction (Jorgensen and Emmitt, 2009). The last planner

system is a key aspect that enhances efficient production

planning and control (Ballard et al., 2003; Winch, 2006;

Jorgensen and Emmitt, 2008). Last planners are the people

accountable for the completion of individual operational

assignments (Salem et al., 2006). Each planner prepares

weekly work plans to control the workflow, and if assignments

are not completed on time, they must determine the root

cause and develop an action plan to prevent future failures.

It is important that each individual takes immediate action

regarding their own work (i.e. self-control) to prevent defects

at the source, hindering them to flow through the process

(Ballard et al., 2003; Green and May, 2005; Salem et al.,

2006). This aspect should be adopted in all activities during

the whole buying process (Salem et al., 2006). Traditionally,

contractors are used to being controlled by the client, which

reduce their incentive to perform self-control satisfactorily.

Nor do design consultants perform self-control satisfactorily

due to lack of time (Andi and Minato, 2003). Empowering allco-workers to control their own work is therefore decisive

(Ballard et al., 2003; Hook and Stehn, 2008).

A third aspect that enhances the focus on the schedule and

production plans is to establish project milestones (Salem

et al., 2006). By clarifying the importance of production

milestones and making them explicit to everyone, the project

participants will feel more involved in the execution of the

project (Salem et al., 2006).

End customer focus

End customer focus is a core element of lean construction

(Naim and Barlow, 2003; Jorgensen and Emmitt, 2009), since

it is vital for maximizing the value of lean construction

(Wright, 2000; Winch, 2006; Jorgensen and Emmitt, 2008;Mao and Zhang, 2008). Contractors and suppliers must

understand the needs of the customer so that they can supply

the customer with what he/she needs, not what he/she asks for

(Styhre et al., 2004). Customer satisfaction is dependent both

on the end product and the process during which it is created,

i.e. service quality (Maloney, 2002). In order to increase end

customer focus, it is important to adopt lean principles

already in the design stage (Wright, 2000; Freire and Alarcon,

2002). Early involvement of contractors and integration of

design and construction in concurrent engineering are an

important aspect in lean construction (Gil et al., 2004; Green

and May, 2005; Winch, 2006; Mao and Zhang, 2008;

Jorgensen and Emmitt, 2009). Concurrent engineering

increases the contractors’ understanding of customers’ needs

and improves teamwork and joint problem-solving, resulting

in significant time savings (Wright, 2000; Humphreys et al.,

2003; Song et al., 2009).

Relying on competitive bidding is not efficient when

procuring customized products in lean construction (Elfving

et al., 2005; Green and May, 2005). A strong focus on lowest

tender price will foster self-protecting attitudes among

contractors (Eriksson and Laan, 2007; Khalfan et al., 2007)

rather than attitudes aiming for customer satisfaction. Hence,

a limited bid invitation of trustworthy and competent

contractors should be coupled with a bid evaluation based

on soft parameters so that partners capable of satisfying the

customer’s requirements are selected (Maloney, 2002;

Eriksson and Nilsson, 2008).

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

Improving construction supply chain collaboration and performance

Per Erik Eriksson


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experiences among supply chain actors and from one project

to another is facilitated.

Measuring performance against pre-set targets is an

important aspect of continuous improvements (Salem et al.,

2006). According to Freire and Alarcon (2002), control and

measurements of different kinds of performance indicators are

vital in order to determine if performance is improving.

Subsequently the reasons for satisfactory or unsatisfactoryperformance should be analyzed in order to decide on

potential improvement actions (Freire and Alarcon, 2002).

Additionally, staff and workers should be encouraged to

initiate ideas and improved solutions to solve problems

encountered on site (Ballard et al., 2003; Pheng and Fang,

2005). Unfortunately, site workers’ participation in problem-

solving is low in construction compared to other industries

(Green, 2002). Additionally, they often believe that they do

not have sufficient opportunity to state their opinions (Riley

and Clare-Brown, 2001). Hence, it is important that

suggestions from workers are taken seriously in order to

enhance their commitment to continuous improvements

(Ballard et al., 2003).

Although knowledge sharing and joint learning among

people from different trades and disciplines is crucial in order

to enhance continuous improvements in lean construction

(Green and May, 2005; Jorgensen and Emmitt, 2009), it is

seldom realized due to lack of suitable methods (Styhre et al.,

2004). Such learning can be obtained by the establishment of

quality circles (i.e. special interest groups), giving project staff

opportunities to participate in the improvement process

(Salem et al., 2006). These groups meet periodically to

exchange knowledge and experience in order to jointly

propose ideas for critical work-related problems (Salem et al.,

2006).

The project participants’ understanding of the lean concept

and its pre-requisites must be improved in order to increase

their willingness and ability to contribute to continuous

improvements. Hence, relevant training is a precondition foreffective lean implementation (Freire and Alarcon, 2002;

Green and May, 2005).

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).

Central to the establishment of such a cohesive partnering

team is the achievement of good communication, integration,

and coordination (Elfving et al., 2005; Pheng and Fang,

2005), which is facilitated by various collaborative tools, such

as joint objectives, joint project office, facilitator, and

teambuilding (Green and May, 2005; Eriksson, 2008;

Eriksson and Nilsson, 2008).

It is important that all parties benefit from improvedperformance resulting from the implementation of lean

construction (Green and May, 2005). Fair and equitable

rewards are especially vital for building trust and cooperation

among construction supply chain actors (Khalfan et al.,

2007). Hence, an incentive-based compensation form

including gain share/pain share arrangements, which

increase the actors’ commitment to contributing to the joint

objectives, is an important measure in cooperative

relationships (Eriksson and Pesamaa, 2007).

Systems perspective

Another core element of lean construction is to adopt a

systems perspective (Jorgensen and Emmitt, 2009), which is

required in order to increase the overall efficiency of lean

construction projects and avoid sub-optimizations (Green and

May, 2005; Pheng and Fang, 2005; Winch, 2006; Jorgensen

and Emmitt, 2008). A reliable workflow in the system as a

whole is more critical than individual activity speed or cost

(Miller et al., 2002; Elfving et al., 2005; Winch, 2006). An

important aspect of this is to consider the whole buying

process and make coherent procurement decisions that

support or complement one another (Eriksson and

Pesamaa, 2007).

Furthermore, by minimizing the number of steps, parts and

linkages, the construction process is simplified (Pheng and

Fang, 2005). Lean construction cannot be achieved by

considering construction, design, and operation in isolation.

Thus, a rearrangement of the contractual boundaries among

the parties is required (Green and May, 2005). Accordingly,large scope contracts are desirable instead of dividing a

project into small pieces, involving many different supply

chain actors during short periods of time.

A systems perspective is also central in terms of the end

result of the process (Green and May, 2005). In order to

obtain properly balanced objectives (e.g. cost, schedule, and

quality), each project objective should receive a suitable

amount of attention, relative to its importance, during the

whole project process. It is also important that the specified

objectives and values of the project are made explicit to all

supply chain actors (Jorgensen and Emmitt, 2009).

Three stages of lean construction

According to Green and May (2005), lean construction

implementation efforts can be divided into three different

stages, with increasing degree of sophistication. Below, the

connections between various aspects of lean construction and

the three different stages are discussed.

Green and May (2005) think that lean stage 1 focuses on

waste elimination from a technical and operational

perspective. The responsibilities and focus are tied to

managers rather than individual workers. Essential parts of

this stage are: elimination of needless movements, cutting out

unnecessary costs, optimizing workflow, and sharing the

benefits from improved performance (Green and May, 2005).


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Accordingly, the previously discussed aspects of lean

construction related to Stage 1 are: housekeeping, JIT-

deliveries, milestones, performance indicators, and gain share/

pain share. The aspects related to the first stage are of a

technical and operational nature and can be adopted in any

construction project striving for operational efficiency.

The second stage focuses on eliminating adversarial

relationships and enhancing cooperative relationships andteamwork among supply chain actors (Green and May, 2005).

The essential parts are cooperation, long-term framework

agreements, workshops, and facilitator (Green and May,

2005). Accordingly, aspects related to stage 2 are: limited bid

invitation, soft parameters, long-term contracts, collaborative

tools, and broad partnering team. Lean stage 2 does not go

much beyond the concept of partnering since it is about

eliminating waste derived from sub-optimizations and

adversarial relationships through increased integration and

collaboration.

Green and May (2005) think that stage 3 is the most

sophisticated, involving a structural change of project

governance. Its essential parts are: information technology,

pre-fabrication, Last planner, bottom-up activities and

emphasis on individuals, a rethink of design and

construction, decreased competitive forces, long-term

contracts, training at all staff levels, and a systems

perspective of both processes and the product (Green and

May, 2005). Accordingly, aspects related to lean stage 3 are:

joint IT tools, pre-fabrication, Last planner, self-control,

concurrent engineering, limited bid invitation, soft

parameters, long-term contracts, special interest groups,

training, suggestions from workers, coherent procurement

decisions, large scale contracts, and properly balanced

objectives. Only when striving to achieve stage 3, a radical

change from other types of project governance is required.

Case study description

The choice of a case study approach as a means to collect

empirical data was justified by the “how-problem” to be

investigated (Yin, 2003) and the process perspective

employed (Edmondson and McManus, 2007; Pratt, 2009),

given the aim of getting a more detailed 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.

Pilot project description

Scania is a manufacturer of heavy vehicles (trucks and buses)

and a professional client procuring construction work

recurrently, often in the form of industrial production

facilities. The construction management role is mostly

outsourced to their subsidiary company DynaMate, which

normally procures and governs construction projects in a

traditional manner. Since Scania and DynaMate have worked

with lean production successfully for many years, they have

now decided to initiate the implementation of lean principles

also in their construction activities. The aim is to utilize

radically different and innovative ways to govern the

construction process in order to reduce waste and decrease

costs and lead times from investment decision to finished

project.

In order to enhance comparisons between the empirical

data and the conceptual arguments it is important to select a

critical case (Yin, 2003) that explicitly adopts lean

construction. Scania and DynaMate chose the case study

project to be a lean pilot project mostly due to its tight

schedule. During the programming stage DynaMate realized

that they would never be able to deliver the project on time

with traditional procurement and governance forms.

Additionally, the project size of approximately e7 million

was considered appropriate for a first effort. Four contractorsresponsible for construction, electricity, ventilation, and

plumbing were involved in the lean implementation.

Although the decision to implement lean construction was

taken during the design stage, it was kept to the construction

stage until it was implemented on a larger scale. Scania and

DynaMate decided to focus the lean approach on improving

cooperation among different supply chain actors through

partnering-related procurement procedures. They judged that

much waste is related to adversarial relationships and that

cooperation is a suitable start in enhancing a more efficient

construction project.

Research methodology

The case study is based on an action research approach in

which the author was engaged as a partnering facilitator,

responsible for planning and conducting a series of three

subsequent surveys and follow-up workshops in the

beginning, middle and end of the construction stage.

Increased collaboration among practitioners and researchers

is vital in order to facilitate construction industry actors’

capabilities to absorb and utilize academic research results

(Gann, 2001). Action research is therefore a suitable

approach within the construction management field since it

enhances a solution of practical problems and creation of new

theoretical knowledge at the same time (Azhar et al., 2010).

Because of the action research approach the survey was

designed from a practical perspective, measuring the progress

(in a three months interval) towards 11 aspects of the joint

objectives of the project. The three surveys were responded toby 26, 29 and 32 project participants, evaluating statements of

11 aspects, which were related to both cooperation and lean

thinking. Five-point Likert scales were used (1 ¼ strongly

disagree, 5 ¼ strongly agree). In this paper the three survey

rounds are merged into one investigation, accordingly with 87

responses, in order to present an overall view of the

implementation process. The three workshops were half-day

events attended by 15-20 participants, reflecting upon the

progress in the Lean construction approach towards the joint

objectives of the project. This explicit focus on evaluation,

reflection, and feedback is a vital element of action research

(Azhar et al., 2010).

Additionally, 12 project participants were interviewed in the

end of the project. Each interview lasted between one and

three hours, summing up to a total of 20 hours of interviews.

The interviewees included the owner of the building, the

client’s representative, the client’s procurement manager, the

project leader from DynaMate and two of his superiors, the

architect, the project leaders from the four contractor

partners, and the contract manager from one of the

contractor partners. The interviews were semi-structured

and based on the developed frame of reference. The

respondents were asked if and how various aspects of lean

construction were utilized in the pilot project and also if and

why they were satisfied/dissatisfied with the way the

implemented aspects affected project participants and


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performance. Furthermore, approximately 20 hours of

document studies were conducted, focusing on joint

objectives, contracts, bonus arrangements and compensation

forms.

To increase reliability (transparency and future replication),

case study protocols were constructed together with case

study databases, containing case study notes, documents, and

the narratives collected during the study, all with the aim of facilitating retrieval for future studies (Yin, 2003). There are

three main uses for case study research: motivation,

inspiration, and illustration (Siggelkow, 2007). The case

study has been used not only for illustration, but also for

motivation reasons, giving empirical support for the

conceptual prescriptions. The qualitative data formed an

empirical data pattern, which described why and how the lean

construction aspects were implemented in the case study

project. The empirical pattern was then compared to the

theoretical predictions in order to investigate differences and

similarities between the empirical data and theory, i.e. a

pattern-matching analysis (Yin, 2003).

Implementation of lean-related aspectsWaste reduction

Housekeeping was considered well executed although it was

not greatly affected by lean thinking. The site was very well

planned and organized, resulting in efficient handling and

stockholding of material. The cleaning of the site was

somewhat improved due to the lean approach. Workers were

encouraged to clean up after themselves and the collaborative

climate even resulted in workers from different companies

helping one another to clean.

In spite of a lack of explicit focus on JIT, the deliveries of

material functioned well in the project. Since space was a

scarce resource the material could not be supplied too far in

advance. Because of the construction boom during the first

half of 2008, some materials had very long delivery times, butthe early involvement of contractors increased their time for

planning purchases. The improved collaboration also made it

natural for contractors to help one another; the one with the

best relationship with a supplier managed the purchase in

order to shorten the time of delivery. There are different

opinions about the suitability of explicit JIT strategies; some

respondents predict a great future potential, although it

requires significant changes, while some think that it is

overrated, increasing the risk of delayed material.

The use of joint IT tools was not affected by lean thinking.

A joint IT-database for exchange of documents was

implemented, but this decision was made before the

decision of a lean approach. The database was easy to use

and functioned satisfactorily, especially among consultants. A

few of the contractors argued that telephone and face-to-face

meetings are more efficient in terms of communication and

information sharing. Some respondents with higher

technological maturity consider 3D modeling to be a useful

tool in future projects but they did not miss it in the pilot

project.

Pre-fabrication was not affected by lean thinking. Some

respondents argued that pre-fabrication is more difficult in

complex industrial facilities than in standardized projects such

as housing. The fact that the lean concept was not fully

implemented during the design stage also held back the pre-

fabrication attempts. Nevertheless, a great number of

reinforcements and parts of the concrete framework were

pre-fabricated and the participants were satisfied with the

degree of pre-fabrication.

Process focus in production planning and control

Last planner was not utilized. In fact, only one respondent

was aware of the Last planner concept and considered that it

would be interesting to try it out some time to see how itwork.

Self-control was slightly affected by lean thinking since it

was a part of the agenda at the coordination meetings, which

were held every other week. This resulted in increased

commitment to the execution of self-control as the

contractors knew that they would have to present their

actions to the group regularly. The quality of self-control

varied among the supply chain actors. It functioned better

among contractors than among consultants, who failed to

coordinate their drawings satisfactorily. At the final workshop

the importance of appointing a person responsible for the

coordination of design documents was highlighted. The

electrical contractor performed self-control very well. An

important reason for this is that the electricians had explicit

responsibility for always controlling their own work, a task for

which they received a salary raise.

One milestone was established as a result of lean thinking.

It had a high symbolic value since it was connected to the

delivery of the machine for which the facilities were built. The

four contractors would receive a shared bonus of e50,000 if

the construction work was finished to such a degree that the

installation of the machine could start the day it was

delivered. The respondents agreed that this milestone

increased the commitment to the schedule and contractors

who were late made significant efforts to increase their speed

and finish as promised. In fact, many of the respondents

would like to have more frequent milestones to avoid heavy

time pressure in the end. During the final workshop it was

suggested that the bonus should involve teambuilding funds,transferring rewards to the individuals who are actually

performing the work. Additionally, it was considered

important that the contractors should be involved in both

the ex ante determination of the milestones pre-requisites and

the ex post control of the achievement of the milestones, in

order to avoid a top-down push of production planning.

End customer focus

Concurrent engineering was a central part of the lean

approach. The aim was to save time, since the deadline was

very important to the end customer. T he client’s

representative and the contractors were involved in the

design stage to a larger extent than normal, resulting in faster

decisions, improved knowledge about the customer, and

increased buildability. The contractors contributed cheaper

material and improved technical solutions and site logistics.

All respondents agreed that concurrent engineering enhances

customer focus and cooperation and that it functioned well in

the project. A drawback, however, was that only the client’s

representative, and not the end user, attended meetings. In

the final workshop it was suggested that both the end user and

the contractors’ foremen should be continuously involved.

Limited bid invitation was taken one step further since

DynaMate negotiated directly with all four contractors.

Competitive tendering is traditionally used for all

contractors but was abandoned altogether due to the lean


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approach. All contractors were obviously very happy with this

arrangement and argued that it decreased their focus on

short-term profits and increased their focus on satisfying the

customer.

Owing to the direct negotiation approach, DynaMate relied

solely on soft parameters when selecting contractors. All four

contractors work extensively for the client, both in the past

and present, so they were all well known. Two of them areactually subsidiary companies to DynaMate and they were

chosen partly from a strategic/political perspective, since their

participation in the pilot project was demanded. The

construction and electrical contractors were chosen due to

their high competence and experience of partnering projects.

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 customer’s

whole business and also a long-term commitment to deliversatisfactory 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 thebenefits 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 DynaMate’s

project leader. Scania had earmarked an amount of e10,000

for rewarding such suggestions (e500 per suggestion). In spiteof 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 leader’s 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.

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 andteamwork. 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 client’s representative, DynaMate’s 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.

These collaborative tools were very important although therewas room for improvements. The fact that the project was not

initiated as a lean project resulted in the collaborative tools

not being utilized in the very beginning, which is an important

stage for establishing a collaborative climate. At the final

workshop it was suggested that joint objectives should be

established through teamwork during a kick-off workshop

instead of being initiated as performance indicators solely by

the client side. It was also agreed that it is better to have

several smaller activities than only one big teambuilding

event. Furthermore, the facilitator role should include a larger

area of responsibility, managing not only partnering issues but

also lean aspects, such as the suggestion box, SIGs, and

training events.

The compensation form was based on open books and a

gain share/pain share arrangement in which the parties’ shareswere relative to their part of the total budget. Accordingly, the

incentives were based on group performance instead of

performance within the individual contracts. The respondents

stated that this arrangement was a central aspect, facilitating

cooperation and a systems perspective since no actor gained

by improving his own performance at the expense of someone

else’s.

Systems perspective

Coherent procurement procedures were implemented,

establishing an appropriate foundation for increased


Per Erik Eriksson


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399



cooperation. The key contractors were procured early through

direct negotiation and involved in concurrent engineering.

The compensation form was based on group incentives and

the broad partnering team used several collaborative tools.

The respondents agreed that these procurement procedures

were suitable and a central aspect of the collaborative lean

concept that was aimed for.

The four contractors had large scope contracts. Theelectricity, ventilation, and plumbing contracts included

d es ig n s er vi ce s, s in ce t he se c omp an ies h ad s uc h

competences internally. The architect and construction

engineer were, however, contracted by DynaMate. An

exception to the large scope approach was that the

mechanical supplier and contractor were procured and

managed directly by Scania and therefore outside the scope

of the project managed by DynaMate. The interface between

the mechanical delivery and the construction project did not

function perfectly smooth in all situations, so this division of

responsibilities was a drawback from a lean perspective.

The respondents stated that the project had properly

balanced objectives. Quality and function are often most

central for Scania. In this project the time schedule was also

highly prioritized and the cost was ranked third. Although the

ranking of these objectives was not explicitly discussed it was

supported by the actions taken during the construction

process. The actors never chose alternatives that saved costs

at the expense of quality and time. In order to enhance clarity

and mutual understanding, the respondents thought it would

be useful to discuss the balance of the objectives among all

supply chain actors in the beginning of the next project.

Results of lean implementation

Identification of lean stages

The lean related aspects implemented in the project are

connected to the three different stages of lean construction. In

Table I, the extent to which different aspects were used isillustrated: aspects that were explicitly used to a large extent

are marked with a superscript a; aspects that were implicitly

used to a large extent are marked with a superscript b; aspects

that were explicitly used to some extent are with a superscript

c; aspects that were implicitly used to some extent are marked

with a superscript d; and aspects that were not used at all are

marked with a superscript e.

The four aspects related to Stage 1 were utilized in the

project to a fairly large extent. Milestones and the gain share/

pain share arrangement were explicit strategies, whereas

housekeeping and just-in-time deliveries were used more

implicitly. This finding is in line with the earlier argument that

Lean Stage 1 is the default that is performed in many efficient

construction projects, although they do not involve explicit

lean thinking. Also the aspects related to Stage 2 were

explicitly utilized to a large extent in order to establish

cooperative relationships among the supply chain actors,

which was the explicit aim of the pilot project. The aspects

related to Stage 3 were used to a lower extent, for which

reason there is still a long way to go in order to obtain full-

fledged lean construction.

Pilot project performance

The pilot project was finished successfully within the target

price and time schedule. Many of the formulated performance

indicators were satisfactorily achieved but some of them were

not, partly due to that some of them were unrealistic and

others were difficult to measure. The manager at DynaMate

that initiated the performance indicators stated that: “this

should not be seen as a failure since it is more important that

we start measuring our performance than that we achieve allspecific indicators at our first attempt”. The improved

cooperation among the partner companies resulted in

monetary savings due to for example efficient coordination

and joint usage of equipment (e.g. cranes and lifts). The five

partner companies received a bonus of e200,000 to share due

to lower costs than the target price and e50,000 for finishing

the construction w ork according to the m ilestone

requirements. Furthermore, all interviewees were satisfied

with the results and considered the project a success.

Ho we ve r, t he y a gr ee d t ha t t he p ro je ct c ou ld b e

characterized more as a partnering project than as a lean

construction project. They thought that the lean concept

could have been developed further in this project if it had

been implemented already during the design stage.

As described in the methodology section the survey

measured the participants’ satisfaction with 11 aspects of

the joint objectives related to both partnering and lean

construction. Overall the survey results confirm that the

project participants are fairly satisfied with the project results.

In Figure 1, the merged empirical results from the three

surveys are presented. Safety, comfortableness (fun to work),

and commitment/participation received high values (4.2-4.3).

All other items have rather high values ranging from 3.3 to

3.9.

However, it is more interesting to divide all items into two

groups: aspects related to lean construction and partnering

Table I Lean-related aspects implemented in the pilot project

Core elements Aspects Lean stages

Waste reduction Housekeepingb Stage 1b

Just in time deliveriesd Stage 1d

Joint IT toolsd Stage 3d

Pre-fabricationd Stage 3d

Process focus Last plannere Stage 3e

Self controlc Stage 3c

Milestonesa Stage 1a

End customer focus Concurrent engineeringa Stage 3a

Limited bid invitationa Stages 2 þ 3a

Soft parameters in bid evaluationa Stages 2 þ 3a

Continuous Long-term contractsb Stages 2 þ 3b

improvements Performance indicatorsa Stage 1a

Special interest groupse Stage 3e

Trainingc Stage 3c

Suggestions from workersc Stage 3c

Cooperative Broad partnering teama Stage 2a

relationships Collaborative toolsa Stage 2a

Gain share/pain sharea Stage 1a

System perspective Coherent procurement decisionsa Stage 3a

Large scope contractsc Stage 3c

Properly balanced objectivesb Stage 3b

Notes: aAspects that were explicitly used to a large extent; baspects thatwere implicitly used to a large extent; caspects that were explicitly used tosome extent; aaspects that were implicitly used to some extent; andeaspects that were not used at all


Per Erik Eriksson


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respectively. The lean construct includes five items

(continuous improvements, fast design change decisions,

focus on function and life cycle costs, site cleaning, and waste

reduction) with high reliability (Cronbach alpha ¼ 0:84) and

mean value ¼ 3:59. The partnering construct includes six

items (collaboration, comfortableness, commitment/

participation, communication/feedback, safety, and trust)

w ith Cronbach alpha ¼ 0:88 and a higher mean

value ¼ 4:04. A one-sample T -test verifies that the difference

in mean values between these two constructs is statisticallysignificant at the 0.05-level. This result confirms the

argument that the pilot project achieved better results in

terms of cooperation than in terms of lean construction.

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 full-

fledged 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

partnering than those related to lean construction. Increased

cooperation among supply chain actors is, however, a

prerequisite and an appropriate starting point for a further

development of the lean concept. One of the managers at

DynaMate expressed this pilot project view as: “sometimes

you have to create movement for its own cause; we have to

start the change somewhere and when we have started moving

we can change our direction as we learn what is working and

what is not”.

The project was successfully executed, both within its

budget and schedule and with a satisfactory quality, much due

to the various aspects of lean construction that were

implemented. Since the participants, both at the client and

at the supply side, are satisfied with the project execution and

its results, this pilot project can serve as a starting point of a

continuous improvement of the supply chain performance.

Another DynaMate manager expressed this view as: ”the pilot

project has been an exiting start on a long-term change

journey”

From a theoretical perspective a weakness of the developed

frame of reference is that the aspects are not exclusively

related to only one core element. The case study findings

show that several aspects facilitate the achievement of more

than one core element, such as: long-term contracts facilitatenot only continuous improvements but also customer focus;

joint project office and concurrent engineering facilitate both

cooperative relationships and customer focus; follow-up

workshops facilitate both cooperative relationships and

continuous improvements; and incentives based on group

performance facilitate cooperative relationships and a systems

perspective. In spite of these multiple relationships the frame

of reference can serve as an illustration of important aspects

and core elements of lean construction. From a practical

perspective, the case study findings show how various lean

related aspects can be implemented and how they affect

Figure 1 Survey 1-3 in lean construction project


Per Erik Eriksson


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supply chain actors and their performance in a construction

project context.

Further research on performance indicators should be

encouraged. Performance measurement is an important

aspect of both lean production (Wee and Wu, 2009) and

lean construction (Freire and Alarcon, 2002). Although

construction supply chain performance measurement is

important it is, however, more difficult than in mostmanufacturing industries (Wickramatillake et al., 2007).

G reen and May ( 20 05 ) also m ean that m easuring

performance is not consistent with a cooperative view of

lean construction, which is vital for stages 2 and 3. The case

study results confirm that it is not easy to formulate and

measure suitable performance indicators and that more

informal collaborative joint objectives are important, parallel

to the formal performance indicators.

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Corresponding author

Per Erik Eriksson can be contacted at: [email protected]


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Improving Construction Supply Chain an Collaboration