How Lean/IPD can Create Certainty in a VUCA World
Like just about every other market sector, the construction industry has entered VUCA territory: volatile, uncertain, complex, and ambiguous. In a VUCA market, traditional construction methods, such as design-bid-build, are becoming riskier undertakings. Projects that progress along a linear line marked by distinct hand-offs between design and construction lack the agility to effectively manage labor shortages, pricing spikes, and seemingly unending supply-chain disruptions.
Owners can reduce their risk by opting for collaborative contracting using lean principles and integrated project delivery (IPD) methods. Lean construction is a proven method for improving productivity and reducing waste. IPD is a model in which key project stakeholders—typically the owner, architect, trade partners, builders, suppliers, engineers, and major equipment manufacturers—work together from the start to define the project scope, budget, and schedule.
Research shows on average, lean/IPD projects cost less, are completed faster, are of higher quality, have safer working conditions, and deliver a better overall experience than projects using traditional methods. Here’s how.
Reducing waste is a hallmark of lean. In this context, waste includes everything from excess inventory and damaged materials to idle time and unnecessary movement. Lean strategies that zero in on waste reduction—such as smarter scheduling, prefabricated components, and a site logistics strategy that manages material storage and project flow more efficiently—also reduce costs. In addition, because contractors are on board from the outset, they can actively monitor the market to procure materials when prices are favorable. In this economy, the savings can make all the difference between a project that fulfills the minimum requirements and one that fully realizes the owner’s vision.
Lean/IPD projects get to market faster because the entire project is organized to drive productivity. Project partners are better able to identify and mitigate potential hurdles early on; strategize on methods, materials, and other ways to compress the schedule; and purchase materials with a long lead time sooner or better match available materials to the design and construction methods. Projects that rely on traditional methods are currently experiencing a gap of 9 to 15 months between design completion and project start. Conversely, lean/IPD projects are generally breaking ground immediately after design completion, if not before.
Continuous improvement is another fundamental principle of lean construction. Teams that incorporate the lean methodology are constantly seeking to enhance and improve their processes, systems, and products. At a time when labor is tight and price escalations are upending budgets, lean/IPD teams can more quickly employ innovative solutions to keep the schedule moving and costs in check without sacrificing quality.
On lean/IPD projects, every project partner is responsible for ensuring every worker goes home in the same condition in which they showed up to work. There are a number of tools and strategies available to manage safety, such as operational risk management reviews. But because lean projects promote a culture of collaboration and accountability rather than blame and retaliation, project partners work together to identify and eliminate potential hazards and unsafe conditions.
Lean/IPD teams are engaged in the same mission from the start: to deliver on the owner’s vision. All project team members understand and commit to the conditions of satisfaction, which define what owners value and how they define success. When issues crop up, the project team comes together to solve the problem rather than waste time and resources pointing fingers. This leads to a better overall experience for owners, above and beyond completing a project on budget and schedule.
Project partners also tend to experience a higher level of satisfaction. Lean projects emphasize respect for people, creating a culture in which every member of the team is valued and has a voice. Creating a more positive experience leads to less turnover on a project.
Selecting the right fit
Lean/IPD projects require greater collaboration, transparency, and trust than traditional delivery methods. For this reason, project partners are chosen based on criteria that are relevant to the project, rather than on price alone. For example, a project partner may be selected based on specific capabilities or experience, or even because they have the capacity to deliver on the project scope when promised.
At Miller Valentine Construction, we have long applied Lean/IPD principles and methods as a means to increase value and build certainty for our customers, project partners, and Associates. Collaboration, accountability, and innovation are woven into the fabric of our culture, and continuous improvement is second nature to our Associates. To ensure our customers gain the full value of our lean/IPD approach, we work to create exceptional teams that embrace these same principles. As a result, the inevitable variability, challenges, and complexity of any given project become an opportunity to bring value to our clients together.
The aim is not just to deliver a project within the contract parameters. It is to provide building owners with an easier, more seamless, and more enjoyable experience. In short, it’s how we build certainty in a VUCA world.
For more information, e-mail Greg Fox or give him a call 513.588.1226.