McGraw Hill Construction, the Lean Construction Institute, and Dassault Systèmes teamed up to produce an in-depth report on Lean Construction. Below is an excerpt from that report on the the impact Lean practices are having on contractors in regards to scheduling.
The Impact on Contractors of Schedule Decreases Due to the Adoption of Lean Practices
Reduced project schedule is one of the top benefits of adopting Lean practices, and saving time in the construction industry also cuts costs on projects and can increase profitability.
However, the savings only accrue to the contractor if the owner has not already factored the reduced amount of time into their expectations of the contractor, especially in the case of a negotiated project, or if the contractor has not deemed it necessary to build those cost savings into their bid in order to win a project in a highly competitive market.
The study results suggest, though, that these options are not mutually exclusive. About two thirds of contractors report that the schedule savings they experience due to their Lean practices do have a positive impact on the profit they experience in their projects, and just about the same percentage of contractors report that they are able to bid projects more competitively due to the schedule savings.
Clearly, there must be significant overlap of firms who both have schedule reductions feeding their bottom line and schedule reductions absorbed in their efforts to be more competitive.
However, the findings also reveal that the industry is nearly unanimous about the growing expectations of owners that projects can be done in shorter time frames due to the adoption of Lean practices in the industry.
This aligns with the previous finding that increasing their firms’ competitiveness rather than direct profits is the larger benefit from Lean.
The in-depth interviews with Lean experts shed further light on this finding. Experts report that, even just five years ago, most owners were not familiar with Lean, but they see a broad change occurring.
Some believe that owner mandates will be the most critical driver of Lean construction in the industry in the future, a shift from what they currently see occurring, other than in one or two sectors like healthcare with engaged owners that have led the industry on Lean adoption.
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