Five steps, one must do, to start being lean

Five steps to implementing Lean thinking into your contraccting business

Lean is not a fad diet but is a way that manufacturing companies have used to become more competitive and successful. Construction companies are just beginning to apply it. Some contractors mistakenly feel they are already as lean as they can get. Here are 10 questions that will tell you if you are in need of Lean thinking:

1. Are workbenches, desks, tabletops and equipment free of clutter and unnecessary items? (Clutter is not lean, and hides problems.)

2. Are tools, fixtures and jigs located at the workstation where workers take less than five to 10 seconds to retrieve them? (We want to keep tools and part searches to a minimum; they add no value to the product.)

3. Do you have the right amount of consumables when needed, neither running out or overstocked?

4. Do you have only one or two jobs at a time started in fabrication or somewhere in progress? (Work in progress is expensive and can be reduced without impacting delivery schedules.)

5. Are tools and gang boxes located where they are used, and organized so they can be easily retrieved? (Watch for employees going on treasure hunts, it indicates a poorly organized work layout.)

6. Is all material stored on racks, pallets or carts at the jobsite, so it can easily be moved instead of stacked on the floor/ground? (The GC will have you move it many times.)

7. Do you measure PPC (the percent of planned work completed weekly)? If so, is it greater than 60%?

8. Are supplies and consumables labeled with specifications and/or restock numbers and the person responsible to contact to reorder?

9. Are file cabinets labeled as to contents in a consistent and organized manner, and are the files easily retrieved?

10. Overall, are employees encouraged and recognized for sharing and implementing improvement ideas?

If you answered yes to most of these questions then you have a good start at being lean. If most of your answers were no, Lean can help. If you have no clue what these questions are telling you, then you may not be interested in reading further as you may not survive many more years while your competition passes you by.

Five ways to start doing Lean
While some may suggest there is only one right way to implement lean, there are actually many approaches that companies have used successfully. You need to find what works for your company. Here are five ways to start implementing Lean. Start with a learning (pilot) project and expand as you have success.

1. Use the 5Ss to organize the work place (shop, field, office or service vans) to reduce treasure hunts.

2. Start measuring PPC and look to remove the constraints that keep your crews from doing more planned work. Research shows that crews on the average do the work they planned to do 54% of the time. How much planned work do your crews do weekly? How effective is their weekly planning? How do you know?

3. Do Muda walks. "Muda" means waste in Japanese. There are seven basics types of waste that lean attacks. (See side bar) A Muda walk is to spend around an hour watching how the work is done and what wastes and barriers happen. Remove the wastes and barriers.

4. Create systems for maintaining consumables. Use a Kanban system, a signal to restock a supply of material, chemicals or parts. One way is to use two bins, a max/min or similar system. For example, consider two bins of screws used in fabrication or install. When one bin is empty, the worker removes it and starts using the second bin. The empty bin has on its side a card with all reorder information. The bin itself or the card goes to whoever is to reorder it. A max – min system may be used on a stack of sheet metal. The markings on the rack show the maximum level to fill to and the minimum mark tells when to reorder.

5. Use a spaghetti chart and ask lots of why questions. This useful and simple tool is used to see how a product flows and the order the work is performed. A physical map of the work area is used and one draws the actual (not what we think) path taken by a specific product, form or person being observed. A line is drawn from start to end indicating the path actually moved. A completed chart often looks like a plate of spaghetti because the product, form or person typically moves all over the area. In one sheet metal shop, the spaghetti chart helped surface questions about where the various machines were located in relation to each other. This led to a closer and more logical relocation of several machines and substantially reduced the distance fittings traveled through the shop.

One must do
Do these five and you will have a great beginning at being lean. But there is something you need to do as a foundation before starting. That is to be sure you, and all employees, understand your company's "True North." To be effectively engaged in improving how your company performs, everyone needs to know and buy into the company's purpose for existing. This purpose is not to do lean, nor is it just to make money. (If you really want to make lots of money why are you in the construction industry anyway?) This purpose includes your company's mission and vision of where the company is going. Employees need to internalize these ideas so they stay focused on true north when storms and challenges happen. They will see how doing Lean can help them achieve the broader vision.

Bonus round, plus one
A key element for success in construction is for managers to understand the priorities they should manage to. The three priorities of managing construction work are:

1. Keep the crews installing. The customer is only paying us for a working system. We can only bill for installed work. The crew is our most expensive per hour work unit and should always be keep installing, doing value added work. All support functions and efforts should be focused on this priority.

2. Reduce inventory. Because of the hidden costs of inventory, we want to reduce it as much as possible, but never at cost of priority No. 1.

3. Reduce other costs. There are many ways to reduce other costs and these should be pursued as long as they don't override No. 1.

Are you doing things the way you have always done them, but hoping they will yield different and better results? This is one definition of insanity. To do Lean is not a question, but an answer: Lean can help your company achieve its true north but only if you try it.

Dennis Sowards is an industry consultant and guest writer for Contractor magazine. His company is Quality Support Services Inc. He can be reached at [email protected] or at (480) 835-1185.

The Seven Types of Waste (Muda):

Defects: Includes doing the wrong installation, defects in fabrication, punch lists and many kinds of change orders. Not meeting the required code is waste.

Over-Production of Goods: In construction, this happens when fabricating material too early and when stockpiling material either in the warehouse or at the job site. Estimating jobs that are not won is a form of this waste. Printing more blueprints or making more copies of a report than needed is overproduction.

Transportation: This waste happens when material is moved around the shop; loaded on the truck or trailer; hauled to the jobsite and unloaded, and when the material is moved from the lay-down or staging area to the installation point or moved to get out of another trade’s area.

Waiting: Includes when a crew waits for instructions or materials at the job site; when a fabrication machine waits for material to be loaded; and when payroll waits for the always-late timesheets.

Over-processing: Includes over-engineering, requiring additional signatures on a requisition, multiple handling of timesheets, duplicate entry on forms, and getting double and triple estimates from suppliers.

Motion: These 'treasure hunts' happen when material is stored away from the job or when workers must go looking for tools, material or information. This waste also happens in the office or jobsite trailer, when looking for files, reports, reference books, drawings, contracts or vendor catalogues.

Inventory: Includes uncut materials; work in process and finished fabrications. If the material is not yet installed and being used by the customer, it is waste. This includes spare parts, unused tools, consumables, forms and copies, and employee stashes and personal stockpiles.