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Lean Methodology for Contractors

Lean methodology seeks to break down the traditional silos in a company to identify wasted resources, and then reorganize in a way that maximizes productivity and value.

Let’s begin with a brief run-down on just what “lean methodology” is and where it came from.

Lean methodology originated mostly from the Toyota Production System. The Toyota Motor Corporation came to the U.S. to learn the production and quality techniques that were being used at the time. They ended up using the methods they learned to build on their existing methods and create their own production system – the Toyota Production System (TPS). TPS is based on implementing simple innovations that will result in minimizing waste and improving production. Lean manufacturing follows these same general guidelines to improve productivity through the elimination of waste. You’ll hear a lot of people reference The Toyota Way by Jeffrey K. Liker, which is a book that outlines a lot of these tools and ideas that we use in lean methodology today.

Some people reading this may be saying to themselves at this point, “wait, I’m in the contracting business, not a manufacturer—how is any of this applicable to my business?”

Well, first and foremost, lean methodology will help you identify wasted steps. We haven’t seen the same productivity incline in construction that we’ve seen in other industries. This has resulted in higher cost and an overall dissatisfaction with the industry. To combat this, lean methodology seeks to break down the traditional silos in a company to identify wasted resources, and then reorganize in a way that maximizes productivity and value. Implementing this type of holistic methodology can result in many advantages for your business including increasing value for the customer, company and employee.

What are the basic principles of lean methodology?

  • The first principle is optimizing the whole, this means that optimization efforts are made with consideration of the entire team and not focused on the individual.
  • Second is the removal of waste which starts by analyzing what you do and recognizing what you don’t need. Oftentimes companies are implementing processes that no longer have value, but since they have been around for years they stay in place. It’s important to take a deep look at what each step offers and evaluate the value it brings to the whole team.
  • The third principle is to focus on process and flow, this entails looking at the process of how you get from A to Z and identifying how you can create continuous flow.
  • The fourth principle is generation of value, specifically identifying what brings value to customers. This requires understanding how you create value and having different conversations to accurately define what value means to your internal and external customer.
  • The fifth principle is continuous improvement which means always looking for opportunities to advance and grow. During a project and when wrapping up a project, it’s important to identify what is currently working, what went well and what areas could be improved.
  • Lastly (and probably most important) the sixth principal is having respect for people. It’s imperative to understand whether someone is in the C-suite or working on the floor, they are a valued team member and when collaborating, input from the entire team is imperative for true success and effective execution.

Those then are the guiding principles. Actually applying them requires that you first take a hard, clear-eyed look at your business and how it operates.

The most important step in implementing lean methodology is to consult with your employees about problems they are seeing. Take the time to ask your employees how you can help fix what bugs them. You’ll get a host of different answers, but some will be small, cost-efficient changes that you could easily make. It usually doesn’t come from the person with the longest title or longest tenure. Sometimes it requires observing from the ground floor and getting feedback from the staff closest to the work. This fosters relationships and respect with your employees and provides an opportunity to grow.

The first thing that we do at Southland is to ask our people how we as a company can help them. This applies everywhere but specifically, as a plumbing contractor, I have to ask the people who perform the particular tasks that are related to a plumbing contract and learn how to improve from the people who are doing the work.

For those who would like to learn more there are a lot of resources available with more information on lean methodology and its application. The Lean Construction Institute (LeanConstruction.org) is a great place to go for information on how to get started on using lean methodology in your company. The Associated General Contractors of America (AGC.org) has a lean steering committee that shares a lot of resources as well.

As Sheet Metal General Superintendent for Southland’s Northern California Division, Henry Nutt is responsible for managing shop and field staff, assisting with project scheduling, personnel assignments and training, managing tools and equipment and project safety, as well as interfacing with the unions. He is directly involved with Southland’s lean construction delivery method, and is a recent recipient of LCI’s Pioneer Award. Nutt also sits on the National Board for LCI, and the Lean Steering Committee for both SMACNA and the Association of General Contractors.

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