Lean management theory for contractors

Feature writing

The principles of lean manufacturing and lean construction can be scaled down from factories and infrastructure projects to contractors running small businesses.

Client: Renovation Contractor
February/March 2017

Building a Lean, Mean, Renovating Machine

By Martin Zibauer

A little history: back in 1885, 17-year-old Frank Gilbreth was a bricklayer’s apprentice in Boston. He watched experienced bricklayers—who could lay about 175 bricks an hour—bend down, grab a brick, inspect it for defects, and turn it the right way before setting it in mortar.  Soon, Gilbreth began making adjustments. He put his bricks on a raised shelf where he could reach them without bending. He delegated brick inspection to the delivery boy—broken bricks never left the ground. That worker (paid less than a bricklayer) also oriented the bricks correctly on the shelf, saving Gilbreth a few seconds per brick. Within a year, Gilbreth could lay 350 bricks an hour.

With his wife, Lillian, Gilbreth later pioneered time-and-motion studies, and their fundamental idea—small efficiencies of movement add up to large improvements in productivity—went on to influence the Ford assembly line in Detroit and, in turn, the Toyota Production System in postwar Japan. In time, Toyota’s system was extrapolated to “lean manufacturing” and “lean construction,” systems that can make any business more efficient.

A more efficient company has a valuable competitive advantage: it gets stuff done faster and cheaper, and its customers are happier. “Being lean goes to the bottom line,” says Kathleen Lausman, co-chair of the Lean Construction Institute, an offshoot of the Canadian Construction Association. As well, she says, lean thinking improves safety and job satisfaction for employees.

Lean is sometimes described as a management philosophy or business methodology, but it’s fundamentally about reducing waste. In lean, waste is any action that doesn’t change the end product in a way the customer values. Sanding surfaces no one will see? Waste. Returning a leftover sheet of plywood to the shop? Waste. Rebuilding a wall because you misread the plans? Waste big league. Once you start applying a simple test—does the customer want to pay for this?—you’ll see opportunities to reduce waste and, ultimately, make more money.

Of course, customers don’t care about the time you spend invoicing, for example, but it has to be done. In lean, that’s called an “essential waste”; it can be reduced but not eliminated. Non-essential wastes, though, often continue because everyone simply stops noticing. Next time you find yourself thinking that some activity or expense is just a cost of doing business or just standard practice, also ask yourself, “Is it really?” Lean categorizes eight wastes; to start seeing them, you need to know what they are.

Transport: Some transport is essential: people and materials need to get to the jobsite. But non-essential transport wastes time and exposes materials to damage. And much of it is easy to reduce. For instance, use checklists to ensure you have needed tools and materials (but not extra inventory that will just have to be transported or scrapped later). Open accounts at suppliers near the jobsite—if you do forget something, you won’t have to go far.

Inventory: Buying and storing materials long before they’re needed ties up money and space. And when materials sit, they can get damaged or grow legs. Schedule deliveries so material arrives just in time and is dropped where it’s needed but not in anyone’s way; every time those drywall sheets need to be moved (more wasted transport), chances are another corner will get dinged.

Motion: Extra lifting, bending, reaching and other movement is inefficient and contributes to jobsite injuries. Wasted motion is often a result of bad planning and bad housekeeping on site.

Waiting: Stopping work until a client makes a decision, a delivery arrives, or the table saw is free are obvious examples of waiting. Unbalanced workloads are more subtle. If one worker’s tasks require 60 minutes, while another worker only needs 40 minutes, rebalance the tasks so both workers finish in 50.

Over-processing: Building better than the client needs or wants, a.k.a. “gold-plating,” hits your bottom line hard. You’re using time and materials for what customers don’t value while likely affecting what they do: the schedule. Communication helps avoid over-processing. The client, with your help, should decide what level of finish is necessary, and you need to pass on that standard to subs.

Over-production: Producing more than you need or building parts long before they’re needed. This can be as minor as printing out too many copies of the contract or as major as prefabricating parts before the client has approved the design.

Defects: When something gets damaged or doesn’t meet standards, it costs more than replacement materials and time. Defects demoralize your workers, create conflict with clients, and can damage your reputation. Work done out of sequence, late decision-making, poor training, and unclear instructions can all lead to defects. Make sure your workers flag any defect as soon as they see it. Errors, after all, compound themselves.

Skills: When employees aren’t given opportunities to use their skills and knowledge, they don’t volunteer ideas that could solve problems, they resist change, and they aren’t loyal to the company.

Malcolm McGrath, a Toronto-based contractor and cabinet maker, has improved his business and built a YouTube following by implementing lean thinking in his workshop and on jobsites. “I try to make things physically easy,” he says, “and I never want to hunt for tools.” He organizes tools not by function or size or such, but in sets according to what he needs for a given job. All the hand tools to install a kitchen, for example, stay together in one set—even if that means having duplicates. “Screwdrivers are cheap,” he says; his time isn’t. It’s more efficient to buy several Phillips for various kits instead of grabbing one each morning or, worse, forgetting it.

He stores the kits in used plastic grocery-store baskets; they’re cheap, light, sturdy, and modular. Each basket and all its tools are numbered; at the end of the day, it’s easy for an assistant to put everything in its basket and then on a numbered shelf in McGrath’s van. The baskets also contain hardware and other small supplies for each job. There’s a lean system here too. McGrath knows, for example, how many screws he needs for a typical kitchen install; a line drawn on a plastic box lets him quickly fill it with the right amount. (Lean construction uses visual controls wherever possible.) He always has enough but never too much. “Some guys think I’m nuts, like I must have had toilet training issues as a child,” he says. “But I don’t do this at home with my socks. This is for work.”

For McGrath, the jobsite is often a downtown condo, where convenient parking spots are rare. To minimize time-wasting trips to and from the van, a classic example of transport waste, McGrath loads all the tool baskets he’ll need onto small rolling scaffolds (Metaltech Minis). On site, the scaffolds become portable workbenches or storage shelves. By moving the scaffolds close to what he’s working on, he can reach tools easily, with little wasted motion.

One big challenge for anyone trying to lean up a workflow is identifying which problems should be fixed first. “When you find yourself swearing, that’s the thing,” says McGrath. “Fix what pisses you off.” (“Pain points,” Lausman calls them.) He makes note of small problems during the week and spends an hour or two on the weekend figuring out a better way. Then, at the end of each project, he looks back to identify any big-picture issues.

Lausman would have him make adjustments even sooner. Like now. “Lean is never static. Often, if a fix isn’t applied immediately, it doesn’t happen,” she says. Effective contractors encourage everyone on the project to suggest improvements. “They all bring some expertise to the table. Let them weigh in. And challenge them to keep innovating, creating, and making things better.”

Training employees to identify the eight lean wastes will help them improve their own work. For contractors, start “in your own backyard,” says Lausman. “Lean up your own day-to-day practices; that’s what Malcolm McGrath and Paul Akers are both doing.” Akers, a former cabinet maker whose company (FastCap) develops woodworking tools based on lean thinking, has a series of YouTube videos demonstrating lean ideas in the workplace and at home.

Lausman also suggests applying Toyota’s 5S approach—Sort, Straighten, Shine, Standardize, and Sustain—to your own workspace. Sorting comes first; remove what you don’t need to do a job. Straighten your tools by creating a place for everything and putting everything in it’s place. McGrath has his system of numbered baskets; Akers often uses pegboards, outlining tools with a marker so he can see instantly if any are missing. Arrange tools to minimize wasted motion—keep the most-used ones closest, their handles oriented so they’re easy to grab, like Gilbreth’s bricks. The third S, shine or sweep, means cleaning the space and your tools. It helps you see a problem, such as a leak, quickly. Standardize your space—take a photo of a supply shelf and post it there, for example, so it’s clear to anyone how it should be restocked. Sustain—make cleaning and tidying part of your routine.

Much of the waste on a construction site, Lausman says, happens in the handoff from one trade to another. Sometimes there’s a wait because of poor scheduling. Or misunderstandings about each trade’s requirements lead to delays or rework. There can be disagreements about scope boundaries (who does what) among trades. Ultimately, she sees these as holdovers of the design-bid-build workflow, where each project phase happens independently, as well as romanticized notions of architect as artist and builder as craftsman, where each works in their own little worlds. “There’s huge waste in being siloed,” she says. “Huge.” As early as possible, get everyone involved in a project together to work out what everyone needs, she advises.

McGrath’s challenge is getting his workers to be more forward thinking. “People are terrific at solving a problem that’s right in front of them,“ he says. “But it’s harder to see a problem that might happen two weeks from now.” It’s those unforeseen obstacles that show how lean can pay off. McGrath recently broke his foot; because of his shop’s efficient layout and the lifting devices he’d installed over the years, he was able to continue working. “I thought I wouldn’t be able to do some things, especially moving and cutting 4x8 sheets of plywood. But I surprised myself.”

Lausman is intrigued by this. Identifying a constraint—the injured foot—and adapting to it is part of lean thinking too. “Necessity is the mother of invention,” she says. “After breaking his foot, he probably came up with some great new ideas. I bet it’s actually made him leaner than ever.”

Like what you see? Let’s get started on your project.