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Laying the Foundation for Lean Construction

by Baris Lostuvali
March 18, 2014

Laying the Foundation for Lean Construction

by Baris Lostuvali
March 18, 2014 | Comments (3)

The Architecture, Engineering, and Construction (AEC) industry is one of the largest and most complex industries in the world, and it's on the verge of a major lean transformation. The synthesis of lean production principles and techniques applied in AEC now form the basis what is called the Lean Project Delivery System™ (LPDS). This new way of doing things has changed the old processes, tools, and relationships that existed in American construction industry for so long.

Over the last century, the nation's other great industries (oil, automobiles, high technology) have undergone waves of profound modernization, breeding competitive, innovative companies where on-time, under budget projects are the norm. A recent survey of the construction industry's productivity recently showed that up to 50 percent of money spent on construction labor is wasted because of late deliveries, poorly coordinated subcontractors, and other circumstances that prevent employees from engaging in productive, on-site work.

In LPDS, projects are managed as value-generating processes. All stakeholders are included in the planning, design, and optimization efforts to ensure a reliable work flow through "pull-scheduling techniques" that organize the flow of materials and information. The essential features for LPDS are:

  1. A clear set of objectives to establish the materials/services delivery process. Customer needs and requirements are well understood.
  2. A cross-functional team designs products and processes concurrently in order to provide more value to the customer.
  3. A work structure of the entire process is established in order to increase value and reduce waste at the project delivery level. Improved performance at the planning level increases performance at the project level.
  1. People create value and flow by systematically eliminating obstacles to value creation and those parts of the process that create no value.
  2. Pull production.

While LPDS is making the AEC industry more efficient and predictable, other lean principles and tools that have already been proven in manufacturing are being adapted to the construction industry with equal success. These include: visual control, process design, JIT, value chain mapping, daily crew huddles, etc.

At Cathedral Hill Hospital (CHH) in San Francisco, new forms of contracts have given rise to new forms of team organization and capital projects in which architects, engineers, and contractors collaborate with a much stronger focus on clients' needs.

Trade professionals performing "pull planning" with sticky notes to make their work more visual and communicate works plans more effectively.


"Study action teams" composed of design and trade professionals meet weekly to discuss lean books on how to translate lean principles to design and construction.

The Cathedral Hill Hospital project is a 1.0 million square feet urban hospital is breaking new ground in design, construction, and operations.

Since the beginning of the project in 2007, the CHH team has implemented a host of concepts, processes, and tools proposed by scholars of Toyota's lean production system.

As project leaders and team members apply lean concepts in a collective way, they learn about teamwork and collaboration. The main focus has been to openly share ideas and knowledge among team members to achieve the best results for the project and the client. In other words, optimizing the whole for ALL.

Along the way, the team learned the importance of transparency, which opens people's minds about possibilities they have not explored. As the team has practiced Lean and matured in the co-location environment, we have all benefitted from the open flow and exchange of information. This is not just within the team, but across team and sectors, which allows team members to learn from other trades, and about leading edge innovations in healthcare design and construction.

As the AEC industry goes through this transformation, organizations like CHH are choosing to embrace this change, creating collaborative teams and working environments in order to do so. While AEC practices are substantially different from manufacturing, lean thinking is opening all sorts of new possibilities for the field. Indeed, AEC professionals are "building the Toyota House" for their industry.

The views expressed in this post do not necessarily represent the views or policies of The Lean Enterprise Institute.
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3 Comments | Post a Comment
Gordon E Mumford March 18, 2014
2 People AGREE with this comment

Where can we learn more about the LPDS, please?

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Baris March 19, 2014

Hi Gordon,

Thanks for your interest and question. Below, see the link for the article we wrote that expands on our Lean experince.


Also, see the video link to take you to our co-location.


Let me know if you'd like to learn more about our practices.



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Daniel Jones March 18, 2014
3 People AGREE with this comment
This is exactly what we recommended in our Rethinking Construction report for the UK government in 1998 that led to major projects in the UK like the Olympics to be under budget and ahead of time. This works and I saw similar 3P exercises being used at Moose Jaw Hospital in Saskatchewan, mentioned in my last Lean Post. Step by step this industry can change too - great post.

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Search Posts:
Integrating Visual Management
Joe Murli & Mark Hamel
Value-Stream Mapping: a Methodology for Sustainable System Improvement
Jim Luckman, Judy Worth, Karl Ohaus & Tom Shuker