UK Construction & Engineering: Lean Thinking Re-Visited

By Vijay Bange

Lean Isn’t for Lockdown, It’s for Life” was a thought provoking treatise by my fellow partner at Duane Morris, Alexander Geisler (London office co-head, author, journalist and creator of the Lean Law Suite of lean practice methods). He discussed how our “New Norm” in the COVID-19 era is forcing industries to adopt Lean Thinking principles to work efficiently and effectively. This paper seeks to consider the extent to which these concepts are applicable to the UK construction & engineering industry.

Lean Thinking as a concept has its roots in Toyota’s production system. One of the primary tenets of this concept is to aim to perfect process, as continuous improvements address root causes of quality issues, and the elimination of waste.

The construction industry, on the other hand, has long been criticised for being wasteful, and failing over the decades to deliver good value. Furthermore, it has a reputation for being an adversarial industry with significant disputes. There have been countless reports over the decades attempting to work out how these ills can be addressed.

The latest, and most prominent, was the Construction Task Force, led by Sir John Egan, that reported to the then Deputy Prime Minister, John  Prescott, on the scope for improving quality and efficiency of the UK construction industry. The report in 1988, officially entitled “Rethinking Construction”, is commonly referred to as the Egan Report. Its remit was to look at the scope for improving quality and efficiency in the UK construction industry.

In summary, its conclusions were that:

  • The UK construction industry as a whole was underachieving;
  • There was a need by the industry to be prepared to challenge waste and poor quality.

Following the publication of the report, a number of organisations from across the industry came together to form what is now Constructing Excellence,  group that champions the actions propounded by the Egan Report.

Many of the goals and ambitions targeted by the Egan Report and by Constructing Excellence would be recognised now as Lean Thinking principles.

However, it’s questionable how much progress has been made, and whether what was being championed by Sir Egan has simply fallen on deaf ears.  Despite laudable efforts, many of the negative practices described in the Egan Report have continued, driven by perennially tight margins, lowest-cost-wins procurement practices, unbalanced contracts and traditionally adversarial attitudes.

The current global pandemic has had a massive impact on the construction industry, as it has on most sectors. The lockdown has caused everyone to review and look at how they can carry on business safely. No one knows how long we will need to work to restrictions of some kind, so getting on with business in what has been termed as the “New Norm” may force Lean Thinking principles to the top of the agenda. Sure, it’s not a voluntary scenario, but is this a pivotal moment that is forcing the industry to re-examine how it can eliminate waste, improve quality, deliver better value and profit, if only to survive.

It certainly is an opportunity to effect change, and as observed by Dame Judith Hackitt recently, the fact that so much construction work has been able to continue during the lockdown demonstrates that the industry is very capable of adapting.

So how can Lean Thinking practices be applied in the construction industry?

  • Working from home and remote working for professionals in the construction process will, as with other industries, obviate the need for expensive and expansive office spaces. This may require in some cases a significant investment in technology, but in turn it can drive down office overheads.
  • The widespread adoption of telephone conference calling and virtual meetings through a variety of platforms has shown the industry what is possible. Sure, that these won’t replace face to face meetings totally, but it will surely compel companies in the New Norm to consider the extent to which all of those travel and meeting costs are really necessary.
  • Previously there has been a slow uptake by the industry on any initiatives where technology has been proposed to improve efficiency. An example is BIM. One has to hope that even the die-hard anti-technology brigade will be more responsive and receptive to the use of technology. Successful companies will be developing and using technology to drive efficiency and reduce costs.
  • Off-site construction, and modular builds are being looked at much more seriously as they will give greater time and cost certainty, and potentially mitigate the social distancing limitations on productivity.
  • Most sites are open or planning to start up soon. There will be social distancing measures that will affect how works are undertaken. It won’t be possible to pick up a project from where it was before. Going forward works will need to be planned so that they are executed efficiently complying with the social distancing requirements, and to mitigate the delays on the project. There will need to be better planning of works, trades, access and methodologies. Greater emphasis on pragmatic and realistic programming will be required.
  • Procurement methods may need a rethink. On existing projects parties may need to consider whether the agreed procurement process needs to be different if the project is to be completed. As the global supply network is likely to be disrupted for some time to come, successful companies and projects are likely to look for local alternatives, reducing risks and lead-in times.
  • Contracting methodologies will undoubtedly change. We may see a resurgence of interest in partnering as a means of more effectively managing current uncertainties. It seems unlikely that the industry will be able to continue to bear contracts designed to offload essentially all risks onto the contractor.
  • Parties will need to be more responsive to negotiation, mediation and alternative dispute resolution options. The traditional adversarial approach so prevalent in the industry is unlikely to serve parties as well in the future.

Finding ways of working more efficiently is no longer a choice but a survival tool. The challenge to eliminate waste and improve efficiency that has long been championed by Sir John Egan and his predecessors, and which up until recently was given lip service only, may now be part of the “New Norm”.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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