The Agile Tribe

Agile and Lean in Construction

on December 20, 2011

Author: Dr. Adrian Smith, Ennova

Large scale construction projects suffer from cost and time overruns that are typically a symptom of productivity problems and directly affect overall industry profitability. As a result, methodologies have been developed to reduce the risk of overruns and improve project outcomes.

A number of these methods are based upon Lean principles that focus on identifying value, eliminating waste and creating a smooth flow of materials, information and work.

Construction Productivity:
Studies [1] suggest that between 70% and 90% of projects exceed the original planned cost and that the overrun commonly varies between 50% and 100% of budget. Some well known examples of significant project overruns include:

  • Sydney Opera House – Final cost was 15 times more than originally planned
  • Channel Tunnel – Final cost was 80% more than originally planned
  • Boston Arterial Tunnel – Final cost was 196% more than originally planned

The causes of construction [2] overruns have been investigated and the most common causes are listed below – excluding issues relating to commercial supply chain or changes in material or labour rates as these are difficult to control.

  • Poor or incomplete design and documentation
  • Client scope change during construction
  • Mistakes during construction
  • Delays in decision making or instructions
  • Poor communication and information dissemination
  • Poor planning and scheduling
  • Weather
  • Labour skills, availability or disputes
  • Incorrect material types or quantity
  • Construction and Manufacturing

When compared with manufacturing, the breakdown of time spent on value added and non-value added activities is significantly different. In construction studies suggest [3] that construction labour spends around 57% of effort on non-value added activities compared with 26% within manufacturing.

This suggests that the above causal factors such as materials, quality, change, and ineffective coordination are adversely affecting productivity.

This difference together with the benefits that Lean methods have delivered to the manufacturing industry has led researchers to consider how Lean principles and practices can be applied to construction.

Lean Construction:

Lean Construction [4] is an adaption of Lean principles and practices to the design and execution of construction projects.

Lean construction supplements traditional construction management approaches by focusing on:

  • Creating material and information flows
  • Maximising value generation
  • Using plan, execute and control paradigms

Although Lean Construction shares many principles with Lean Production, it is different in how it is practiced.

Shared Principles:

  •  Optimisation of entire system through collaboration and systematic learning
  • Continual improvement and pursuit of perfection involving everyone in the system
  • Focus on delivering the value desired by the owner/client/end-user
  • Creating flow though systematically eliminating obstacles to value creation and elimination of processes that create no value
  • Creating pull production


  •  Construction projects are unique (one-of-a-kind) prototypes
  • Multiple contractors/suppliers act under different commercial arrangements
  • Construction environments are typically outdoors and/or difficult to control
  • Communication challenges caused by teams being geographically separated adding complexity to sharing of information

Despite these differences Lean manufacturing principles have already been applied to construction and have lead to the development of specialised methods such as the Last Planner System [4] and WorkFace Planning [5] which address the unique challenges of faced in large scale construction.

Further Information:
This post is an extract from a more detailed discussion of Agile and Lean application to construction.



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