If you’ve ever observed the construction of a major building, you’ve witnessed hundreds of construction workers using a wide variety of equipment to move earth, build foundations, erect walls and transport materials.
It’s hard to imagine how this all gets coordinated and that somehow the flurry of activity and noise results in a fabulous new addition to a skyline or landscape.
The construction industry has traditionally followed a top-down approach to building – an owner hires a construction manager to build an architect’s plans and the construction manager hires subcontractors to complete the project along with his own staff.
The owner and builder agree to a construction management contract up front in which the general contractor agrees to a budget and a timeline.
The problem with that approach is it allows for little flexibility and adds waste to the construction process. Just as the manufacturing industry grappled with such cost-wasting problems of excess inventory, transportation delays, unnecessary waste and defects, the construction industry has had its own efficiency problems.
In the latter half of the 20th Century, non-farm productivity more than doubled, while in the construction industry productivity fell by almost 50 percent despite advances in equipment, processes and materials.
The Boldt Co., founded in Appleton in 1889 and now one of the top builders in the nation, decided there had to be a better approach.
Starting in 1998, under the leadership of president Bob DeKoch, the company decided to practice what he eventually wrote about in his book, “Embrace Uncertainty.”
Studies from Stanford University found that most construction projects resulted in 50 percent waste. That included employee downtime, transportation delays, and missteps in the design process realized when plans were executed.
It is necessary for the leader to identify a problem and reach out to others to help solve it. DeKoch’s background was in manufacturing and he understood lean manufacturing and the benefits it brought to that sector of the economy. Boldt found 50 percent waste in construction to be intolerable.
Consequently, Boldt took the initiative, with a handful of other companies in the United States, to pioneer lean process methods in the construction. Boldt was a charter member of the Lean Construction Institute, formed to drive new approaches into the construction process. It has to be remembered that each building is unique, which makes construction processes more complicated than repeatable manufacturing processes.
To overcome that, Boldt introduced its Integrated Lean Project Delivery process, which now permeates everything the company does and serves to differentiate it from its peers by creating more value for its customers.
That included adopting new practices, such as better collaboration between subcontractors to identify waste, better utilization of employees, open-book accounting, reducing defects and maximizing value delivered to customers every step of the way.
The results are apparent.
The examples senior executive vice president Jim Rossmeissl points to are the highly complex Wisconsin Institutes for Medical Research tower projects at UW-Madison.
Rossmeissl said Boldt employed the Integrated Lean Project Delivery construction process, which enabled the university to make critical design changes and use funds that were saved for additions such as laboratory and research facilities – all during construction and without sacrificing timelines. This would have been impossible using the customary construction management approach.
We can all learn from the Boldt journey no matter what our business or sector of the economy:
- Innovation and creativity are not limited to creating an iPhone or some other new device. It can also be about improving a process for delivering goods or services to customers.
- Hire talent from other industries. They bring a different perspective to your business, as they are not bound by the habits of your industry.
- Identify problems clearly and develop solutions unequivocally backed up by facts.
- Embrace uncertainty in seeking solutions and be willing to look at multiple alternative approaches in resolving those problems and driving changes for the benefit of customers. Every year, step back and take the time to look hard at your business and ask your team to innovatively address the problems it discovers. This will deliver greater value to customers.