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Supply Chain Management: An International Journal

Improving construction supply chain collaboration and performance: a lean construction pilot project
Per Erik Eriksson

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Per Erik Eriksson, (2010),"Improving construction supply chain collaboration and performance: a lean construction pilot project",
Supply Chain Management: An International Journal, Vol. 15 Iss 5 pp. 394 - 403
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Anders Segerstedt, Thomas Olofsson, (2010),"Supply chains in the construction industry", Supply Chain Management: An
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Andrew R.J. Dainty, Sarah J. Millett, Geoffrey H. Briscoe, (2001),"New perspectives on construction supply chain integration",
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Improving construction supply chain


collaboration and performance:
a lean construction pilot project
Per Erik Eriksson

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Department of Business Administration and Management, Lulea University of Technology, Lulea, Sweden
Abstract
Purpose Improving construction supply chain collaboration and performance is central for achieving short-term business objectives as well as longterm competitive advantage. Lean thinking is an approach that has been adopted in many different industrial settings as a means for improving supply
chain performance. In the project-based construction industry, lean thinking has, however, not yet been widely adopted. The purpose of this paper is to
increase the understanding of how various aspects of lean thinking can be implemented in a construction project and how they affect supply chain
actors and their performance.
Design/methodology/approach Action research was performed in a case study of a lean construction pilot project. Empirical data were collected
through three surveys and follow-up workshops, document studies, and interviews of 12 project participants.
Findings The findings show that many of the lean-related aspects identified in the literature review were utilized in the pilot project. These aspects
have mostly focused on increasing the cooperation among supply chain actors, for which reason the pilot project is very similar to a partnering project.
Hence, much work remains in order to obtain full-fledged lean construction, but the pilot project may serve as a starting point for continuous
improvements and development of lean construction in future projects.
Research limitations/implications The research results are based on one empirical case study for which reasonable generalisations could be made,
albeit cautiously.
Practical implications The frame of reference can serve as an illustration of important aspects and core elements of lean construction and the case
study findings show how various lean related aspects can be implemented and how they affect supply chain actors and their performance in a
construction project context.
Originality/value The action research approach based on both qualitative and quantitative data collection in a lean construction pilot project
provides a valuable opportunity to study both the process of implementing lean construction and its outcomes.
Keywords Lean production, Construction industry, Partnership, Procurement, Supply chain management
Paper type Research paper

management and lean thinking, from a manufacturing context


(based on continuous processes and relationships) to the
discontinuous and project-based construction industry is,
however, problematic (Riley and Clare-Brown, 2001;
Wickramatillake et al., 2007; Hook and Stehn, 2008). Some
aspects of lean production may not be equally applicable in
construction, for which reason lean construction has to be
developed and modified to fit the project-based context
(Hook and Stehn, 2008; Mao and Zhang, 2008). In order to
learn more about how various aspects work in a construction
context, case studies involving lean construction
implementation therefore appear relevant.
The field of lean construction is relatively immature and
occasionally criticized for having an overriding positive bias
based on enthusiastic arguments in management books rather
than on scrutinizing unbiased theoretical reasoning in peerreviewed journals (Green, 1999, 2002; Green and May, 2005;
Fearne and Fowler, 2006; Jorgensen and Emmitt, 2008). In
the last few years, however, the amount of papers investigating
lean construction have increased, although from low levels.
This paper utilizes the scientific literature on lean
construction to develop a frame of reference on which the
analysis of case study findings is based. The purpose of this
paper is to increase the understanding of how various aspects
of lean thinking can be implemented in a construction project

Introduction
Many authors highlight the importance of improved
construction supply chain performance in order to enhance
the actors achievement of both short-term business objectives
and long-term competitive advantage (Egan, 1998; Dubois
and Gadde, 2000; Riley and Clare-Brown, 2001). Lean
thinking, which is heavily influenced by the Toyota
Production System (Womack et al., 1990), has been widely
recognized and adopted by many other companies in the
automotive sector (Towill et al., 2000; Wee and Wu, 2009)
and in other manufacturing sectors with the purpose of
improving supply chain performance (Naylor et al., 1999;
Segerstedt, 1999). Recently it has been adopted by the
construction industry (i.e. lean construction) as a means of
supply chain improvement (Ballard and Howell, 2003; Green
and May, 2005; Jorgensen and Emmitt, 2009). The adoption
of innovative management practices, such as supply chain
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Supply Chain Management: An International Journal


15/5 (2010) 394 403
q Emerald Group Publishing Limited [ISSN 1359-8546]
[DOI 10.1108/13598541011068323]

394

Improving construction supply chain collaboration and performance

Supply Chain Management: An International Journal

Per Erik Eriksson

Volume 15 Number 5 2010 394 403

and how they affect supply chain actors and their


performance.

at the source, hindering them to flow through the process


(Ballard et al., 2003; Green and May, 2005; Salem et al.,
2006). This aspect should be adopted in all activities during
the whole buying process (Salem et al., 2006). Traditionally,
contractors are used to being controlled by the client, which
reduce their incentive to perform self-control satisfactorily.
Nor do design consultants perform self-control satisfactorily
due to lack of time (Andi and Minato, 2003). Empowering all
co-workers to control their own work is therefore decisive
(Ballard et al., 2003; Hook and Stehn, 2008).
A third aspect that enhances the focus on the schedule and
production plans is to establish project milestones (Salem
et al., 2006). By clarifying the importance of production
milestones and making them explicit to everyone, the project
participants will feel more involved in the execution of the
project (Salem et al., 2006).

The core elements of lean construction

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First, an investigation of important aspects and core elements


of lean construction seems pertinent in order to increase the
understanding of what lean construction really is about. The
literature review presented below discusses how various
aspects of lean construction can be grouped into six core
elements.
Waste reduction
The most important core element of lean construction is
waste reduction (Green, 1999; Ballard and Howell, 2003;
Jorgensen and Emmitt, 2008; Mao and Zhang, 2008). A
central aspect of waste reduction is housekeeping, that is,
keeping the construction site well organized, clean and tidy
(Ballard et al., 2003; Salem et al., 2006). Workers should
therefore be encouraged to clean the job site once an activity
has been completed (Salem et al., 2006).
A related aspect, crucial for waste reduction in lean
construction, is efficient transportation and stockholding of
material, often termed just-in-time (JIT) delivery, (Fearne
and Fowler, 2006; Jorgensen and Emmitt, 2008; Mao and
Zhang, 2008). From a JIT perspective inventories are not
valuable and should be regarded as waste (Akintoye, 1995;
Salem et al., 2006). Through JIT, contractors strive to receive
smaller batches of material to the site when they need it in
order to reduce stockholding and double-handling of material
(Fearne and Fowler, 2006; Mao and Zhang, 2008).
Another aspect of waste reduction is information
technology (Ballard et al., 2003; Green and May, 2005).
Joint IT tools in the form of 3D-modelling allow detection
and correction of most errors prior to production (Ballard
et al., 2003; Woksepp and Olofsson, 2008). Joint IT tools,
enhancing integration among supply chain actors and their
tasks, therefore increase the chance of cost and schedule
success (OConnor and Yang, 2004; Woksepp and Olofsson,
2008).
A fourth central aspect of waste reduction is off-site
manufacturing of components and units (Green and May,
2005). Pre-fabrication has many advantages similar to
manufacturing industries, such as reducing material waste,
shortening construction duration, improving work
environment, etc. Hence, increased pre-fabrication makes
lean construction more similar to lean production in
manufacturing industries.

End customer focus


End customer focus is a core element of lean construction
(Naim and Barlow, 2003; Jorgensen and Emmitt, 2009), since
it is vital for maximizing the value of lean construction
(Wright, 2000; Winch, 2006; Jorgensen and Emmitt, 2008;
Mao and Zhang, 2008). Contractors and suppliers must
understand the needs of the customer so that they can supply
the customer with what he/she needs, not what he/she asks for
(Styhre et al., 2004). Customer satisfaction is dependent both
on the end product and the process during which it is created,
i.e. service quality (Maloney, 2002). In order to increase end
customer focus, it is important to adopt lean principles
already in the design stage (Wright, 2000; Freire and Alarcon,
2002). Early involvement of contractors and integration of
design and construction in concurrent engineering are an
important aspect in lean construction (Gil et al., 2004; Green
and May, 2005; Winch, 2006; Mao and Zhang, 2008;
Jorgensen and Emmitt, 2009). Concurrent engineering
increases the contractors understanding of customers needs
and improves teamwork and joint problem-solving, resulting
in significant time savings (Wright, 2000; Humphreys et al.,
2003; Song et al., 2009).
Relying on competitive bidding is not efficient when
procuring customized products in lean construction (Elfving
et al., 2005; Green and May, 2005). A strong focus on lowest
tender price will foster self-protecting attitudes among
contractors (Eriksson and Laan, 2007; Khalfan et al., 2007)
rather than attitudes aiming for customer satisfaction. Hence,
a limited bid invitation of trustworthy and competent
contractors should be coupled with a bid evaluation based
on soft parameters so that partners capable of satisfying the
customers requirements are selected (Maloney, 2002;
Eriksson and Nilsson, 2008).

Process focus in production planning and control


Approaching production management through a focus on
processes and flow of processes is a core element of lean
construction (Jorgensen and Emmitt, 2009). The last planner
system is a key aspect that enhances efficient production
planning and control (Ballard et al., 2003; Winch, 2006;
Jorgensen and Emmitt, 2008). Last planners are the people
accountable for the completion of individual operational
assignments (Salem et al., 2006). Each planner prepares
weekly work plans to control the workflow, and if assignments
are not completed on time, they must determine the root
cause and develop an action plan to prevent future failures.
It is important that each individual takes immediate action
regarding their own work (i.e. self-control) to prevent defects

Continuous improvements
A long-term perspective on continuous improvements (called
Kaizen in the Toyota Production System) is important in lean
construction (Green and May, 2005; Pheng and Fang, 2005;
Salem et al., 2006; Jorgensen and Emmitt, 2009) in order to
reduce waste and increase the efficiency of the construction
process over time. Long-term contracts (e.g. framework
agreements) are therefore an important aspect, reducing the
traditional short-term focus on cost reduction (Green and
May, 2005) and promote lasting improvements. By working
together on a series of projects the transfer of knowledge and
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Improving construction supply chain collaboration and performance

Supply Chain Management: An International Journal

Per Erik Eriksson

Volume 15 Number 5 2010 394 403

experiences among supply chain actors and from one project


to another is facilitated.
Measuring performance against pre-set targets is an
important aspect of continuous improvements (Salem et al.,
2006). According to Freire and Alarcon (2002), control and
measurements of different kinds of performance indicators are
vital in order to determine if performance is improving.
Subsequently the reasons for satisfactory or unsatisfactory
performance should be analyzed in order to decide on
potential improvement actions (Freire and Alarcon, 2002).
Additionally, staff and workers should be encouraged to
initiate ideas and improved solutions to solve problems
encountered on site (Ballard et al., 2003; Pheng and Fang,
2005). Unfortunately, site workers participation in problemsolving is low in construction compared to other industries
(Green, 2002). Additionally, they often believe that they do
not have sufficient opportunity to state their opinions (Riley
and Clare-Brown, 2001). Hence, it is important that
suggestions from workers are taken seriously in order to
enhance their commitment to continuous improvements
(Ballard et al., 2003).
Although knowledge sharing and joint learning among
people from different trades and disciplines is crucial in order
to enhance continuous improvements in lean construction
(Green and May, 2005; Jorgensen and Emmitt, 2009), it is
seldom realized due to lack of suitable methods (Styhre et al.,
2004). Such learning can be obtained by the establishment of
quality circles (i.e. special interest groups), giving project staff
opportunities to participate in the improvement process
(Salem et al., 2006). These groups meet periodically to
exchange knowledge and experience in order to jointly
propose ideas for critical work-related problems (Salem et al.,
2006).
The project participants understanding of the lean concept
and its pre-requisites must be improved in order to increase
their willingness and ability to contribute to continuous
improvements. Hence, relevant training is a precondition for
effective lean implementation (Freire and Alarcon, 2002;
Green and May, 2005).

Central to the establishment of such a cohesive partnering


team is the achievement of good communication, integration,
and coordination (Elfving et al., 2005; Pheng and Fang,
2005), which is facilitated by various collaborative tools, such
as joint objectives, joint project office, facilitator, and
teambuilding (Green and May, 2005; Eriksson, 2008;
Eriksson and Nilsson, 2008).
It is important that all parties benefit from improved
performance resulting from the implementation of lean
construction (Green and May, 2005). Fair and equitable
rewards are especially vital for building trust and cooperation
among construction supply chain actors (Khalfan et al.,
2007). Hence, an incentive-based compensation form
including gain share/pain share arrangements, which
increase the actors commitment to contributing to the joint
objectives, is an important measure in cooperative
relationships (Eriksson and Pesamaa, 2007).
Systems perspective
Another core element of lean construction is to adopt a
systems perspective (Jorgensen and Emmitt, 2009), which is
required in order to increase the overall efficiency of lean
construction projects and avoid sub-optimizations (Green and
May, 2005; Pheng and Fang, 2005; Winch, 2006; Jorgensen
and Emmitt, 2008). A reliable workflow in the system as a
whole is more critical than individual activity speed or cost
(Miller et al., 2002; Elfving et al., 2005; Winch, 2006). An
important aspect of this is to consider the whole buying
process and make coherent procurement decisions that
support or complement one another (Eriksson and
Pesamaa, 2007).
Furthermore, by minimizing the number of steps, parts and
linkages, the construction process is simplified (Pheng and
Fang, 2005). Lean construction cannot be achieved by
considering construction, design, and operation in isolation.
Thus, a rearrangement of the contractual boundaries among
the parties is required (Green and May, 2005). Accordingly,
large scope contracts are desirable instead of dividing a
project into small pieces, involving many different supply
chain actors during short periods of time.
A systems perspective is also central in terms of the end
result of the process (Green and May, 2005). In order to
obtain properly balanced objectives (e.g. cost, schedule, and
quality), each project objective should receive a suitable
amount of attention, relative to its importance, during the
whole project process. It is also important that the specified
objectives and values of the project are made explicit to all
supply chain actors (Jorgensen and Emmitt, 2009).

Cooperative relationships
Cooperative relationships among the supply chain actors
(often referred to as partnering) are an important element of
lean construction (Naim and Barlow, 2003; Green and May,
2005; Jorgensen and Emmitt, 2008), facilitating the
integration of different actors competences and efforts in
joint problem-solving. Since traditional procurement and
governance forms are often criticized for producing waste,
long lead times, and adversarial relationships (Miller et al.,
2002; Elfving et al., 2005), they need to be changed into a
lean contracting approach (Toolanen, 2008).
Since subcontracting can account for most of the project
value and because project activities are totally interrelated, a
harmonization between main contractors and subcontractors
is important for partnering (Dubois and Gadde, 2000;
Humphreys et al., 2003) and for lean construction (Miller
et al., 2002). Accordingly, it is crucial to involve key
subcontractors in a broad partnering team, allowing all
important actors to contribute to the joint objectives
(Eriksson et al., 2007). Earlier research has, however, found
practical difficulties when trying to involve the wider supply
chain in lean construction initiatives (Jorgensen and Emmitt,
2009).

Three stages of lean construction


According to Green and May (2005), lean construction
implementation efforts can be divided into three different
stages, with increasing degree of sophistication. Below, the
connections between various aspects of lean construction and
the three different stages are discussed.
Green and May (2005) think that lean stage 1 focuses on
waste elimination from a technical and operational
perspective. The responsibilities and focus are tied to
managers rather than individual workers. Essential parts of
this stage are: elimination of needless movements, cutting out
unnecessary costs, optimizing workflow, and sharing the
benefits from improved performance (Green and May, 2005).
396

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Improving construction supply chain collaboration and performance

Supply Chain Management: An International Journal

Per Erik Eriksson

Volume 15 Number 5 2010 394 403

Accordingly, the previously discussed aspects of lean


construction related to Stage 1 are: housekeeping, JITdeliveries, milestones, performance indicators, and gain share/
pain share. The aspects related to the first stage are of a
technical and operational nature and can be adopted in any
construction project striving for operational efficiency.
The second stage focuses on eliminating adversarial
relationships and enhancing cooperative relationships and
teamwork among supply chain actors (Green and May, 2005).
The essential parts are cooperation, long-term framework
agreements, workshops, and facilitator (Green and May,
2005). Accordingly, aspects related to stage 2 are: limited bid
invitation, soft parameters, long-term contracts, collaborative
tools, and broad partnering team. Lean stage 2 does not go
much beyond the concept of partnering since it is about
eliminating waste derived from sub-optimizations and
adversarial relationships through increased integration and
collaboration.
Green and May (2005) think that stage 3 is the most
sophisticated, involving a structural change of project
governance. Its essential parts are: information technology,
pre-fabrication, Last planner, bottom-up activities and
emphasis on individuals, a rethink of design and
construction, decreased competitive forces, long-term
contracts, training at all staff levels, and a systems
perspective of both processes and the product (Green and
May, 2005). Accordingly, aspects related to lean stage 3 are:
joint IT tools, pre-fabrication, Last planner, self-control,
concurrent engineering, limited bid invitation, soft
parameters, long-term contracts, special interest groups,
training, suggestions from workers, coherent procurement
decisions, large scale contracts, and properly balanced
objectives. Only when striving to achieve stage 3, a radical
change from other types of project governance is required.

critical case (Yin, 2003) that explicitly adopts lean


construction. Scania and DynaMate chose the case study
project to be a lean pilot project mostly due to its tight
schedule. During the programming stage DynaMate realized
that they would never be able to deliver the project on time
with traditional procurement and governance forms.
Additionally, the project size of approximately e7 million
was considered appropriate for a first effort. Four contractors
responsible for construction, electricity, ventilation, and
plumbing were involved in the lean implementation.
Although the decision to implement lean construction was
taken during the design stage, it was kept to the construction
stage until it was implemented on a larger scale. Scania and
DynaMate decided to focus the lean approach on improving
cooperation among different supply chain actors through
partnering-related procurement procedures. They judged that
much waste is related to adversarial relationships and that
cooperation is a suitable start in enhancing a more efficient
construction project.
Research methodology
The case study is based on an action research approach in
which the author was engaged as a partnering facilitator,
responsible for planning and conducting a series of three
subsequent surveys and follow-up workshops in the
beginning, middle and end of the construction stage.
Increased collaboration among practitioners and researchers
is vital in order to facilitate construction industry actors
capabilities to absorb and utilize academic research results
(Gann, 2001). Action research is therefore a suitable
approach within the construction management field since it
enhances a solution of practical problems and creation of new
theoretical knowledge at the same time (Azhar et al., 2010).
Because of the action research approach the survey was
designed from a practical perspective, measuring the progress
(in a three months interval) towards 11 aspects of the joint
objectives of the project. The three surveys were responded to
by 26, 29 and 32 project participants, evaluating statements of
11 aspects, which were related to both cooperation and lean
thinking. Five-point Likert scales were used (1 strongly
disagree, 5 strongly agree). In this paper the three survey
rounds are merged into one investigation, accordingly with 87
responses, in order to present an overall view of the
implementation process. The three workshops were half-day
events attended by 15-20 participants, reflecting upon the
progress in the Lean construction approach towards the joint
objectives of the project. This explicit focus on evaluation,
reflection, and feedback is a vital element of action research
(Azhar et al., 2010).
Additionally, 12 project participants were interviewed in the
end of the project. Each interview lasted between one and
three hours, summing up to a total of 20 hours of interviews.
The interviewees included the owner of the building, the
clients representative, the clients procurement manager, the
project leader from DynaMate and two of his superiors, the
architect, the project leaders from the four contractor
partners, and the contract manager from one of the
contractor partners. The interviews were semi-structured
and based on the developed frame of reference. The
respondents were asked if and how various aspects of lean
construction were utilized in the pilot project and also if and
why they were satisfied/dissatisfied with the way the
implemented aspects affected project participants and

Case study description


The choice of a case study approach as a means to collect
empirical data was justified by the how-problem to be
investigated (Yin, 2003) and the process perspective
employed (Edmondson and McManus, 2007; Pratt, 2009),
given the aim of getting a more detailed understanding of how
various aspects of lean thinking can be implemented in a
construction project and how they affect supply chain actors
and their performance.
Pilot project description
Scania is a manufacturer of heavy vehicles (trucks and buses)
and a professional client procuring construction work
recurrently, often in the form of industrial production
facilities. The construction management role is mostly
outsourced to their subsidiary company DynaMate, which
normally procures and governs construction projects in a
traditional manner. Since Scania and DynaMate have worked
with lean production successfully for many years, they have
now decided to initiate the implementation of lean principles
also in their construction activities. The aim is to utilize
radically different and innovative ways to govern the
construction process in order to reduce waste and decrease
costs and lead times from investment decision to finished
project.
In order to enhance comparisons between the empirical
data and the conceptual arguments it is important to select a
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Improving construction supply chain collaboration and performance

Supply Chain Management: An International Journal

Per Erik Eriksson

Volume 15 Number 5 2010 394 403

performance. Furthermore, approximately 20 hours of


document studies were conducted, focusing on joint
objectives, contracts, bonus arrangements and compensation
forms.
To increase reliability (transparency and future replication),
case study protocols were constructed together with case
study databases, containing case study notes, documents, and
the narratives collected during the study, all with the aim of
facilitating retrieval for future studies (Yin, 2003). There are
three main uses for case study research: motivation,
inspiration, and illustration (Siggelkow, 2007). The case
study has been used not only for illustration, but also for
motivation reasons, giving empirical support for the
conceptual prescriptions. The qualitative data formed an
empirical data pattern, which described why and how the lean
construction aspects were implemented in the case study
project. The empirical pattern was then compared to the
theoretical predictions in order to investigate differences and
similarities between the empirical data and theory, i.e. a
pattern-matching analysis (Yin, 2003).

reinforcements and parts of the concrete framework were


pre-fabricated and the participants were satisfied with the
degree of pre-fabrication.
Process focus in production planning and control
Last planner was not utilized. In fact, only one respondent
was aware of the Last planner concept and considered that it
would be interesting to try it out some time to see how it
work.
Self-control was slightly affected by lean thinking since it
was a part of the agenda at the coordination meetings, which
were held every other week. This resulted in increased
commitment to the execution of self-control as the
contractors knew that they would have to present their
actions to the group regularly. The quality of self-control
varied among the supply chain actors. It functioned better
among contractors than among consultants, who failed to
coordinate their drawings satisfactorily. At the final workshop
the importance of appointing a person responsible for the
coordination of design documents was highlighted. The
electrical contractor performed self-control very well. An
important reason for this is that the electricians had explicit
responsibility for always controlling their own work, a task for
which they received a salary raise.
One milestone was established as a result of lean thinking.
It had a high symbolic value since it was connected to the
delivery of the machine for which the facilities were built. The
four contractors would receive a shared bonus of e50,000 if
the construction work was finished to such a degree that the
installation of the machine could start the day it was
delivered. The respondents agreed that this milestone
increased the commitment to the schedule and contractors
who were late made significant efforts to increase their speed
and finish as promised. In fact, many of the respondents
would like to have more frequent milestones to avoid heavy
time pressure in the end. During the final workshop it was
suggested that the bonus should involve teambuilding funds,
transferring rewards to the individuals who are actually
performing the work. Additionally, it was considered
important that the contractors should be involved in both
the ex ante determination of the milestones pre-requisites and
the ex post control of the achievement of the milestones, in
order to avoid a top-down push of production planning.

Implementation of lean-related aspects


Waste reduction
Housekeeping was considered well executed although it was
not greatly affected by lean thinking. The site was very well
planned and organized, resulting in efficient handling and
stockholding of material. The cleaning of the site was
somewhat improved due to the lean approach. Workers were
encouraged to clean up after themselves and the collaborative
climate even resulted in workers from different companies
helping one another to clean.
In spite of a lack of explicit focus on JIT, the deliveries of
material functioned well in the project. Since space was a
scarce resource the material could not be supplied too far in
advance. Because of the construction boom during the first
half of 2008, some materials had very long delivery times, but
the early involvement of contractors increased their time for
planning purchases. The improved collaboration also made it
natural for contractors to help one another; the one with the
best relationship with a supplier managed the purchase in
order to shorten the time of delivery. There are different
opinions about the suitability of explicit JIT strategies; some
respondents predict a great future potential, although it
requires significant changes, while some think that it is
overrated, increasing the risk of delayed material.
The use of joint IT tools was not affected by lean thinking.
A joint IT-database for exchange of documents was
implemented, but this decision was made before the
decision of a lean approach. The database was easy to use
and functioned satisfactorily, especially among consultants. A
few of the contractors argued that telephone and face-to-face
meetings are more efficient in terms of communication and
information sharing. Some respondents with higher
technological maturity consider 3D modeling to be a useful
tool in future projects but they did not miss it in the pilot
project.
Pre-fabrication was not affected by lean thinking. Some
respondents argued that pre-fabrication is more difficult in
complex industrial facilities than in standardized projects such
as housing. The fact that the lean concept was not fully
implemented during the design stage also held back the prefabrication attempts. Nevertheless, a great number of

End customer focus


Concurrent engineering was a central part of the lean
approach. The aim was to save time, since the deadline was
very important to the end customer. The clients
representative and the contractors were involved in the
design stage to a larger extent than normal, resulting in faster
decisions, improved knowledge about the customer, and
increased buildability. The contractors contributed cheaper
material and improved technical solutions and site logistics.
All respondents agreed that concurrent engineering enhances
customer focus and cooperation and that it functioned well in
the project. A drawback, however, was that only the clients
representative, and not the end user, attended meetings. In
the final workshop it was suggested that both the end user and
the contractors foremen should be continuously involved.
Limited bid invitation was taken one step further since
DynaMate negotiated directly with all four contractors.
Competitive tendering is traditionally used for all
contractors but was abandoned altogether due to the lean
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Improving construction supply chain collaboration and performance

Supply Chain Management: An International Journal

Per Erik Eriksson

Volume 15 Number 5 2010 394 403

approach. All contractors were obviously very happy with this


arrangement and argued that it decreased their focus on
short-term profits and increased their focus on satisfying the
customer.
Owing to the direct negotiation approach, DynaMate relied
solely on soft parameters when selecting contractors. All four
contractors work extensively for the client, both in the past
and present, so they were all well known. Two of them are
actually subsidiary companies to DynaMate and they were
chosen partly from a strategic/political perspective, since their
participation in the pilot project was demanded. The
construction and electrical contractors were chosen due to
their high competence and experience of partnering projects.

Cooperative relationships
A broad partnering team was established, including Scania,
DynaMate, and the four contractors. Instead of letting the
construction contractor serve as main contractor with the
three other companies as subcontractors, DynaMate chose
equivalent contracts for all contractors, making them work
side by side as equals. The respondents argued that this
solution was very important for promoting cooperation and
teamwork. However, they thought that important consultants
(e.g. the architect and construction engineer) should also be
involved in the partnering team.
Seven collaborative tools were explicitly utilized in the
project:
.
Joint objectives were formulated in form of performance
indicators. The purpose of these indicators was not,
however, to enhance a team spirit but rather to measure
performance.
.
A collaboration agreement was attached to the formal
standardized contract in order to explicitly describe the
parties expectations and responsibilities in terms of
collaboration.
.
Two joint project offices were established: one on the site
for the contractors and one client office near the site for
the clients representative, DynaMates project leader, and
some additional staff. This made it possible for the client
representative to attend meetings instantly if some
question requiring his presence suddenly popped up,
resulting in increased customer focus.
.
The facilitator was responsible for the execution of three
surveys and three follow-up workshops. The respondents
agreed that these events were important for cooperation
and continuous improvements.
.
One teambuilding event, attended by approximately 40
participants, was held during the second half of the
project.

Continuous improvements
Scania does not have long-term contracts regarding
construction projects with the four contractors. However, all
contractors have framework agreements regarding more
continuous work involving maintenance and services.
Hence, they have deep knowledge about the customers
whole business and also a long-term commitment to deliver
satisfactory products. The respondents argued that these
framework agreements facilitated continuous improvements
and customer focus in the project although they were related
to other parts of the business.
Measurable performance indicators related to many
different improvement areas were adopted. They were first
formulated by Scania and DynaMate and then discussed and
approved by the contractors.
Special interest groups (SIGs) were not utilized. Although
many respondents considered SIGs to be a good idea for
enhancing commitment and knowledge transfer among
different trades, they raised the question whether SIGs can
cover their costs in a single project setting. The client
probably has to adopt a long-term perspective, reaping the
benefits of SIGs over a series of projects.
The amount of training was not greatly affected by lean
thinking. During the second workshop many respondents
expressed a demand for training and education related to
partnering and lean construction. As a result the action
researcher held a short lecture about partnering and lean
construction during the final workshop. It was also agreed
that in future projects lectures and discussions about these
concepts will be held continuously as parts of the workshops.
In order to facilitate suggestions from workers a suggestion
box was established. Workers were encouraged to hand in
formal written improvement suggestions to DynaMates
project leader. Scania had earmarked an amount of e10,000
for rewarding such suggestions (e500 per suggestion). In spite
of good intentions the suggestion box did not work
satisfactorily. The handling and follow-up of the suggestions
were not performed in a structured and continuous way due
to the project leaders overload of work. In the final workshop
it was agreed that the suggestion box should be a permanent
part of the agenda of construction meetings so that suggested
improvements are dealt with shortly after submission.
Furthermore, it was argued that the reward for good
suggestions should be in the form of teambuilding funds in
order to increase workers motivation for suggesting
improvements.

These collaborative tools were very important although there


was room for improvements. The fact that the project was not
initiated as a lean project resulted in the collaborative tools
not being utilized in the very beginning, which is an important
stage for establishing a collaborative climate. At the final
workshop it was suggested that joint objectives should be
established through teamwork during a kick-off workshop
instead of being initiated as performance indicators solely by
the client side. It was also agreed that it is better to have
several smaller activities than only one big teambuilding
event. Furthermore, the facilitator role should include a larger
area of responsibility, managing not only partnering issues but
also lean aspects, such as the suggestion box, SIGs, and
training events.
The compensation form was based on open books and a
gain share/pain share arrangement in which the parties shares
were relative to their part of the total budget. Accordingly, the
incentives were based on group performance instead of
performance within the individual contracts. The respondents
stated that this arrangement was a central aspect, facilitating
cooperation and a systems perspective since no actor gained
by improving his own performance at the expense of someone
elses.
Systems perspective
Coherent procurement procedures were implemented,
establishing an appropriate foundation for increased
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Improving construction supply chain collaboration and performance

Supply Chain Management: An International Journal

Per Erik Eriksson

Volume 15 Number 5 2010 394 403

cooperation. The key contractors were procured early through


direct negotiation and involved in concurrent engineering.
The compensation form was based on group incentives and
the broad partnering team used several collaborative tools.
The respondents agreed that these procurement procedures
were suitable and a central aspect of the collaborative lean
concept that was aimed for.
The four contractors had large scope contracts. The
electricity, ventilation, and plumbing contracts included
design services, since these companies had such
competences internally. The architect and construction
engineer were, however, contracted by DynaMate. An
exception to the large scope approach was that the
mechanical supplier and contractor were procured and
managed directly by Scania and therefore outside the scope
of the project managed by DynaMate. The interface between
the mechanical delivery and the construction project did not
function perfectly smooth in all situations, so this division of
responsibilities was a drawback from a lean perspective.
The respondents stated that the project had properly
balanced objectives. Quality and function are often most
central for Scania. In this project the time schedule was also
highly prioritized and the cost was ranked third. Although the
ranking of these objectives was not explicitly discussed it was
supported by the actions taken during the construction
process. The actors never chose alternatives that saved costs
at the expense of quality and time. In order to enhance clarity
and mutual understanding, the respondents thought it would
be useful to discuss the balance of the objectives among all
supply chain actors in the beginning of the next project.

Table I Lean-related aspects implemented in the pilot project

Results of lean implementation

not, partly due to that some of them were unrealistic and


others were difficult to measure. The manager at DynaMate
that initiated the performance indicators stated that: this
should not be seen as a failure since it is more important that
we start measuring our performance than that we achieve all
specific indicators at our first attempt. The improved
cooperation among the partner companies resulted in
monetary savings due to for example efficient coordination
and joint usage of equipment (e.g. cranes and lifts). The five
partner companies received a bonus of e200,000 to share due
to lower costs than the target price and e50,000 for finishing
the construction work according to the milestone
requirements. Furthermore, all interviewees were satisfied
with the results and considered the project a success.
However, they agreed that the project could be
characterized more as a partnering project than as a lean
construction project. They thought that the lean concept
could have been developed further in this project if it had
been implemented already during the design stage.
As described in the methodology section the survey
measured the participants satisfaction with 11 aspects of
the joint objectives related to both partnering and lean
construction. Overall the survey results confirm that the
project participants are fairly satisfied with the project results.
In Figure 1, the merged empirical results from the three
surveys are presented. Safety, comfortableness (fun to work),
and commitment/participation received high values (4.2-4.3).
All other items have rather high values ranging from 3.3 to
3.9.
However, it is more interesting to divide all items into two
groups: aspects related to lean construction and partnering

Core elements
Waste reduction

Aspects

Lean stages
b

Housekeeping
Just in time deliveriesd
Joint IT toolsd
Pre-fabricationd
Process focus
Last plannere
Self controlc
Milestonesa
End customer focus Concurrent engineeringa
Limited bid invitationa
Soft parameters in bid evaluationa
Continuous
Long-term contractsb
improvements
Performance indicatorsa
Special interest groupse
Trainingc
Suggestions from workersc
Cooperative
Broad partnering teama
relationships
Collaborative toolsa
Gain share/pain sharea
System perspective Coherent procurement decisionsa
Large scope contractsc
Properly balanced objectivesb

Stage 1b
Stage 1d
Stage 3d
Stage 3d
Stage 3e
Stage 3c
Stage 1a
Stage 3a
Stages 2 3a
Stages 2 3a
Stages 2 3b
Stage 1a
Stage 3e
Stage 3c
Stage 3c
Stage 2a
Stage 2a
Stage 1a
Stage 3a
Stage 3c
Stage 3b

Notes: aAspects that were explicitly used to a large extent; baspects that
were implicitly used to a large extent; caspects that were explicitly used to
some extent; aaspects that were implicitly used to some extent; and
e
aspects that were not used at all

Identification of lean stages


The lean related aspects implemented in the project are
connected to the three different stages of lean construction. In
Table I, the extent to which different aspects were used is
illustrated: aspects that were explicitly used to a large extent
are marked with a superscript a; aspects that were implicitly
used to a large extent are marked with a superscript b; aspects
that were explicitly used to some extent are with a superscript
c; aspects that were implicitly used to some extent are marked
with a superscript d; and aspects that were not used at all are
marked with a superscript e.
The four aspects related to Stage 1 were utilized in the
project to a fairly large extent. Milestones and the gain share/
pain share arrangement were explicit strategies, whereas
housekeeping and just-in-time deliveries were used more
implicitly. This finding is in line with the earlier argument that
Lean Stage 1 is the default that is performed in many efficient
construction projects, although they do not involve explicit
lean thinking. Also the aspects related to Stage 2 were
explicitly utilized to a large extent in order to establish
cooperative relationships among the supply chain actors,
which was the explicit aim of the pilot project. The aspects
related to Stage 3 were used to a lower extent, for which
reason there is still a long way to go in order to obtain fullfledged lean construction.
Pilot project performance
The pilot project was finished successfully within the target
price and time schedule. Many of the formulated performance
indicators were satisfactorily achieved but some of them were
400

Improving construction supply chain collaboration and performance

Supply Chain Management: An International Journal

Per Erik Eriksson

Volume 15 Number 5 2010 394 403

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Figure 1 Survey 1-3 in lean construction project

respectively. The lean construct includes five items


(continuous improvements, fast design change decisions,
focus on function and life cycle costs, site cleaning, and waste
reduction) with high reliability (Cronbach alpha 0:84) and
mean value 3:59. The partnering construct includes six
items (collaboration, comfortableness, commitment/
participation, communication/feedback, safety, and trust)
with Cronbach alpha 0:88 and a higher mean
value 4:04. A one-sample T-test verifies that the difference
in mean values between these two constructs is statistically
significant at the 0.05-level. This result confirms the
argument that the pilot project achieved better results in
terms of cooperation than in terms of lean construction.

partnering than those related to lean construction. Increased


cooperation among supply chain actors is, however, a
prerequisite and an appropriate starting point for a further
development of the lean concept. One of the managers at
DynaMate expressed this pilot project view as: sometimes
you have to create movement for its own cause; we have to
start the change somewhere and when we have started moving
we can change our direction as we learn what is working and
what is not.
The project was successfully executed, both within its
budget and schedule and with a satisfactory quality, much due
to the various aspects of lean construction that were
implemented. Since the participants, both at the client and
at the supply side, are satisfied with the project execution and
its results, this pilot project can serve as a starting point of a
continuous improvement of the supply chain performance.
Another DynaMate manager expressed this view as: the pilot
project has been an exiting start on a long-term change
journey
From a theoretical perspective a weakness of the developed
frame of reference is that the aspects are not exclusively
related to only one core element. The case study findings
show that several aspects facilitate the achievement of more
than one core element, such as: long-term contracts facilitate
not only continuous improvements but also customer focus;
joint project office and concurrent engineering facilitate both
cooperative relationships and customer focus; follow-up
workshops facilitate both cooperative relationships and
continuous improvements; and incentives based on group
performance facilitate cooperative relationships and a systems
perspective. In spite of these multiple relationships the frame
of reference can serve as an illustration of important aspects
and core elements of lean construction. From a practical
perspective, the case study findings show how various lean
related aspects can be implemented and how they affect

Concluding discussion
This investigation started off by identifying 21 aspects and six
core elements of lean construction and how these are related
to three different stages of lean construction. Of these three
stages only the third can be judged as full-fledged lean
construction, whereas the second stage is similar to partnering
and the first stage is related to efficient project governance in
general.
The literature review findings then served as a frame of
reference in an action research based case study of a lean
construction pilot project. The findings show that this
particular project utilized a broad range of lean related
aspects, corresponding to the second stage of lean
construction, focusing on cooperation. Some aspects related
to the more sophisticated third stage were also utilized,
although there is a long way to go in order to reach such a fullfledged lean approach. Hence, one can argue that this
particular project had more similarities to a partnering project
than to a sophisticated lean construction project. This was
verified by the survey results indicating that the project
participants were more satisfied with aspects related to
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Improving construction supply chain collaboration and performance

Supply Chain Management: An International Journal

Per Erik Eriksson

Volume 15 Number 5 2010 394 403

supply chain actors and their performance in a construction


project context.
Further research on performance indicators should be
encouraged. Performance measurement is an important
aspect of both lean production (Wee and Wu, 2009) and
lean construction (Freire and Alarcon, 2002). Although
construction supply chain performance measurement is
important it is, however, more difficult than in most
manufacturing industries (Wickramatillake et al., 2007).
Green and May (2005) also mean that measuring
performance is not consistent with a cooperative view of
lean construction, which is vital for stages 2 and 3. The case
study results confirm that it is not easy to formulate and
measure suitable performance indicators and that more
informal collaborative joint objectives are important, parallel
to the formal performance indicators.

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Corresponding author
Per Erik Eriksson can be contacted at: pererik.eriksson@ltu.se

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