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Article information:
To cite this document: Raid Al-Aomar, (2012),"A lean construction framework with Six Sigma rating", International Journal of Lean
Six Sigma, Vol. 3 Iss: 4 pp. 299 - 314
Permanent link to this document:
http://dx.doi.org/10.1108/20401461211284761
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A lean
A lean construction framework construction
with Six Sigma rating framework
Raid Al-Aomar
College of Engineering and Computer Science, Abu Dhabi University, 299
Abu Dhabi, United Arab Emirates
Abstract
Purpose – The purpose of this paper is to investigate the application of lean construction practices in
the construction industry and develop a practical and applicable framework that incorporates Six
Sigma rating into the best practices of lean construction. The objective is to help the industry reduce
waste and cost, increase effectiveness, and improve quality.
Design/methodology/approach – A generic yet practical framework of lean construction is
developed using the guidelines of project lean delivery system developed by the Lean Construction
Institute (LCI). Applicable lean techniques and Six Sigma rating are integrated into the developed
framework. A cyclical look-ahead planning and execution approach is used to implement the lean
construction techniques. A set of Lean Six Sigma (LSS) performance indicators is defined to measure
performance, set target threshold values, and guide improvement actions. A case study of the construction
industry in Abu Dhabi (AD) is used to clarify the proposed approach and identify its key practical aspects.
Findings – Analysis of wastes in AD construction industry reveals 27 types of construction wastes.
These wastes were categorized into the seven types of wastes. Defects (errors and corrections) are
found to be the most common type of construction waste in the surveyed companies. This calls for
integrating Six Sigma rating into the proposed lean construction framework. The other common types
of wastes are overprocessing and delays. Lean project management is focused on assessing a set of key
performance indictors (KPIs) at the end of each “look-ahead” period. First lean practices are employed
during the period and Sigma Rating is assessed at the end of the period along with other KPIs. The
proposed LSS-KPIs were able to measure progress and guide improvement.
Research limitations/implications – The credibility of the research findings is dependent on the
accuracy and reliability of collected data from construction companies. Implementing lean
construction techniques within a look-ahead period is not expected to achieve significant project
gains in terms of quality, speed, and cost without adopting the overall lean construction framework.
Social implications – The work of construction companies largely contributes to the quality and
safety of public and society at large through residential and commercial buildings, transportation, and
infrastructure projects. Lean construction practices and Six Sigma rating positively impact these
important aspects and often result in reducing waste and costs, improving safety, and saving energy
resources in construction projects.
Originality/value – Research significance stems from the focus on increasing the effectiveness of the
construction industry. Research contributions include the development of an applicable lean construction
framework that integrates lean construction practices with Six Sigma rating. This contributes to the effort
of applying Lean Six Sigma (LSS) in the vital field of construction. This research prescribes a systematic
approach for implementing the proposed framework within a cyclical look-ahead period and highlights the
practical implications of the proposed approach. Also, the research provides an effective periodic
measurement system of project effectiveness based on five LSS key performance indices.
Keywords United Arab Emirates, Construction industry, Six Sigma, Construction management,
Lean construction, Lean project delivery, Lean Six Sigma, Look-ahead planning
International Journal of Lean Six
Paper type Research paper Sigma
Vol. 3 No. 4, 2012
pp. 299-314
q Emerald Group Publishing Limited
The author would like to thank the College of Research and Graduate Studies (CRGS) at 2040-4166
Abu Dhabi University for funding this research DOI 10.1108/20401461211284761
IJLSS 1. Introduction
3,4 To survive in today’s competitive market, it has become imperative for construction
companies to improve the quality of their work, increase work effectiveness, reduce
waste and costs, and increase profit. This is particularly more pressing under the current
financial crisis and economic recession. Consequently, the combination of project speed,
high quality, and low cost has become a key engineering and managerial effort in facing
300 the growing competition in the construction business. Most construction managers
agree that the industry is susceptible to wasteful spending, delays, errors, and project
inefficiency. Projects seldom finish on time, within budget, or at a quality level accepted
by the customer. Thus, several project management approaches have emerged to
improve construction performance including lean construction, lean project
management, and value-engineering.
Lean construction, as defined by the Lean Construction Institute (LCI), is a production
management-based project delivery system emphasizing the reliable and speedy delivery
of value (LCI, www.leanconstruction.org). Lean construction adopts the concepts of lean
thinking and lean principles drawn from production management (originally developed
at Toyota production system in the 1950s) to create a new way to manage construction
projects. The goal is to build the project while maximizing value, minimizing waste,
and pursuing perfection. In the context of both construction and production, waste is
primarily defined in seven categories: defects, delays, over-processing, over-production,
excess inventory, unnecessary transport and conveyance of materials and equipment,
and unnecessary movement of people.
Although this concept is still new to many construction industries, previous studies
showed that cost reduction using lean techniques can reach up to 25 percent compared
to the traditional project management approach (Koskela, 1993). According to Ballard
and Howell (2003), countries such as UK, Australia, USA and Brazil have gained
significant benefits by adoption of lean construction concepts. Examples of lean
construction applications can be found in Thomassen et al. (2003), Höök and Stehn
(2008) and Senaratne and Wijesiri (2008).
The lean project delivery is focused on implementing the guidelines of Lean Project
Delivery System (LPDS)e developed by the LCI (Ballard, 2008). According to LCI, the
main modules of project delivery system include, but not limited to, lean design, lean
supply, lean assembly, lean production, and lean delivery system. As shown in
Figure 1, these modules interact at the construction site to form a lean construction
environment and platform. The lean definition provides a value-based scope of work
(SOW) and effective master production schedule (MPS) and cost estimations. At the
construction site, the MPS is executed as small work-chunks pulled as needed from a
look-ahead plan.
The lean design phase transforms the conceptual design of the project definition into
a lean product and process design that is consistent with project scope and design criteria.
The lean supply module consists of detailed engineering of the product design, then
fabrication or purchasing of components and materials, and the logistics management
of deliveries and inventories. Lean assembly extends from the first delivery of tools, labor,
materials or components to commissioning and project delivery to the client. Lean
construction keeps an eye on the VA element of the construction process (conversion) as
well as the NVA elements (flow, delay, and errors). A lean delivery emphasizes a
cost-effective and on-time handover with no delays or rejects or quality issues.
A lean
construction
framework
301
Figure 1.
Lean construction process
Six Sigma concept and method can be relevant to all industries including construction
as it seeks to improve quality and reduce variability and errors. Similar to lean
manufacturing and lean services, Six Sigma can play a complementary role to lean
construction. Improving quality in the construction context contributes to the lean focus
on speed delivery and cost effectiveness by reducing reruns, delays, and re-works in the
completed tasks and ensuring the quality of delivered materials to the work site.
Similarly, lean construction contributes to the quality focus of Six Sigma by reducing
process variability, streamlining the work flow, and increasing the transparency of the
work site. Thus, Sigma rating (i.e. assessing the Sigma level of delivered work packages
by teams or contractors) can be used to quantify and benchmark the work quality.
A combined Lean and Six Sigma application to construction projects can be referred to
as Lean Six Sigma-Construction (LSS-C). The objective is to improve the construction
process through lean techniques (less waste and cost) and Six Sigma DMAIC process
(less variability and high quality). As shown in Figure 2, a value stream map (VSM) is
used as a template for integrating lean techniques towards continuous improvement
and DMAIC is used as a process for achieving Six Sigma performance.
From a research perspective, reviewed literature showed that lean construction efforts
have been focused on proposing and applying lean methods and tools in the various sectors
of construction industry. However, few researchers have actually addressed how
to evaluate the impact of lean practices on the quality, speed, and cost of the construction
project. None of the reviewed studies has incorporated Six Sigma in the application of lean
construction practices. Thus, this paper aims to investigate and categorize the different
types of wastes in the construction industry and to develop a lean construction
framework with Six Sigma rating that can be used to quantify and assess the quality, cost,
and schedule implication of lean construction practices. Empirical results from a locally
funded research project that analyzes lean construction practices in Abu Dhabi (AD)
construction industry will be used to clarify the practical aspect of the proposed framework.
2. Literature survey
The lean concept is based around controlling resources in accordance with the
customers’ needs and reducing unnecessary waste. Womack and Jones (2003) describe
IJLSS
3,4
302
Figure 2.
Lean Six Sigma in
construction
waste (muda in Japanese) as any human activity which absorbs resources, but creates
no value. This includes over production, excess processing, inventory, rework, motion,
transport and material handling, defects, failures, setup and under utilizing people’s
abilities.
As discussed by McCurry and McIvor (2001), lean principles are fundamentally
driven by customer in terms of understanding customer value, value stream analysis,
continuous flow, “pull not push” demand-driven flow, and perfection. To achieve these
principles, a variety of lean tools have been developed and widely applied. Commonly
used lean tools include value stream analysis, layout redesign, Kanbans, total
productive maintenance (TPM), quality-at-the-source, single minute exchange of die
(SMED), visual aids, 5S, work standards and Kaizen. Details of these tools can be found
in George (2002), Womack and Jones (2003), and Dennis (2002).
Construction is a project-based industry with unique characteristics. Quality, time, and
cost are the three pillars/criteria of a successful construction project. In lean terminology,
the goal is to achieve highest level of work quality with shortest lead time and lowest
cost possible. Traditional thinking of construction focuses on conversion activities and
ignores flow and value considerations. In particular, waste is generally associated with
waste of materials in the construction processes while activities such as inspection,
delays, transportation of materials and others are not recognized as waste. Koskela (1993)
has pioneered the introduction of lean construction as an approach to address these
wastes. Further details of the lean construction approach can be found in Alarcon (1997),
Diekmann et al. (2004), Salem et al. (2006), and Conte and Gransberg (2001).
Latest research on lean construction is focused on lean project management and
issues related to variability and sustainability. Lean project management enhances the
traditional project management process to adopt lean construction methods and
practices. This includes the enhancement of project definition, scoping, scheduling,
cost estimation, procurement, control, and leadership. Details of lean project
management can be found in Leach (2006) and Ballard and Howell (2003). Song and
Liang (2011) studied the implication of lean construction on sustainability. Their focus
was on reducing waste of all types, flow variability and irregularity, and interruptions A lean
in material delivery to the site. Finally, Thomas et al. (2002) investigated the construction
relationship between variability and project performance. They concluded that
variability in labor productivity has more impact on project performance than output framework
variability. Hence, they recommended redirecting lean improvement initiatives to
adaptable workforce management capabilities to reduce variability in labor
productivity in order to improve project performance. 303
On the other hand, Six Sigma provides a data-driven approach for the attainment of
quality products and services with a focus on improving a set of critical-to-quality (CTQ)
measures. It targets product/service attributes as well as the overall process
improvement. It improves process performance by reducing products defects and
process variability with an ultimate goal of meeting or exceeding customer expectations.
Details of Six Sigma methods and applications can be found in Breyfogle (2003), Harry
and Schroeder (2000), Montgomery and Woodall (2008). Lean Six Sigma (LSS) has
emerged as a synergic integration of both lean techniques and Six Sigma method. As
discussed in George (2002), Lean and Six Sigma play a complementary role in real-world
applications to increase efficiency and reduce errors (defects). Snee and Hoerl (2007)
presented a holistic approach for integrating Lean and Six Sigma. LSS has been also
linked to applications that involve creativity and innovation as discussed in Hoerl and
Gardner (2010). Laureani (2012) discussed the Critical Success Factors for LSS
implementation.
Although Six Sigma has been implemented in the manufacturing and other services
industries, it is still a relatively new concept in construction industry. As pointed out
by Stewart and Spencer (2006), despite the large number of studies having addressed
the concept of quality in construction, there is limited research into the use of Six Sigma
to measure quality of construction work or as a strategy for process improvement in
construction. Key challenges stem from the unclear definition of variability, defects, and
yield in the construction contexts combined with the difficulties of applying the DMAIC
process in terms of data collection, measurement, and control. This is similar to the
difficulties of defining VA (conversion) and NVA (flow) activities and the PULL
implications in the lean context.
Aoieong et al. (2002) presented a process approach in measuring quality costs of
construction projects. Pheng and Hui (2004) presented a case study on applying
Six Sigma initiative in the building industry. The paper explains the implementation
phases as well as the training programs. Improvement measures taken by a contractor
helped to raise the Sigma level from 2.66s to 3.95s for the quality of internal finishes.
The findings suggest that management initiative and support, relevant training,
appropriate selection of pilot projects, and commitment by team members are crucial for
the successful implementation of Six Sigma in the organization. Unlike manufacturing
where Six Sigma is applied at a larger scale, Stewart and Spencer (2006) suggest that
applying Six Sigma in construction typically involves breaking down large tasks into
smaller ones that can be re-engineered and improved in a process of continuous
improvement.
Conceptual Design & Criteria Product & Process Design Lean Supplies, Design & MPS
Look-ahead Planning
Logistics No
PPCA Set Work Packages
(Connected, balanced,
buffered & multi-tasked)
VSM No
Value Engineering
Pull-Scheduling
No No
Viable? Pass?
Ready?
Figure 3. Yes Yes
Yes
Lean construction
framework Adopt Contract & Procure Execute & Check LSS KPIs
Lean assembly requires a lean preparation of the construction site and a pull execution A lean
schedule. Lean layout, 5S (sort, set, shine, standardize, and sustain), and flow analysis construction
are effective lean techniques that can be used to develop a lean construction site. The
pull scheduling starts by setting a look-ahead planning period (e.g. five weeks) and framework
selecting work packages to be executed during the look-ahead plan. All resources are
set, balanced, and connected (streamlined) to attain the closest form to continuous flow
of small batches (chunks) of work. Buffers (time, capacity, and cost) are used to 305
synchronize the flow in a critical chain. Multitasking is used to increase resource
utilization and work flexibility. Based on a pull schedule, that starts from the target
work level, work tasks are executed until the end of the look-ahead period. Lean Six
Sigma key performance indicators (LSS-KPIs) are assessed at the end of the look-ahead
period to measure performance and adjust planning and work activities. The cycle is
repeated until the project is completed and a lean delivery process is set to transfer the
project to the client.
Figure 4.
Construction LSS-KPIs
IJLSS .
Sigma rating: the quality of worked completed internally or through the
subcontractors is reviewed at the end of each look-ahead period. The quality level
3,4 is measured through a Sigma rating to emphasize the complementary function of
Lean and Six Sigma methods. To this end, we count the number of defects (ND) in
the performed work units (WU) or number of quality checks performed at each
contractor’s work and at each work package performed internally.
306
Examples from a building include the samples taken or the quality checks or the
performed work units in the foundation, the structure, the internal finishes, the
electrical work, the mechanical work, etc. The % yield (%Y) is computed as follows:
ND
%Y ¼ 100% 2 ð1Þ
WU
The overall yield value can then be translated into a Sigma rating (SR) by estimating its
corresponding Z-score and adding 1.5 to account for the shift in performance. Excele
can be used to determine the Z-score. Thus, the SR formula can be expressed as follows:
SR ¼ NORMSINV ð%Y Þ þ 1:5 ð2Þ
The obtained SR value is compared to a certain company standard or benchmark value
of Sigma rating to decide if a DMAIC Six Sigma improvement study is needed. For
example, the company may not accept any SR value below 3 and they may recommend
that the SR for the contractor work be improved for the next review. Similar action will
be taken for the work done by the owner (if any).
.
The project speed and cost effectiveness are key aspects in lean construction.
Both schedule variance (SV) and cost variance (CV) are typical performance
measures in the earned value management system (EVMS) at the project review
(i.e. the end of look-ahead period in our case). EVMS is a technique that reports
the project status by relating project resources to schedule and technical
performance. The variance is a deviation from the specific plan that should be
mitigated through corrective actions. As discussed in Kerzner (2009), using the
budgeted cost (i.e. planned value, PV) for work scheduled, budgeted cost for
work performed (i.e. earned value, EV), and actual cost (AC) for work performed,
schedule and cost variances are determined as follows:
SV ¼ EV 2 PV ð3Þ
CV ¼ EV 2 AC ð4Þ
Both SV and CV can be expressed in dollar value or hours. A negative schedule
variance indicates a behind schedule condition and a negative cost variance
indicates a cost overrun. Proper actions to control the project schedule and cost
will be taken accordingly.
From a lean perspective, we need to estimate the cost and schedule effectiveness of the
project’s physical progress based on the earned value (EV) during the look-ahead period
compared to the actual cost (AC) and the planned value (PV) during the same period.
This is achieved through a cost performance index (CPI) and a schedule performance
index (SPI). The two indices are estimated as follows:
EV A lean
CPI ¼ ð5Þ
AC construction
framework
EV
SPI ¼ ð6Þ
PV
Indices values that are less than 1.0 indicate a cost overrun and a behind schedule 307
condition, respectively.
.
Finally, the value and waste indices are crucial to measure the tangible impact of
adopting lean techniques in the construction process. In addition to less defects
and higher cost and schedule effectiveness, lean construction practices should
translate on the floor into less material waste, low inventory levels, and less
conveyance and movement of labor and material. As discussed in Thomas et al.
(2002), a project waste index (WI) can be used to indicate waste in material and
working hours. For the material waste, the index compares the amount procured
(P) to the site during the look-ahead period in the material standard unit to the
amount actually used (U) and estimated (E) for the same period, as follows:
ðP 2 U Þ
WI ¼ ð7Þ
E
This is a lower-the-better index with an ideal value of zero which indicates that
lean supply of material results in procuring only the amount actually needed.
The difference between the amount of procured and used material is referred to
as ending inventory in production and is typically carried over to the next
look-ahead period. Thus, low values of this index indicate more frequent JIT
shipments are delivered to the site and low inventory levels are eventually
maintained. An average value can be taken for multiple types materials using
their corresponding units (weight, length, volume, etc.).
The value index (VI) compares the duration of the effective work (conversion time) to
the total duration of the look-ahead period. The focus is on increasing the amount
of time spent in performing conversion activities (value-adding work) and minimizing
delays, interruptions, and the time spent in unnecessary conveyance and movement of
material and labor. By tracking the conversion time (CT) and the flow time (FT) during
the look-ahead period (review period), the VI can be estimated as follows:
CT
VI ¼ ð8Þ
ðCT þ FTÞ
This is a higher-the-better index with an ideal value of 1.0. The periodic review of this
index checks the amount of work spent in value-adding activities during the
look-ahead (review) period.
Needless to say that lean construction practices are to be executed within the overall
lean construction framework shown in Figure 3. The technical actions within the
look-ahead planning period will not be able to achieve the required results unless
integrated into the overall lean construction framework.
Finally, and as guidance for improvement, project managers need to set threshold
values for the LSS-KPIs. Based on the business specifics, companies can update the
values yearly based on progress and benchmark studies. For example, SR can be set to at
least 3 so that about 99 percent of the work meets the specifications. CPI can be set to at
least 1.15 so that we have about 15 percent of cost buffer. Similarly, SPI can be set to 1.1 to
have 10 percent time buffer. WI can be set to zero or in some cases to a maximum 5 percent
to limit the amount of ending inventory and prevent accumulation of material due to
large shipments and overproduction. Finally, the VI can be set for example to 75 percent
(case dependent) to emphasize the conversion tasks and limit the flow activities.
Repair work Long approval Late work Damaged Transport Idle Labor
process delivery material time periods movement
Equipment Clarification Activity Excess Material Excessive
310 breakdown needs start delays materials handling space
Work defects Excessive safety Work Pilferage
measures interruptions
Rework/re-run Excessive Ineffective
training time work
Design errors Excessive
supervision
Execution Excessive use of
errors equipment
Retest work Overqualified
Table I. resources
Categories of identified Uncompleted
construction waste work
Figure 5.
Ranking the main
categories of construction
wastes
categories of waste include correction, over processing, and delay. Together, they
represent 72.5 percent of all wastes in the surveyed construction companies. The
fact that errors (defects) correction has the highest ranking highlights the need
for integrating Six Sigma rating into the lean construction framework.
(5) Based on the wastes analysis, set lean construction actions within a rational
look-ahead period. In the case, the look-ahead period is set to five weeks and a
set of lean actions are recommended to be implemented in the next look-ahead
period according to LCI model and company’s specifics.
(6) Assess the LSS-KPIs for the current status: during a look-ahead period of A lean
five weeks (8 hours a day and six days a week), the total available working construction
hours are 240. During this period, as shown in Table II, the data collected from a
residential building project are organized as Quality, EVMS, Value, and Waste. framework
Using formulas (1)-(8), the LSS-KPIs are estimated. Table II shows the collected
data and the estimated values of the LSS-KPIs.
(7) Set threshold values for the 5 LSS-KPIs. The construction company selected the 311
values for the 5 LSS-KPIs that are summarized in Table III.
(8) Run gap analysis: it is clear from the results in Tables II and III, that the
construction company is not meeting the lean threshold values recommended
by the lean construction framework in Table III. Currently the company is not
implementing the lean construction measures during the look-ahead period.
(9) Recommend improvement actions to close the lean performance gap in the next
look-ahead period. The recommended actions in this case include:
.
A Six Sigma study to reduce the number of errors to around 66,800 in order
to improve the SR to 3.0.
.
The recommended plan for lean actions during the look-ahead period should
be implemented to attain the target values of CPI and SPI. It is clear that the
company is spending more than needed during the review period to complete
less than needed physical work (i.e. resulting in less than 1.0 for both CPI
and SPI). The lean practices are expected to increase the cost effectiveness and
the resources utilization (balanced work) while overcoming flow issues and
bottlenecks.
.
The flow time (conveyance and movement of material and people) is
consuming a large portion of the total work duration. A better site layout
5. Conclusion
A lean construction framework with Six Sigma rating is presented. The focus is on
increasing the effectiveness of the construction industry by reducing the numerous
types of waste in the construction projects (in both conversion and workflow). The
framework recommends specific lean construction techniques to be adopted within a
look-ahead planning scheme. Six Sigma methods were used to compliment the lean
construction practices by placing emphasis on reducing the defects and errors as well as
the variability of project schedule, performance measures, and cost estimates. Five LSS
measures are proposed to quantify the impact of adopting lean construction and Six Sigma
rating on the project in terms of quality, cost, and time. The practical implications of the
proposed framework were presented through a case study in Abu Dhabi construction
industry. The construction wastes in the targeted companies were first identified and
categorized into the commonly used seven types of wastes. Lean techniques are then
implemented and reviewed within a look-ahead period. The LSS-KPIs are assessed at the
end of each review period, compared to a benchmark of preset threshold values,
and improvement/correction actions are recommended and implemented until the project
is concluded. The proposed framework can be adapted to fit the specifics of other
segments of construction industries.
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Thomassen, M.A., Sander, D., Barnes, K.A. and Nielsen, A. (2003), “Experience and results from
implementing Lean construction in a large Danish contracting firm”, Proceedings of 11th
Annual Conference on Lean Construction, Blacksburg, VA, pp. 644-55.
Womack, J.P. and Jones, D.T. (2003), Lean Thinking, Simon and Schuster, New York, NY.
IJLSS Further reading
3,4 Mann, D. (2005), Creating a Lean Culture: Tools to Sustain Lean Conversions, Productivity Press,
New York, NY.