The company’s objective to deliver maximum value to the clients was greatly impacted during the execution stage of the projects, which had serious implications on our client satisfaction. This led us to take a step back and evaluate the processes, eventually leading to the adoption of the Lean philosophy, says Jaiprakash Aildasani – Director Lean Initiative and India South, Space Matrix Design Consultants Pvt. Ltd.
With India being pegged as the ‘bright spot’ in the global landscape by IMF, the world is looking at us as a haven for investment and for which the country’s real estate needs to attain a certain level of readiness and quality. However, in India, real estate has historically been a disorganized sector, dominated by several local, family owned players. A majority of which put little to no emphasis on streamlining processes, quality or curbing the wastages resulting from unstructured working.
The construction industry also bears the burden of having the lowest innovation as compared to other industries, globally. The biggest challenges the industry faces today are:
• An alarming 66% projects are not successful
• Almost 57% of efforts are spent on non-value added activities
• Approximately 91% project get delayed
• About 94% projects result on cost-over runs by 15% or more
• The customer satisfaction is going as low as 8%
The construction industry in India has reached a critical point where to succeed and come at par with the global standards, it needs to overhaul its approach to projects and the subsequent end result it produces.
The Lean philosophy
The Lean philosophy, though born in manufacturing, focuses on a new way to coordinate action and is essentially ‘A systematic approach to define VALUE, identifying and eliminating WASTE, bringing PREDICTABILITY & CERTAINITY in Construction WORKFLOW through PULL Planning and achieve PERFECTION through continuous improvement.”
Lean construction is an ideal approach to construction as it focuses on maximizing value and minimizing waste, the two biggest drawbacks plaguing the industry. However, when Lean is applied to construction, it has the ability to extend beyond these two to the entire process.
The industry as a whole, needs to assimilate the potential economic value of dissatisfied clients and the opportunity cost lost with the backing out investors in the country due to underdeveloped infrastructure and a shortsighted real estate industry.
We studied snags across 20-25 of our projects and analyzed them using the ‘Pareto Analysis’ or the 80/20 rule. This principle is based on the idea that by doing 20% of work, you can generate 80% of the results. The results showed that five critical snags contributed to 80% of the snag list on every project. This formed the starting point of putting processes in place to eliminate these snags, thereby ensuring the snag list/punch–list gets drastically reduced.
Our project approach focuses on data and facts rather than human biases, allowing us to become more customer focused for value and waste. Planning with Lean tools that are structured, lay the foundation for more structured approach to projects.
We leveraged the robust digital infrastructure to develop Lean dashboards that allow the clients to get live project updates, thereby smoothening the transformation of information. The main challenge for us was to train our partners and motivate them to adopt lean practices with the same fervor.
Though adopting Lean and applying it to the project methodology is the clear path forward, but for Lean to be successful, the culture of Lean has to be deeply embedded in that of the organization and partners as well.
So far, Lean has helped achieve an alignment with all key stakeholders on the project with a clear understanding on the key milestones, setting of expectations and a clear view of interdependencies so a clear working plan can be mapped to ensure the work is smooth and continuous during the course of the project.
The defect/ snag list has drastically reduced and liquidated in four weeks from substantial completion based on the Lean processes followed for effective closeout. The snags were further funneled to understand the ones with maximum business impact. Lean should thus be viewed as a mindset that governs how one looks at a business or its processes.
The Lean way of project management has ensured that projects are delivered on time, provides value directly related to client business goals and allows greater speed to market. No cost over-runs ensure that clients are well within their budgeted capital expenditure and snag free sites allow interruption free working for their employees.
Lean has also improved our communication, partnership and collaboration with the execution partners. The nature of such relationships is traditionally a strained one marked with miscommunication and pressure tactics to complete projects on time. With Lean, communication gets streamlined and project predictability allows for early resolution of any conflicts or issues leading to easing of relationships between the multiple projects stakeholders.
At Space Matrix, by applying the Lean philosophy to our project management system, we have been able to bring about a paradigm shift in the way projects are constructed in the commercial interior design sector, resulting in a substantial drop in the wastage of resources, resulting in high Net Promoter Scores.