This post was written by Mark Jenkins, Director of Product Strategy for Oracle Construction and Engineering.
The construction industry remains relatively strong, but that doesn’t necessarily mean builders have their houses completely in order.
With project owners demanding faster builds and trade resources becoming increasingly scarce, construction companies are keen to identify operational changes that will enhance project execution and boost productivity, both to improve margins and create competitive advantages. The urgency for more efficient project management becomes even more apparent when one considers that approximately 70 percent of projects come in late and over budget, according to the Lean Construction Institute.
That’s why some progressive construction firms are beginning to integrate two project scheduling/execution methodologies traditionally seen as separate: the Critical Path Method (CPM) and Lean Construction.
CPM is a proven, longstanding scheduling approach that uses a project network diagram to identify and map relationships between activities that affect the project completion date. This approach is ideal for any project with a network of interdependent activities, making it the standard across construction and engineering projects. The methodology’s precursor, developed by DuPont in the early 1940s, was even applied to and associated with the success of the Manhattan Project.
Lean Construction is a more recent concept that focuses on the task level of building activities and the precise coordination and communication required to meet project commitments. Based on the Lean Manufacturing methodology, this approach strives to continually improve quality and efficiency in construction processes by maximizing utilization of materials and labor, thereby eliminating waste and minimizing activities that do not add value. In fact, a Dodge Data & Analytics Owner Satisfaction & Project Performance study last year found high Lean intensity projects were three times more likely to complete ahead of schedule and two times more likely to come in under budget.
Both approaches offer significant efficiencies and other project delivery benefits to construction companies. But Lean values often don’t align with CPM priorities, giving rise to tensions between scheduling camps. While CPM advocates view its methods as ideal to building and maintaining a proper schedule, Lean proponents argue that CPM doesn’t consider the level of detail to properly execute the field production work.
However, limiting adoption to one or the other also means leaving important opportunities on the table that could help improve project performance. Innovative companies know this and recognize that, if they can successfully merge the two and harness the power of both approaches, they can achieve synergies with the potential to deliver significant, operational, competitive, and financial benefits.
By blending the “rival” scheduling methodologies in a single platform, construction firms can have a holistic view of the project – i.e., both the long-view analytics they need to accurately determine project milestones and completion dates, as well as prescriptive roadmaps for how to reach project completion as efficiently and economically as possible.
So how can a company bridge the gaps that have divided scheduling camps and held back the efficiencies and visibility of a combined approach? Technology holds the key.
New tools, powered by cloud technology, enable full digitization of processes as well as collaboration across project participants and centralization of project planning information. By eliminating the paper processes of Lean Construction – the wall of Post-It notes on the trailer in the field – and digitizing all activity and task planning data in a shared workspace, such a platform eliminates the traditional silos and optimizes processes for all project teams.
In recent years, the industry has embraced standalone point systems that automate parts of the commitment and task management process. Companies embracing such tools have taken an important first step toward bringing new levels of efficiency to site-based Lean processes. But they need to recognize that this approach does not address the Lean/CPM divide, which means construction firms will still struggle with communicating accurate task status information to the enterprise project management system in a timely manner. The next stage in the evolution of scheduling systems is a generation of project management solutions that effectively bridge the gap between master schedulers and “last planners,” connecting the field office with the enterprise in ways that can deliver even greater efficiencies.
In conclusion, builders today have tremendous business opportunity in front of them but must never lose sight of the need for optimal project management and delivery. To that end, it is time to harness the exponential power of cloud-based tools that combine the key capabilities of the time-tested CPM approach with those of Lean Construction. Such an approach has the potential to put builders ahead of the pack and deliver even better projects to their clients, while also improving their own bottom line.
This article originally appeared in the January issue of Modern Contractor Solutions. Visit Oracle Construction and Engineering to learn more about how we can help you digitize Lean Construction and integrate Lean task management with the CPM schdule.