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Dodge Data & Analytics recently benchmarked the current state of capital project delivery performance and found a statistically significant correlation between use of Lean methods and better project outcomes. High Lean intensity projects were three times more likely to complete ahead of schedule and two times more likely to complete under budget.
To establish a benchmark, eighty-one owners responded to Dodge Data & Analytics’ Owner Satisfaction & Project Performance survey by answering questions about their perceived best project and a typical project in the last three years — providing data on schedule, budget, quality and safety performance as well as information on how the project team was organized, the commercial terms for the project and the management methods used.
On schedule and cost performance, which owners cite as most valuable, Dodge found that 24% of best projects finished ahead of schedule compared to only 6% of typical projects, and 46% of best projects finished under budget compared to only 10% of typical projects. A staggering 61% of typical projects finished behind schedule and 49% of typical projects completed over budget.
Why did some projects excel? Dodge studied the differences between best and typical projects, finding that best projects outperformed typical projects by doing the following three things:
#1 Implement more Lean methods: Best projects had a higher usage of specific Lean management methods than typical projects. When looking deeper into the best of the best projects, researchers found that high Lean intensity projects (projects using a number of Lean management methods) are three times more likely to complete ahead of schedule and two times more likely to complete under budget than low Lean intensity projects.
“The research conclusions reached by Dodge Data & Analytics show strong correlations between added value for the owner and use of Lean methodologies, particularly where a number of Lean techniques are used in combination,” said Dan Heinemeier, Executive Director of the Lean Construction Institute (LCI), the non-profit organization that sponsored the research.
#2 Organize and build project teams earlier: Dodge found that 76% of best projects engaged key stakeholders before or during conceptualization, giving them the advantage over the 42% of typical projects that did not engage key stakeholders until design development or later. Key stakeholders represent, at a minimum, the owner, architect, MEP and structural engineers, construction manager/ general contractor and key trade contractors.
#3 Use delivery method and contracts that promote collaboration: Dodge found that best projects used more collaborative delivery methods and contract types than typical projects. Most best projects used Construction Management at Risk with Guaranteed Maximum Price, while most typical projects used Lump Sum Design-Bid-Build. Use of Integrated Project Delivery (IPD) and Shared Risk & Reward was used by approximately 20% of best projects.
For more information about the research and how to advance your own Lean journey, visit https://www.leanconstruction.org/learning/ to watch Bevan Mace of Balfour Beatty Construction US talk more about the Dodge Data & Analytics study. You will also find a fact sheet that offers visual graphs and charts to better illustrate the research findings.
Questions about the research findings may be directed to Dan Heinemeier at [email protected].
About Lean Construction Institute: Founded in 1997, LCI is a non-profit, membership-based organization with a vision to transform the built environment through Lean implementation. With common language, fundamental principles and basic practices, LCI aims to increase stakeholder satisfaction and project delivery value. The design and construction industry’s productivity level has remained nearly stagnant in 50 years as other industry’s thrive, but LCI sets out to improve the industry by facilitating continuous education through their Transforming Design and Construction book series, Lean instructional training courses and the annual LCI Congress and Design Forum. LCI advocates for using a variety of tools and techniques that help promote collaborative planning, waste elimination and work-site safety. For more information, please visit www.leanconstruction.org.
About Dodge Data & Analytics: Dodge Data & Analytics is a technology-driven construction project data, analytics and insights provider. Dodge provides trusted market intelligence that helps construction professionals grow their business, and is redefining and recreating the business tools and processes on which the industry relies. Dodge is creating an integrated platform that unifies and simplifies the design, bid and build process, bringing data on people, projects and products into a single hub for the entire industry, from building product manufacturers to contractors and specialty trades to architects and engineers. The company’s products include Dodge Global Network, Dodge PlanRoom, Dodge PipeLine, Dodge SpecShare, Dodge BuildShare, Dodge MarketShare, and the Sweets family of products. To learn more, please visit www.construction.com.