Lean Construction is a way to design production systems in order to generate the maximum possible value by minimizing waste of materials, time, and effort. With Lean Construction, the focus is having work flow reliably and predictably on the construction site. This is possible only through the collaboration of all project participants during the early stages of the project. With improved communication and collaboration, the likelihood of claims for delay or changed conditions is lessened.
The concept of Lean Construction derives from the “lean production” and “lean manufacturing” models of the Toyota Production System. Many people do not know that Toyota was founded as an industrial loom manufacturer in the 1920s. At that time, looms were powered by engines, which would continue to run even after a thread broke. Toyota developed a system that would automatically shut down the loom when the thread broke, thereby eliminating the waste and defects that resulted. This system became known as the “Toyota Way.”
In recent years, construction experts have utilized many of the philosophical underpinnings of the “Toyota Way” to develop Lean Construction. According to a study published in 2013, 63% of construction firms are aware of Lean Construction, yet only 28% of those firms report implementing any of its practices. Because Lean Construction is still an emerging practice in the construction industry, one of the biggest obstacles to its adoption is a lack of education. Although Lean Construction is expanding in the private construction sector, most public agencies still rely on design-build or design-bid-build contracts in which the lowest responsible bidder is awarded the project.
Lean Construction is still an emerging practice in the construction industry, but there are standard, multi-lateral contracts that have been developed for its use, including the following:
ConsenusDocs 300: This is the first standard Integrated Project Delivery Agreement published in the United States. The owner, designer, and contractor all sign the same agreement, which incorporates Lean Construction principles. The contract creates a core team at the project management and project development levels to make consensus-based decisions to increase efficiency and decrease waste.
AIA Document C191 – 2009: This is a standard form agreement signed by the owner, architect, contractor, and other key project participants, which provides a framework for a collaborative environment. The compensation model is goal-oriented and provides incentives for collaboration in design and construction of the project. This contract also creates a team for project management and project execution comprised of one representative of each of the parties.
Integrated Agreement for Lean Project Delivery: This contract was created by Sutter Health, a not-for-profit, community-based health care provider in Sacramento, California. Like the AIA and ConsensusDocs contracts, this agreement creates a core team representing the interests of the owner, contractor, and design professional early on in the process. From there, the contract focuses on five main ideas: collaboration through design, planning, and execution; increase relatedness among all project participants; creating a network of commitments; optimizing the project, not the pieces; and coupling action with learning.
Lean Construction attempts to establish systems to reduce and eliminate risk, rather than merely transferring it. To do this, the Lean Construction model creates a system of shared risks in which the core group identifies which firms have design responsibility for a given scope of work. The Lean Construction model also combines design and construction contingencies, which are usually separate. Since Lean Construction attempts to eliminate the most common causes for change orders – lack of documentation and poor scheduling coordination – the reasons in which a contractor may obtain change orders are limited.
Another example of the Lean Construction method’s focus on collaboration is its dispute resolution system. Initially, problem solving is facilitated by the core group and, if needed, senior management representatives of the owner, contractor, and design professional. In the event that a resolution cannot be resolved internally, the core group has the option for an independent expert review. By providing for an internal dispute resolution, the Lean Construction contracts attempt to decrease the cost associated with arbitration and/or litigation.
 William A. Lichtig, “The Integrated Agreement for Lean Project Delivery,” Construction Lawyer (American Bar Association, Summer 2006).