Implementing Lean Construction in Peru

November 8th, 2006 by Hal

Peru, like many Central and South American countries is doing lean construction. COINSA is a real estate developer building for its own account and for 3rd parties. They've become a leader in their market and the Developer of the Year in 2005. The historical market was based on price. Projects were over schedule. Construction was viewed as a commodity. Firms routinely went bankrupt. COINSA decided to do lean construction to distinguish themselves from their competitors. After almost 5 years of doing lean construction they can tell others about it. They see three phases:

Early applications
Stabilizing workflow, applying Last Planner System®
Culture Change: Lean as a company way of work

Their first attempts focussed on workflow and constructibility. They introduced the idea of a "work train" (production line) for repetitive work.

Eventually the "old school" has converted to the "new school".

In their 2nd phase they started by making a strategic decision to adopt lean construction. They used their project office and a lean champion to launch the effort. On their first project they produced 550 apartment units in one year at significant cost reductions. Their next project was bigger. People were able to move into apartments while others were still under construction. Their own crews achieved 100% PPC on their tasks. Subs had lower PPC with an overall average of about 85%.

The culture change phase started with company-wide training. They encountered "old school" thinking. They provided incentives and opportunities to those people who had the best performance with lean construction. The lean engineers began to excel. They were able to hire people had some lean construction knowledge. Eventually the "old school" has converted to the "new school". During this time they had some delays in starting due to permit issues. It forced them to complete 6 units/day. Productivity continues to improve. Due to the training COINSA is providing subs their PPC is improving.

They have begun working with 3D modeling. 3D is not well known in Peru. They are also interested in using 4D models for their projects. They are also pursuing ISO 9000 quality approach for standardizing work practices.

Conclusions and Recommendations

Make lean part of your strategic plan
Name a lean leader
First stabilize the workflow with LPS, then improve efficiency
Train and develop your subcontractors. Do it at the beginning.
The trip has just one ending: be more competitive.
Lean construction will increase your capacity. Plan for increasing projects.

Benefits

Growing of the company
Seen as a different company that is very reliable
They are the leader in the housing market
Quality and safety have been improved

Participant Key Points

Market growth
Stabilize, then improve
Standardize tools. Use ISO to standardize the knowledge
Owners see them differently
Winning in the marketplace — 80%
Investing in technology and research
Training the subs
Make lean part of your strategic business plan

Questions

How do you change your production system during the time you became lean?
Provide examples of incentives you used
Provide an explanation on how lean improved safety
Who does the lean training? in-house or hired?
Provide more details on what was done to improve productivity.

Presenter Responses

Lean construction improves safety in many ways. You have less labor in one place. The detailed daily plan know at the beginning of the day what they will do that day. Doing the same activity over again gives them the chance to learn and be safe.
The production system using moulded panels has not changed during adopting lean construction.
By changing the weight of the panels they used
They provide incentives — shared savings — with the labor.
Training is done by the leader of the project. They also ask their engineers to get training.
COINSA reviews their projects annually to assess how well lean techniques have been applied along with what new tools the team develops and applies on their project. They also include measures of quality and safety.

Learn to Implement the Last Planner on Your Project

Making Lean Work for You

Messer Construction — On a Lean Transformation

Herrero Contractors — Enthusiastic Lean Construction Leaders

Construction Summit 2003

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