Addressing the Construction Industry\u2019s Labor Shortage With Lean Principles

How the Building Blocks of Lean Construction are Helping Contractors Get Ahead

For those working in the construction industry, the labor shortage is no new topic. It’s a widespread issue and many companies are feeling the pressure to hire and keep skilled workers. To put it into numbers, in the first quarter of 2018 alone, it was reported that nearly 225,000 construction jobs were available each month.

Unfortunately, this isn’t an issue we can just leave behind in 2018 and chalk it up to a bad year. The shortage is expected to continue in years to come.

The Impact on Construction Businesses

The effects of the shortage are felt at many levels of the business. From increased construction costs to delayed project schedules, the challenges related to the scarcity of skilled workers continue to drive costs higher and higher. This may provide a dismal outlook, but the construction industry is resilient. Many companies continue to be optimistic about the future of the workforce and are already taking steps to improve labor savings.

For those who haven’t begun planning for the shortage of workers, starting out the task may seem daunting. But by implementing the building blocks of Lean construction processes, reducing waste and saving time and money during these industry challenges is possible.

Get the Most Out of Your Employees: Understanding Lean

In a time when skilled workers are hard to come by, getting the most out of current employees is important. This is where the building blocks of Lean construction come into play.

A Lean process takes each block and brings them together to build a plan for doing business in a smarter and more efficient way. Before diving in too far, it’s important to understand what Lean means to a business.

In short, a Lean program is designed to cut out unnecessary steps that don’t add value to the overall project. This can be done by identifying any activity that keeps workers from doing the main task they are

paid to do. That could be as simple as time waiting for materials to arrive, moving equipment or locating the required tools.

An example of a common scenario on construction sites is when valuable time is wasted when crews are traveling to and from a centralized material area to look for components and tools. Often times, crew members may get sidetracked and stop along the way for a smoke break or get carried away in conversations, adding even more wasted time to their trip. But, by implementing a Lean program and reducing this waste and labor by just 5 percent, contractors can double overall profitability.

The Three Key Building Blocks for Lean Construction in a Tight Labor Market

Building Block 1: The Foundation

The foundation in the Lean construction process is to identify and reduce waste. This block can also be known as Kaizen. Kaizen, the Japanese word for improvement, is the concept of continuously improving all functions within a business. A Kaizen program is a continuous cycle and grows with each stage. During the foundation stages the focus is on identifying an opportunity, analyzing the process, and developing a solution.

This stage is heavily focused on identifying the opportunity to eliminate waste. There are a number of different areas where waste can be identified and eliminated. For commercial construction contractors, identifying these seven areas of waste can be impactful given the current labor shortage.

1. Correction of defects: Time wasted correcting errors2. Overproduction: Producing more than is demanded by customers3. Transporting: Unnecessary transporting of material or personnel

4. Waiting: Downtime experienced in the process due to inefficiencies occurring in previous steps within the process

5. Inventory: Holding more inventory than required that is taking up valuable space and incurring carrying cost

6. Motion: Excessive movement due to inefficiencies within a process

7. Over processing: Adding more to a process than is valued by the customer

SCENARIO 1

Problem: Wasting time obtaining the materials needed to do the job. Whether it is because material storage is unorganized or located away from the point of use, crews are wasting time locating or moving materials.

Solution: Implement a point-of-use solution. This will ensure that the required materials are located near the usage point, decreasing the time spent on locating and moving material.

SCENARIO 2

Problem: Skilled workers are repeatedly pulling similar sets of material to complete spaces with identical needs. This results in time wasted during site preparation.

Solution: A kitting program. This will allow for sets of material to be boxed together prior to arriving at the construction site for quicker access and identification. A kitting program will decrease employee time pulling material and allow them to move onto the next step sooner.

SCENARIO 3

Problem: Employees are doing assembly tasks that are beneath their level of expertise taking away from the more complex steps only they can do.

Solution: Utilize prefabricated materials. Electrical systems will arrive as one ready to install unit versus several small components that need to be assembled. Reducing assembly needs will provide instant time savings for crews.

SCENARIO 4

Problem: Time is wasted in the process of ordering, tracking, and paying for materials. Unorganized change ordering processes can cause delays, repeated reviews, and disputes or late payment fees.

Solution: A set of transaction solutions. A reduction in SKUs is a natural outcome when outsourcing prefabrication and assembly to your distributor. Your distributor will combine multiple parts into one SKU, reducing the number of P.O. invoices and unnecessary back office procurement activities. This allows for increased bandwidth.

Building Block 2: The Action

Once the largest area of waste has been identified and the plan has been developed, it is time to get everyone within the organization involved and execute the plan. This is also the time to pull in outside entities such as supporting suppliers who may play a role in the overall plan.

Distributors, like WESCO, have years of experience with supply chain solutions and can provide specific services to address the most common concerns in the commercial construction industry. Working closely with a distributor can be a value-added component by helping streamline and manage project implementation. After everyone inside and outside of the organization is onboard, it’s time to execute your plan.

Building Block 3: The Result

TRACKING RESULTS THROUGH METRICS AND EVALUATIONS

The last building block of the Lean construction process is to monitor and adjust the plan for ongoing improvement. At this point, the Lean processes is in the works and should be making an impact on the job site. Now it’s time to evaluate the metrics on the program.

Metrics can be determined based on what solution was utilized. These metrics can include the number of on-time deliveries or the calculation of reduction in work by the labor savings gained from the kitting program. In this stage, continue to monitor the process, adjust the plan as needed, and look for new was to continue improving the process.

An evaluation of the program should occur annually or when a significant change occurs within the process. Marking these program reevaluations on the calendar is imperative and drives accountability.

CONTINUOUS IMPROVEMENT

At this point, each step of the Kaizen process has been executed. It’s time to go back to square one and continue identifying new ways to improve everyday business.

Here is what the continuous cycle looks like:

Stay Ahead With Lean Construction

By implementing each building block of the Kaizen process, reducing the labor required to complete a job can help to make the most out of employees’ time at all levels. Developing a Lean process to eliminate waste and make every minute on the job site count can help combat the effects of the labor shortage.

With the help of an electrical distributor, completing each level of the Kaizen Lean construction can be easier than ever. The only question now is, what are you waiting for?

Take Lean Construction to the Next Step

Are you interested in implementing a Lean program on your construction site? WESCO is ready to assist you in developing a plan to assess waste and improve your productivity. Contact us for a free consultation (valued at $3,500) to see how you can benefit from a Lean program.

Contact us at supplychainservices@wescodist.com to set-up your consultation.

WESCO Distribution is a Fortune 500 global leader of supply chain solutions and Leanservices. Start implementing the building blocks of Lean construction by contacting us atsupplychainservices@wescodist.com.