Even regular walks can save the construction industry billions

In some countries, this methodology is already spreading rapidly, but in the domestic construction industry, it is completely new. Market Építő Zrt. We spoke with Réka Pap, Lean management expert about the challenges and key steps involved in the pioneering role the company has been undertaking for two years now at the headquarters of the market-leading building construction company.

Lean, which originated in the automotive industry, is defined as a method of business organisation and production management that aims to make a company produce its products or provide its services as economically as possible. However, Réka Pap added: "It is basically a philosophical mindset and cultural approach, rather than a tangible system."

A huge tradition of construction overseas

Lean has attracted the interest of Market managers because it has become a popular trend in the construction industry in the United States and Western Europe. "Although it is new to our industry in Europe, it has a strong tradition overseas. Since 1995, a Lean in Construction conference has been organised in the US to showcase the results of the method through case studies from different companies, and this year Market was represented by eight people," he says.

More than a hundred American and Canadian general contractors participated in the event called Lean Construction Institute Conference (LCI Conference), organised in Detroit in October this year.

"They showed the tools, the principles and the organisational units by which Lean was introduced. They are so open about the knowledge they have acquired that they even gave us the documents of an achievement."

They could see the results of Lean first hand

Prior to the conference, Market also participated in a study tour to the US in September. During the Lean Study Tour 2023 programme, which lasted over a week, seventeen colleagues from the group gained experience in Appleton, Green Bay, San Francisco and Chicago. "The tour, organised with the help of US general contracting firm The Boldt, was designed to give us a first-hand experience of the results of applying Lean in large general contracting companies in the US."

The study tour group was made up of professionals from different positions and Market companies - in addition to Market Építő, OKM, Moratus and Vilati - "people who are involved in a Lean project or interested in applying the method."

In the US it gives prestige and is already a competitive advantage

Summing up the experience outside, he said that it is striking how much further ahead digitalisation is than here, and how much more open to change the construction industry is there, which is one of the important foundations of Lean.

"Overall, we have found that open information, transparent, people-centric communication and a high level of forward planning are the hallmarks of Lean companies in the US. There is an emphasis on everyone seeing for themselves what their job is and how it relates to other project elements."

The importance of Lean is demonstrated by the fact that its application in the US is already a competitive advantage. "Representatives of US general contractors told me at an online conference that the application of Lean is giving prestige and is being recognised in prices. The other significance, according to them, is that by applying it, a company is declaring that it has room for improvement and is signalling to its environment that it is willing to be open to change - a very important criterion."

They prefer to tailor Lean to the company culture

At Market, Lean has been gradually implemented for two years now. Réka Pap explained that Lean is usually applied in the company's core processes, but in the Hungarian company it was introduced on a project basis, in technical project management: firstly, in selected industrial and hotel developments as pilot projects. At the same time, PREBeton, a subsidiary of Market, has also started to apply Lean, mainly in the development of production processes and in pre-planning.

One of the general characteristics of Lean is that it does not radically change the company when it is implemented, but rather it is tailored to the culture of the company. "Accordingly, we want to introduce the innovations to add to what Market has achieved so far, without wiping any of them off the table. We are not necessarily Leaning the Market, but rather Leaning the Market."

This Lean method has already been proven on the Market

One of the Lean tools introduced in Market is the big room in the construction site, which is a principle of visualisation. This is nothing more than a container that is made accessible to all the actors on the project. "The big room contains all the information that is important, including the project milestones, the actors, the amount of manpower and equipment used, the goal and the current status of the project broken down by month and by actor. All this is done through large tables and BIM phase charts."

The system described above received positive feedback on the Market. "It has been my personal experience that the subcontractor post-it notes on the whiteboard during a customer cooperation have been of great service to the Market colleagues, helping them to answer questions much faster and to see the status of the project."

The big room at Market has been implemented for a single project, while the US study tour saw a construction company implement it for its own operation. "At the company's headquarters, they had all their project schedules, all their financial metrics, their strategic goals and their month-by-month results displayed in a space open to everyone."

When the introduction of a walk can save $8 million

Réka Pap also detailed another Lean method that has proven to be effective, which has also been adopted by Market. "One of our project managers started using the so-called loss walk after our overseas work trip this year. This means organising an optional one-hour walk-through of the project site twice a week, to which all subcontractors are invited."

The focus of the walkthrough is not on holding the wrongdoer responsible, but on finding solutions. "They look at the project elements completed during the period, examining their quality and the 7+1 possible losses for which the method is named. At the end of the walkthroughs, a protocol is drawn up in which everyone writes down the losses they have seen and what they can change for the next time. This creates a constructive atmosphere and greatly supports the partnership with our contractors."

He explained that the success of the Market was indicated by the fact that, although it was not made compulsory, the number of people coming to the loss walks was increasing week by week.

He also gave the example of a Canadian company that has five years of experience with loss walks. "They made it a competition so participants didn't feel obligated and the rewards motivated them. The effectiveness of this method is shown by the fact that they were able to save $8 million (about 2.77 billion forints - ed.). It makes a big difference that in many cases the problem is identified at its root cause, so the cost of fixing it is usually much lower."

It's your colleagues who tell you what will drive your company forward

Réka Pap also spoke in detail about the main principles of the introduction of the new methods. While it is a slow and gradual process to introduce Lean, she stressed that the first step is not to introduce new software, but to rely on human factors: personal discussions and joint thinking. "It's important that we don't dictate and project forward, but that colleagues themselves say what will move the company forward. When we asked how best to implement the methodology, one of our US Partners said that there is no specific solution or recipe for successful implementation, because it is more of a psychological process of relearning human communication. We have to master the ability to tune in to people in the easiest way and we will know what to do to move forward based on the impulses they give us."

Communication is therefore key to the process. "It's important to involve colleagues from different levels, including the preparer, design coordinator and construction manager, finding a common place where they can communicate." In his view, often the improved flow of information alone can speed up a project.

Although Lean is not primarily a software solution methodology, there are already software development companies that support Lean scheduling with their products. "As a result, there is already a Market project underway that we will follow up with software that we have learned on the US apprenticeship route."

It's good for everyone if this culture spreads

Based on the above mentioned experiences from abroad and the processes in place at Market, a written Lean strategy is being prepared, on the basis of which Lean training will be developed in the future. "We want everyone in the company to know what Lean is: we are talking about about 200 methods and tools in total. From these, we are trying to extract the ones that can really make Market more efficient and accommodating for him."

At the same time, Market also has sectoral objectives: they want to spread this approach among Hungarian businesses. "It's not just good for us, it's an isolated operation, but it's good for everyone if this culture spreads."