Is Agile applicable to the Construction industry? If so, how can its practices help the construction project management process? Find out in our guide below.
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Agile has become one of the most famous approaches to managing projects nowadays. Various industries, ranging from digital solutions to even complex industrial products, have started implementing its practices.
What about construction management, though? How can something as valuable as building a bridge or an oil pipeline rely on Agile project management to be completed? In truth, it's not very likely.
However, that doesn't mean that Agile can't help the construction industry deliver projects more successfully.
Let’s dig deeper into:
Before we answer this question, let's first briefly look at the traditional construction process.
The construction project lifecycle usually goes through the following phases:
Also, before the Design phase can begin, there is usually a shorter Conceptualization stage, which includes gathering the project's requirements.
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As you can see, the process is very linear, with no other stage beginning before the previous one is complete. After all, you can't build the second floor of a house without first laying the foundations, can you?
In reality, Agile is mostly applicable to the Planning (Design & Pre-construction) phase, where the rough construction work has not started yet. There, the focus of Agile construction teams is to create an iterative work process and frequently deliver value while being adaptive to changes. Through sketches, site plans, etc., they aim to collect initial customer feedback as fast as possible to ensure that requirements have been properly communicated. This allows them to adapt to changes early in the process, which is a lot cheaper in an industry such as construction than doing reworks later down the line.
Another technique that Lean/Agile construction teams use is to break down plans into more manageable pieces and progressively elaborate them as they get closer to execution. This is known as the Last Planner System (LPS), where the final plans are prepared by those responsible for executing the work. Just like any Lean/Agile project management method, it promotes "systems thinking" rather than "local optimization". The approach focuses on "pull planning", where only the most critical work that can be done is considered. As a result, this contributes to the creation of an environment of shared leadership.
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As construction is one of the most complex industries that often create products of great public importance, naturally, the risk is extremely high. After all, it's far from uncommon for construction projects to be delayed and go over budget. Due to that, there is an increased need for enhanced communication, process visibility, and adaptability to emerging issues.
Below, we will discuss some common challenges the construction industry faces and see how an Agile approach to project management can help solve them.
A challenge that construction companies often face is the inability to properly track their processes from concept to execution, resulting in an environment of chaos. Often, there are a lot of "he said, she said" type of status updates with teams tracking their work in endless spreadsheets. This makes the already complex processes even more cumbersome.
To deal with this problem, Agile preaches visualization in every step of the workflow. In reality, this can be achieved with the integration of Kanban boards where Agile construction teams can visualize the stages (and substages) of their work process. Eventually, these boards will turn into value stream maps, providing teams with the ability to quickly discover constraints, eliminate waste, and promptly react to emerging issues.
Furthermore, making the work process more transparent helps bridge gaps between planning and execution. As mentioned above, the Last Planner System brings forward the concept of creating plans on multiple levels, which are then progressively elaborated. To bring that to practice, Agile construction teams can use multiple interconnected Kanban boards to connect the dots between setting up project milestones and the actual work-level execution.
For example, in Kanbanize, we do that by introducing both Strategic and Team Kanban boards. There, construction companies can break down their high-level plans into work packages and connect them with the teams responsible for their further elaboration and delivery.
This creates a system for easy project status communication between all concerned parties and tracking the progress of the different work activities on multiple team Kanban boards.
Ineffective communication is given as one of the main reasons for many failed projects regardless of the industry. No wonder that Agile teams put forward “Individuals and Interactions” before “Processes and Tools”. However, due to the high complexity of the construction industry's work process, there is often inadequate communication and a lack of accountability.
Integrating regular feedback loops to sync progress and discuss issues is Agile's way to solve that. For example, Agile construction teams engage in daily meetings where they present what work has been completed, what they are planning to get done, and discuss anything standing in their way to accomplish that.
This keeps everyone on the same page and ensures that any blockers are revealed as quickly as possible. Team members are also encouraged to get into follow-up conversations after the meeting and help each other if somebody is stuck.
Another Agile best practice that construction teams can successfully adopt is the integration of regular Service Delivery Reviews. After completing their weekly, bi-weekly, or monthly plans (preference to the shorter time frame), they can engage in lessons learned sessions, bringing up issues and suggesting improvements - related to both the execution and management of work. The idea here is to tackle more broad topics in the process while they are still relevant to the project.
Team members are also encouraged to provide input to construction managers and collaboratively decide how to make work processes better and faster. This contributes to an endless cycle of continuous improvement and a safe environment where people can freely voice their opinions.
Regular delays in construction projects are far from an exception nowadays. A study from Mckinsey shows that large projects typically take 20% longer to finish, which results in 80% cost overruns. In contrast, another research shows that only 25% of projects came within 10% of their original deadlines.
Of course, the reasons for those delays can range from inaccurate budgets to problems with contractors. However, another cause lies within unstable and cumbersome processes that lead to less predictability, and this is where Agile has a solution to offer.
For example, construction teams can use different Lean/Agile metrics to record how long their work activities take to flow through their entire process (lead time) and different parts of it (cycle time). Furthermore, throughput data shows how much work is getting done in a particular reporting interval, which helps produce better forecasts of what can be completed on average in the future.
Other than that, in Kanbanize, you can daily monitor your work in progress through the Aging WIP chart. The tool stores historical cycle time information from your process and helps you track how certain tasks are aging day by day. Based on this data, you can spot work items that accumulate risk of deviating from their historical cycle times and then take necessary actions early in the process, before the delays occur.
In addition, Cumulative Flow Diagrams can also help Agile construction teams track their workflow's stability and see where too much work gets cluttered. This can help them reveal bottlenecks and optimize their process efficiency.
Another reason for extensive project delays and cost overruns in the construction industry is the accumulation of constant rework. For example, a study shows that around 30% of the work performed by construction companies is actually reworking.
Lean/Agile techniques aim to deal with that by introducing regular and short quality assurance steps in the project lifecycle. Usually, good practice in Lean is to shorten as much as possible or even remove altogether the big Quality Control stage of a given output. However, when managing construction projects, that might not be possible. Still, by visualizing and implementing frequent monitoring steps to ensure quality is continuously built-in, you will react to issues faster and reduce the amount of excessive rework that causes overspendings and project delays.
According to KPMG research, the next-generation construction company has the following distinctive elements:
As one of the main pillars of agility in terms of project management, transparency is foundational for achieving organizational agility in the construction industry. Once you achieve that, you can gradually start looking for other enhancements such as efficiency improvements, finding better ways to track plans, etc. This is exactly what a Lean/Agile method such as Kanban preaches - "Start what you do now" by visualizing your processes first, and then "pursue incremental, evolutionary change".
The theory is an excellent first step, but when it comes to implementing Lean/Agile practices in the construction industry, you need to see how things happen in practice too. That's why it's time we back up everything said with a real-life case study of a construction company that improved its process efficiency and project delivery with Kanban's help.
Suffering from ineffective communication, lack of process transparency, communication issues between various teams, struggle with revealing waste in the system, etc., the organization's management turned to Kanban for solutions.
The adoption of its practices provided the company with some immediate benefits, including:
of Using Kanban in the Construction industry.
Even though the construction industry is highly sequential and complex, Agile finds its way even here. Some of the major problems that an Agile approach to project management helps construction companies solve include:
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