Continuous Cost Improvement in Construction

Theory and Practice

Temitope Seun Omotayo, Udayangani Kulatunga, Bankole Awuzie

• Publisher: Routledge
• Year: 2022
• Print ISBN:
  9780367774585
  9781032008448
• eBook ISBN:
  9781000552416
• Edition: 1
• Topic: Tecnologia e ingegneria
• Subtopic: Architettura generale

Continuous Cost Improvement in Construction: Theory and Practice aims to provide students and practitioners with an all-inclusive understanding of strategies for adopting continuous improvement in construction cost management. This book addresses continuous improvement practices from the perspective of cost management and applies case study examples to question the readers' perspective of continuous cost improvement strategies in the project lifecycle. Continuous cost improvement practices in managing the cost of minor, major, and mega projects are all connected with decision-making tools for devising strategies for choosing the approaches for mitigating the effect of cost overruns in construction projects. Continuous cost improvement should be taught as part of modern methods and processes of construction in further and higher education institutions. This book will be key reading for all advanced undergraduate and postgraduate courses in Construction Project Management, Building and Quantity Surveying. Professionals in all aspects of the AEC industry will also gain greatly from engaging with the key concepts of continuous cost improvement throughout this book.

SECTION ABACKGROUND

1Continuous Improvement and the Construction Industry

Temitope Omotayo, Udayangani Kulatunga, and Bankole Awuzie

DOI: 10.4324/​9781003176077-2

1.1 Introduction

Between the late 1800s and early 1990s, attention was given to management practices geared towards alternative means of solving production problems and the development of new labour standards. In the process of alleviating production and labour challenges, the United States (US) government established the “Training Within Industry” service during the Second World War. Training Within Industry comprised job method training and programmes designed to train and educate supervisors on the benefits of continuous improvement in the workplace.

On the international stage, concepts and application of continuous improvement were introduced in Japan after the Second World War (Kapur, Adair, O’Brien, Naparstek, Cangelosi, Zuvic, Sherin, Meier, Meier, Bloom & Potters, 2016; Maarof & Mahmud, 2016; Suárez-Barraza, Ramis-Pujol & Kerbache, 2011). In Japan, continuous improvement is known as Kaizen, which literarily means “change for the better” (Omotayo, Awuzie, Egbelakin, Obi & Ogunnusi, 2020a; Singh & Singh, 2015). The Toyota Production System in Japan was one of the first organisations to implement continuous improvement in their production line. Shortly after the Second World War, the US wanted to encourage Japan to rebuild their country. Gen. MacArthur tasked developmental experts in the US to visit Japan for the sole purpose of helping the Japanese to rebuild. Dr Edward Deming, a statistician, was one of the experts who explored a new mechanism for creating a manufacturing workforce in Japan. Prior to the infrastructure issues plaguing Japan in the 1940s, continuous improvement had already been a culture of Japan. However, in the past 30 years, continuous improvement has transformed into a major part of the lean philosophy. Continuous improvement has not only been used in the manufacturing sector but also in other sectors, such as health care, agriculture, sport, governance, quality management, human resource management, and construction (Imai, 1992; Kapur et al., 2016; Prashar, 2014; Suárez-Barraza et al., 2009; Suárez-Barraza & Ramis-Pujol, 2010). There are many construction industry practices that are synonymous with the concept of continuous improvement. Target costing, waste reduction, and post-project reviews are being practised in many construction companies globally.

In the construction industry, continuous improvement in managing construction cost is a relatively new concept. Continuous improvement in cost management has been suggested as a panacea for the challenges of cost overrun. Many authors, such as Koskela, Ballard, Howell and Tommelein (2002), Macomber, Howell and Barberio (2007), and Omotayo et al. (2020a) viewed construction cost management from the perspective of lean construction, target value design, and Kaizen costing as an opportunity for managing construction cost. Nevertheless, there is a dearth of literature addressing continuous improvement in construction cost management. For a clearer understanding of how continuous improvement can work with construction cost management, there is a need to highlight the definition and concepts of continuous improvement and construction cost management.

1.1.1 Defining continuous improvement

The definition of continuous improvement has evolved in the last 40 years. Although the general opinion concerning continuous improvement emerged from the Japanese word known as “Kaizen”, the “change for better” mantra has blended into the various sectors of its application. Sanchez and Blanco (2014) studied the various definition of continuous improvement in the last 40 years. The following definitions were extracted from these studies.

Deming (1982. p. 2) described continuous improvement as “improving constantly and forever the system of production and service”. Deming's description of continuous improvement was from the perspective of the production system and human resource management.

Imai (1992, p. 71) defined continuous improvement as “finding a better way of doing the job and improving the existing standard”. Imai's explanation of continuous improvement addresses the non-ending training of all talents in organisations as a tool for enhancing organisational productivity and growth.

According to Bessant, Caffyn, Gilbert, Harding and Webb (1994, p. 26), “a company-wide process of focused and continuous incremental innovation” is the most effective definition of continuous improvement in an organisation.

Juergensen's (2000, p. 3) definition of continuous improvement is very generic and is applicable to any sector, namely “improvement initiatives that increase successes and reduce failures”.

Bessant, Caffyn and Gallagher (2001, p. 76) defined the concept as “a particular bundle of routines which can help an organisation improve what it currently does”. Their perspective is based on organisational growth and activity enhancement.

Dahlgaard, Kristensen and Kanji (2010, p. 445) mentioned: “small continuous changes for the better”. Furthermore, Dahlgaard et al. (2010) provided a generic micro-level understanding of how continuous improvement can be achieved in an organisation, in methods, and in processes. Small changes in organisations can be incremental and continuous.

Brunet and New's (2003, p. 1428) definition, namely “pervasive and continual activities, outside the contributor's explicit contractual roles, to identify and achieve outcomes he believes contribute to the organisational goals” includes change management in the process of continuous improvement. The authors’ definition also understands the strain of continuous improvement on the employees within an organisation and thus acknowledges the role of a continuous improvement champion.

Boer and Gertsen (2003, p. 882) viewed continuous improvement from the perspective of activities carried out within a system. For continuous improvement to fit into any system, effective planning is vital: “The planned, organised and systematic process of ongoing, incremental and company-wide change of existing practices aimed at improving company performance”.

According to Chang (2005, p. 414), “The continuous improvement cycle consists of establishing customer requirements, meeting the requirements, measuring success, and continuing to check customers’ requirements to find areas in which improvements can be made”. Chan's perspective of continuous improvement considered incremental client satisfaction. In exceeding clients’ expectations, there needs to be a constant review of what went wrong and right and feedforward into future activities.

Bhuiyan, Baghel and Wilson (2006, p. 671) defined continuous improvement as a “culture of sustained improvement aimed at eliminating waste in all organisational systems and processes and involving all organisational participants”. Their inclusion of waste reduction in continuous improvement practices stems from lean thinking in organisations. Lean involves waste reduction and it is an integral part of continuous improvement.

Manos (2007, p. 47) definition of the concept as: “subtle and gradual improvements that are made over time” also considers change management in the process of continuous improvement and development. Although Manos's definition seems generic, there is a clear indication of incrementality in the process of attaining continuous improvement.

Overall, continuous improvement may seem to be a generic terminology. Yet, in its application, there are focal areas that articulate its innate meanings. Continuous improvement is the process of incrementally enhancing structures, services, products, quality, processes, and policies. For example, when continuous improvement is applied in an organisation, change management must be considered. In activities and processes, a systemic approach will be adopted. Continuous improvement is a philosophy that cyclically creates a steady non-ending change with the purpose of continually improving systems, methods, and processes.

1.1.2 Deming's cycle

Deming's cycle indicating the plan-do-check-act (PDCA) principle was designed by Dr Edward Deming as a tool for implementing continuous improvement within activities, as indicated in Figure 1.1. The first phase of continuous improvement must start with the identification of problems, waste, or non-value-adding activities. This will be followed by a plan to reduce the identified setbacks.

Figure 1.1 Deming's cycle.

Source: Authors.

The planned solutions are tested in the “do” phase. A testing stage is required to fully understand the effect of the solution on a small-scale level before implementing it on a larger scale. Therefore, there is a need to check and analys...

Table of contents

• Cover Page
• Half-Title Page
• Title Page
• Copyright Page
• Contents
• List of figures
• List of tables
• Foreword
• Preface
• Acknowledgements
• SECTION A BACKGROUND
• SECTION B STRATEGIES
• SECTION C CASES
• SECTION D DECISION TOOLS
• Index