Lean ‘6 Ps’ to fight the labor ‘blackout’ in construction

The construction industry in Brazil has recently been facing an unusual kind of shortage in a country that has suffered from the effects of unemployment for decades: a labor “blackout.”

The thing is, construction companies have recently found themselves in the following situation: they want and need to hire, but they increasingly face enormous difficulties in finding qualified labor available to work. And this has, of course, created all kinds of problems for the sector.

So much so that it has even given rise to the expression “labor blackout,” now common in engineers' circles, who borrowed the famous term used for sudden power outages to sum up the scarcity of this other, equally important kind of energy: that of the workers on construction sites.

The causes of the phenomenon are already known. They have to do with the resumption of construction projects and the post-pandemic rebound in business, in a less recessionary economic scenario. As a result, construction companies took projects off the shelf, sped up their drawing boards, ramped up launches, started or resumed projects...

The result was a race for labor, causing good available professionals to disappear. Those who are good are already busy. This was made worse by the lack of workforce renewal in construction, a phenomenon well known in more developed countries and that is also happening in Brazil.

Another explanation often repeated in the industry is that some of the people who, in other times, traditionally went to work in construction are now choosing other types of careers. Whether because of the adverse and often unsafe conditions on job sites, or because of the alternatives now available in new business models, attracting workers who traditionally would have gone to construction sites and would have become the future skilled construction professionals.

On the one hand, this raises costs and creates immediate bottlenecks, but it brings a highly beneficial element, which is to require the sector to accelerate initiatives to improve productivity and working conditions.

The good news is that, while these contextual factors persist, improving management can be an excellent way to minimize the difficulties inherent in this blackout.;

For example, by implementing and deepening what we will call here the “6 Ps.” These are six fundamental elements for the construction industry that, if worked on in a lean way, can rationalize, balance, and even reduce the pressure for more labor at construction companies.

Productivity

The first “p” refers to the need to optimize productivity on job sites. That is because, by producing more and better, construction companies will tend to avoid the need for more labor. This may seem obvious, but it is not so easy to put into practice. To do so, it is necessary to deepen lean concepts and practices that have always reinforced the productivity factor in every type of business, including the construction industry.

Basic lean concepts can bring large productivity gains, such as basic stability, analyzing the “4 Ms” in advance, that is, the needs for Manpower, Materials, Method, and Machines, equipment, and tools. Applying 5S, organizing the workplace, is also a basic factor in increasing productivity, quality, and safety.

Lean also brings the principle of a detailed analysis of the work itself, through tools such as the spaghetti diagram (focused on movements) and process analysis (aimed at eliminating unproductive time and waste). Always, of course, with the participation of workers and foremen, establishing more productive ways of performing tasks through standardized work.

Not to mention the ever-growing need to optimize logistics and supply chain processes to eliminate waste in handling and storage, with the use of teams dedicated to internal logistics, kits, supply routes, advance preparation of materials, etc.

Prefabrication

The second “p” has to do with making more intensive use of the ever-greater possibilities of using industrialized and prefabricated components, reducing the need for labor on job sites and increasing the content produced in factories, with greater quality, safety, and productivity.

However, not in a “pushed” way, that is, manufacturing and pushing out more and more, as usually happens, but in a way that is “pulled” by the assembly needs of the project.

In other words, analyzing and understanding demand as precisely as possible at the “front end” of the job site, in order to produce and deliver neither more nor less, but what is needed, connecting with the real needs of the field.

This also involves implementing truly lean logistics and supply chain, in the sense of getting all components to the job site in the right quantity, at the right place, and at the right time (just-in-time), always seeking to reduce flows, waiting, inventories, and handling.

Project design

The third “p” means a lean connection between design and construction that can be made so as to also contribute to greater productivity, integrating the design of the product and of the construction process.

With lean, we can optimize this connection through technical solutions that generate greater constructability and, at the same time, add more value for the customer. For example, by using value engineering and target costing techniques that seek a greater perception of added value from the end customer's point of view. At the same time, reducing the project's costs and promoting improvements related to management, technologies, and construction systems.

In this context comes the growing use of Building Information Modeling (BIM), which brings great benefits in optimizing the design process. And it has enormous potential, still little explored, for integration with lean initiatives. For example, enabling the simulation and optimization of the construction process as a whole.

This means developing an optimized and economical design in terms of the use of equipment, technologies, and construction systems that use as little labor as possible.

Planning

It is also important to understand that the world of construction, because it is heavily based on non-repetitive projects, depends enormously on robust planning.

In the lean system, this means incorporating the concepts of continuous flow between activities. And always prioritizing planning this in such a way that there is a uniform pace of progress between trades, without waiting.

Similarly, this also needs to happen in what we call “micro planning,” the kind that happens right there, in the day-to-day of the job site. This is so that all the conditions are in place for the work to be productive and for the stipulated deadlines to be met.

Partnership with contractors

The fifth “p” refers to a new partnership with contractors, who are important suppliers of labor. This means establishing a different kind of relationship from the one that usually exists.

The thing is, construction companies traditionally hire contractors and completely delegate the management of the work to them, focusing their efforts on inspecting and demanding that deadlines be met. It is necessary to go further.

These contractors rarely have the capabilities and technical knowledge to improve management and optimize the use of labor. As a result, they are always under pressure to use more and more workers than would be necessary, a fact that ends up significantly reducing their margins or even “breaking” these contractors over the course of the project.

Thus, in a new kind of partnership, the construction company should stay much closer to the contractor to effectively help it improve productivity and labor management.

For example, supporting contractors in correctly sizing the team, using Standardized Work to design day-to-day execution and logistics at the workplace, in order to reveal and solve problems, eliminating bottlenecks and waste. Providing guidance on visual management and Daily Management (DM), so that the contractor can have a clearer, more precise, and more immediate sense of what is happening on the job sites.

Also helping with everyday issues, such as tax problems, the application of labor laws, relationships with suppliers... Always with the aim of strengthening a partnership so that the contractor delivers greater quality and, consequently, productivity.

And, why not, supporting the contractor in preparing and analyzing costs, so that there is a true win-win between the parties. And not in the sense of what more traditionally happens, which is the daily pressure to cut profits and deadlines (“squeezing” the contractor).

People

The sixth “p” refers to understanding how to develop “people,” so that they produce more and better.

To that end, it is essential first to develop the construction companies' leaders, so that they avoid command and control, still common in this sector, and start guiding their team members to go to the gemba with the clear intention of developing their own team members, so that they have the initiative and the means to solve problems as soon as they occur.

This also presupposes developing the people management departments of construction companies, bringing in concepts such as safety, ergonomics, motivation, performance evaluation, etc., elements that are basic in other sectors but still poorly structured in many construction companies.

These “6 ps” obviously do not work miracles. Nor can they immediately change the contextual and structural causes that today generate this “blackout” affecting the construction industry.

However, they can greatly minimize this pressure, reducing already chronic problems that affect construction companies. For example, delays in project deadlines or even financial impacts that bring companies to the brink of bankruptcy because they do not have people available to execute projects that have already been budgeted and sold.

For all these reasons, intensifying the understanding and execution of these 6 “ps” is almost mandatory, or even a matter of survival. Always from a lean perspective.

Is the shortage of qualified labor already affecting your project? Lean construction consulting helps your team produce more with less, standardizing processes, reducing rework, and increasing productivity. Don't let your project come to a halt: talk to our consultants and prepare your team for the future of construction.