Building competitive advantage with lean thinking

INTERVIEW - We spoke with the CEO of a construction company in Dubai to learn about the competitive advantage lean thinking is giving them.

Planet Lean: Tell us about ECC, please, and what led you to lean thinking.

Kareem Farah: Engineering Contracting Company was founded in 1975 and is one of the long-established contractors in the United Arab Emirates. The fundamental attributes of our corporate ethos are quality, transparency and sustainability. It is important to stress that we intend to grow by innovating rather than just trying to continuously increase our market share: we strive to offer our clients cost-effective solutions and streamlined service delivery. This is only possible because we are working hard to continuously improve our processes: the principles of lean construction define what ECC wants to achieve as an organization. Efficiency is becoming an essential requirement for organizations of all kinds, and we are investigating new methods and technologies that will simultaneously improve our construction capabilities and our profitability.

PL: What are you doing to bring people on board?

KF: We started by introducing team leaders in our departments to the principles and techniques, in order to build an understanding of what would be needed in the future. After that, we selected 30 people to take part in a three-day workshop and better understand how lean could make our processes more efficient. Trainers from the Lean Gulf Institute were hired to support our improvement efforts: their work included the introduction of new construction methods, work practices and technologies, which would help us eliminate waste and speed up processes throughout ECC. The training was key to generating interest in departments across the company, from sales to planning, from site management to project management. As more people in these business areas learn to implement the new procedures, our hope is that it will become easier and faster to roll out the changes across other teams and departments.

PL: What practical steps have you taken so far to improve ECC's processes?

KF: We are at the beginning of our journey: lean principles are being implemented in one of ECC's projects in Dubai, Mirdif Hills. It is our pilot project, aimed at improving ceramic tiling activities. We will start broadening the scope of the transformation as soon as enough employees become familiar with lean thinking and practice. We certainly intend to bring lean to all our projects and processes in the future, but we understand that this has to be a gradual process, to give people time to digest the new way of working and thinking and to ensure that we are still delivering the best quality to our clients.

As part of our initial improvement efforts, we developed several value engineering standards. Value engineering allows us to understand the requirements of a construction project and strategically aim to deliver them at every phase of the project, with an emphasis on quality and cost. We have managed to build these values into the way our employees think, which ensures the success of the project.

PL: Can you tell us more about the pilot project?

KF: The team responsible for the ceramic tiling project got together to carry out a value stream mapping exercise to identify activities that did not add value. Several ideas for kaizens came out of it, with the initial goal of reducing the time spent on NVA activities from 7,020 minutes to 5,400 minutes.

We made improvements to the process and to the logistics supporting the tiling work. As far as the process is concerned, we managed to increase our productivity from 625 square meters of ceramic tiles per day to 1,000 square meters. We did this by:

• Eliminating the rework associated with placing and removing the protective sheet that covers the tiles, by changing the work sequence to ensure the tiles are not damaged during the process.
• Using visual management to monitor subcontractors' work, with a simple “planned versus actual” format.
• Reducing the subcontractor's cycle time for laying tiles from 27 minutes to 20 minutes and reducing by 50% the number of cut pieces that cannot be reused (from 2 square meters per apartment to 1 square meter). We did this by deploying a water-jet cutting machine.

We also managed to reduce our inventory from five days to one day, by improving replenishment with a supermarket system (so that the right quantity of the right material is supplied at the right time, close to where the tiles are being laid) and by implementing 5S to better organize the work area and hand it over to the next shift in good condition.

PL: How would you define the attitude of ECC's leadership toward change?

KF: As ECC's management team, we constantly strive to update our mindset so that we can help the organization maintain its track record of delivering projects on time and cost-effectively. We always ask ourselves how the company could be more innovative and try to empower people on the front line to adapt our processes to changing circumstances. At ECC, we lead with innovation and have done so from the start - as a company, we are aware that we must adapt to the dynamic changes of the market. As leaders, we have embraced lean principles because we believe they will enable ECC to overcome any challenges we may face in the future as the construction market continues to evolve. There is no doubt that the most efficient companies will be the ones that adapt most easily to changing market conditions.

PL: Speaking of market conditions, what competitive advantage can lean bring to ECC?

KF: Lean helps us be more efficient and streamline our operations, because non-value-added activities are minimized, delivery quality is improved, and shorter lead times result in cost reductions. There is a lot of competition in the construction industry, but there are few companies that offer great quality at a lower cost. Developers are beginning to see the benefits of working with companies that apply lean ideas, because these are the ones that will thrive.

Our lean way of working brings considerable benefits to our clients. At ECC, for example, we have brought together all the parties involved in the process (the developer, the contractor and the architect). Ensuring that these key people work in sync makes commitment to the project a top priority for all of them. It also helps bring more clarity to the work, which reduces risks and unnecessary costs. Another thing we do - inspired by lean teaching on the voice of the customer - is offer clients a range of cost-effective alternatives they can consider and choose from before we start construction.

Adding value to projects is now a key element of any new ECC development: one example is creating show apartments and villas for our clients at no extra cost (this has the added benefit of enabling faster decision-making on materials). We have seen customer satisfaction increase and our relationship with them grow stronger.

PL: What do you think will make the transformation successful at ECC?

KF: The construction landscape is evolving in such a way that companies that are not lean will soon be left behind. It is clear to me that changing is not just a challenge, but a necessity to survive (and hopefully thrive) in the near future. To achieve a lean turnaround, I believe a company must commit to change at the highest levels and in every department. It is also increasingly important to involve external stakeholders: subcontractor efficiency is becoming an integral part of every lean company's plan. We have also made the executive decision to integrate BIM (Building Information Modeling) into our projects and operations going forward, because it enables greater operational efficiency, significant cost savings and the best possible quality for our clients. BIM is another step toward becoming a model for lean construction. We believe it is the game changer in our industry. Sustainability in a competitive market such as the United Arab Emirates requires early adoption of technology to avoid mistakes and remain cost-effective at every stage of operations: ECC is an established contractor in this country, but that does not mean we want to stop evolving.