Performance measurement in Lean Construction

Abstract

The construction industry accounted for approximately 16% of Norway's GDP in 2018, and a well-functioning and efficient industry is thus of great importance (Øye, 2019). However, it is commonly recognized that the productivity and efficiency in the construction industry have been stagnated for a long time. As a result, more attention has been drawn towards figuring how to counteract this negative trend. During the past two decades, Norwegian construction companies have implemented various practices and methodologies aimed at their performance, where one of these practices is the Lean methodology. During this period, the Lean Construction has grown in prominence and is considered one of the most appropriate initiatives to improve performance. In addition, some researchers have claimed that by conducting performance measurements, it is possible to identify areas for improvements. Thus, this thesis will try to gain a better understanding of how performance measurement is used in Lean Construction by investigating the formal structures implemented and used for measuring performance and how this is affected by informal conditions. Hence, our research aims to answer the following two research question: - How is performance measured in Lean Construction? - Why, or why not, should performance be measured in Lean Construction? Our research is based on an exploratory case study of Veidekke ASA, where Lean Construction has been used since early 2000. This has provided us with an in-depth understanding of the phenomenon by conducting 18 semi-structured interviews, six observations, and participation at LC-NO seminars. The findings from our research revealed that tools and systems must be used adequately and in a coherent matter to conduct performance measurements with the aim for continuous improvement. Moreover, informal conditions must be taken into consideration and focused upon in order to optimize the potential outcome. However, our thesis concludes that there is not a yes/no answer to the question of if performance measurements are in accordance with Lean thinking. This is because our findings demonstrate that this highly depends on several aspects and conditions that need to be addressed, such as what the goal of the measurements is.