Efficiency versus effectiveness in construction supply chains: the dangers of “lean” thinking in isolation

Abstract

Purpose To illustrate the potential danger of applying “lean thinking” discretely and indiscriminantly in a project environment with high levels of complexity and uncertainty. Design/methodology/approach Insights are presented from two case studies of private residential construction projects which the authors believe are indicative of recent efforts to reduce the cost of construction activities. Findings Evidence was found of attempts to remove capacity in transportation, stockholding and on‐site labour. Some of these attempts were logical and resulted in cost‐savings but others were illogical and resulted in reduced levels of responsiveness and flexibility to respond to the uncertainty which is a characteristic of most construction projects. Research limitations/implications Further research is required to quantify the impact of discrete improvements in functional aspects of supply chain projects and the conditions in which lean thinking can be put to best effect. Practical implications Firms operating in the construction sector need to pay greater attention to the impact on the effectiveness of supply chain projects of achieving cost savings in discrete activities. Originality/value This paper challenges conventional thinking with respect to the application of lean principles to the construction industry and calls for greater awareness of the project‐centric nature of the construction industry and the application of lean thinking therein.