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How To Increase Construction Labor Productivity Through Lean Culture


Constructing The Lean Culture Timeline

California-based Pankow Builders' Lean initiative has been in the works since 2004. Beginning with original membership in the Northern California CoP, Pankow began developing its Lean strategy through co-location and training on Sutter/CPMC Projects. By 2008, the company had begun revitalizing internal management to successfully implement this cultural shift.

Fast forward to 2014. Pankow began implementing internal strategy to help pinpoint and eradicate wasteful practices from construction projects while generating greater value. In 2015, creation of the Lean Strategic Goal Committee helped implement and continue this culture.

This year, Pankow has been focusing on bringing Lean thinking to the field. In 2016, the firm introduced field crew training to the formal Lean program. The intent is to build efficient, quality and safe job sites and efficient, standardized processes throughout.

The company’s Last Planner task system begins with a General Contractor’s Master Schedule informed by both historical data and the specific requirements of each project. These are followed by Pull Schedules that set up and regulate the next six to eight weeks of work; weekly work plans and six-week look-ahead schedules; and daily subforeman meetings where foremen and GC leadership gather to review the day’s schedule, the next day’s plans and improvement ideas.


The construction industry has been facing a downturn in productivity for the last 52 years, and construction firms are increasingly turning to improving employee relationships and building strategy to “flip the curve” of the market’s downturn. The key is ensuring every team member is invested in the success of each project, and equipped to make that success happen. 

Enter Lean culture, which is about becoming a learning organization in pursuit of continuous improvement. This approach focuses on employee engagement and each individual's ability to identify and eliminate waste. Lean reduces time spent on-site and in construction while establishing an expectation of transparency. It allows creativity and efficiency to flourish, increasing labor productivity. Part of the process is shown above and below.

But revolutionizing the construction industry doesn’t happen overnight. Here’s how one firm has been making it happen.


"Lean helps us engage the power in people, and it gives us a way to bring everyone in the organization—from senior leadership to workers on the job—to bring their best ideas to impact operational excellence," Pankow president and COO Dave Eichten said.

By hiring and retaining a long-term workforce of diverse, dedicated employees whose passions and relationships to each other are nurtured and challenged, the firm fuels efficient problem-solving on individual projects and in the construction industry as a whole.

These are executed through companywide Study Action Teams, a residual of the last two years’ daily Lean Huddles meant to familiarize employees with the industry’s eight wastes and four criteria of Lean improvements while providing dedicated time to develop creative solutions to improving the company and job-site environment.


Accelerating The Return On Investment

The process often accelerates return on investment for clients.

Take the Palo Alto Medical Foundation Mills Peninsula Health Urgent Care. Pankow focused primarily on two things: team culture and engagement during pre-construction budgeting and investigation; and engaging with technologies in Berkeley’s Project Production Systems Laboratory, such as integrated project delivery, Building Information Modeling planning and execution, and alternative energy solutions.

Working closely together on an unorthodox, team-oriented approach to a construction project and new technologies and strategy permanently deepened co-worker relationships and crafted a building with greater precision and less waste.

The Last Planner System is already in major California cities, including LA’s Metropolis Residential Tower and Ford Theatre, San Francisco’s War Memorial Veterans Building and Beverly Hills’ Montage Hotel.

To learn more about Bisnow partner Pankow Builders, click here.