Assessment 1 Details: This Article summary assess your knowledge of key content areas of project delivery methods and contract management. Attached file is the Article please refer to it Word count sh

a French contractor’s experience Zakaria Dakhli Department of Civil Engineering, Ecole Centrale de Lille, Villeneuve d’Ascq, France and Department of Research and Development, Rabot Dutilleul, Wasquehal, France Zoubeir Lafhaj Department of Civil Engineering, Ecole Centrale de Lille, Villeneuve d’Ascq, France, and Marc Bernard Department of Research and Development, Rabot Dutilleul, Wasquehal, France Abstract Purpose– While many procurement systems govern the construction sector, Design/Bid/Build is still prominent among the French building actors. The research applies Lean thinking (via a kaizen event) to the bidding phase of a building construction company to improve its bidding outputs. Design/methodology/approach– The method used in this study is “Action-Research”. A two-month preparation phase was needed to prepare for the kaizen event. The results were based on an assessment conducted after 6 months of the kaizen event. Performance was measured following selected indicators related to ‘Time’, “Economical Impact”, “Quality” and “Sustainability”. Findings– The Lean implementation had positive side-effects on the company’s organization and strategy as well. Practical implications– The findings of this action-research project can be used to help researchers and practitioners assess the potential application of Lean in the bidding phase. It also provides insights into the importance of the cultural and existing practices for a successful Lean implementation. Originality/value– A few research projects investigated the application of Lean thinking in bidding as it is considered as a wasteful process. However, waste can also be organized. The research proves that bidding can benefit from Lean thinking. KeywordsLean, Performance indicators, Change management, Bidding, Lean implementation, Building construction Paper typeResearch paper 1. Introduction The current economic situation in France is characterized by a fierce competition among companies, especially in the construction sector. Indeed, the investments made during the past five years have stagnated ( Figure 1 ). The number of residential projects dropped significantly from 4,519 thousands in 2005 to 3,117 thousands in 2012. The same decline was noticed in non-residential projects ( Figure 2 ). As a consequence, construction costs increased during the past five years.

The employment was also affected because of the decrease in demand. All those factors make the construction industry under pressure in France due to the tight possible margin. The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/2040-4166.htm Application of lean 153 Received 12 March 2016 Revised 14 August 2016 Accepted 14 August 2016 International Journal of Lean Six Sigma Vol. 8 No. 2, 2017 pp. 153-180 © Emerald Publishing Limited 2040-4166 DOI 10.1108/IJLSS-03-2016-0010 As the number of projects undertaken is decreasing ( Figure 2 ), contractors (CM/GC) try to innovate and to rethink their approaches to stay competitive. For instance, Ballesteros-Pérez et al.(2014) address the need to improve contractors’ bid by implementing a Smartbid BTFM (Bid Tender Forecasting Models) to estimate future competitor’s behaviours. Ho and Hsu (2014) investigated the bid compensation theory and revealed the patterns behind offering a compensation to encourage contractors to make extra-effort in their offering. Other studies 0 50 100 150 200 250 2002 2004 2006 2008 2010 2012 2014 Investment (Billion euros) Year Sum of activities Specialized construction Buildings Civil engineering Source: Adapted from INSEE 1 Figure 1.

Investments made in the construction sector in three different activities 0 100 200 300 400 500 2000 2002 2004 2006 2008 2010 2012 Number of projects undertaken (thousands) Year Residential projects Non residential projects Source: Adapted from INSEE Figure 2.

Residential and non-residential projects undertaken in France IJLSS 8,2 154 explained the interactions between the different stages in a construction project. Parvanet al.

(2015) pointed out the loss behind inefficient communication between the design and construction phases. He stated that as much as 20 per cent of variability in overall project costs is due to this design-construction interphase.

The bidding phase operates as a link between the design and construction. If well undertaken, it can provide a significant improvement for project outcomes. However, this phase is generally underestimated in the construction practice. This research focuses on the enhancement of the bidding phase using the Lean theory via a kaizen event with the purpose of improving time, economic impact, quality and sustainability. Those indicators are described more in details in the “Research methodology part”.

The next part (Sections 2-6) concerns a literature research linked to the main concepts linked to the research project. Afterwards, the sections introduce the context of the study and the research methodology. Then, the “result and discussions” section presents the impact of the kaizen event after 6 months of the Lean implementation in the bidding phase of the contractor.

2. Lean theory Lean management is a system that aims to generate value to the client while eliminating the waste in the value chain. Lean concept emerged from Toyota Production System (TPS) in the 1950s. TPS, initiated by Taiichi Ono, was a major shift in process efficiency following the mass production system established by Henry Ford ( Liker and Meier, 2005 ). “TPS” was seen as a more flexible system that allows more control and change along production lifecycle ( Marksberry, 2011 ).

In 1992, Womack and Jones studied the TPS system. They assigned it to the term “Lean” in their book “The machine that changed the world”( Womacket al., 1990 ) and established a set of principles for Lean thinking ( Womack and Jones, 1996 ):

•Identify the value for the customer: Be clear about what the client wants. Product characteristics should reflect the client needs.

•Identify the value chain and eliminate wasteful processes: Characterized by non-value added tasks – once the client requirements are clearly identified, all the processes should be directed towards creating the value desired by the client. Waste is associated to any activity that does not create value for the client or any activity that is not necessary/needed for value creation. Based on this definition, three types of activities could be distinguished: value added activity, activity necessary for value creation and non-value adding activities.

•Create a continuous flow: The creation of a continuous flow is the next step once the process is mapped. The objective is to set the production rhythm and to maintain a steady flow state.

•Seek a pull system based on the customer demand: Lean system is a pull mechanism where production is activated by the client demand. Push systems where the production is not triggered by client demand generates waste in different manners (inventory, over-processing, etc).

•Set a continuous improvement process to seek perfection: Lean is about enhancing the system permanently. A continuous improvement system should be included.

2.1 Kaizen Kaizen is a Japanese term that stands for “good change” and is one of the techniques used in the last planner system (LPS). Kaizen events are used to implement a continuous 155 Application of lean improvement by different companies. Over time, new standards and procedures will be created, and resisting the change will become harder ( Ortiz, 2009 ). According to Suárez-Barraza and Rodríguez-González (2015) , leaders of some business understand continuous improvement more formally as: “a continuous, incremental improvement of an activity to eliminate waste, unevenness, and unreasonableness and create more value”.

Kaizenadds an additional “human element” that all stakeholders, not just management, must be involved in such change ( Knechtges and Decker, 2014 ). Ikumaet al.(2011) , for instance, presented a case study where a kaizen event was used in a modular housing manufacturing facility. The changes resulted in a 16 per cent increase in value-added activities and increased the framing crew’s overall output by 55 per cent.

In his article, Forbes (2001) talks about the challenges of implementing a continuous improvement process in the construction industry. He stated that: One obstacle to the transformation is perhaps the disconnect between the ultimate customer, the building owner, and the suppliers, that is, the designer and the contractor. In most enterprises the customer can readily evaluate product or service quality through simple points of reference. On the other hand, Alarcónet al.(2005) presented a set of barriers to implementing a Lean philosophy in the construction sector, lack of time for implementing new practices in the projects, lack of training, challenge to create organizational elements, lack of self-criticism to learn from errors, respond to some deficiencies, low understanding of the concepts, low use of different elements, inadequate administration, weak communication and transparency and lack of integration of the construction chain.

The challenge is that there is a lack of experimentations of the effect and outputs of kaizen events ( Suárez-Barrazaet al., 2011 ). This is more prevalent in the construction industry where Lean management is introduced slowly. In addition to that, kaizen events are generally engaged strategically with top management approval in processes identified as bottlenecks. In construction, however, the stake is to identify those bottleneck in the value chain of construction, which is a difficult task, as many stakeholders are involved in the act of construction.

3. Lean construction After the noticeable benefits of lean theory in the manufacturing industry ( Khanchanapong et al.2014 ;Belekoukiaset al., 2014 ), lean was adopted by different sectors, among them are health care ( Crema and Verbano, 2015 ) and IT ( Hickset al., 2015 ). For the construction sector, Koskela wrote about Lean construction (LC) in 1992. He analysed in his report“Application of new philosophy to construction”( Koskela, 1992 ) the potential applicability of lean principles to the construction sector. In 1992, Koskela has reported the adaptation of Lean production concepts in the construction industry and presented a production management paradigm where production was conceptualized in three complementary ways, which is known as transformation, flow and value generation (TFV) theory of production. This tripartite view of production has led to the birth of LC as a discipline that subsumes the transformation-dominated contemporary construction management Koskela (1992) and Howell and Ballard (1994) also contributed to LC genesis by stressing the crucial lack of collaboration.

LC community is composed of researchers as well as practitioners striving to develop the construction sector: visualization ( Daouet al., 2015 ), pull planning ( Kalsaaset al., 2015 ), prefabrication and modularization ( Hermes, 2015 ) are some of the concepts integrated into LC, adapted and applied to improve the construction sector. The prominent system of LC is the adapted production planning for construction called “Last Planner System” (LPS®).

They noted that only half of the planned actions are performed on site per week ( Ballard, IJLSS 8,2 156 2000 ). The idea behind LPS® is to master collaboratively work plan early in the project by putting together all the involved stakeholders (client, constructors, subcontractors, architects […]). As construction is a “people” business where different construction actors collaborate to design and construct, the LPS is an efficient way to foster communication in project team. LPS® is based on four integrated planning elements:

•Master schedule: provides an overall overview on project milestones.

•Phase plan: called revers phase scheduling. It is based on a pull planning where stakeholders design the project in a reverse chronology.

•Look ahead planning: It is a six-week planning with constraint analysis.

•Weekly work plan (WWP): preparation of next week work. WWP helps calculate the planned percentage completed (PPC) which describes the percentage of tasks accomplished in a certain week and track its variance throughout project lifecycle.

The International Group for Lean Construction (IGLC) contains an extensive literature of the LC field of research. IGLC was founded in 1993 and makes up a network of professionals and researchers in architecture, engineering and construction (AEC) who feel that the practice, education and research of AEC have to be radically renewed to respond to the challenges ahead ( International Group for Lean Construction, 1993 ).

Lean implementations are well developed in literature mainly in the form of case studies ( Castilloet al., 2014 ;Yuet al., 2013 ).

Another implementation types concern one aspect of lean management theory. For instance, Suárez-Barraza and Rodríguez-González (2015) focused on the role of kaizen in lean implementation and provided a set of lessons learned and good practices for a successful kaizen approach. Domingoset al.(2014) presented a Kanban system implementation. Pheng and Chuan (2001) evaluated the maturity level of contractors to adopt Just-In-Time principle applied to precast concrete components for on-site delivery.

Finally, Lean implementation is considered as a change; thus, an implementation strategy is to be well developed before action. People’s perception, involvement and empowerment is also required for a successful implementation ( Losonciet al., 2011 ). The cultural aspect is also well stressed for setting a suitable lean implementation approach ( Knapp, 2015 ).

4. Performance indicators in the construction industry As stated by Peter Drucker: What gets measured gets managed. The concept of “Performance indicators” is key concept in the Lean management philosophy ( Al-Aomar, 2012 ). Indicators like “Inventory rotation”, “Work In Progress” and “Lead time” help assess the current performance and keep track of what is meaningful to attain a desired objective:

setting up lots of indicators leads to confusion and difficulties to focus on what matters most.

On the other hand, low number of indicators can be challenging to identify a clear image in the current performance of the process.

Beathamet al.(2005) proposed three types of indicators: key performance indicators (KPIs), key performance outcomes (KPOs) and perception measures. The first type of indicators provides the opportunity to act and thus change the outcome of the process before the finish. An example of a KPI is the binary indicator “adequacy of client need with the design”; it is possible to act on the design before the actual construction. For KPOs, those are the outputs of the process and do not provide the chance to change. “Actual delivery time” is an example of a KPO. Finally, perception measures tell the perception of people on a given process and they are generally carried out by direct question or survey ( Horstman and Witteveen, 2013 ). An example is “client satisfaction”. 157 Application of lean Despite the large number of searches made, the construction sector is still proclaimed as the least effective and efficient in all industries ( Alinaitweet al.2009 ;Beathamet al., 2004 ).

The reason for the low productivity is the focus on financial rather than performance-based approach ( Egan, 1998 ). From this, several companies began to develop performance measurement tools (1.5bn £ for UK private companies) ( Edwards and Thomas, 2005 ). Therefore, the construction should also replace the competitive market system standard based on short-term financial gains, with a system based on transparent measure of the quality and effectiveness ( Egan, 1998 ). Indeed, the financial perspective has received much criticism for not providing a true picture of the performance ( Beathamet al., 2004 ,2005 ; Kaplan and Norton, 2000 ). Tam and Zeng (2013) introduced a set of sustainability indicators in the building construction as a response to the construction-related legislations in Australia. They categorized those indicators into “environment” and “social”. “Environment”-related indicators include “ecological quality of construction area”, “emission of greenhouse gas”, “energy efficiency”, etc. Social indicators include but not limited to “minimize cooling loads:

building design, glazing section, lighting design, and landscaping”, “separated regulation of interior temperature”, etc.

In the LC philosophy, the LPS® introduced the PPC indicator. It is considered a reliable indicator of the construction performance, as the number of research realized to support its relevancy ( Kalsaaset al., 2015 ;Issa, 2013 ). This indicator describes a basic measure of how well the planning system is working. It is calculated as the number of tasks completed on certain period of time (frequently during a week) divided by the total number of tasks made for period. This indicator is generally related to the construction phase while the construction value chain starts from the client appointing the architect for design, to the bid for construction companies and finally the last step is the construction. This research focuses on the bidding phase, as no enough literature and knowledge regarding meaningful indicators is explored.

5. Procurement strategies in the construction sector Procurement systems describe how the project is going to be managed and executed. Thus, it is a crucial decision that has a direct impact on the quality of the delivery.

Procurement system (or delivery method) is defined by Masterman (2002) in the construction industry as “the organizational structure adopted by the client for the management of the design and construction or a building project”. According to Mossman (2012) , the construction sector delivers value based on six procurement systems.

(1)Design/Bid/Build: It is the traditional delivery method characterized by a sequential process that starts with project design established by an appointed designer (the architect). Once the design is finished, the contractor is selected using some criteria (price, technical feasibility, sustainability). However, the main criteria of selection usually is the price. This phase is called the bidding phase. The selected contractor can begin the construction with a complete design and clear schedule.

(2)Design/Build: This type of procurement system is characterized by the signature of one single contract for the client. As a consequence, the owner deals with only one entity for the design and the realization of the project. The entity is in charge of all aspects of the project.

(3)Construction management agency: The contractor is selected based on his qualification. He is generally an expert and give consultancy to the owner to manage the project. Indeed, all the contracts are set between the client and the trade contractors. This configuration is the least comfortable for the client because he takes IJLSS 8,2 158 responsibilities for all the aspects of the project including the scheduling, cost overrun, errors […].

(4)Construction management at risk: The client secures the services of a construction manager to work with the design team and the trade contractors as well. However, in this configuration, the risk is now taken by the construction manager. The latter is responsible of the project success according to the design fixed with respect to the schedule and the budget.

(5)Public-private partnership: This type of procurement system concerns offers provided by the public sector designated to the private sector. The contractor is in charge of the construction, maintenance and management of the public work. The contractor can receive direct payment from the public partner or he can use the public installation (example: highway) for a certain period as a payment method.

(6)Integrated project delivery: IPD is the “lean project delivery” method in construction.

It consists of the integration of all parties involved in the early project phase. IPD is based on close collaboration to generate the maximum added value to the client.

Thomsenet al.described the differences between the traditional construction method of leading a project and IPD system. The traditional construction project is organized into three “camps” with diverse interests that sometimes converge and other times are opposed: owner, designer and contractor. Project participants come into their camps at various times during the project, with designers coming on early, construction managers (if any) coming on in mid-design, and general and trade contractors coming on after design is substantially complete ( Thomsenet al.2009 ).

Thus, IPD tries to minimize “the fragmentation” issued by the traditional methods ( Figure 3 ).

Finally, procurement systems can also refer to parts of the construction processes. For instance, Yinet al.(2014) investigated the relationship between contractors and subcontractors by studying and improving its procurement system.

6. The bid D/B/B (Design/Bid/Build) is a common procurement strategy used in construction projects mainly due to: insufficient knowledge of others procurement methods; D/B/B is considered as a “safe solution” for the client, as the non-respect of project cost and schedule is generally attributed to the contractor; market nature and readiness; and the habit of using D/B/B by the client. Different studies investigated the differences between D/B/B and others procurement methods. Idoro (2012) compared D/B/B with direct labour method and concluded that the mean level of planning done at the design stage in projects procured by D/B/B method is higher than that of projects procured by direct labour method. ( Francomet al., 2015 ) described “Alternative Project Delivery Methods” (APDM) to the trenchless pipeline industry. The authors found that the most common delivery method used in the pipeline industry is D/B/B. The latter prevents from a continuous project flow due to the lack of technical knowledge exchange between the design engineers and contractors. Linget al.

(2004) compared D/B (Design/Build) and D/B/B. As those two procurement systems are organized differently, they have different benefits and drawbacks. The authors also developed a model to predict D/B/B and D/B project performances.

Bidding is the underpinning phase for a sustainable activity for contractors. The first reason is that bidding in construction is still not fully controlled and suffers from a great variability, uncertainty and subjectivity ( Chuaet al., 2001 ). Indeed, there is no systematic approach to bidding as every construction project is different and requires an engineered 159 Application of lean approach to solve (thus bid) on the implementation solutions for construction ( Laryea and Hughes, 2011 ). The second reason is that winning bid is the tunnel for a continuous activity for the construction company; without enough projects going from a winning bid to the construction phase, contractors’ survival is at risk in the mid-term vision (as workers wait for work). If a bid is won, it means a continuous activity during the construction project duration, which varies from few months to few year depending on the building project size. In contrast, a lack of successful bids translates into construction managers waiting for work and more risk for the company’s mid-term source of revenue. The importance of the bidding phase is thus capital for the company in the context of a buyer’s market.

In a D/B/B configuration, the client communicates the selection criteria. In many cases, a large weighting is associated to the price. For the studied construction company in this research paper, its bidding is generally associated with:

• 60 per cent to the proposed price; • 30 per cent to the technical value of the project: it includes constructability, feasibility and the organization set in place; and • 10 per cent to sustainable development, mainly the suggested procedures for protecting the environment (material used, onsite construction noise, etc.).

Once the contractor is selected, the client’s expectation is that project would follow the fixed design and schedule proposed in the bid. However, literature reveals that the majority of D/B/B projects are run over budget and schedule ( Parvanet al., 2015 ).

While some research projects deal with the bidding phase ( Gurcanliet al., 2015 ), less focus is directed towards the bidding phase as a research thematic in the construction research community. In addition, existing literature provides no guidance on how to improve this Figure 3.

Construction procurement systems in the construction sector IJLSS 8,2 160 transition phase between design and construction. The aim of this article is therefore to address this gap by experimenting a first Lean implementation via a kaizen event for a contractor’s bidding phase.

The next part of this paper presents the context of the study and the research methodology. Then, the “results and discussion” part is divided into two sections: the first section presents the current practices and culture embraced by the contractor to facilitate the Lean implementation. The second section evaluates the impact of the implementation owing to a selection of adequate key performance indicators.

7. Context of the study The study concerns a construction enterprise (1,266 employees) specialized in building construction. It is a familial company created in 1920. The construction company acts as a contractor that can undertake mainly three construction activities:

(1) public facilities; (2) rehabilitation; and (3) private real estate development.

The construction company proceeds using three different delivery methods:

(1) design/bid/build; (2) design/build; and (3) public-private partnerships PPP (small number of operations).

Many projects are established following a D/B/B procedure in the company studied. The turnover related to each delivery method is as follow:

• 70 per cent for D/B/B; • 13 per cent for D/B; and • 17 per cent for PPP.

This repartition is due to the strategy taken, but mostly, the French market conditions that generate many opportunities are related to the D/B/B practice.

In the conducted research, the focus is on improving the bid of D/B/B of the three construction activities: public facilities, rehabilitation and private real estate development using Lean thinking.

7.1 Research question This study concerns the investigation of the bidding phase generated from a D/B/B delivery method. In this scenario, contractors can act only during the bidding and the building phases.

The building phase is then a consequence of a successful bidding.

The current building industry in France is set in a way that D/B/B is the main source of value creation for contractors. Taking into account this information, the research question was formulated as follow:

RQ1. How can contractors benefit from Lean thinking to enhance D/B/B project outputs?

7.2 Research scope The research draws the effect of the Lean implementation on the bidding phase inscribed in the (Design/Bid/Build) configuration. D/B/B is followed by three activities of the construction company (Public facilities, rehabilitation and private real estate development). 161 Application of lean According to Jinaet al.(1997) , classifying products in three categories, namely, runners, repeaters and strangers, helps identify where the focus should be concentrated for improvement initiatives. “Runners, repeaters, and strangers” is a planning and control classification based on the frequency with which a manufacturing operation is called upon to make a product or deliver a service ( Slack, 2015 ). In the case of the conducted research, “Design/Bid/Build” are the runners. The French market is more focused on this type of project delivery system ( Dakhli and Lafhaj, 2015 ). “Design/Build” are repeaters. Finally, strangers could be assigned to PPP projects as they are very occasional.

The conducted research draws the performance of the bidding phase of the three activities: “Private Real estate development”, “Public facilities” and “rehabilitation”.

8. Research methodology In their research, Pekuriet al.(2014) stated: “While there is no cookbook capable of explaining exactly how lean can be applied in a way that maintains the fit among the elements of an existing business model while developing it as a system”. They also argued that Lean could be considered as a viable business model a company can envision.

In this research, Lean was applied in the context of a change that aims to improve the bidding performance. The application was in the form of a kaizen event that was prepared following the steps described in Table I .

A two-month preparation phase was needed before the kaizen event. Four steps were included in the preparation phase.

The first step is “Current practices and culture identification”. Discussions with bidding managers helped to list the current practices that should be taken into account when implementing the Lean change. Table I.

Lean implementation steps in the bidding phase No Step DescriptionReferences to support the step Kaizen preparation (Before the kaizen event)1 Current practices and culture identificationHow the company proceeds. Its values and core beliefs Bortolottiet al.(2014) , Knapp (2015) 2 Formulation of the targeted objectivesMeasured indicators to track Nakhai and Neves (2009) 3 Data gathering Organization chart, process sheets Bhamu and Singh Sangwan (2014) 4 Mapping the current processThe process that leads to creating value for the client Basu and Dan (2014) , Hubbard (2014) ,Kaplan and Norton (2000) Kaizen event (During the kaizen event)5 Problems, constraints and waste identificationIshikawa diagram, 5why’s Maoet al.(2009) ,Khisty and Khisty (1992) 6 Mapping the future state of the processNew process was drawnYuet al.(2013) 7 Setting up improvement actions“Continuous improvement” is one of the pillar principles of the lean theory Kale and Karaman (2012) , Yeunget al.(2013) IJLSS 8,2 162 The second step is “Formulation of the targeted objectives”. Objectives were set in conjunction with the construction company in the form of performance indicators related to time, economical impact, quality and sustainability. While there is no previous data on the current performance of the bidding department for benchmarking purposes, targets were set based on the senior bid manager’s experience.

In the third step, data were gathered (process charts, organization and all the necessary information) to draw the current process followed in to bid. The forth step was to map the current state (the future map will be discussed later in the paper).

Steps 5 to 7 were realized during the kaizen event. The latter lasted one week and involved 15 collaborators from different departments (from the bidding department, supply department, quality service, onsite construction managers and the researcher) to give different insights and point of views for the enhancement of the bidding phase.

During the kaizen event, problems with the current process were discussed and constraints were identified. This led to the next step “Mapping the future state”. (The scope of this paper does not include listing and discussing the kaizen event in details). The last step was to set the improvement actions generated from the kaizen event. According to Table I , the Lean approach was initiated within the “bidding department” using three features:

(1) value stream mapping (VSM) and process lead time analysis; (2) A kaizen approach for a sustainable improvement; and (3) problem-solving techniques.

Performance was measured based on selected indicators from Step 2. Those indicators are described in the next section. Performance indicators were monitored and presented after 6 months of the kaizen event in the “results and discussion” section. The results were based on an assessment conducted after 6 months of Lean implementation with a total of 45 bidding operations.

The method used in this study is “Action-Research”. This type of research methodology falls into the applied research category. It is characterized by the integration of the researcher within the working group that aims to change the system.

In their book, Fellows and Liu (2009) quote some requirements related to the methodology given by Henry (2000) :

“A trust-based relationship […] built up beforehand […] accepted by all parties […].” The researchers will have fully accepted the firm’s or institution’s objectives for innovation or change by having negotiated the extent to which they will be involved and their freedom as regards access to information and interpretation.

A research and innovation project will be jointly drawn up, which must be open ended with regard to the problems to be explored, but very precise in terms of methodology […].’ The researcher was involved in the implementation plan and was considered as any other company’s employee. Thus, his inputs were considered equivalent to any other collaborators regarding the three deployed features (designing the future state, identifying problems with the current process and establishing the adequate measures for improvements).

9. Results and discussions The results were based on an assessment conducted after 6 months of Lean implementation with a total of 45 bidding operations.

Those operations are related to three bidding departments (operation types):

(1) public facilities; (2) rehabilitation; and (3) private real estate development. 163 Application of lean 9.1 Current practices and culture identification as a key enabler of the lean implementation According to Gregory (1999) , human issues play a crucial role in the lean implementation success. While there is a lack of previous lean implementation experiences in the French construction industry, some key aspects were taken into accounts:

• involvement of top management; • skills and training provided; and • team work and involvement of collaborators.

In their study, Bresnenet al.(2005) focused on change initiatives that involve a disruption in the existing processes and knowledge. Most of those initiatives fail due to the high change impact generated among collaborators.

Before starting the Lean approach, the company’s history was reviewed and integrated within the implementation process. Five criteria were identified.

9.1.1 Avoid adding another “tool” (as a solution) to managers.Records show that the company knew dozens of tools, provided as a solution to enhance performance. Thus, the output of the kaizen implementation should not be another “tool or software” proposition but a real process change. The lean approach must be directed towards process improvement.

9.1.2 Avoid wheel reinvention.The current context of the French construction market requires actors to think outside the box to make the difference. Every collaborator is aware of this fact. When presenting the lean approach, it should not be presented as a way of reinventing the existing business but adapting it to the current situation. Generally, people assign negative connotation when obliged to start from scratch and reinvent everything.

Lean is about adaptation to the client point of view by enhancing the actual system not reinventing it.

9.1.3 Simplicity.After few months in the company, one can easily notice the strong presence of a result-oriented mindset. Simplification is the key word.

Lean approach is about eliminating waste. As a consequence, the process becomes simplified and contains only the essentials.

The fact of knowing this information increases the chances of the Lean approach success by identifying the triggers that challenge the employees to participate actively.

9.1.4 Translating “Lean” terminology into the company’s jargon.Words are powerful.

Using them in the right purpose can make considerable change in the final outcome.

Lean terminology should be replaced by the local vocabulary. It allows employees to appropriate the Lean philosophy. For instance, the Lean approach could be translated into “an approach to empower collaborators to give the best value to the client”. In addition, every Lean methodology or tool should be backed by a clear goal definition.

9.1.5 Employees first, then the client.One of the key criteria of Lean implementation success is employee’s involvement and full appropriation of the Lean methodology. To guarantee this, focus should be put in explaining the benefits gained by the employees from Lean adoption during the first implementation. Afterwards, focus should be directed slowly towards the final client. By doing so, collaborators will be aware that the Lean methodology is here to empower them to give the best value to the client (the one we bid for) ( Figure 4 ). Figure 4.

Lean implementation:

focus shift IJLSS 8,2 164 9.2 Assessing the benefit of the Lean approach With the purpose of evaluating the benefits of the Lean approach, the impacts were defined according to Ebbesen and Hope (2013) findings. The project management triangle (cost, time, quality) is not the best representation of the project success. Ebbesen and Hope (2013) suggested new models where the triangle is guided by sustainability.

Many attempts were conducted to elaborate the best fit of sustainability within the project management triangle: for instance, the star-model in Figure 5 developed by ( Grevelman and Kluiwstra, 2010 ).

9.2.1 Performance indicators selection.The impacts were explored according to the established indicators in Step 2.

Table II summarizes the indicators monitored in this study and their subparts. For “time”, we tracked “Lead time of the bid”. “Economical impacts” is composed of three subparts: Earned Value Method, productivity and exploring alternatives.

Each one has a performance indicator. For “quality”, it contains two subparts: kaizen and variability control. Finally, “sustainability” is divided into “People” (how bidding operations are assigned to people?) and “strategy” (choosing the right strategy for the bid: quick or detailed bid).

Targeted performance values were established according to senior bid managers’ experience, as no previous records were available. Those values are supposed greater than the current performance of the existing processes. Figure 5.

Sustainability integration in the project management triangle Table II.

Performance indicators selected to track the lean implementation Subpart Performance indicator Time Lead time of the bid Economical impact Earned value method Cost variance between the planned value and actual cost of the bid Productivity Manpower/operation exploring alternatives Operation cost reduction using alternative design Quality Kaizen Number of improvement ideas and actions Variability control Cost variability (before/after technical review) Sustainability People Operation assigned based on competences “skill matrix” Strategy Adding “quick estimation” part in the existing process 165 Application of lean 9.2.2 Time.One of the targeted improvements is bidding lead time reduction ( Figure 6 ). If a bid takes more time than needed, the bidding team (structural and secondary trade bid managers, senior bid manager) is mobilized while other bids could be started.

“The team used a modified VSM to draw the biding process. The reason is that a manufacturing process (a production process) is different from a bidding process. The latter requires a specific legend to best describe its complexity “repetitive tasks, on demand tasks, etc. see Figure 7 (a) .

Using the modified VSM (Step 4 in Table I ), the current bidding process contained more than 150 tasks (This was realized owing to Step 3 “Data gathering”). The kaizen event helped rethink the bid and draw a new mapping [ Figure 7 (b) ]. The future process is now composed of 72 tasks and was divided into three phases as follows:

(1)Phase 1 “Launch of the project”: it is the first phase of the process and its objective is to assess and give the “yes or no” to bid on the selected project. The phase is composed of 19 tasks.

(2)Phase 2 “Project study”: once the project is confirmed, it is studied in details. The “Project study” phase of the process contains 44 tasks (from consulting sub-contractors to worksite visit, etc.). This phase ends when the price and technical feasibility (bidding process outputs as showed in Figure 6 ) are validated.

(3)Phase 3 “Finalization”: the last phase of the process is activated if the bidding is successful. The construction company proceeds the administrative work with the client. The process finishes when the bidding team receives feedback about their estimation from onsite construction team at the end of the construction. This phase contains nine tasks.

The application of the modified VSM helped distinguish three collaborators responsible for conducting the bid (structural bid manager, secondary trades bid manager and senior bid manager). The blank rectangle in Figure 7 (a) legend means that other people are responsible for doing the task (commercial sale, technical study manager, etc.). Their respective tasks were clearly described: task sequencing, time slot if fixed, the necessary tools and support to achieve the task and a comment area ( Figure 8 ). In addition, interactions with other company’s department were identified. Finally, repetitive task for each project were (worksite visit for instance) and on-demand task (meeting requested by the responsible of the study) were highlighted. Figure 9 presents lead times of the bidding process of 45 projects after 6 months of the Lean implementation. Lead times range from 15 to 27 days and the targeted performances from 29 to 36 days. Overall, a clear lead time reduction is noticed in all operation types. This result is expected as the new bid process resulted in a 46 per cent task reduction in the bidding phase.

About 24 per cent lead time reduction for public facilities, 49 per cent for rehabilitation and 28 per cent for private real estate development. In rehabilitation projects, the improvement is more effective. Rehabilitation is a relatively new market for the construction company. Thus, its process is under development, which explains its high variability. Figure 6.

Lead time in the bidding phase, input and outputs IJLSS 8,2 166 9.2.3 Economical impact.Not only did Lean philosophy improve the bidding phase productivity but did introduce a new concept that help practitioners track project progress and control budget dedicated for each operation.

9.2.3.1 Earned value method application. Onemajor constraint cited many times by collaborators is the difficulty encountered to “act” before “it’s too late”. Many times, collaborators engage in a bidding operation that consumes time, on average one month, before finding out that budget was exceeded. For this reason, Earned Value Method was initiated.

EVM is a technique of performance measurement focused on the interrelationship between the project physical, financial and time progress, indicating planned and actual Figure 7.

(a) A drawing of the bidding future process, (b) modeling of the drawn future process 167 Application of lean performance with the purpose of establishing corrective measures ( Ponz-Tiendaet al., 2012 ).

However, according to the research of ( Kim and Ballard, 2002 ), EVM is an effective tool only under the limiting assumption that every activity or cost account is independent. As the objective of the “economical impact” indicator is to monitor cost provided for bidding, EVM was tested and the results drawn. Figure 10 represents cost variance between the planned cost and the actual cost of bidding after 6 months of EVM implementation. The planned value means the established cost of the bid the company managed to provide. It includes: bid manager and senior bid manager costs, technical studies costs and building surveying services.

A decrease in cost variance between the planned cost and the actual cost of bidding was noticed. The cost variance ranges between 7 and 0.78 per cent after 6 months of EVM implementation. A negative cost variance means savings in the bidding budget. While there are savings in the private real estate development and public equipment, rehabilitation Figure 8.

Example of a task identification Figure 9.

Lead times of the bidding process of 45 projects after 6 months of the Lean implementation IJLSS 8,2 168 operations perform better due to the closeness to the targeted performance. The objective is to eliminate cost variance when setting the initial budget for each bidding operations. The reason that cost variance is positive for rehabilitation projects (which means that the initial budget fixed for the bid was exceeded) is that this expertise is relatively new compared to the other two since rehabilitation is a new market.

As a conclusion, the lean implementation resulted in substantial budget savings (cost variances are negative except for rehabilitation projects). However, the process suffers from a certain variability that should be tracked and eliminated over time.

9.2.3.2 Increase in productivity. Productivity was assessed using the number of men mobilized per bidding operation as an indicator. Figure 11 expresses the indicator manpower/operation (how many people are mobilized for the bid) according to operation types and the targeted performance. For public equipment, an average of 1.33 men were mobilized. The lowest value is attributed to the rehabilitation operations with an average of 0.78 men/operation. Finally, the private real estate development required on average 1.28 men/operation. Figure 11.

Manpower per operation after 6 months of lean implementation Targeted performance zone [-2:+2%] –8 –6 –4 –20 2 4 Public facilities Rehabilitation Private real est.

n o i t a t n e m e l p m i M V E s h t n o m 6 r e t f a ) % ( e c n a i r a v t s o C Figure 10.

Cost variance between the planned value and the actual cost of bidding after 6 months of EVM implementation 169 Application of lean The decrease in Manpower/operation is due to process documentation, collaborative rethinking of the bidding phase and lead time reduction.

9.2.3.3 Exploring alternatives to offer value to the client. Applying lean thinking to offer competitive advantage during the bidding phase was also explored through“la culture de la variante”. The latter is in the form of a brainstorming session where bid managers share ideas to modify slightly the operation design to reduce cost and to give the client (final client, who will select the construction company) new perspectives. Those brainstorming sessions were added to the new bidding process.

Many researchers study the effect of collaboration and information sharing on a construction project success. In their article, Kanget al.(2012) focused on the obstacles encountered in sharing information knowledge. Many benefits are expected in the construction phase according to O’Connor (1985) findings: construction time reduction, effective use of manpower […].

The conducted brainstorming sessions led to changes in design through the exploitation of:

• structural alternatives: enhancement in the structure of the building; • sustainable development alternatives: add sustainable design to the project; • contractual alternatives: for instance, proposing special contract to sub-contractors to reduce cost; • architectural alternatives: it involves changes in all the construction architecture including: doors, millwork, wall and soil finishing, etc.; and • technical alternatives: electricity, heating system, plumbing […].

Ten operations benefited from brainstorming sessions to generate new design improvements alternatives to propose in the bid for the client. The results are given in Figure 12 .

As a consequence of this type of collaboration, the bid provided by the contractor decreased by 5,12 per cent in public equipment tenders. In rehabilitation, alternatives proposition reduced the bid by 4 per cent. Finally, in private real estate development, the benefits are quantified at 1.56 per cent.

The application of Lean thinking initiated “une culture de la variante” which could be translated into “a culture of alternatives”. Figure 12.

Cost optimization using “brainstorming sessions” to find alternatives IJLSS 8,2 170 9.2.4 Quality 9.2.4.1 Kaizen. The Lean initiative resulted in 21 change ideas undertaken that aim to eliminate waste throughout the value chain. Those ideas are developed in 48 actions assigned to collaborators ( Table III ).

A kaizen system was designed with the purpose of sharing knowledge and best practices among collaborators. The effect of kaizen approach in the bidding phase was previously assessed by ( Abdul-Rahmanet al., 2012 ).

The system helps generate new project design variants for the final client with the purpose of improving constructability and cost. Every Tuesday morning and for one hour, collaborators of the bidding department gather to share insights and give feedbacks on a particular ongoing project by providing improvement ideas. Afterwards, the ideas are collected and capitalized.

This model help collaborators launch a continuous improvement approach to the bidding phase. Among the benefits: an increase in pricing accuracy, more realistic estimates and better evaluation of risks associated with tender.

9.2.4.2 Variability decreases in the bidding process. The process of the bidding phase comprises two essential meetings before submitting the final bid ( Figure 13 ). The first one is the “technical review meeting” followed by the “commercial review meeting”.

•Technical review meeting: the objective is to provide final changes in the technical feasibility to reduce the suggested bidding price.

•Commercial review meeting: it is the last meeting before the bid validation. It requires the presence of one commercial and the structural bid manager. The aim is to validate the final project bid.

A variability indicator was proposed: “bid price variability before/after technical review meeting”. Records of the proposed indicator before the Kaizen event were not registered. This indicator assesses process variability of the bidding phase. Figure 14 presents bid variability of 45 operations undertaken after 6 months of the kaizen event. The suggested bid before the technical review was reduced by 1.55 per cent in the public equipment department, 2.22 per cent in rehabilitation and 3.34 per cent in private real estate development. The greater absolute value of cost variably, the unstable is the process. Indeed, a great absolute value means many changes occurred between the technical and the commercial review meetings thus the process is inefficient.

The reason behind this result is that the new bidding process enables bid managers to fix meetings (whenever it is necessary) with the project sales representatives to get his inputs on the client needs.

Those tasks are assigned to “on demand tasks” in the modified VSM [see Figure 7 (a) ].

9.2.5 Sustainability.

9.2.5.1 People: competence management to foster collaboration. The previous method of bidding consisted in affecting bid managers to project according to their availability. This method is easy to use and does not require many decision-making factors. However, competencies are not well used. As a consequence, value loss for the final client is inevitable. Table III.

Number of ideas and actions developed via the kaizen approach After Lean implementation After 6 months of lean implementation Improvement ideas 21 15 Actions 48 17 171 Application of lean Figure 13.

Technical – commercial review meetings process Figure 14.

Bid price variability according to operation types IJLSS 8,2 172 The system was modified. Projects were assigned based on expertise not availability. In addition to that, competencies of each employee were collected to generate more collaboration using “skill matrix”. Each collaborator can inform his level of expertise according to several criteria:

• operation type; • previous projects undertaken and experiences; • tool development and optimization; • technical skills: structure, engineering, construction, etc.; and • competencies could be soft or hard skills.

9.2.5.2 Strategy: a value-based approach to rethink the bidding phase. Sustainable business is a direct outcome of a long-term operations established by strategic orientations.

Lean thinking could be viewed as an operational enabler thanks to its tools and practical methodologies. It also could be viewed as a strategic enabler by considering the only value added the one formulated by the client (internal and external). Thus, strategy could be declined based on maximizing added value outputs.

The company’s archive revealed that bidding was always done in details. As a consequence, great amount of time is needed to provide a final price.

In some cases, detailed tendering leads to a price out of the client’s ball parking zone. Time is lost doing non-value added activities for a large amount of time (one month or more). To address this issue, a quick estimation step was added to the bidding process ( Figure 15 ).

Quick estimation was a Lean strategic move. It takes few days to assess project feasibility by using ratios for quick estimation. It allowed eliminating waste in time, over-quality and competence waste: by engaging employees in a project that has no value added for the client (the final price is not in the ballpark).

9.2.5.3 Implication of the “Sustainability factor” on the bidding process. “Time” and “Economical impact” indicators have a direct impact on the short-term performance of the bidding process. “Quality” indicators on the others have a medium-term impact on the performance. “Sustainability” indicators set the foundations for a sustainable performance for the bidding process.

Selecting the right team for the right project helps empower project team by fostering collaboration. People are less likely to complain about their colleagues due to lack of competencies for instance.

Finally, having a clear strategy for bidding (not bidding the same way for all the projects) helps reduce risks and enhances greatly the chances of securing a certain amount of activities in the long run. Figure 15.

Integration of quick estimation in the bidding phase 173 Application of lean 9.3 Research validity and limitations The validity of the research depends on three criteria: internal validity, external validity and reliability ( Johnson, 1997 ;Bashiret al., 2008 ). The first criterion could be translated into the following question: “Is what we’reintendingto measureactuallybeing measured?”. Our research measured the impact of the kaizen event based on factual indicators collected that best describe the initial objective set for the kaizen event.

The second criterion is equivalent to the question: “Is what we’reactuallymeasuring applicableto the real world?”. The conducted research is practical and is experimented in a professional context (real world).

The last criterion could be answered through the question: “If we did this study again, would we get the same results?”. The research was conducted with fixed “external variables” which means that during the experimentation process (from the kaizen event till data collection after 6 months), no important changes happened (hiring/firing) or other external variables that could affect the results.

The main limitation of the research is that it does not deals exhaustively with the link between the design and construction phase. The reason is that bidding is a “transitional phase”. The first objective of the bid for construction companies is to secure the project.

Thus, resources should be well used to attain this objective without compromising the profitability (appointing a construction manager during the bidding phase has a corresponding cost). Thus, our objective was to improve the outputs of this repetitive “transition phase”.

10. Conclusion In this research study, a kaizen event was applied to the bidding phase in a building construction company. Performance indicators were for monitoring. The selected performance indicators were related to time, economical impact, quality and sustainability factors.

The results could be resumed as follows:

• bidding can benefit from lean thinking; • cultural aspects should be assessed before engaging a lean change programme; and • Lean thinking not only helps improve operational processes but also acts as a guide for setting up the new strategies as well.

The Lean thinking had also a managerial and social consequences: project team selection in for the bid shifted from “the availability status” to a selection based on competences. In addition, a new bidding strategy was set to maximize the output of this phase.

Few research studies concern the contractor’s bidding phase and its improvement using lean thinking. It is mainly due to the sequential structure of actors’ involvement in the construction project. However, the prominence of this type of procurement in the French market should be viewed as an opportunity to make it more efficient for all the stakeholders (owner, architect, contractors). Focus should be directed towards setting up Lean frameworks for contractor’s bidding phase. Finally, the link between the bidding and building phase should be assessed by identifying waste occurrence (information loss, rework […]) within the contractor processes. Note 1. Institut National de la Statistique et des Etudes Economiques collects, produces, analyses and disseminates information on the French economy and society. IJLSS 8,2 174 References Abdul-Rahman, H., Wang, C. and Malay, S.B. (2012), “Structured project learning model toward improved competitiveness in bidding for large construction firms”,Journal of Civil Engineering and Management, Vol. 18 No. 4, pp. 546-556, available at: www.tandfonline.com/doi/abs/10.

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