Lean in the public sector in Finland.

Abstract

Finland is undergoing an immense change in the execution of real estate development and construction projects. Since 2011 nearly 100 projects have already been launched in the country with the Integrated Project Delivery (IPD) principle. The total value of the projects is close to 7.3 billion euros. The principles of integration are currently applied especially to project management contracts, but also to other traditional contract models with fixed content or fixed price. Implementation of the IPD models has triggered a change in work culture and practices across the whole construction field. Focus within the traditionally somewhat quarrelsome and fragmented industry has now shifted towards cooperation and continuous improvement – both important Lean principles. Experience from the integration of contracting authorities and service providers has shown the advantages to be achieved. The contracting authority can utilize the know-how of different parties from the start of the project, as designers and builders are planning ways of execution together. A joint development phase leads to better planning and more accurate budgeting as well as better commitment of different parties. The use of IPD models has also served as a significant basis for introducing Lean principles and tools in Finland. Without IPD models, especially the customers' awareness of the benefits of Lean methods would have remained low. Furthermore, the sharing of risks and benefits encourages the execution of projects with stricter adherence to budget and schedule. So far, all completed IPD projects have achieved the target schedule and budget. Despite minor shifts in the cost targets of the projects, all contracting parties have been satisfied with the achieved results.