Lean and Flexible Project Delivery

Abstract

The average cost and time overrun of frequent changes in ETO and construction projects is high, and with steadily increasing cost constraints, productivity increase is critical for future competitiveness. Successful lean implementations in project-based production systems have led to great reductions in waste and time to market. However, companies also often struggle with effective customization of lean principles to their changing contexts. This paper extends the scope of the operational system of lean project delivery, initially focused on a project-based production system with the Last Planner System (LPS®) at core, to enhance master planning with options to flexibly handle changes. The research follows the guidelines of Design Science Research, combining the theory and practice of lean project management with results for project flexibility from quantitative models. The main contribution is the proposed operational system, along with the process to evaluate its intended utility, i.e., to increase the ability to quickly and cost effectively handle late changes. This enables the quantitative assessment of the value of planned flexibility in lean projects, before the decision is taken, and illustrates this value for capturing opportunities from customer-driven changes. Insights into the value of design research for the management of project uncertainty are emphasized.