Author: Dr. Adrian Smith, Ennova
Large scale construction projects suffer from cost and time overruns that are typically a symptom of productivity problems and directly affect overall industry profitability. As a result, methodologies have been developed to reduce the risk of overruns and improve project outcomes.
A number of these methods are based upon Lean principles that focus on identifying value, eliminating waste and creating a smooth flow of materials, information and work.
Construction Productivity:
Studies [1] suggest that between 70% and 90% of projects exceed the original planned cost and that the overrun commonly varies between 50% and 100% of budget. Some well known examples of significant project overruns include:
- Sydney Opera House – Final cost was 15 times more than originally planned
- Channel Tunnel – Final cost was 80% more than originally planned
- Boston Arterial Tunnel – Final cost was 196% more than originally planned
