Understanding the risks in lean construction and how to mitigate them

Eliminating waste, financial or otherwise, is a feature of construction projects — but it brings its own risks. Matthew Murray of Notable explores how to minimise those risks — including the role of building information modelling.

In every construction project, risks are taken by both sides of the bargaining table. This makes risk mitigation an integral part of any signed contract and the corresponding building project. On the client's side, risks to consider are mostly financial in nature as they are looking to maximise the value of their investment. For the constructing firm, risks include costs, health and safety, and quality control.

Losses due to risk can also affect the brand name of both parties.

All these issues make risk mitigation an essential focus during every phase of any building project. Mitigating risk can be defined as the steps one takes to reduce or eliminate adverse effects. There are four basic types of risk mitigation.

• Risk acceptance

• Risk avoidance

• Risk limitation

• Risk transference

In lean construction, the latter three types of risk inform the relationship between client and builder.

Risk avoidance and lean concept in construction

Lean concepts are systematic procedures that can be employed in the construction industry to eliminate waste, financial or otherwise, during the building phase. Therefore, a good fiscal policy that can be achieved by putting certain lean measures in place plays a key role in risk mitigation.

An apt example is working closely with a client to know what procedures, design or component he or she sees as unnecessary or of low importance to the overall quality of a structure.

The contractor may decide to eliminate what the client views as waste as long as it doesn’t affect the structure’s overall performance. But, first, the contractor must ask the client whether they would prefer to forgo the unwanted elements at a reduced cost or retain them at a higher construction cost.

This type of communication helps the client save resources while also reducing construction time for the constructor. And it is a form of risk avoidance by taking out non-value items after informing the client of potential impacts to the structure.

Risk limitation and lean concepts

Risk-limitation procedures are the most common mitigation techniques used by companies. It tries to foresee risk and limit the possibility of them happening. This is why every construction site has a health, safety and environment (HSE) expert in its fold. While HSE personnel are charged with keeping track of safety measures during construction, applying lean concepts drastically limits future risks in its own way.

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