Reducing cost overruns in construction projects using lean methodology

Cost overrun has emerged as one of the most frequently reported problems facing projects in the construction industry. The problem of cost overruns is experienced more in publicly funded projects, such as New York City capital projects. Traditional cost control measures have failed to solve the problem of cost overruns in construction projects. This research includes applying nine lean construction principles: supply, people involvement, planning and scheduling, quality, standardization, transparency, waste elimination, continuous improvement, and customer focus. Throughout the construction process, these principles will reduce the element of waste and non-value adding activities, and they will be applied through twenty-five selected sub-principles, which are specific techniques that reduce various forms of waste in the construction process. To investigate the effectiveness of the above lean construction principles in controlling project cost, the research adopted a quantitative approach executed through an online survey involving the managers of the various projects listed in the New York City projects database and nationwide. The study results will show which Lean Construction Principles (LCPs) critical factors will significantly reduce average cost overruns in construction projects. This research proposes a practical model called Lean Principles in Construction Management (LPCM) that can help engineering managers improve overall project performance by reducing major waste factors.