Lean cuisine is a concept familiar to anyone with weight loss in their sights, but as Victorian home builder Metricon has discovered, that exact same principle can be equally well applied to sustainable building practice with outstanding results.
Metricon is Australia's third largest housing construction company, with an annual revenue in excess of $800 million and over 850 full and part-time employees.
Currently, Metricon spends in excess of $3,000 per site to remove and manage waste generated during construction. As Australia's third largest volume home builder, turning out more than 3,000 homes each year that adds up to $9m in costs, not including the time and effort for their supply partners or ultimately the cost transfer to their customers.
Getting a grip on that inefficiency and potential loss to their bottom line was all the incentive Metricon needed, to find out exactly what sort of waste streams they were generating during home design construction and to start looking at ways they could eliminate it – now and into the future.
Through funding support provided by Sustainability Victoria’s Beyond Waste Fund, Metricon was able to implement a three step project to address this waste.
As a first step, the consultancy True North was engaged by Metricon to run a Waste to Lean Conversion (Lean Blitz) program within the company. The Lean Blitz methodology selected three frequently built Metricon house types and then conducted a series of workshops to identify waste elimination and reduction opportunities. This included:
- facilitating lean construction workshops for Metricon staff / suppliers around design, supply and construction
- interviews with more than 35 suppliers and stakeholders to identify waste and generate waste elimination strategies
- a review of Metricon's house design process to eliminate waste at the source
- identification of opportunities for Metricon to reduce the use of construction materials and their associated overheads
- identification of improved construction processes with a focus on the elimination of material waste.
Secondly, Metricon established a Lean Trade and Supplier Council representing key businesses within the house construction supply chain, who met monthly to provide Metricon with a 'guiding coalition' to validate waste reduction strategies and assist in their implementation.
And thirdly, students from Victoria's Royal Melbourne Institute of Technology (RMIT) were engaged by Metricon to:
- conduct research into waste streams generated in the volume housing market
- identify and quantify all waste generated across a sample population of home construction sites
- categorise waste by waste stream, current disposal methods and impact to landfill.
Through the project over 300 waste reduction ideas were generated, and the company is now working through many of these opportunities with a view to implementation.
Although the vast majority of the Lean opportunities were construction / on-site focused, Metricon is looking to leverage the LEAN theory into all parts of their business, such as sales, drafting and estimating.
Cost savings from the Lean Construction Blitz were initially estimated at $24m for Metricon and its supply chain. While these are not necessarily cost savings that will impact profit, many of the ideas to be implemented have impacted Metricon's efficiency.
Twelve suppliers now sit on Metricon's Lean Trade and Supplier Council and the group continues to meet monthly. Supplier representatives hold the chairperson and vice chairperson positions and the council publishes a regular newsletter to share with all Metricon's suppliers and trades, including what actions they are taking to adopt 'lean' practices into their businesses.
An email address has been set up and suppliers are encouraged to make direct contact with the council, to let them know what improvements can be made on site to eliminate waste and inefficiency.
Any time Metricon is able to eliminate waste from our processes is a major opportunity. These gains will ultimately enable us to service our customers more efficiently and at a lower cost-to-serve, and with a probable improvement in net profit yields.
Matthew Gaunson – Victorian Operations Manager, Metricon
A major finding from Metricon's program was the significant contribution of up-front design to physical waste levels. Metricon has already collaborated with suppliers to look at methods to eliminate waste.
And while they say there is a long way to go, Metricon report that they are getting traction, and look forward to building strong supply chain relationships that will significantly reduce the amount of waste generated by the whole supply chain and limit the volumes heading to landfill.
For more information contact Adam Siegel: 03 9915 5566