LEAN FOR DUMMIES

This morning Kerry and I were lucky enough to have breakfast with our globe trotting and long-time friend Natalie Sayer who, along with Bruce Williams, wrote the fabulous book Lean For Dummies.  According to Amazon.com the book sets out how "Competitive pressures force everyone to satisfy more demanding customers while using less of everything — time, energy, space, materials, and money. This no-nonsense guide shows you how to apply the proven philosophies and techniques of Lean to eliminate waste and maximize the effectiveness of your resources. You'll see step-by-step how to implement Lean practices in any type of organization".

Over many years Rider Levett Bucknall's North American practice has been fortunate to have Natalie facilitate our strategic workshops.  The workshops have always been fun and the resultant strategies a superb blend of vision and practicality. 

The gem from this morning's breakfast was Natalie's vivid description of Toyota's view of the role of  management in continual improvement…a topic that is near and dear to all of our hearts and especially our colleague (and Rider Levett Bucknall's eponymous) David Bucknall.

Cooperate,  be leaders, help each other to succeed, help the project to succeed, apply research, improve project performance, improve client satisfaction, improve our professional skill levels and drive out waste from the design and construction process...all end goals of the Rider Levett Bucknall Method.

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TODAY'S NUMBER - 634.76

That's how much the Dow Jones Industrial Average fell today (a loss of over 5.5% of total value) and it is, in part, a reaction to Standard & Poors stripping the United States of its AAA credit rating. But what does it mean for construction?  The truth is that it is hard to tell right now but a few things seem certain.

First, interest rates are likely to rise (I think that they will only rise slowly) but this will prove to be a drag on the economy and hence the construction industry.

Second, it will negatively impact consumer confidence, which will, in turn hold back economic recovery and the construction industry.

Third, there is likely to be a fall in the cost of oil (and oil derived products) and the cost of base metals which will act to hold down some construction costs even as CPI inflation continues to lap at the 2.5% mark.

Finally, with the ongoing slump in the AIA's Architectural Billing Index, rising interest rates and this new delay in  (dead-weight on) the recovery, it is likely that the failure of contractors, sub-contractors and even some consultants will accelerate as those unable to hold on will finally succumb to the ongoing construction recession.

The only positive is that, according to Fidelity Investments, REITS will start to look like a decent investment (as a hedge agaisnt inflation).

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