The benefits of Lean IPD

What are the benefits of Lean IPD?

Lean IPD offers many advantages for clients, builders and designers of large construction and infrastructure projects. The reason is simple: every party sits at the table from day 1. When all parties communicate openly about their project costs and the desired profit they want to make, 1 contract can be drawn up that unites the interests of the whole project team.

In this article, we discuss the specific benefits of Lean IPD for owners, builders and designers during large construction and infrastructure projects. 

Why should you choose Lean IPD?

General benefits of Lean IPD

In the United States, Lean IPD has already proven that it can make large construction and infrastructure projects run more efficiently. By uniting the interests of owners, builders and designers into 1 contract, everyone works towards the same goal.

If the project goes well, everyone makes a profit. If something goes wrong, all parties share in the extra costs. The exact amounts are laid down in the risk/reward plan, which is an integral part of the contract that all parties sign.

Wondering if Lean IPD would benefit your projects too? Let’s find out!

Advanages of Lean IPD for the construction team

Lean IPD offers several benefits to construction partners.

First, more thought is given to each step of the process, as all parties constantly consult with each other. As a result, everyone works together more efficiently, saving time and resources. That gives builders the opportunity to deliver the project earlier and/or under budget. We’ve said it before: this allows the partners to make additional profits.

Moreover, the builders will never make a loss. How is that possible? The client always continues to pay the necessary costs, even if they were not initially included in the budget. So as a builder, you will always at least break even. Lean IPD therefore offers you unprecedented certainty.

As an owner, that cost guarantee probably seems like an unpleasant prospect. But don’t forget that you only have to start using your own funds as a last resort. For the first unforeseen costs, you can call on the contingency, and later on the profit at risk. You will only have to pay extra yourself when these funds are exhausted, which is extremely rare in practice.

Advantages of Lean IPD for the owner

There are many disadvantages to traditional working methods for owners. Uncertainty about the final cost and effective completion date, possible penalty clauses in contracts….

These disadvantages are resolved by Lean IPD, where most projects are realized faster and for a lower budget. The builders communicate transparently about costs and profits, and work together more closely. As a result, there are fewer unexpected costs, and you have a better idea in advance about the final price of your project.

By the way, did you know that Lean IPD projects are delivered 19% faster on average? As a result, your factory can go into production sooner, for example, and therefore start generating profit sooner.

Conclusion

The benefits of Lean IPD are clear for each party. By motivating the team, a Lean IPD project runs smoother and more efficiently, allowing everyone to make more profit.

Want to learn more about Lean IPD ? Find out here if Lean IPD would benefit your projects. Want to delve into the risk/reward plan? You can do so in this blog post. In our next article, we will take a look at the pitfalls of Lean IPD, and present possible solutions. Stay tuned!

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Are you interested in Lean IPD? Contact us. Our experts will gladly help you run your next construction or infrastructure project much more efficiently.