The Potentials of Lean Construction for an Optimized Construction Cost in the Nigerian Real Estate Industry

Housing affordability is the bane of most Nigerians. Traditionally, Nigerians see shelter as the greatest achievement, even if it requires saving all earnings to achieve homeownership. Housing affordability is extremely limited, given the country's level of unemployment and the low incomes earned. As a developing country, Nigeria’s real estate sector is evolving at a tremendous pace, and it received supports from the government for territorial developments, including building housing units for the people. However, this industry is still plagued with very high cost, unaffordable housing units despite the plans and strategies. Some affordable housing estates are tagged “substandard” due to a compromised level of quality in exchange for profit maximisation. The cost of a housing unit in Nigeria is the combined cost of land (fixed), construction cost (amount varies), and profit margin. After the study of ‘Lean-Thinking’ Principles, the researcher feels it is not impossible to optimise the housing development process for a reduced cost of construction. The Lean production concept was applied to the real estate housing development projects by systematically eliminating waste in the processes, simplify construction procedures and speed up housing unit delivery. A case study estate project in Lekki, Lagos was worked on, to determine lean construction potential for optimised construction cost in the industry. While trying to determine the possibility for cost optimisation, the researcher uses qualitative tools to determine the potential challenges and barriers to implementing lean thinking principles in the Real Estate Industry. The researcher used Vico Office for the Location-Based Scheduling of their conventional process, which revealed many potentials for improvement in terms of labour waste, activities clashes, and duration. The research outcome showed lean thinking portends a good cost-saving for the housing development process for the industry. It was observed that Sponsor Instalment Payment Rate has an enormous influence on Cash Flow Performance which is pivotal for timely project delivery. Cash Flow performance was improved from -73.9% to -52%. There were cost savings from labour waste and cost savings from gained duration. Optimisation revealed that the project could be completed earlier with 30days gain. Findings from the questionnaires' analysis showed that the Real Estate Industry lacks an adequate number of construction professionals in the sector. The employees are new to Lean principles and have no BIM tools or BIM use experience. The barrier analysis for implementing lean construction is high, even though 100% of respondent companies indicated readiness for change adoption for an optimised process for cost savings