The use of Lean and Six Sigma principles on construction (infrastructure) projects in Victoria are limited, cognisant of their use in projects overseas in particular in the United Kingdom.
This paper examines the return on investment in the use of lean and six sigma principles, when compared with the cost of inaction and continuing with the status quo, in the context of my experience over the past 30 years within the infrastructure (construction) section both in Victoria (Australia) and London (England). Based on the averages of 5 projects, the cost of inaction has a cost overrun of 79%, with completion 17 months late or a time overrun of 54%. Conversely based on the averages of 6 projects, the cost of action via the implementation of lean (and Six Sigma) has a Return on Investment (RoI) of 130, with a cost underrun of 12% and a completion of 4 months or 13% earlier than planned. This is not the panacea for infrastructure projects not performing, but part of a wider framework with respect to the culture in how we deliver infrastructure projects and challenging the status quo in ensuring value for money outcomes for all stakeholders.