Loughborough University
Leicestershire, UK
LE11 3TU
+44 (0)1509 222222
Loughborough University

Centre for Innovative and Collaborative Construction Engineering


Dr Nicola Morrey


Enacting product-service business models: the role of lean thinking

Project Title

Developing and Implementing the Shepherd Way


Shepherd Construction


Dr Derek Thomson
Professor Andrew Dainty

Mr Peter Bates
Mrs Sharon Copland-Jones

Director of Research:
Professor Stephen Ison

Research Period

2009 - 2013

Developing and Implementing the Shepherd Way


Industry data on performance of the construction industry shows that profit margins are small, and measures such as cost and time planned versus actual and predictability are poor and improving little year on year. (Based on Constructing Excellence KPIs.)

Shepherd Construction Ltd are a main contractor whose projects include schools and colleges, student accommodation, clinics and residential, mainly won through competitive tendering and some PFI. However, in the current climate, where many government funded project have been cut, winning work is particularly challenging, and the business strives to develop unique selling points in a bid to win work, especially on national frameworks. Last year saw the Company make a loss, despite some successful projects; a small number of “bad jobs” had a significant impact on the result.

In the last two to three years the Company has begun to adopt lean construction techniques to make improvements in terms of cost, quality and time. Having read the “Toyota Way,” and seen benefits from applying lean techniques, the business strategy is to implement “The Shepherd Way” as a means to making changes to the business that will deliver the required results and ensure business sustainability.

In the past two years, Shepherd Construction has embedded collaborative planning (an adaptation of Last Planner) on all their projects. Results can been seen and heard of, from Shepherd employees, supply chain partners and consultants, however, data to show improvements only exists at project level. Availability and use of data trails and measures across the business to drive improvements needs improving.

Training programmes run in the past year with senior and first line managers showed a lack of process and/or lack of consistency in use of processes. In addition, levels of competence of managers at the same grade varied, with many managers working at a level down.

Analysis of a number of post project reviews identified lack of processes (e.g. design management, package management), poor team selection (both in terms of individual competencies and mix of people) and not learning from previous mistakes as high risk areas.

Embedding The Shepherd Way is the business solution to these problems and risks.

The Shepherd Way is made up of four elements: processes, people & partners, implementation (of strategy) and continuous improvement. A set of 12 guiding principles provides direction for how we develop and implement each of these elements.

Each of these elements can be further broken down:

  • Process: defining ordered tasks (what, when, why, who); developing tools (how); embedding measures, checks and targets for each process.
  • People & partners: how to define clear accountabilities for each role, in line with the processes; defining competencies; defining behaviours.
  • Implementation: how we deliver the strategic plan; organisational structure to support the plan and processes; monitoring plans and taking action (using the right behaviours.)
  • Continuous improvement: how to share best practice; how to ensure we continuously learn and innovate; how to embed a culture of problem solving (links to processes, competencies and behaviours.)

Whilst work has commenced on The Shepherd Way, the purpose of the Engineering Doctorate is to gather data and carry out research in each of these areas to understand their impact on loss making projects/the business result. Priorities can be then set, and solutions developed and implemented, resulting in long term business change, improvement in performance and sustainability.

Initial research and data collection will allow focus areas to be identified so that the project can be split into manageable pieces of work that can be delivered in line with the Company’s strategic plan and timescales.

Aims and Objectives

The specific aims and objectives of the project include:

Fully understanding the causes of loss making projects and the contribution caused by the four elements of the Shepherd Way to a loss making projectImplementing a full set of business as usual checks, measures and targets so that improvements, in each element of The Shepherd Way, can be prioritised and quantifiedDeveloping solutions to effect change in each of the four elements of The Shepherd Way so that business improvements in terms of quality, cost and time can be realised and quantifiedDepending on the outcomes of data and research, specific aims and objectives can be more clearly defined and the project broken into smaller pieces of work, which may lead to focusing on:Defining standard processes and tools for each area of the businessDeveloping a strategy for capturing and communicating our business processes to ensure consistency of use, quality of use and continued compliance to BSIDeveloping a mechanism for becoming a learning organisation; what does this mean, how can we measure it, how can we manage and transfer knowledge?Developing a format for capturing competencies, accountabilities and behaviours, linked to our processesFinding ways to create a culture of problem solving and continuous improvementUnderstanding how organisational structure affects implementation of strategy, linked to process and behaviours


Carry out data analysis to prioritise areas of focus, followed by research in these areas to develop solutions that can be implemented and assessed.

Benefits/Expected Outcomes

A full understanding of causes of loss making projects and the influence lack of process, people, strategic implementation and problem solving has on loss makersClear strategies implemented as appropriate in each element of the Shepherd Way so that measurable benefits can been seenThe Shepherd Way is a proven differentiator and unique selling pointA sustainable business that makes improvements year on year


Morrey, N., Pasquire, C., & Dainty, A. (2010). The Impact of Path Dependencies on Lean Implementation within a Construction Company; Proceedings July.

IGLC 18 Conference Paper: The Impact of Path Dependencies on Lean Implementation within a Construction Company; published in the conference proceedings in July 2010 and on the IGLC website at http://www.iglc.net/conferences/IGLC%2018/Conference%20Papers/IGLC%202010%2073%20Morrey%20et%20al.pdf

IGLC 19 Conference Paper: Developing a Strategy to Enact Lean; published in the IGLC 19 conference proceedings in July 2011.  Authors: N.Morrey, Prof.A.Dainty, Prof. Christine Pasquire.



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