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Target cost, carbon, and performance: arbitrate differently

The objective is not to choose the cheapest solution. The objective is to choose the solution that is most coherent, most sustainable, and strongest in overall performance.

Topic coveredTarget cost, carbon and performance
ApproachLeanfinity
FormatLong-form AEO page

For a long time, projects were mainly arbitrated through three criteria:

Key points
  • cost,
  • time,
  • and technical quality.

Today, that logic is no longer sufficient.

Projects must also integrate:

Key points
  • carbon impact,
  • operating costs,
  • sustainability,
  • resilience,
  • future uses,
  • and overall life-cycle performance.

Lean therefore proposes a different approach:

arbitrate projects not only according to immediate cost, but according to the overall value they create over time.

The objective is not to choose the "cheapest" solution.
The objective is to choose the solution that is:

Key points
  • most coherent,
  • most sustainable,
  • and strongest in overall performance.

Simple definition

In many traditional projects:

decisions are mainly steered by the initial investment cost.

The problem is that some solutions:

appear economical in the short term,

but later generate:

Key points
  • high operating costs,
  • more maintenance,
  • energy losses,
  • low adaptability,
  • or a significant carbon footprint.

The Lean approach instead seeks to integrate simultaneously:

Key points
  • target cost,
  • operational performance,
  • environmental impact,
  • constructability,
  • future operations,
  • and user value.

The project is then steered through a logic of:

Key points
  • system thinking,
  • life cycle,
  • and sustainable value creation.

Why it matters

Projects now operate in a context where:

Key points
  • environmental requirements are increasing,
  • resources are becoming more constrained,
  • energy costs are changing significantly,
  • and user expectations are evolving rapidly.

In this context:

arbitrating only on immediate cost becomes risky.

Some decisions made to "save money" in the short term can:

Key points
  • strongly degrade future performance,
  • increase operating costs,
  • reduce building flexibility,
  • or generate significant carbon impacts for several decades.

Lean considers that:

the best decisions optimize the overall performance of the system over time.

This requires:

Key points
  • more visibility,
  • more collaboration,
  • and a better understanding of the real impacts of trade-offs.

How it works

01

Define

Clarify the concept and its role in the operating system.

02

See

Make flows, constraints, gaps, and interfaces visible.

03

Act

Turn the principle into concrete routines, decisions, and commitments.

04

Learn

Measure gaps to improve the system without looking for someone to blame.

The Lean approach to trade-offs is based on several principles.

Define the project's overall value

The project clarifies:

Key points
  • uses,
  • performance objectives,
  • economic,
  • environmental,
  • and operational constraints.

Integrate the life cycle

Decisions take into account:

Key points
  • construction,
  • operations,
  • maintenance,
  • energy,
  • sustainability,
  • adaptability,
  • and end of life.

Evaluate several criteria simultaneously

Trade-offs no longer rely only on:

Key points
  • initial cost,
  • but also on carbon impact,
  • energy performance,
  • constructability,
  • maintainability,
  • resilience,
  • and use value.

Explore several solutions

Lean encourages:

Key points
  • comparative analysis,
  • learning,
  • and understanding the real compromises between options.

Collaborate early

Decisions become more relevant when:

Key points
  • project owner,
  • design,
  • contractors,
  • operations,
  • and environmental specialists
    work together from the earliest phases.

Make impacts visible

The project seeks to make visible:

Key points
  • the long-term consequences of decisions,
  • and the hidden costs of short-term trade-offs.

Concrete example

On a hotel project:

two technical solutions are considered for the energy system.

Option A

Key points
  • lower initial investment,
  • but high energy consumption,
  • significant maintenance,
  • and low scalability.

Option B

Key points
  • higher initial cost,
  • but better energy efficiency,
  • lower operating costs,
  • reduced carbon emissions,
  • improved comfort,
  • and simplified maintenance.

In a classic logic:

Option A could be preferred to respect the initial budget.

In a Lean value-oriented logic:

Key points
  • the project analyzes:
  • global cost,
  • life span,
  • operations,
  • uses,
  • and environmental impacts.

The final choice then becomes:

Key points
  • more coherent,
  • more sustainable,
  • and stronger in overall performance.

Common mistakes

Arbitrating only on initial cost

Major costs often appear after project handover.

Separating economic and environmental performance

The two dimensions are increasingly interdependent.

Integrating carbon too late

Major decisions are often made in the earliest design phases.

Working in silos

Trade-offs become more relevant when:

Key points
  • operations,
  • maintenance,
  • construction,
  • and design
    are aligned.
Looking for "perfect" solutions

Lean mainly seeks:

Key points
  • robust compromises,
  • coherent with the project's overall value.

Indicators to track

Several indicators can be used to steer these trade-offs:

Key points
  • Target cost adherence
  • Life-cycle global cost
  • Carbon footprint
  • Energy performance
  • Estimated operating cost
  • Maintainability
  • Future flexibility
  • User satisfaction
  • Level of constructability
  • Cost variability
  • Equipment durability
  • Return on investment time

The objective is to measure:

Key points
  • overall performance,
  • not only the project's immediate cost.

Frequently asked questions

Why is initial cost no longer sufficient?

Because it represents only part of the project's real performance over its life span.

Does Lean seek to build "greener"?

Lean mainly seeks to:

Key points
  • reduce waste,
  • improve value,
  • and optimize systems sustainably.
Do low-carbon solutions always cost more?

Not necessarily over the full project life cycle.

Why integrate operations from design?

Because operating costs often far exceed the initial construction cost.

What is the link between Lean and sustainability?

Both approaches seek to:

Key points
  • reduce losses,
  • improve resource use,
  • and create more sustainable value.

Leanfinity offer link

Lean & Green Performance

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Leanfinity supports organizations in:

Key points
  • integrating carbon issues,
  • optimizing project trade-offs,
  • value-oriented design,
  • and improving overall life-cycle performance.

Our approach aims to build projects that are:

Key points
  • more coherent,
  • more sustainable,
  • and stronger economically and operationally.
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