1st Edition

Manufacturing Cost Policy Deployment (MCPD) Profitability Scenarios Systematic and Systemic Improvement of Manufacturing Costs

By Alin Posteuca Copyright 2019
    374 Pages 50 B/W Illustrations
    by Productivity Press

    374 Pages 50 B/W Illustrations
    by Productivity Press

    This book shows how to consistently obtain annual and multiannual manufacturing target profit regardless of the evolution of sales volumes, increasing or decreasing, using the Manufacturing Cost Policy Deployment (MCPD) system. Managers and practitioners within the manufacturing companies will discover a practical approach within the MCPD system that will help them develop and support their long-term, medium-term, and short-term profitability and productivity strategy. The book presents both the basic concepts of MCPD and the key elements of transforming manufacturing companies through MCPD system, as well as supporting the consistent growth of external and internal profit by directing all systematic and systemic improvements based on meeting the annual and multiannual Manufacturing Cost Improvement (MCI) targets and means for each Product-Family Cost (PFC).

    This book is unique because it presents two types of systematic and systemic improvement projects for MCI that have been applied over the years in various multinational manufacturing companies operating in highly competitive markets, in order to address the consistent reduction of unit manufacturing costs by improving the Cost of Losses and Waste (CLW).

    Readers will discover the practical approach of MCI based on a structured approach to MCPD system beyond the traditional approach to manufacturing improvements based mainly on improved time and quality. Therefore, from the perspective of the MCPD system, the multiannual manufacturing target profits are met while the annual and multiannual manufacturing target costs are a predetermined stake and not a result of the improvements already made.

    List of Figures. List of Tables. List of Abbreviations. Preface. About the Author. Introduction. Part I: Understanding of the MCPD system. Chapter 1: Let's Start by Really Tackling Improvement of the Current Level of Manufacturing Profit through Productivity Improvement. Chapter 2: Scenarios and Strategies of the MCPD System. Chapter 3: The MCPD Transformation: Establishing and Implementing Profitable Improvement Projects. Chapter 4: Annual Transformation Example through MCPD System: MCI with at least 6% per year for a PFC. Part II: Profitable Improvement Projects Implementation through MCPD for MCI towards Maximizing Outputs. Chapter 5: MCI and Increasing Equipment Effectiveness. Chapter 6: MCI and Increasing Manufacturing Capacity through a New Products and a New Equipment. Part III: Profitable Improvement Projects Implementation through MCPD for MCI towards Minimizing Inputs. Chapter 7: MCI through Improving Variable and Fixed Costs: Material, Environment and Labor Costs. Chapter 8: MCI through Aligning the Factory Lead Time to Takt Time. Appendix 1: The MCPD Transformation ChecklistAppendix 2: Glossary - The basic concepts of the MCPD system. Bibliography. Index.


    Alin Posteucă, Ph.D, is a management consultant in profitability, productivity and quality and Managing Partner of Exegens Management Consultants (Romania). Prior to this position, he held top management positions in manufacturing and service companies.

    His major research areas include manufacturing policy deployment, manufacturing cost improvement, and operational management of production. His recent research includes the manufacturing cost policy deployment (MCPD) which aims at achieving multiannual manufacturing target profit by meeting the external target profit, by providing the manufacturing capacities needed to support sales plans, especially when sales are increasing (effectiveness or maximizing output by reducing or eliminating non-effective use of inputs - losses), and in achieving internal profit through continuous improvement of manufacturing costs, especially when sales are decreasing (efficiency or minimization of inputs by reducing or eliminating excessive amounts of inputs - waste). He has been actively involved in various industrial consulting and training projects for more than 20 years in Romania.

    He has an MBA degree (University of Iasi, Romania). He received his Ph.D. in managerial accounting from the Bucharest University of Economic Studies (Romania). Also, he received his Ph.D. in industrial engineering from the Polytechnic University of Bucharest (Romania). He is certified public accountant in Romania.

    He has published in various research journals and presented papers at numerous conferences and congresses regarding productivity, manufacturing cost improvement and industrial engineering. He is the co-author of Manufacturing Cost Policy Deployment (MCPD) and Methods Design Concept (MDC): The Path to Competitiveness (2017, Productivity Press, USA). Also, he is the author of Manufacturing Cost Policy Deployment (MCPD) Transformation: Uncovering Hidden Reserves of Profitability (February, 2018, Productivity Press, USA).

    "There are numerous structured approaches to productivity improvement available - and countless consultants who help you apply them. However, reality is never quite the same as the scenarios painted by these consultants or the purveyors of the tools and techniques. The theory is usually great; the practical application is less certain. Most approaches are relatively superficial, provided in outline only … requiring the reader to uncover the flaws and failings, the practical difficulties of interpretation and implementation.

    This book is different. Firstly, it acknowledges the fact that people find implementation difficult so it approaches the situation by focusing on a number of specific scenarios --some involving growth, some involving decline …. and takes the reader through the detailed application of MCPD in these scenarios.

    The author’s experience as a lean manufacturing consultant has clearly shaped his approach to the development of strategy and practice - no bad thing obviously … but he has added his own thoughtful and thorough approach on top to provide a ’system’ capable of providing real improvements in manufacturing productivity and profitability.

    The book is detailed and peppered with abbreviations - sometimes making it quite a ‘hard’ read. It is also generally a book that suits readers not afraid of quantitative approaches and the application of mathematical formulae. However the author also recognizes that improving productivity via a structured, quantitative approach also brings intangible benefits.

    It is worth persevering with the detail to uncover the underlying principles and ‘truths’ that will allow you to ‘make a difference’."

    John Heap, President of the World Confederation of Productivity Science


    "All too often, it seems that publications related to manufacturing productivity focus on short-term fixes in 'easy' scenarios. This book is unique in that it addresses improvement projects that cover the full planning range from a temporal perspective, and the pursuit of excellence regardless of product life cycles. It is key that the concepts presented in the book consider short-, medium-, and long-term productivity in a way that precludes the tendency to focus on short-term fixes. It is perhaps also this approach that leads to the development of strategies that can be used even during times of economic contraction. In short, this book provides the tools required to manage manufacturing organizations and maximize profitability during both good and trying times."

    G. Don Taylor, Ph.D., P.E.

    Charles O. Gordon Professor – Virginia Tech

    Vice Provost for Learning Systems Innovation and Effectiveness


    "This book provides a way to improve practical approach and tools for competitive target costs setting with a goal engineering approach at first and unfold it for a whole organization about cost management and cost reduction, using both growth and reduction sales scenarios".

    Shigeyasu Sakamoto, Ph.D. Doshisya, P.E.

    CEO, Productivity Partner INC. Japan


    "Effective cost management underpins the achievement of competitive manufacturing, and increasingly manufacturing strategy is dominated by the need to reduce operating costs. Firms that arbitrarily cut costs to satisfy short-term profitability goals miss the bigger opportunity to both reduce costs and increase productivity. This is where Alin’s book makes an important and unique contribution, bridging the strategic management and operations improvement domains. Through MCPD decision makers are better informed to identify cost reduction opportunities, which can then be implemented through productivity improvement. To put it simply, MCPD makes manufacturing better: cheaper, more productive, and more capable of competing on a global scale."

    Daniel Eyers, Ph.D.

    Lecturer in Manufacturing Systems Management - Cardiff University


    "I’ve been collaborating with Alin since a long period already for different projects, and I have been witness to the development of the Manufacturing Cost Policy Deployment (MCPD) concept at different stages until this third book on MCPD has been reached. The MPCD system is a unique reference concept in an operational environment to drive productivity improvements in order to achieve the operating profit goal through manufacturing cost improvement. Using the MPCD system, it is easy to identify and continually reduce the manufacturing costs associated with losses and waste across each product family processes. Also, cases study are very useful to understand how this new concept can be translated into practice, some of them developed in our factory, so you just need to get it done!"

    Vasile Haiduc,

    Plant Operations Manager, DeLonghi


    ”Written by a seasoned professional Ph.D., the book of Alin Posteucă is a mind opening a new way of scientifically and practically approach the concepts of manufacturing operations. Want to make your business more profitable, you the present days entrepreneur? Do you want to get immersed in the wonderful philosophy of productivity, get to know the latest ideas that the experts are conveying them to the production floor?

    Alin’s book is an answer and a practical guide to all these. It shows the basic fundamental and scientific steps and factors that are supporting his new very original approach to the profitability and productivity and also practical suggestions when facing problems on the production floor."

    Florin Larion,

    Lean-Six Sigma Master Black Belt, Philadelphia, USA.


    "While most of authors are focusing their efforts, experience and explanation on productivity improvement, Alin, with his "Manufacturing Cost Policy Deployment" (MCPD) goes further- providing real improvement factors, continuous targeting of improvements to profit, financial quantification of results - all elements needed in order get the results of improved productivity at the level of profit and loss statement (P&L). This third book dedicated to MCPD, named "Manufacturing Cost Policy Deployment (MCPD) Profitability Scenarios: Systematic and Systemic Improvement of Manufacturing Costs" is "advanced level manual": 15 improvement projects documenting previously explained scenarios, concise, clear, targeted and obviously easy to replicate to meet the Manufacturing Cost Improvement (MCI) goal - you CANNOT pretend haven't found your company's situation in one of those".

    Ovidiu Ambrus,

    Plant Manager at Litens Automotive Eastern Europe (Litens Automotive Group)


    "This book demonstrates how MCPD system is helping companies with different type of production environments, to focus their improvement strategies and transformation of product families flow to meet customer demand, continuously targeting Manufacturing Cost Improvement convergent to zero Cost of Losses and Waste and continuous profitability improvement. Readers will find different scenarios of MCPD implementation that show impressive easy to replicate results (i.e. to meet the annual MCI goal, an kaizen project for MCI achieved profitability targets by reducing the set-up time by 70% and another by reducing breakdown by 35% to increase OEE level)."

    Catalin Neagoe,

    Lead Black Belt, Cameron, a Schlumberger company


    "In this new book on the MCPD system, starting from the basic questions of any manager (such as what are the activities that generate losses and waste, what types of losses and waste occur and how they are generated along the manufacturing flow, which processes are in the top of the ones that generate most of the costs of losses and waste (CLW) and what is their trend etc.) the systematic and systemic activities are presented, both annual and multiannual, for identification, quantification and analysis of CLW to consistently achieve manufacturing cost improvement (MCI) targets. The surprising and documented context is valid in the vast majority of manufacturing companies. The potential for approaching and improving the CLW of 30-50% is enormous and represents the path to true competitiveness through costs.

    The 7 presented matrixes are intuitive and can be easily used for any practical model, and based on them (using the PDCA cycle), real data are available to achieve annual MCI targets. Also, it is very well underlined the way to set the annual MCI means targets ("what how/through what leverage") taking into account the current and future context of the market & sales.

    Clearly, it is a book that can be applied in factories to reduce costs consistently and strategically. I recommend the MCPD system and this book to those who realize or not that they are on a mountain of losses and waste and also have the necessity, ambition and leverage needed to radically improve this current status!"

    Gabriel Hîncu,

    Plant Maintenance Manager, ZF Group-TRW Airbag Systems


    "Since I as child I’ve loved nature. Why? Because it knew how to deal with changes to find simple solutions to complex problems. In our industrial era we have simple problems and we try to find complex solutions. In the same way Manufacturing Cost Policy Deployment (MCPD) Profitability Scenarios: Systematic and Systemic Improvement of Manufacturing Costs book by Alin Posteucă shows us the nature way. Not only by theoretical but also by practical example. Doing Lean more than 15 years I’ve learnt what is the "KISS" – "Keep It Simple Stupid". In the same way the book written by Alin teaches us how to survive and make profit in a very competitive market."

    Constantin Anechitei,

    Lean Manager at Filtration Group