1st Edition

Mr. Lean Buys and Transforms a Manufacturing Company The True Story of Profitably Growing an Organization with Lean Principles

By Greg Lane Copyright 2009
    296 Pages 16 B/W Illustrations
    by Productivity Press

    This is the true story of how, armed with only Lean improvement methodologies, a specially trained Toyota Lean expert purchased a business he knew nothing about, applied Lean techniques, and succeeded in doubling sales and increasing profitability, before he finally sold the thriving business.

    With humility and humor, the author recounts his successes and failures, introduces his key employees and their struggles with change, and provides motivation and simple ideas for all readers looking to improve their businesses. He captures key points highlighted in text boxes and includes illustrative photos and examples of Lean tools at work.

    This story dispels the fallacy that Lean management does not achieve excellent results in high variation companies and job shops. Toyota’s OSKKK methodology is introduced to understand processes and guide a Lean transformation on the shop floor and in the office.

    Prologue: The Purchase
    Chapter 1 The Beginning: Observation and Documentation
    1.1 Introduction
    1.2 Observing
    1.3 Getting a Detailed Understanding of the Processes I Would Be Responsible For
    1.4 A Lack of Training Can Be Costly
    1.5 Training as a Machine Operator
    1.6 Discovering a Lack of Documentation
    1.7 Identifying Skill Sets That Needed to Be Replaced
    1.8 Workplace Organization (5S) Opportunities
    1.9 Discovering Different Methods Being Utilized for the Same Task (No Standardization)
    1.10 Discovering Difficult Processes to Standardize
    1.11 This Much Observation Required Me to "Divide and Conquer"
    1.12 Summary
    Chapter 2 Standardizing the Estimating Process
    2.1 Hiring a New Programmer/Estimator
    2.2 Writing the First Draft of Standardized Steps for Programming and Estimating
    2.3 Considering the Complications with Quoting
    2.4 Minimize Training and Start-Up Time by Utilizing Similar Equipment
    2.5 Continuing to Determine Where Skill Sets Would Be Lost
    2.6 Meeting the Customers
    2.7 Starting Some Measurements
    2.8 Visualizing the Measurement
    2.9 Plan, Do, Check, Act (PDCA)
    2.10 Summary
    Chapter 3 Learning the Office Processes
    3.1 Introduction
    3.2 Inputting Orders
    3.3 Problems Working without a PDCA Cycle in the Estimating Process
    3.4 Re-pricing Discussions Are Easier if Based on Accurate Data
    3.5 Learning to Purchase
    3.6 Scheduling the Shop Based on Tribal Knowledge
    3.7 Job-Shop Planning
    3.8 Simplified Short-Term Planning
    3.9 A More Comprehensive Work Order Package
    3.10 Poor Work Order Packages Can Increase SetupTime
    3.11 Closing the Books
    3.12 Collecting the Money
    3.13 Summary
    Chapter 4 The First Days Alone
    4.1 Introduction
    4.2 My First Pricing Decision Alone
    4.3 Creating Extra Capacity with 5S
    4.4 Establishing Normal versus Abnormal
    4.5 Problem Solving versus Firefighting
    4.6 Identifying the Need for Shop-Floor Visuals
    4.7 Converting Small Productivity Improvements into Profit
    4.8 Challenging the Reported Profit Margins
    4.9 Summary
    Chapter 5 Creating and Selling Capacity
    5.1 Only Thinking in Terms of Full Absorption Costing
    5.2 Overtime as a Positive
    5.3 Setup-Time Reductions
    5.4 Continuously Measuring Setup Times
    5.5 Creating a Team Leader
    5.6 Increased Productivity through Visual Management
    5.7 PDCA of the Estimating Process
    5.8 Becoming the Estimator
    5.9 Summary
    Chapter 6 Getting Everyone Motivated for Improving the Machine’s Output
    6.1 Introduction
    6.2 Managing Each Job Visually
    6.3 The Desire for Independence from Day-to-Day Operations
    6.4 Preparing for Further Setup Reductions
    6.5 Continuing the Kaizen of Equipment by Improving the Adjustment Phase of Changeovers
    6.6 Running a Machine while Confirming the Quality of the First Piece
    6.7 Difficulties in Creating a Profit-Sharing Plan
    6.8 Staying Hands-On since "the Devil Is in the Details"
    6.9 Cost Justifying a Team Leader
    6.10 Closing the Books Becomes Anticlimactical
    6.11 Summary
    Chapter 7 Seeing the Administrative Processes from a New Angle
    7.1 Introduction
    7.2 Visualization Confronts Obtaining Information Either from Computers or in Meetings
    7.3 Not Allowing Excuses for a Late Start
    7.4 Small Businesses Look at the Recruiting Process
    7.5 Focusing to Improve the Office Processes
    7.6 Purchasing Is a Critical Administrative Function to Look toward Improving
    7.7 Unsuccessful at Significantly Reducing the Time Necessary for Quotations
    7.8 5S for Shared Computer Drives and Files
    7.9 Outside Quality Accreditation
    7.10 Summary
    Chapter 8 Moving the Business
    8.1 Industrywide Downturn
    8.2 Background for Moving the Business at This Point in Time
    8.3 Creating a New Layout from a Blank Canvas
    8.4 A Nondisruptive Move
    8.5 Simulating the New Layout
    8.6 Introducing Procedural Changes during the Move
    8.7 Using a Major Event to Introduce Change in the Office
    8.8 Summary
    Chapter 9 Accurate Pricing through Better Cost Allocations
    9.1 Introduction
    9.2 Determining More Accurate Allocations during
    Tough Times
    9.3 Using My "Modified Activity-Based Costing"
    9.4 Starting Simplified Activity-Based Costing in the Shop Using a Matrix
    9.5 How to Relate the Matrix to Cost
    9.6 A Simple Activity-Based Costing Matrix for the Office
    9.7 Relating the Matrices to Hourly Costs
    9.8 How Others Often Allocate Costs
    9.9 Keeping the Team Leader Focused during the Slow Times
    9.10 Increasing Process Capabilities to Reduce Outsourcing
    9.11 Standardizing the Business Processes Allows Time for Pursuing Other Opportunities
    9.12 Summary
    Chapter 10 Up-Front Delays
    10.1 The Measurements Confirm Success
    10.2 Continuously Developing Protocols Allows More Autonomy from Day-to-Day Operations
    10.3 Planning Only Based on Available Materials Is Costly
    10.4 Capacity Planning Based on Lead Times
    10.5 Identifying Areas Where We Were Only Being Reactive
    10.6 Available Time Utilized to Document Processes
    10.7 Lead Time Reduced through "Strategic" Inventory
    10.8 Prioritizing Problems during Busy Periods
    10.9 The Lack of Hands-On Experience Is Very Costly
    10.10 My Personal Experience of Generating Costly Designs
    10.11 Summary
    Chapter 11 Making Money during the Good Times
    11.1 Introduction
    11.2 Improving Processes during Slow Periods Pays Off
    11.3 Problem-Solving Skills Developed during the Slow Periods Begin to Pay Off
    11.4 The Leader Keeps in Practice
    11.5 Diversification Would Have Been Helpful
    11.6 The Need for a Second Shift
    11.7 The Entrepreneurial Spirit Pays Further Dividends during the Busy Times
    11.8 Structured Problem Solving Minimizes Opinions
    11.9 Problem Solving Requires Looking into the Process Details Using a Structure
    11.10 Equality in Enforcing Your Own Policies Is Critical
    11.11 Summary
    Chapter 12 Expanding into New Products
    12.1 Introduction
    12.2 The Logic behind Expanding into Sheet Metal Fabrications
    12.3 Previous Expansion Considerations Resulted in Little Impact to the Current Layout
    12.4 Filling the First Order
    12.5 Investing Step by Step
    12.6 OSKKK Takes to Life within Our New Processes
    12.7 Once Again, a PDCA Cycle in the Quoting Process Proves Critical
    12.8 Again, Engineers’ Lack of Hands-on Experience Is Costly
    12.9 Summary
    Chapter 13 Business for Sale
    13.1 Introduction
    13.2 Determining the Process Steps for Selling a Business
    13.3 Determining an Asking Price
    13.4 A Marketing Package
    13.5 Advertising
    13.6 The First Nibbles
    13.7 Considerations of Owner Financing
    13.8 Lowering the Price
    13.9 Three Serious Buyers
    13.10 Evaluating Offers
    13.11 Offer Accepted
    13.12 Drawing to an End
    13.13 Summary
    Chapter 14 Reflections
    14.1 Introduction
    14.2 Lessons Learned
    14.3 Using the Correct Measurements Is Critical to Achieving Results
    14.4 Cross-Training Is a Critical Part of Success in High-Variation Companies
    14.5 Team Leaders Increase Profit through Higher OEE
    14.6 Managing Parts Differently
    14.7 Activity-Based Costing Proves Helpful in Securing More Orders
    14.8 A Process to Examine Your Business
    Appendix A OSKKK Methodology
    Appendix B Documentation Techniques
    Appendix C My First Attempt at Standardizing the Quoting Process
    Appendix D Example of the First Day-by-Hour Board for the Bottleneck Machine
    Appendix E Real-time Pareto Chart
    Appendix F Overall Equipment Effectiveness (OEE) for Bottlenecks
    Appendix G Typical Team Leader Responsibilities
    Appendix H Cross-training or Skills Matrix
    Appendix I New Layout with Some CNCs Set Up as an "L" Cell
    Appendix J Initial ABC Costing Matrix for Shop and Office
    Appendix K Initial Equipment and Area Layout for Expansion into Sheet Metal
    Appendix L Sequence Utilized for Learning the Business and for Implementing Lean
    Appendix M Different Applications of Value Stream Mapping and Process Mapping
    About the Author


    Greg Lane was trained as a Toyota Production System (TPS) Key Person and has turned his training into a career of consulting supporting companies on in their successful Lean journeys. He is a faculty member of the Lean Enterprise Institute in the US and an advisor to the Instituto Lean Management in Spain.

    This intriguing story proves beyond a doubt that Lean principals go a long way towards profitability for all of us. Assuming you subscribe to management being synonymous with improvement, you are sure to come away from this book with a clear plan for a few new improvements.
    —Xavier Pujol, Plant and Site Manager, Continental Corporation

    The beauty of Mr. Lane's books (and this is the second I have read and studied) is that no matter where your company finds itself along its path and development towards Lean manufacturing, you can find something to apply easily and immediately. His books are very pragmatic and lend themselves as guides to quick direct action. Mr. Lane's books are mandatory reading for both my high level managers and engineers as well as my frontline supervisors.
    —Jason T. Draffin, Plant Director, Board Member, Harris Calorific International Sp. z o.o., A Lincoln Electric Company

    This book has been insightful as it helps to break down a complicated subject matter into practical and easily implementable components. The examples provided were especially helpful in visualizing which steps to take when developing our improvement and implementations plans. After reading this book, you are sure to come away with a number of ideas that will create value for your organization.
    —Tom Meola, President, Premix Incorporated