Mr. Lean Buys and Transforms a Manufacturing Company: The True Story of Profitably Growing an Organization with Lean Principles, 1st Edition (Hardback) book cover

Mr. Lean Buys and Transforms a Manufacturing Company

The True Story of Profitably Growing an Organization with Lean Principles, 1st Edition

By Greg Lane

Productivity Press

296 pages | 16 B/W Illus.

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pub: 2009-12-17
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Description

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.

Reviews

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

Table of Contents

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

Differently

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

Index

About the Author

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.

Subject Categories

BISAC Subject Codes/Headings:
BUS053000
BUSINESS & ECONOMICS / Quality Control