Speed-Based Target Profit Planning and Developing Synchronous Profitable Operations
Profitable production planning is and will remain an eternal challenge to ensuring the prosperity and dignity of companies in a global market. Even though there are different approaches to achieving the target profitability through productivity in the production planning stage, these approaches do not guarantee consistent planning, creation, and sustenance of synchronous profitable operations for multiannual and annual target profit. In feedback to this predicament, Alin Posteucă develops a new system called speed-based target profit (SBTP).
SBTP is the profitable production management and manufacturing improvement system that approaches production planning to achieve unit speed of target profit for target products through manufacturing cost improvement and bottleneck profitability control for maximum takt time. Managers and practitioners within manufacturing companies will discover a practical approach for cost down and cash up by applying a powerful operational profitable production planning formula to meet profitability expectations through productivity based on strong leadership with the help of a specific system for feedforward, concurrent, and feedback control. Therefore, the SBTP system in this book presents a holistic approach to profitability for target products and the development of its own mechanism since the acceptance of each order from customers to achieve continuous synchronization of all manufacturing processes to market requirements, profitability management, and profitable production planning.
The uniqueness of the book is reinforced by a detailed presentation of the successful application of the SBTP system in two case studies, as a way of life and a unit speed of target profit improvement ethos at all hierarchical levels, in two multinational manufacturing companies operating in highly competitive markets in order to address the synchronous profitable operations for both the sales increase scenario and the sales decrease scenario.
By adopting the SBTP system, your company will be able to consistently achieve unit speed of target profit in the bottleneck process for fulfilling annual and multiannual target profit as a unique and effective way through a new profitable production planning paradigm that operates according to its own production system.
List of Abbreviations.
About the Author.
Section I Understanding Speed-Based Target Profit.
Chapter 1 Changing The Production Planning Paradigm.
Chapter 2 Develop Your Speed-Based Target Profit Mechanism and Start to Live It.
Section II Planning Synchronous Profitable Operations.
Chapter 3 Support Striving for Speed-Based Target Profit.
Chapter 4 Feedforward Control for Production Planning and Scheduling.
Section III Developing Synchronous Profitable Operations.
Chapter 5 Concurrent and Feedback Controls.
Chapter 6 Speed-Based Target Profit Case Studies.
Alin succeeded in a beautiful new book -- this time a new theory and a new practice in operations management. The SBTP is a new paradigm for profitable production planning which integrates productivity measurement and improvement directly within the planning and scheduling of production activities. Without a good production planning system, in fact a maximum degree of use of current and future capacities, the results of improvements in working methods and performance may disappear, so SBTP is necessary for productivity management to achieve target profitability. Therefore, both managers and practitioners and academia will have a real enlightenment by identifying a new valuable way to achieve the target profit by increasing productivity for those concerned with operations management. I am convinced that SBTP will have a major impact on the science of management and will certainly open a new implementation topic in manufacturing companies and beyond in these days and in the future.
-- Shigeyasu Sakamoto, Ph.D, Doshisya, P.E.; CEO, Productivity Partner Inc., Japan
The author, Alin Posteucă, has conducted a very courageous and honest examination of Toyota Production Systems (TPS), Lean Manufacturing, Theory of Constraints (ToC), Six Sigma, Kaizen (Incremental Changes) and Kaikaku (Radical Change), Overall Equipment Effectiveness (OEE), Total Quality Management (TQM) and its strengths and weaknesses in achieving planning and developing synchronous (occurring at the same time) profitability in operations. While the author is not proclaiming that these methods do not work, he does point out where many of the weak points in the overall systems do not achieve their intended potential. Additionally, the Author does not claim that the new system, Speed-Based Target Profit (SBTP), should replace these other system approaches, but instead demonstrates how Speed-Based Target Profit (SBTP) will help in the realization of the target profit these systems strive to achieve.
The Author has introduced new concepts, tools and methods such as Takt Profit, Kaizenshiro, first presented in his previous books on Methods Design Concept (MDC), Waste Map, and presents a deeper understanding of the various concepts like the 3 G’s of Kaizen: Gemba, Gembutsu, Genjitsu.
I usually read a book in a day or 2, but I spent more than three weeks studying this book. This is a book for deep thinkers and for those wanting to meet the annual and multiannual ROI targets in their businesses. The universities just do not teach these ideas in MBA programs and it’s a shame because so many managers and business leaders are left blind-sided in the real world with trying to solve the common problem of achieving profitability targets but without the system or tools to accomplish this goal.
I not only recommend you read Speed-Based Target Profit (SBTP), but that you study it deeply. While you will likely need to adjust the system and models to your own companies’ specific customer demand, flow, and constraints, whether that be internal (i.e., Total Productive Maintenance) or external (i.e., Supply Chain), the reward of achieving profitability targets will be yours to celebrate. Reading this book will not make the work you have to do in implementing the system, methods, and solutions less hard, but I believe it will make it at least possible. You can avoid much the trial and error, and strategies of hoping and praying, with real system tools and methods that the author has demonstrated can solve these common production planning and development problems that exist in most business operations.
I recommend this book to all those wanting to delve deeper into systems thinking, to understand the bridge between Industrial Engineering and business profitability. For all Operations Managers, Production Managers, Planners, Schedulers, Supply Chain Managers, Lean Sensei, Kaizen practitioners and Lean Six Sigma Belts. I challenge all professors in colleges and universities to encourage your students to compare and contrast, the concepts and models presented in this book, with the theories currently being taught. Books like this can bring hope and integrity, where learning can be restored in our educational systems, but more so that the students have the tools and insights needed to actually take on these problems in the real world.
-- Steven Bonacorsi, President of the International Standard for Lean Six Sigma (ISLSS) and Certified Lean Six Sigma Master Black Belt (CLSSMBB), Management Consultant and Owner of the Lean Six Sigma Group
Alin has spent many years developing and refining the concepts that underpin the content of this, his latest book. I have observed this development and can attest to the rigour and application he brings to the subject. The result is the development of a new approach to productivity development and target-setting called Speed-Based Target Profit - essentially a new paradigm for production planning which integrates productivity review and improvement directly within the planning process. Alin makes the point in the book: the real question is not "Is my methodology theoretically sound?" but "Does my methodology solve practical problems?" Examples are also continually revisited and worked through in detail, so readers should be able to follow the development of the ideas as they progress from concept to practical implementation. Regular summaries and conclusions also help in explaining the concepts and drawing out key messages. This is a rewarding book to read - especially so if you are looking to make a commitment to improving your manufacturing operations and your profits. The book is the result of many years of thinking and practical experience, fusing approaches from the East and West into a comprehensive, profit-focused, productivity improvement approach that can bring together managers from different disciplines to form a change team capable of transforming production planning and operations.
-- John Heap, Managing Director The Institute of Productivity (UK); Past-president of the World Confederation of Productivity Science; President of the European Association of National Productivity Centres; Member of the Advisory Board of the Institute for Consultancy and Productivity Research (India); Director of Juice e-Learning; Visiting professor at Srinivas Institute of Management Studies in Mangalore, India.
I am pleased that Productivity Press, the company I started in 1980 is publishing Alin’s new book. You will find this book innovative, interesting and very challenging. The book is scholarly, and will require study by serious practitioners of Lean thinking but it will be worth the effort. I recommend that the book be read in study groups with the readers asking each other questions to bring out the information to be practically used in your organization.
-- Norman Bodek, President of PCS Press, Teacher, Consultant, Author and Publisher, He started the Shingo Prize, He was selected to Industry Week’s and American Manufacturing Association’s Hall of Fame
The world productivity community calls him ”Godfather of Lean."
I appreciate Dr. Alin Posteucă for developing a structured approach for rational cost reduction through productivity improvement in four connected books, each developing and describing the approach further. In his latest book, "Speed-Based Target Profit: Planning and Developing Synchronous Profitable Operations", the novelty is the conversion of the target profit into TAKT PROFIT or profit per takt minute, facilitating planning and optimizing production accordingly, to continuously meet the target profit, for both the sales increase scenario and the sales decrease scenario. This new approach implements a production plan to simultaneously meet both the customer's expectations for the promised delivery schedules and the organization's growth expectations. It is important to add that Dr. Alin Posteucă successfully implemented this new approach in companies and included the description of two successful assignments in the book. The production quantity and profit planning from this book implements many of the principles of industrial engineering codified by me. Dr. Alin Posteuca's approach within this book and his previous books on Manufacturing Cost Policy Deployment are a must read for C-Suite managers, manufacturing managers, corporate planners, production planners, industrial engineers and other continuous improvement specialists, cost accountants, management accountants and cost estimators. A must have book for corporate and academic institution libraries. So, through this book about Speed-Based Target Profit, Dr. Alin Posteucă makes a radical beneficial change in the theory and practice of manufacturing management, a new paradigm of thinking for today and tomorrow.
-- Dr. K.V.S.S. Narayana Rao, Professor, National Institute of Industrial Engineering (NITIE), Mumbai, India, Researcher, Online Author & Publisher: Principles of Industrial Engineering, Functions and Focus Areas of Industrial Engineering. Industrial Engineering Knowledge Center, http://nraoiekc.blogspot.com
Alin has done a great work again in this book to bring to bear the relationship between productivity and profitability. His research work has made this book to be a valuable resource in the hands of productivity practitioners, professionals in various fields of human and material management and academia. The light he shared in the book I believe will help many managers in the understanding on how to measure, analyze and practically calculate productivity for profitability with every factor of production. This is a must to read for anyone who really seek to find the alignment of productivity to profiting, which has been a big-gap in the ecosystem of productivity managers and many business owners. Productivity measurement in line with result achieved and goals actualization are common knowledge but Alin has gone further to cascade expected output to profit per unit of resources added with a lot of formulas and calculations to make this simple for anyone in the helm of affairs in the service or manufacturing industry. This book is a complete mind shift from the old ways of measuring performance to a new way of calculating additions of every single item that goes into making a product or service. This new thinking will be greatly helpful in planning, execution and evaluation stages of operations. I therefore recommend to everyone who seek to affect bottom-line and see financial returns as key measurements for productivity.
-- Remi Dairo, President, Institute of Productivity and Business Innovation Management (IPBIM), Africa
As a trend, the practical need to have a production planning to ensure the consistent profitability of companies is increasingly evident now and especially in the future. This book presents a new thinking for achieving profitable production planning in detail. Besides practical applications, which are clear and to be followed, I especially liked the concepts of TAKT PROFIT, profit bottleneck operations and KAIZENSHIRO budgeting that are necessary for any company. The anticipated natural impact must be constituted by the reaching of a critical mass that will assume (at individual level as well as by the structure) the idea of continuous improvement of the processes; in addition, the degree of penetration of the details mentioned in this book comes to logically complete the adherence to the ideas presented. Great ideas, a well-structured book and a very clear motivation for success.
-- Gabriel Hîncu, Plant Maintenance Manager, ZF Group-TRW, Romania
After reading the book Manufacturing Cost Policy Deployment (MCPD) Profitability Scenarios, the strategic approach to cost improvement, I wondered how we could use this in terms of production planning. Then I discovered Alin Posteucă's new book entitled Speed-Based Target Profit, which addresses how to achieve profitable synchronization of operations, in fact a new paradigm of profitable production planning. It links one of operational language at the level of takt time with finance terms through establishing and continuous fulfillment of TAKT PROFIT. I believe the TAKT PROFIT will lead a journey to profitability by improving costs based on productivity in these times and in the future. The book provides all the details needed to successfully replicate these new concepts in any company. It is worth reading the book and trying to apply the methodology.
-- Mohamed Abdel Moemen Mousa, Operational Excellence Senior Consultant, SMART Consulting, Egypt