At the time when Lean Thinking was published, I was CFO of Lantech, the manufacturer who invented stretch wrap machines in 1972. The chapter about our lean management journey was called “The Simple Case.” Of course, it only was simple relative to size and from an outside view.
At the time, lean management literature was sparse especially once we started lean improvement efforts beyond the manufacturing floor, and we had to brainstorm which lean tools to apply where and often had many PDCA cycles. Far from simple, but it was a complete thrill for many of us to be part of the company’s transformation because we were convinced Lantech was joining and perhaps adding a bit of knowledge to the way companies would be run in the future. For me, the accountant, being directly part of the product and company lean journey was an unexpected and priceless gift.
One of the most exciting changes was how we applied lean to transform our product design and development work.One of the most exciting changes was how we applied lean to transform our product design and development work. One catalyst for this was that our owner was already habitually and intensely customer focused. Company folklore included the story that early on he would ride around in the back of tractor trailers to see how well our stretch wrap packaging protected customer products.
Plump Profits from Lean Development
After we learned how to bring cross-functional teams together to improve production and office functions while often changing the entire flow, it was a natural next step to look further up the chain to the origination of our products. We wanted to determine how we could increase our growth through faster design and the integration of new products.
As a finance person, I knew there was only so much that manufacturing alone could do to improve overall outcomes. To sustain our growth and profit, we really needed a pipeline of ongoing new and improved products with unique features to stay ahead of our competition and meet the ever-evolving needs of our customers. The management team knew if Lantech could do that, customers would prefer us to other alternatives.
I remember one of our first efforts, a bold move in retrospect. We decided our highest volume product was the best place to make major improvements. And not just tweaks, but a full redesign from the ground up. We were mentally swimming in the lean elixir. We were also confident because of our earlier lean successes in other parts of the company and—an essential element—our owner/CEO was a huge lean champion as well as an inventor.
So, we gathered members from sales, production, field service, customer engineering, and finance in addition to the product design and skunkworks teams. During a one-week period with just cardboard, foam, and duct tape, a new product was imagined. Enough for R&D to work on for a couple of weeks. Then the entire team returned for more imagining with working models. This cycle continued until the product launch. And, then?
Then, Lantech had one of its best launches ever and by far the best launch since I had arrived there. There were still some initial new product problems in the field, but the entire value stream by virtue of participating in the development cycle was by that time confident we could embrace those issues and resolve them quickly. And, we did.
As reported in Lean Thinking, our new product family development time had gone from 3-4 years using our prior batch-and-queue method to one year or less with our new flow method.
That initial new product and the lean development cycle used became the baseline for many additional designs as we went forward. It was a core reason for our dramatic turnaround where we went from declining market share and profits to growing market share and first quartile profitability in our industry for several years.
So, I’m always interested in discovering how other companies are building market share and profits using the principles of Lean Product and Process Development (LPPD). You and your team will learn how to cut development time and boost profits when you join me and experienced LPPD leaders from Honda, Caterpillar, Schilling Robotics, TechnipFMC, and other top companies at the 2nd Designing the Future Summit 2019, June 27-28: https://www.lean.org/designfuture2019