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Lean Thinking at Lantech

Operations Management

Based on: “Lean Thinking”
By James P
...
Jones

LANTECH
Company Profile and Background
•Lantech founded the Stretch Wrapping industry in 1972
•It is the world’s largest stretch wrapper Manufacturer
•Headquartered in Louisville, Kentucky USA, with manufacturing and
sales operations in the U
...
and Europe
...

In 1972 when Pat Lancaster (Company Founder) was 29, he had his big
idea: a new way for manufacturers to wrap their products for
shipment
...

Lancaster’s idea was a device that would stretch-wrap pallets of goods
with plastic film so that they could be shipped easily from plant to
plant within a manufacturing system and then onward, as finished
products, to wholesalers and retailers
...

Lean manufacturing promotes:
1
...
Decreasing waste
3
...
Basically, lean is centred on preserving value with less
work
...


Definitions
Kaizen: continuous, incremental improvement in an activity, to create more value
with less waste
...

Standard work: a precise set of work instructions specifying cycle time, takt time,
work sequence, and minimum inventory needed
...

Takt time: the available production time divided by the rate of consumer demand
...
/day, and the rate of customer demand for that model averages 1
...
5, or 360
...


Identification of Problems
1
...
Lantech conducted its 3 major activities - creating new designs, managing information on what to
make, and physically producing its machines – in a classic batch-and-queue manner
...
“We offered so-so quality in terms of manufacturing defects in machines delivered to customers”
Pat Lancaster

4
...
And we had tons of money”
Pat Lancaster
5
...

I knew Lantech was the walking dead” - Pat Lancaster

Performance Objectives
Cost

Speed
Dependability

Quality

Flexibility

Current
Ideal

Transformation Process
TRANSFORMED
RESOURCES

MATERIALS: Steel
INFORMATION
CUSTOMERS

Input
TRANSFORMING
RESOURCES

Engineers
Designers
Marketers
Production Staff

TRANSFORMATION PROCESS
SAWING
MACHINING
WELDING
PAINTING

Output

WRAPPING
MACHINES
•E Model
•H Model
•T Model
•V Model
•Q Model

Old Production Methodology: Batch and Queue System

1
...

2
...

3
...


Old Process for handling orders

1
...
Lantech tried to move
the orders gathered by the independent sales force through the office and the plant
...
Because the $10,000 - $150,000 machines were usually customised, the sales force had to contact
Lantech for authorisation before quoting a price
...
Because every department had a queue of orders, there were usually delays
...


SOLUTION!
New Production Process
- Continuous Flow, Cell Production
New Order Process
- Continuous Flow
New Product Development
-Dedicated “Kaikaku” Teams work together in one location

NEW Production Methodology: Continuous Flow

1
...


NEW Production Methodology: Cell Production

1
...

2
...

Ron Hicks furthermore proposed making stretch wrappers, one at a time, in precise
response to customers’ demands
...


NEW Process for handling orders

1
...


1
...

2
...
The entire Kaikaku team, including all the workers
involved in the process, and one external technical consultant, mapped the entire
value flow and looked for wasted time and effort
...
"And here’s the most important thing you need to know: we’ve added no employees
in that time
...
” – Pat Lancaster

Monitor Implementation, Measure Results
KPI Improvements
“We’ve changed from assembling machines from modular parts in
inventory, to a total custom-order process” Pat Lancaster

1
...

3
...

5
...

7
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Carry no inventory, and that has slashed costs
...

Improvement in on-time delivery from 40% to 90%
Market share of stretch wrapping up from 38% in 1991 to 50%
in 1995

Specific tools include:
a
...
One-piece flow
c
...


Monitor Implementation, Measure Results
KPI Improvements

Lantech achieved unimaginable results by applying lean
thinking to every aspect of its business!

Key Lessons from Womack and Jones

Converting a classic batch-and-queue production system to clearly specified
value streams that flow continuously as they are pulled by the customer will:

1
...
Errors reaching the customer, scrap within the production process, job related
injuries, time to market, and effort required to develop new products will
usually be cut in half
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A wider variety of products will be offered at a modest additional cost

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