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Speed-Based Target Profit: Planning and Developing Synchronous Profitable Operations

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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.

Author(s): Alin Posteucă
Edition: 1
Publisher: Routledge/Productivity Press
Year: 2020

Language: English
Pages: 388
City: Boca Raton

Cover
Half Title
Title Page
Copyright Page
Dedication
Contents
Figures
Tables
List of Abbreviations
Preface
About the Author
Introduction
Section I: Understanding Speed-Based Target Profit
Chapter 1: Changing The Production Planning Paradigm
1.1. Why Just Synchronous Operations are No Longer Enough?
1.2. A Board Meeting Story on Insufficiently Profitable Synchronization
1.3. The New Role of Production Planning for Striving the Target Profit
1.4. What is Speed-Based Target Profit?
1.4.1. Speed-Based Target Profit Concept
1.4.2. The Main Goal: Takt Profit
1.4.3. The Basic Image
1.4.4. Deep Understanding of the Actual State of Takt Profit and Actual Productivity Level
1.4.5. Comparison with Expected Takt Profit
1.4.6. Predicting the Possibility of Improving Productivity in Order to Achieve theExpected Takt Profit
1.4.7. Computation of Speed-Based Target Profit
1.4.8. Features and the Basic Mechanism
1.5. The System: Taking Profitability Future Across Boundaries
1.6. Expected Results
1.6.1. Tangible Financial Effects
1.6.2. Tangible Operational Effects
1.6.3. Intangible Effects
1.7. Conclusion: Synchronous Profitable Operations from Production Planning Stage
Chapter 2: Develop Your Speed-Based Target Profit
Mechanism and Start to Live It
2.1. Real Managerial Commitment
2.2. Understanding of Profit and Customer Demands
2.3. Setting the Main Operational Parameters
2.3.1. Target Products
2.3.2. Bottleneck Operation
2.3.2.1. Deep Understanding
2.3.2.2. The Goals
2.3.3. Buffer Size
2.4. Defining Actual Manufacturing Costs Structures
2.4.1. Actual Cost of Goods Manufactured
2.4.2. Actual Costs of Losses and Waste
2.5. Defining Future Manufacturing Costs Structures
2.5.1. Determining the Theoretical Target of Cost Reduction
2.5.2. Detailed Targets and Means Design
2.6. Productivity: Consistent Support of the SBTP Mechanism
2.6.1. Structural Reform of Profitability Through Productivity Reform
2.6.2. The Productivity Implementation and Improvement Design
2.7. Conclusion: Speed-Based Target Profit Mechanism at Production Planning Stage
Section II: Planning Synchronous Profitable Operations
Chapter 3: Support Striving for Speed-Based Target Profit
3.1. Predicting the Possibility of ImprovingProductivity
3.2. Current Losses and Waste Structures and Maps
3.2.1. Losses of Production Volume
3.2.2. Losses of Production Costs
3.2.3. Losses and Waste of Production Control
3.2.4. Losses and Waste Maps: Location, Magnitude, and Causality
3.3. Methods for Setting Annual Cost of Losses andWaste
3.3.1. The Unique Rate Method
3.3.2. The Modules Rates Method
3.3.3. The Causality Method
3.3.3.1. Increasing Sales Scenario
3.3.3.2. Decreasing Sales Scenario
3.4. Annual Costs of Losses and Waste Deployment Maps
3.4.1. Costs of Losses and Waste Map
3.4.2. Critical Costs of Losses and Waste Map
3.4.3. Annual Target Profitability
3.5. Setting Profitable Production Formula
3.6. Improvement Budgets
3.6.1. KAIZENSHIRO’s Financial Visibility in Projected Profit and Loss Statements
3.6.2. The KAIZENSHIRO Budgeting Framework
3.7. Conclusion: Planning Operations Strictly for Customers’ Needs is Inefficient
3.7.1. Continuous Incorporation of Management Needs in the SBTP Mechanism
3.7.2. Establishment of Several Convergent Measurement Modes
3.7.3. Establishment of KPIs of Losses and Waste Related to the Expected Results and Possible Actions
3.7.4. The Measurement of Costs of Losses and Waste Is Not Done With a General Purpose
3.7.5. Measuring and Improving the Cost of Losses and Waste Strictly for Customer Needs Is Efficient
Chapter 4: Feedforward Control for Production Planning and
Scheduling
4.1. Productivity Improvement in Production Planning and Scheduling
4.1.1. From Method and Performance to Production Planning and Scheduling
4.1.2. The Main Factors for Production Planning Improvement
4.2. Why an SBTP Control Trilogy?
4.3. Feedforward Control: Production Planning
4.3.1. Profit Demand Stage
4.3.2. Customer Demand Stage
4.3.3. Bottleneck Modules Stage
4.3.3.1. The Management Tasks Design
4.3.3.2. Bottleneck Capacity Module
4.3.3.3. Bottleneck Profit Module
4.3.4. Synchronization and Profitability Stage
4.4. Feedforward Control: Production Scheduling
4.4.1. Scheduling Practice: Freedom
4.4.2. Synchronization of Supply Lead Time With Production Takt Time
4.4.3. Load Balancing in Profitable Order-Based Production
4.5. Feedforward Control: Manufacturing Costs Improvement
4.6. Conclusion: Production Planning is Useless If It Doesn’t Take into Account Improvements and the Takt Profit
Section III: Developing Synchronous Profitable Operations
Chapter 5: Concurrent and Feedback Controls
5.1. Concurrent Control: CLW’s Daily Management
5.1.1. The Goals of Concurrent Control of CLW
5.1.2. The Need of Concurrent Control of CLW
5.1.3. Roles for Supporting Synchronous Profitable Operations
5.1.4. The Basic Tools
5.1.5. Step-by-Step Implementation
5.2. Feedback Control: Total Synchronous Profitable Operations Control
5.2.1. Total Manufacturing Flow Control Based on Five Pull
5.2.2. Control of Production Volumes and Profitability
5.2.3. Results Reports of Synchronous Profitable Operations
5.2.4. Robust Restrictive Conditions
5.2.5. Control of the Anticipatory Approach
5.3. Synchronous Profitable OperationsLeadership
5.3.1. Leadership Tasks
5.3.2. Leadership Instruments
5.3.3. Leadership Behaviors
5.4. Phases and Main Steps of Implementation of Speed-Based Target Profit
5.5. Critical Success Factors of Speed-Based Target Profit Program
5.6. KAIZENSHIRO Culture: Improving Productivity Mind
5.7. Conclusion: The Production Management Must Lead the Synchronous Profitable Operations
Chapter 6: Speed-Based Target Profit Case Studies
6.1. Case Study 1 at “AA Plant”: Speed-Based Target Profit for Sales Increase Scenario
6.1.1. Company Characteristics and Manufacturing System
6.1.2. Requests from Headquarters and Top Managers for Implementing the SBTP Mechanism
6.1.3. Problems Prior to Introducing SBTP
6.1.4. Defining Systemic Measures
6.1.5. Annual KAIZENSHIRO Design
6.1.6. Countermeasures Using SBTP for Performing Synchronous Profitable Operations
6.1.7. Implementing Improvements and Solving Problems
6.1.7.1. Improvement Project 1: Systematic Improvement (Kaizen) by Cycle Time Reduction at an Assembly Line
6.1.7.2. Improvement Project 2: Systematic Improvement (Kaizen) by Synchronizing theProduction of Semi-Finished Products with the AssemblyLine (With a Wireless IoT Sensing Device Solution)
6.1.7.3. Improvement Project 3: Systemic Improvement (Kaikaku) by Increasing Capacity through the Purchase of New Equipment
6.1.7.4. Improvement Project 4: Problem-Solving Project for CLW (A3 for Elimination of Functional Testing Errors)
6.1.8. The Main Challenges of Implementing the SBTP Mechanism
6.1.9. Conclusion
6.2. Case Study 2 From “BB Plant”: Speed-Based Target Profit For Sales Decrease Scenario
6.2.1. Background to Developing SBTP
6.2.2. Establishment of Continuous Measurement Indicators for CLW and KAIZENSHIRO Design
6.2.3. Promotional Organization forIntroducing Speed-Based Target Profit
6.2.4. Choosing and Implementing Improvements
6.2.4.1. Improvement Project 1: Systematic Improvement (Kaizen) by Eliminating Idling and Minor Stoppages
6.2.4.2. Improvement Project 2: Systematic Improvement (Kaizen) by Reducing Raw Material Leaks
6.2.4.3. Improvement Project 3: Systemic Improvement (Kaikaku) by Product Redesign
6.2.4.4. Improvement Project 4: Problem-Solving Project for CLW (A3 – for Elimination of the Consumption of Stretch Wrap in Production Areas)
6.2.5. Tangible and Intangible Results of SBTP at BB Plant
6.2.6. Conclusion: Obstacles Encountered While Implementing SBTP
6.3. Conclusion: When Just Synchronous Operations Are No Longer Enough, Then Speed-Based Target Profit
Bibliography
Index