Turn waste into wealth: how to find cash in every corner of the company

167 Pages·2016·1.476 MB·English

by  DeLuzio, Mark C;Fox, Jeffrey J(Foreword)

Praise for Turn Waste into Wealth
“I have been a passionate advocate of Lean for over twenty-five
years. Based on my experience as a Life Member of the Shingo
Prize Academy, the ex-Chairman of the Board of the Shingo
Institute, and the only Wall Street professional who is also a
‘Champion’ of the Association for Manufacturing Excellence, I
can say with confidence that Mark DeLuzio’s insightful book
is an essential addition to the world of Lean. It is concise,
punchy, and illuminating. Importantly, Mark communicates
precisely the difference between Lean tools and Lean culture, a
nuance missed by many Lean experts. His book is a blueprint
for CEOs in any industry who want to turn certain waste into
inevitable wealth.”
— Clifford F. Ransom II, President and Founder, Ransom
Research, Inc., “The Way of Lean Investing”
“I know something about Lean. In fact, I wrote a book about
my experience as CEO of the Wiremold Co., where we used
Lean to quadruple the company’s size and increase its enter-
prise value by 2,500 percent in ten years. Mark DeLuzio’s Turn
Waste into Wealth is an absolute ‘must read’ for transformative
managers around the world.”
— Art Byrne, CEO (Ret.), Wiremold Company,
author of The Lean Turnaround
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Turn Waste into Wealth
“Mark DeLuzio presents advice and tips on Lean manage-
ment that his company used in their unique approach called
the Financial Process Optimizer, enabling us to dramati-
cally reduce the lead times and cycle times in our closing
and forecasting processes. This provided us with a powerful
competitive edge while also building the foundation for a
Lean continuous improvement culture throughout our South
American finance operations.”
— Carlos Zarlenga, Chief Financial Officer,
General Motors South America (GMSA)
The author’s words match his methods: hard hitting, simple,
direct, and to the point . . . in very compelling short chapters,
the purpose, the principles, and the process are explained, and
the resulting profits of Lean are delineated.
— BOOKLIST (Barbara Jacobs)
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TURN WASTE
INTO WEALTH
HOW TO FIND CASH IN EVERY
CORNER OF THE COMPANY
iii
Turn Waste into Wealth
iv
TURN WASTE
INTO WEALTH
HOW TO FIND CASH IN EVERY
CORNER OF THE COMPANY
MARK C. DELUZIO
MAVEN HOUSE
v
Turn Waste into Wealth
Published by Maven House Press, 4 Snead Ct., Palmyra, VA 22963
610.883.7988 • www.mavenhousepress.com.
Special discounts on bulk quantities of Maven House Press books
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For information about subsidiary rights (translation, audio, book club,
serial, etc.) contact [email protected].
Copyright 2016 by Mark C. DeLuzio. All rights reserved. No part
of this publication may be reproduced, stored in or introduced into a
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While this publication is designed to provide accurate and authoritative
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understanding that the publisher is not engaged in rendering legal,
accounting, or other professional service. If legal advice or other expert
assistance is required, the services of a competent professional person
should be sought. — From the Declaration of Principles jointly adopted
by a Committee of the American Bar Association and a Committee of
Publishers and Associations
This book is an independent publication and has not been authorized,
sponsored, or otherwise approved by any of the companies mentioned in
the book.
Library of Congress Control Number: 2015938502
Hardcover ISBN: 978-1-938548-45-1
ePUB ISBN: 978-1-938548-46-8
ePDF ISBN: 978-1-938548-47-5
Printed in the United States of America.
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Contents
Foreword by Jeffrey J. Fox ..................................................xiii
Part One: Lean Purpose
1. Mountains of Money ...................................................3
2. Lean .............................................................................6
3. The Lean Journey .........................................................7
4. The Lean Transformation ............................................9
5. Lean’s Good Numbers ...............................................11
6. The New Cost Reduction Frontier:
Using Lean to Cut Administrative Waste ..................14
7. How to Enhance Your Culture with Lean .................18
8. Change from Problem Hiding to Problem Solving ...21
9. The 10%-80%-10% Population Rule .........................23
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TCuornnt eWnatsste into Wealth
10. How to Identify a Naysayer .......................................25
11. Ours Not to Reason Why, Ours But to Waste
and Die ......................................................................27
Part Two: Lean Principles
12. The Eight Deadly Sins of Waste ................................33
13. The Leadership Rules of Lean ...................................35
14. Lean Transformations Are Not Pain Free ..................38
15. LEAN Does Not Mean Less Employees are Needed ....40
16. Never Tie Headcount Reductions to Lean ................43
17. Continuously Grow with Continuous Flow ..............45
18. Customers Will Not Pay for Non-Value Activity ......47
19. Accounting for Lean ..................................................52
20. How Traditional Accounting Promotes Accounting
Waste and Costly Behaviors ......................................55
21. Don’t Employ Purchase Price Variance ......................58
22. New Lean Rules for Capital Expenditures ................60
23. You Can Teach an Old Dog New Tricks ....................63
24. What and Why to Benchmark ..................................67
Part Three: Lean Process
25. The Five Whys: Too Much Pigeon Poop ...................71
26. Standard Work Is the Gold Standard ........................73
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Contents
27. TAKT Time is Money Time .....................................75
28. She Walked from San Diego to St. Louis in
One Year and Never Left the Factory Floor ..............77
29. The Blue Parts Cart: Or, Minutes Mean
Big Money .................................................................79
30. Don’t Blame Manufacturing: Three Days
Process Time, Eighteen Weeks Lead Time ...............82
31. A Hospital without Waste .........................................86
32. Don’t Cherry-Pick Lean Tools ..................................92
33. Kaizen ........................................................................94
34. Kaizen Event Rules ....................................................96
35. Lean Trumps Six Sigma .............................................99
36. The Problems with Kanban ......................................102
Part Four: Lean Profits
37. The Lean Profit Formula..........................................107
38. Lean Distribution ....................................................112
39. The Wallet ................................................................113
40. The High Cost of Carrying Inventory .....................117
41. Cross-Functional or Dysfunctional: There is
No Choice................................................................122
42. Waste Mapping: Where to Deploy Value Streams ..125
43. Strategy Deployment ...............................................128
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