When Continuous Improvement Efforts Don't Hit the Bottom Line; New Book Explores Why and What to Do

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In a candid new book from the Lean Enterprise Institute with practical lessons for every business leader, the CEO of Lantech vividly describes the rise, fall, and rise again of its lean continuous improvement effort.

Cover of The Work of Management book

New Book: The Work of Management

"My most important advice to CEOs is to screw up your courage, put aside your daily distractions, and walk out into the work to see how value is created at the frontline.”

Lantech, a star of the lean management movement in the 1990s, enjoyed success after success for a decade as it converted operations from wasteful batch production to efficient flow production. Lead times and costs shrank. Manufacturing velocity and quality grew. Millions of dollars in inventory were freed up.

Its turnaround was featured in the Harvard Business Review and business best-seller Lean Thinking. Groups of executives, managers, and continuous improvement practitioners visited the mid-sized capital equipment maker’s Louisville, KY, plant to learn how a company committed to continuous lean improvements operated. Lantech was an American manufacturing success story. Or so it seemed.

But Lantech CEO Jim Lancaster was trying to solve two mysteries that were deepening over the years: If we’re so good at continuous improvement, why are profits so poor? And why do kaizen improvements deteriorate so quickly?

The answers to these two interrelated questions came after he pulled on his steel-toed boots early one morning and walked, not to his office, but into a manufacturing cell and embarked on a journey to understand the daily work of frontline operators who made the company’s stretch wrapping machines. After months of observations, experiments, and improvements, he installed and maintained a new system of “daily management.” The system is based on overlapping daily and weekly cycles of standardized work activities for Lancaster and managers at every level that resolve frontline operational problems immediately.

As a result, improvements were sustained, money from them hit the bottom line, and Lantech’s profitability quadrupled.

Profitable Continuous Improvement
Lancaster explains this dramatic comeback in his new book, The Work of Management (2017, Lean Enterprise Institute), a practical and inspiring story on two levels. It’s a close-up, candid look at Lancaster’s personal transformation as a leader and manager. It’s also a practical, in-depth, business case study of Lantech’s lean transformation, relapse, and comeback that American manufacturing – and any industry practicing continuous improvement -- can apply profitably.

Lancaster uses illustrations and plain language to reveal:

  • Why Lantech, a stellar performer in continuous improvement for a decade, struggled over time (like many other companies) to sustain gains and improve financial performance.
  • 8 steps executives can take to lead experiments to create a bullet-proof, real-time daily management system without expensive consultants.
  • Why 60 to 90 minutes of daily frontline management activities are a CEO’s most important minutes of the day because of how they grow the business.
  • Why daily management requires a major shift in managers’ mindsets and behaviors from giving orders and judging individuals on performance to asking questions and enabling good work by people at lower levels so metrics are routinely met.
  • How daily management and sustainable continuous improvement produces dramatic positive effects on the bottom line.

CEO to CEO: “Screw up your courage”
One problem Lancaster hasn’t solved is convincing other CEOs of how critical it is to get engaged in daily operational issues.

“You must take the time to go where value is actually created,” he said. “You can’t just walk by. You have to be there long enough to see frontline associates deal with problems and the frustration on their faces so you understand how the existing management system utterly fails to support their daily work. Then you have to jump in and help. My most important advice to CEOs is to screw up your courage, put aside your daily distractions, and walk out into the work to see how value is created at the frontline.”

About the Author
Jim Lancaster is CEO and owner of Lantech.com, LLC, one of the earliest companies to implement Toyota’s lean management principles, as chronicled in Lean Thinking, the Harvard Business Review, and other publications.

Before joining Lantech, Jim worked in the financial industry in New York City. In 1990, he joined Lantech as a sales manager in the Custom Machinery Group. After several promotions, he became president and CEO in 1995. Jim also serves as board chairman at Jefferson Community and Technical College to personally support technical and vocational education in Louisville and is involved in other educational efforts.

Lantech is known as the leader in stretch wrap technology and innovation, as well as case handling equipment. It has sales and manufacturing headquarters in Louisville, sales and manufacturing facilities in The Netherlands, and sales and service operations in Australia and China. Annual gross sales exceed $130 million. Lantech employs approximately 475 associates.

About the Book

Editors/Producers/Bloggers: For review copies of The Work of Management or to interview the author, contact LEI Communications Director Chet Marchwinski cmarchwinski(at)lean(dot)org or 617-871-2930.

About LEI
Lean Enterprise Institute Inc., is a 501(c)(3) nonprofit based in Cambridge, MA, with a mission to makes things better through lean thinking and practice. Founded in 1997 by management expert James P. Womack, PhD, LEI conducts research, teaches educational workshops, publishes books and ebooks, runs conferences, and shares practical information about lean thinking and practice. We support other lean initiatives such as the Lean Global Network, the Lean Education Academic Network, and the Center for Lean Engagement and Research in Healthcare at the University of California Berkeley School of Public Health, and the Healthcare Value Network. Visit http://www.lean.org for more information.

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Chet Marchwinski
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