Friday Fact – Going Beyond Excellence with Lean Tools and Techniques

June 14, 2019by Faber Infinite0

Did you know, there is something known as Caterpillar Production System (CPS) just like Toyota Production System (TPS)?
Caterpillar, the world’s leading manufacturer of mining and construction equipment, industrial gas turbines and diesel-electric, diesel and natural gas engines (Source – https://www.mindsumo.com/caterpillar) . The invention of CPS happened in a little tricky way! In the year 2005, the company realized that their factories could win awards in the area of efficiency and productivity. So, Caterpillar decided to launch their own production system to raise the manufacturing standard in order to be competitive. That is how CPS was invented.
CPS is an order to delivery process which was implemented across the enterprise to achieve quality, cost, velocity, and people goals. CPS is based primarily on the Toyota Production System (TPS) philosophy. CPS also embraced a lot of lean manufacturing concepts like; Poka Yoke, Standard Work, Reducing Waste, Continuous Improvement. And to your surprise, CPS was not merely implemented in their factories but was also implemented across other verticals like – Purchase, Product Design, Quality, and Supply Chain.
The implementation of CPS created a remarkable transformation for the organization. Till 2008, the organization capitalized on the economic boom that started in the year 2004. The Sales and revenues crossed $51 billion, exceeding the goal of 2010 of $50 billion which was far ahead of the target, also, profit per share was recorded at $5.66.
Apart from this, the organization had to go through a downturn due to the recession period in the year 2009-2010. But, to everyone’s surprise, the organization emerged to become a classic example of emerging strong after the recession with the help of continuous implementation of the Caterpillar Production System. Even after such hard times, the company recovered itself. The sales and revenue increased by 31% which was $42.59 billion, from 2009. Also, the profit per share rose up to $4.15 from $1.43 in 2009.
Hence, as you can see, the lean tools and techniques can be molded in any form and will always help you grow leaps and bounds. Here we saw a classic example of the organization customizing lean manufacturing tools in their own way. The objective of the initiative was being competitive but as they saw phenomenal results they decided to work beyond excellence.
Just like Caterpillar, any organization can customize and implement the lean tools and techniques to accelerate their growth. So, have you started implementing lean tools and techniques in your organization?
Compiled by Faber Priyal & Faber Mayuri

by Faber Infinite

Faber Infinite is an International Business Management Consulting Organization offering consulting solutions and services for Increase Profitability in Business.

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