CED

July 2013

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Editor's Note The Best Ideas You'll Never Hear You only discover excellent people and lightbulb thoughts by being in the right place at the right time. By kIM pHELAN I first met Sergio Kariya a couple of months ago – he was giving a talk about how he has gone about the task of introducing and applying the lean manufacturing concepts of Toyota into his rental operation in Brazil. The progress he's made in five years piqued my interest, so we arranged a follow-up phone call a few weeks later. Sergio is Japanese by descent and Brazilian by citizenship – he's responsible for the entire operation of Mills Rental, one of four of Mills' business divisions, which he has grown from its inception in 2008 to the largest rental company in the country today with 12 locations. And the aerial rental company is growing by 30 percent a year. He came to Mills Rental from Otis Elevator Co., a United Technologies company, and brought with him the lean concepts he had implemented there. Actually, Sergio was partly responsible for having introduced three significant concepts in Brazil. (1.) When he initially launched a rental business at Mills in 1999 (which had to be sold in 2004 during a downturn) Sergio was actually introducing the whole concept of aerial equipment to a customer base completely immersed in the use of scaffolding and ladders for all work involving heights. (2.) Not only were AWPs and telehandlers foreign to Brazil's contractors, the concept of rental itself was relatively unheard of. (3.) Toyota's lean principles, including Kaizen, were also little known in the country, but this entrepreneurial pioneer has made considerable strides in this as well. Here's a taste of how our conversation went. KP: You took concepts from manufacturing and applied them to the rental business. Would you say they are generally applicable to all businesses, including the traditional equipment dealer model? SK: Yes, the basic concept is. If what you're doing is not adding value to the customer or the process, you don't need to do it. Lowing costs, providing better quality, making people more satisfied – these are things that can be applied in every business. KP: What areas are we talking about? SK: Sales reps, field service calls, equipment loading and unloading, service shop. We mapped the things that customers say are the most important things from a rental company. It's availability of equipment, it's whether we are agile enough to attend to everything they need [such as service and sales calls], and we must be reliable for them. Knowing that, we looked at our processes inside the company that affect them. These were the main drivers for deciding where to put our energies. KP: What's the hardest part about getting people on board with lean? SK: In my opinion, the most difficult part of applying the concept is everything that's in the field – whatever is far from your hands. Inside sales or in the depot is easier; you're there looking at them everyday, you can better control how they're doing their tasks. Changing the mindset of people is the most difficult part. KP: What is Kaizen? Is it something different from the Toyota lean concept? SK: It is part of the Toyota system – Kaizen simply means continuous improvement. After you implement lean, it never ends. You start every day with Kaizen – what can you change in order to increase or improve the quality, or add value to the process, reduce time and waste. It goes hand-in-hand with the lean concept. KP: What are the "5 S's" you've talked about? SK: It's a Japanese methodology, translated as Sorting, Straightening, Systematic Cleaning/Shining, Standardizing, and Sustaining. Sustaining is the most difficult. Look at your desk covered in paper. You can sort it and set it in order, standardize a place for everything. You can do the 5 S's in any environment, but the most difficult is one week later. Can you sustain that? Are the papers out of order again? People do not buy in to the lean concept if it's not sustained. Food for Thought I hope Sergio's ideas have given you something to think about. I wouldn't have met him if I had not stepped away from my routine and gone to the event where he was presenting. That's how it is. Stay glued to the treadmill of your daily grind and you miss the sharing of best practices that only comes from being in the right place at the right time. AED has just such an opportunity designed with you in mind: Executive Forum. Want to know what to do about lousy profitability? Want to know what business threats you can be preparing for? Want to meet some people who understand your challenges? Check out aednet.org/forum, and I'll see you in September. Happy Summer, and thanks for reading. Kim Phelan (kphelan@aednet.org) is the executive editor of Construction Equipment Distribution and director of programs for AED. July 2013 | Construction Equipment Distribution | www.cedmag.com | 7 7_editors note_KP.indd 7 6/27/13 3:05 PM

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