Press release: October 18, 2024
Bret Bruin, Toyota Material Handling USA
Lessons learned from one manufacturer improving their operations by applying key tools and principles, plus insight rental companies can use to implement real, lasting change within your business.
Throughout this four-part series on The Toyota Way, we’ve explored various strategies to help you improve your rental business. In part one, Brett Wood astutely wrote that, in essence, The Toyota Way is a set of practices that can be incorporated by companies in any business sector that is based on two foundational pillars – Kaizen, or continuous improvement, and respect for people. In the second article, Bill Finerty outlined the importance of effective organizational leadership, and how it can be the key to harnessing the remarkable power of inspiration. In part three, Lea Ann King provided an even deeper dive on what a people-centric organization looks like.
This final segment showcases how Toyota helped a customer improve their operations by applying these key tools and principles, and offers insights you can use to implement real, lasting change within your rental organizations.
This story begins in Kiel, Wisconsin, the home of Amerequip. This manufacturer specializes in the design and production of custom equipment for various industries, including lawn and garden, agricultural, construction, and industrial sectors. In September of 2022, the company underwent a change in ownership when JMC Investment purchased a majority interest in the company. Jean-Marie Painvin, the founder of JMC Investment, scheduled several world-class Lean tours throughout France for him and a few of Amerequip’s operations leaders, with a Toyota manufacturing facility being one of the highlights.
Amerequip CEO Mike Vander Zanden was part of that visit to France, and fully supported the new owner’s vision of becoming a Lean organization. A long-time industrial engineer for the company, Vander Zanden was eager to stay connected to the operations side of the business when he was promoted to CEO. "In my 30 years of touring factories, the Toyota plant in France wowed me to the point of thinking ‘this is something different. This is something unique. This is something I want to be someday,’" says Vander Zanden. "I was most amazed by the processes, the procedures, and how the facility was run. But it was a true culture I had never experienced before. We were prepared to send a lot of people to France to tour that factory."
But taking an entire company of nearly 300 employees to France wasn’t the most practical idea. That’s when Amerequip first learned of Toyota Material Handling and soon connected with Scott Redelman, who was Toyota Material Handling’s Toyota Lean Management (TLM) manager at the time and has decades of experience.
Vander Zanden sent an initial group to the Toyota Material Handing headquarters in Columbus, Indiana, in April of 2023 to compare the experience and learn the principles of The Toyota Way. Amerequip’s Lean Leader, Ryan Schleis, was part of that first group. “I had been on five to seven world-class lean-oriented tours before I went to Columbus, and I felt like I walked away from Toyota Material Handling fulfilled in a way I never had been before – I had a clear direction,” recalls Schleis. “The light bulb clicked on, and everything was in alignment.”
Just over a year later, nearly 80 percent of Amerequip’s salaried staff has been to Toyota’s Columbus location. The company has plans to make that 100 percent. “Our relationship with Toyota Material Handling has been nothing short of an incredible experience,” says Vander Zanden. “What they do in Columbus is something unique, something I’ve never seen before in all my travels and experiences. We wanted to take what they do, apply it to our processes, and then replicate what we could.”
It Starts at the Top
Amerequip was always interested in the concept of Lean, but as Vander Zanden admits, they had only dipped their toe in the water beforehand. “It was kind of like painting brushstrokes without knowing what the whole picture is supposed to look like,” Vander Zanden says. “We were taking bits and pieces, and as you can imagine, it didn’t sustain itself.”
Amerequip’s story is more common than you may think. Many companies are intrigued by the tools and principles of The Toyota Way, but far fewer ever get beyond the “painting brushstrokes” stage.
There are a few key things to point out about Amerequip’s story. First, sustainable change requires buy-in from the company’s top leaders. Vander Zanden says Amerequip’s majority owners “infused the money, resources, and commitment” to accelerate the organization’s Lean journey from five years down to two.
When customers visit Toyota Material Handling in Columbus, there are several options available to them. The first visit always begins with a world-class factory tour, and then customers have the option to enroll in a three-day Toyota Lean Management training camp of sorts.
The formal, standardized training approach was a breath of fresh air to Schleis. He previously worked for what he described as “a regional leader in Lean manufacturing”, where he learned that Lean was a way of life.
"I quickly realized that Lean is a competitive advantage," says Schleis. "If you want to continue to be the best at what you’re doing, you can’t get comfortable or complacent. It’s no different than a professional sports team – they practice and still try to get better and hone their skills. I quickly understood that The Toyota Way and TLM were the tools we needed to refine, improve, and be competitive – to stay on the leading edge of manufacturing."
Amerequip has capitalized on both of Toyota’s training opportunities and has plans to send as many people as they can for the three-day training session. As a result of having real "respect for people" – one of the two main pillars of The Toyota Way – Amerequip is inspiring its employees to embrace lifelong learning, continuous improvement, and overall excellence.
"I don’t think there’s more than a couple days that go by where I don’t hear one of our employees talking about their experience at Toyota, or asking when they get to go back," says Vander Zanden. “The people that went for one day are wanting to go back for the three days, so the impact and the influence that Toyota has had on Amerequip is phenomenal. It’s been a wonderful partnership.”
A big part of Amerequip’s success has come as a result of hiring and empowering a Lean leader to help implement change in the company. Schleis reports directly to Vander Zanden and is responsible for creating a vision for how to transform the organization by embedding TLM and principles of The Toyota Way in everything they do. “Ryan is living it every day now, inspiring everybody and creating a high level of enthusiasm and engagement, all the way down to the shop floor. It has been incredible,” he says. “I would ask any company leader, including those in the rental industry, to really consider hiring and empowering a Lean leader if you haven’t already. If you do it the right way, it will do so much more good than you could possibly imagine.”
‘They Know What Different Looks Like’
Even though they’re still relatively early on the overall journey, Amerequip is already seeing tangible benefits to living The Toyota Way. For example, the company has implemented regular kaizen events where all employees can share their own kaizen ideas – just like we do every day at Toyota Material Handling. Many of those ideas have eliminated muda, or waste, such as inventory, unnecessary motion and waiting.
“It’s become an addiction for a lot of people,” says Vander Zanden. “When our people participate in kaizen events, they can’t wait to do another one. There’s just this enthusiasm and passion to continually improve that wasn’t there before. Our people have seen what Toyota is doing. They now know what different looks like, and they want to be different, too.”
Initially, these incremental changes reduced each work cell’s footprint, but Amerequip couldn’t take advantage of the extra space because it was spread in small pieces throughout the plant. Amerequip then decided to visualize what a layout of their fabrication department could look like in the future with a focus on optimal process flow and space utilization.
The company is now analyzing the possibility of getting rid of or repurposing an ancillary facility and absorbing the equipment and functions of that building into their main facility. In total, Amerequip has freed up 35,000 sq.ft. of factory space in the 15 months they’ve been working with Toyota Material Handling, resulting in significant cost savings for the company.
Amerequip now feels ready to achieve their long-term business goals. A $20M company in 2011, Amerequip grew its revenue to more than $100M in 2021 and has a 2030 target of more than $300M.
“We see TLM and The Toyota Way as a foundational part of our strategy to achieve that growth over the next six years as efficiently as possible,” says Vander Zanden. “We don’t believe we can get to $300M without TLM. Toyota helped us identify the things we need not only in operations but within the company at large to grow at a sustainable pace and win in the long term.”
We Win First with Our People
It always comes back to your people. It starts and ends with them. There is a Japanese phrase, “monozukuri wa hitozukuri,” which means “making things is about making people.” At Toyota we often say – we win first with our people, then with our products.
At Amerequip, The Toyota Way has become a way of life, and has helped Schleis answer the question: What is the right culture to build, and where do you start?
"Sustainable change requires buy-in from the company’s top leaders."
“A lot of places focus so heavily on the tools that they forget the people,” says Schleis. “We went heavy on the people first, really focused on the culture and the way people think. Then, as people became engaged, started asking awesome questions on the shop floor, and grew that appetite for more, we started introducing the tools that helped continue to move that knowledge barrier. Our focus was on teaching people.
“I think that’s what the Toyota experience gave me. I had a foundation, I knew the tools, but I didn’t necessarily know how to organize that into a cultural change within an organization. The week we were in Columbus, that’s when I started to see the vision. That was my aha moment.”
Perhaps the most compelling reason to embrace a people-focused culture is the impact it has on organizational performance. Studies have shown that companies with highly engaged employees outperform their competitors in virtually every metric – from productivity and profitability to customer satisfaction. When individuals feel a sense of purpose and connection to their work, they're more likely to collaborate effectively, take ownership of their responsibilities, and go the extra mile to ensure success both for themselves and the organization.
"The most compelling reason to embrace a people-focused culture is the impact it has on organizational performance."
“Our line leaders are now empowered to own their work area in ways they never were before,” says Schleis. “Now, you can walk on the shop floor, talk to a line leader, and you’re going to feel like you’re talking to a supervisor – we are that engaged from the ground level all the way up. The KPIs we’re using to measure the performance inside a work cell are directly tied to our top level KPIs. Now every employee, regardless of their role, understands how they can impact the business at the highest level, a connection they may not have seen before.”
Empowerment goes beyond professional development; it's about fostering a sense of ownership and accountability among employees. In a people-focused culture, associates are more than employees, they’re stakeholders in the company's success. When individuals feel valued and respected, they are more likely to drive innovation.
“By focusing on the people, letting them experience what different is and what world class looks like, then following up with the tools, our people were able to see the connection,” says Vander Zanden. “Focusing on culture first enabled us to move at a fast pace because people were excited and enthused as a result of seeing what world class looked like and started striving to emulate it.”
A Way of Life
For your company to really experience the benefits of The Toyota Way principles, it can’t just be something you do – it must become who you are. In a very real sense, The Toyota Way is a way of living.
No matter your business – be it a rental company, or anything else – you, too, can benefit from adopting these principles in ways you probably don’t even realize.
For Amerequip, the next big step will be a visit from Toyota’s Redelman – who has served as Amerequip’s TLM “accountability partner” – to their Wisconsin headquarters in October. Amerequip will show Redelman their progress in person, discuss their future goals and plans, and Redelman will share his own kaizen opportunities with their team.
It’s a great example of The Toyota Way in action, incorporating the foundational principles of Genchi Gembutsu (“go and see with your own eyes”), kaizen, hansei (become a learning organization through relentless reflection), identifying muda, and using visual control with 5S so that no problems are hidden.
In the meantime, Amerequip will continue to live The Toyota Way, which has already helped Vander Zanden realize one of his initial goals – making his facility one that people are impressed by when they visit.
“We’ve hosted visited that have repeatedly told us they’ve never seen a manufacturing facility so clean,” Vander Zanden said proudly. “The results of this successful implementation and how people have taken to it are blatantly obvious and noticeable to our guests and to our team members.
“For me, the three biggest advantages from this experience have been the freeing up of floor space; the organization and cleanliness of the facility; and then even more importantly – people are thinking differently and asking different questions all the way down to the shop floor because of the tools and the education we’ve provided. That’s the most exciting part to me.”
In just over a year’s time, Amerequip has made significant improvements by engaging with Toyota and truly investing in The Toyota Way. I hope this serves as a great example of what you can do within your organization – no matter how big or how small.
Amerequip’s is a prime example of how the principles, skills, processes, ideas, and values this series has highlighted can drive meaningful, lasting change within your organization – and relatively quickly.
“We select our professional partners based on the values and the characteristics they exemplify,” says Vander Zanden. “When you find somebody that shares similar values, interests, and characteristics, you do everything you can to support them because you know they’ll return the favor. Ultimately, if you do the right things for the right reasons, good things happen. I will always want to associate and partner with people like that.”
That’s what The Toyota Way is all about.
Implementing Principles
When you look at the 14 principles of The Toyota Way, Amerequip has applied no fewer than 12 of them already (bolded below).
- "Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals."
- "Create a continuous process flow to bring problems to the surface."
- “Use ‘pull’ systems to avoid overproduction.”
- “Level out the workload (heijunka).”
- “Build a culture of stopping to fix problems and ge quality right the first time.”
- “Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.”
- “Use visual control and 5S so no problems are hidden.”
- “Use only reliable, thoroughly tested technology that serves your people and processes.”
- “Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.”
- “Develop exceptional people and teams who follow the company’s philosophy.”
- “Respect your extended network of partners and suppliers by challenging them and helping them improve.”
- “Go and see for yourself to thoroughly understand the situation.”
- “Make decisions slowly by consensus, thoroughly considering all options, and implement decisions rapidly.”
- “Become a learning organization through relentless reflection and continuous improvement.”
Eliminating Waste
When you think of the eight types of muda, Amerequip has eliminated waste in at least five of them (bolded below).
- Transportation
- Overproduction
- Unnecessary motion
- Waiting
- Overprocessing
- Defective parts
- Inventory
- Underutilized People
Next Steps
The Toyota Way is a journey without an absolute end – I hope you’ll take the time to critically consider how you can implement these proven principles to improve your business. Remember the key factors that helped drive Amerequip’s success.
- Hire, train, and empower a Lean leader to instill a vision within the organization and track progress. You’ll be amazed how many people they can inspire.
- Engage, educate, and empower your people. Remember: We win first with our people, then with our products.
- Encourage everyone within the company to develop kaizen ideas, and then provide the opportunity to share them. Some will be bigger ideas than others, but a small win is better than no action.
- Get buy in from the top leaders in your organization – sharing this article with them would be a great first step!
- Recognize that sustainment is the most difficult part and commit to The Toyota Way for the long term.
Please see the link below to the original press release.
