Operations Management Journal | Real Earnings Management and Subsequent Operating Performance

The IUP Journal of Operations Management :

Danaher Business System: Lean Thinking and Strategy

Article Details

Pub. Date	:	May, 2017
Product Name	:	The IUP Journal of Operations Management
Product Type	:	Article
Product Code	:	IJOM41705
Author Name	:	Debapratim Purkayastha and Tangirala Vijay Kumar
Availability	:	YES
Subject/Domain	:	Management
Download Format	:	PDF Format
No. of Pages	:	19

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Abstract

This case is about the lean operating mechanism evolved by the Danaher Corporation (Danaher) called the Danaher Business System (DBS). DBS was a mode of operation wherein the inefficiencies in any process were eliminated by going through multiple iterations of the process. The fine-tuned process was then standardized. Also DBS was not confined to just manufacturing operations but was implemented with equal rigor in all other operations such as product development and sales. The case also describes how some of the Danaher subsidiaries had initially perfected the single-piece flow manufacturing practice with a ‘just-do-it’ mindset and continuous cycles of value stream mapping. It further talks about the importance of Kaizen or continuous improvement events to DBS and the participation in it by employees at all levels at Danaher. Danaher institutionalized DBS throughout the organization with the help of Hoshin Kanri or policy deployment strategy so that the short-term profit goals of the company were not compromised. The case also describes the importance given to and the procedure that Danaher put in place to train all its managers in DBS.

Description

Danaher Corporation (Danaher), founded in 1982, had evolved into a multi- billion dollar conglomerate by 2012, thanks to its numerous acquisitions and the robust operating strategy that it used to integrate them. According to observers, Danaher, which achieved a double-digit profit percentage in 2012, owed its expansion and success to the constant stream of acquisitions it had undertaken since the 1980s. The integration of all these acquisitions was underlined by an operating strategy that Danaher had evolved and which had come to be known as the Danaher Business System (DBS). The DBS was essentially a lean operating mechanism that scrutinized every process in the company, be it in manufacturing, new product development, or sales and distribution; it ironed out the inefficiencies in the concerned process and standardized the ensuing process. The entire operations at the company were based on the tenets of the DBS. However, some analysts wondered whether there could be a limitation to an acquisition-driven strategy in terms of, for instance, a culture clash, given Danaher’s institutionalized mechanism of implementing the DBS in the acquired entity.

Keywords

Operations Management Journal, Danaher Business System ,Lean Thinking and Strategy,Jacobs’ Business System and Lean Accounting