AMETEK: Post-Acquisition Operations & Kaizen

This is a snippet of the transcript, sign up to read more.

It sounds like there's quite a lot of integration involved with these acquisitions. They're not just purchasing businesses and leaving them to operate independently; there are specific actions that seem to increase margins after acquisition. This could be because they can expand into other regions, or perhaps lower costs through, as you mentioned, manufacturing efficiencies or other means. Could you provide more details about how this process works? On one hand, these businesses are very decentralized, but on the other, there's significant integration. I'm trying to understand how to reconcile these two aspects.

They organize Kaizen events, and we've had a few at my operating unit as well. We take some of our employees from the operating site to be part of the team, along with a small team of facilitators and experts who come on site. It's usually about a week-long commitment by the operating unit and the organization. During this week, the team will delve deep into the operations, focusing on key issues such as on-time deliveries (OTD) and similar challenges.

This is a snippet of the transcript, sign up to read more.

It sounds like there's quite a lot of integration involved with these acquisitions. They're not just purchasing businesses and leaving them to operate independently; there are specific actions that seem to increase margins after acquisition. This could be because they can expand into other regions, or perhaps lower costs through, as you mentioned, manufacturing efficiencies or other means. Could you provide more details about how this process works? On one hand, these businesses are very decentralized, but on the other, there's significant integration. I'm trying to understand how to reconcile these two aspects.

During a Kaizen event, you might conduct a value stream analysis, interview associates on the floor, observe assembly processes, perform time studies, and other typical activities. At the end of it, there's an action plan. You might start with a hundred action items, but it's impossible to tackle all at once without overwhelming everyone. To avoid inaction, AMETEK does an excellent job of training facilitators to prioritize effectively. We apply the 80/20 rule, focusing on the 20% of actions that will have the greatest impact.

This is a snippet of the transcript, sign up to read more.

It sounds like there's quite a lot of integration involved with these acquisitions. They're not just purchasing businesses and leaving them to operate independently; there are specific actions that seem to increase margins after acquisition. This could be because they can expand into other regions, or perhaps lower costs through, as you mentioned, manufacturing efficiencies or other means. Could you provide more details about how this process works? On one hand, these businesses are very decentralized, but on the other, there's significant integration. I'm trying to understand how to reconcile these two aspects.

We pare down to about five to seven key actions that we can track for the next quarter. We have bi-weekly calls with the Kaizen lead facilitator, about twice a month, and continue this for a quarter. We then report out to the Executive Leadership Team (ELT) every quarter. As we do this, we start to see small wins and gradually achieve our goals, allowing the company to remain as decentralized as it has always been. The reason these units were acquired in the first place is that they were successful and knew what they were doing. We aim to add more margin and growth.

This is a snippet of the transcript, sign up to read more.