Effects of Lean Management on company value

Table of Contents

1. INTRODUCTION

1.1. OBJECTIVES OF THE MASTER THESIS

1.2. COMPOSITION OF THE MASTER THESIS

2. INTRODUCTION BUSINESS VALUATION

2.1. DISCOUNTED CASH FLOW –EQUITY APPROACH

2.2. CALCULATION OF FLOW TO EQUITY

2.3. CAPITAL COST RATE – CAPM: CAPITAL ASSET PRICING MODEL

2.4. MARKET MULTIPLIER METHOD

3. INTRODUCTION LEAN MANAGEMENT

3.1. OBJECTIVES OF LEAN MANAGEMENT

3.2. TOOLS AND METHODS

3.2.1. Value Stream Mapping

3.2.2. Kaizen

3.2.3. Kanban

3.2.4. One-piece flow

3.2.5. 5-S-systematics

3.2.6. Standard operation sheet

3.2.7. Poka-yoke

3.2.8. Single minute exchange of die – changing tools in one minute

3.3. CHALLENGES REGARDING LEAN MANAGEMENT

3.4. POTENTIAL EFFECTS ON COMPANY VALUE

4. PRIMARY RESEARCH

4.1. QUALITATIVE RESEARCH – INTERVIEWS

4.2. DECISION OF INTERVIEW-TYPE

4.3. INTERVIEW AGREEMENT

4.4. INTERVIEW CHECKLIST

4.5. ANALYSIS OF THE INTERVIEWS

4.5.1. Qualitative assessment of the interviews

4.5.2. To which extent is an increase of turnover possible through lean management (specification in %)?

4.5.3. To what extent is a decrease of variable cost possible (specification in %)?

4.5.4. What are the outputs of lean management regarding fixed costs (specification in %)?

4.5.5. Can the above mentioned percentages and information be used for all industries and sizes of companies?

4.5.6. Which tools are the ones you would suggest for a company trying to implement lean management?

4.5.7. What are the reasons for a failure of a lean management implementation?

4.5.8. At which point of the process can a failure be determined?

4.6. SIGNIFICANT POINTS OF THE INTERVIEWS

4.7. EFFECTS OF LEAN MANAGEMENT ON COMPANY VALUE

5. CONCLUSION

5.1. CONCLUSION REGARDING OBJECTIVES

5.2. EFFECTS ON COMPANY VALUE – THEORY AND PRACTISE

5.2.1. Porsche

5.2.2. Toyota

5.2.3. Anonymous company

5.3. RESUME OF THE AUTHOR

Objectives and Research Themes

This master thesis investigates whether the implementation of lean management principles can effectively increase company value. The primary research goal is to develop a robust calculation model based on operating cash flow to measure these effects, addressing the challenge that traditional valuation methods often involve too many external variables. By analyzing lean management tools and conducting qualitative interviews with specialists, consultants, and researchers, the thesis aims to establish a verified link between lean process improvements and financial performance.

• The influence of Lean Management on corporate value creation.
• Methodological application of operating cash flow for business valuation.
• Exploration of Lean Management tools (e.g., Value Stream Mapping, Kanban, 5S).
• Analysis of implementation success factors and causes of failure in different organizational cultures.
• Integration of practical insights from specialists and scientific perspectives into a calculation model.

Excerpt from the Book

Summary of Chapters

1. INTRODUCTION: Outlines the research focus on the effects of lean management on company value, defining the master thesis objectives and the composition of the study.

2. INTRODUCTION BUSINESS VALUATION: Explores various business valuation methods and selects the Discounted Cash Flow (DCF) equity approach as the most transparent indicator for analyzing lean management effects.

3. INTRODUCTION LEAN MANAGEMENT: Provides a comprehensive overview of lean principles, history, and key tools such as Value Stream Mapping, Kaizen, Kanban, and Poka-Yoke, while discussing implementation challenges.

4. PRIMARY RESEARCH: Details the methodology of the qualitative study, including in-depth interviews with specialists, consultants, and researchers to assess potential turnover increases and cost reductions through lean initiatives.

5. CONCLUSION: Reflects on the findings regarding the link between lean management and company value, confirming the positive impact through the developed calculation model and real-world company examples.

Keywords

Lean Management, Company Value, Business Valuation, Discounted Cash Flow, Operating Cash Flow, Kaizen, Value Stream Mapping, Kanban, SMED, Process Optimization, Corporate Culture, Change Management, Qualitative Research, Efficiency, Waste Elimination

Frequently Asked Questions

What is the core subject of this thesis?

The thesis explores the relationship between lean management practices and the resulting impact on a company's market value, specifically focusing on the operational aspects that drive value.

Which valuation methodology is applied?

The author uses the Discounted Cash Flow (DCF) equity approach, as it offers the most transparency when isolating the effects of lean management from other financial external factors.

What is the primary objective of this research?

The goal is to determine if lean management truly influences company value and to create a calculation model that verifies this influence using practical data and expert insights.

How is the primary research conducted?

The research uses a qualitative approach, consisting of semi-structured in-depth interviews with a panel of three international consultants, three industry specialists, and two academic researchers.

What are the main thematic areas covered in the practical section?

The main themes include evaluating the extent of potential turnover increases, reductions in variable and fixed costs, and identifying common reasons for the failure of lean implementations.

Which lean management tools are analyzed?

The thesis examines Value Stream Mapping, Kaizen, Kanban, One-piece flow, 5-S-systematics, Standard operation sheets, Poka-yoke, and Single minute exchange of die (SMED).

Why are cultural differences considered in this research?

The author emphasizes that European and Japanese cultures differ significantly in their approach to problem-solving and failure tolerance, which directly impacts the success of lean initiatives.

What conclusion does the author draw regarding company value?

The author concludes that lean management generates measurable company value, provided that the implementation is not treated as a temporary tool kit but as a long-term cultural transformation.

Does the model account for external market fluctuations?

No, the model purposefully focuses on internal operating cash flow factors to maintain a clear connection between lean activities and financial outcomes, acknowledging that stock prices are influenced by exogenous factors.