{"id":2576,"date":"2010-06-16T04:46:26","date_gmt":"2010-06-16T11:46:26","guid":{"rendered":"https:\/\/staging.opexlearning.com\/resources\/?p=2576"},"modified":"2014-10-08T15:34:05","modified_gmt":"2014-10-08T20:34:05","slug":"case-study-improving-sealy-matress-and-bedding-products","status":"publish","type":"post","link":"https:\/\/staging.opexlearning.com\/resources\/case-study-improving-sealy-matress-and-bedding-products\/2576\/","title":{"rendered":"Case Study: Improving Sealy, Matress and Bedding Products"},"content":{"rendered":"<div class=\"a296a24fa2fc69ef5487857f02f111e8\" data-index=\"9\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<!-- Single Post readerboard -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:inline-block;width:728px;height:90px\"\r\n     data-ad-client=\"ca-pub-8207522353004717\"\r\n     data-ad-slot=\"1144967431\"><\/ins>\r\n<script>\r\n(adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p>This article shows a case study of how Kohlberg, Kravis, Roberts &amp; Co. (KKR) was able to create value at Sealy, the world&#8217;s largest manufacturer of mattresses and bedding products (not <a title=\"luxury mattress\" href=\"https:\/\/staging.opexlearning.com\/resources\/luxury-mattress-saatva\/8083\/\">Luxury Mattress<\/a>), through the implementation of Lean Thinking in the enterprise.<\/p>\n<p><a title=\"using lean in private equity\" href=\"https:\/\/staging.opexlearning.com\/resources\/role-of-lean-thinking-in-private-equity\/2593\/\">Lean in Private Equity is not new<\/a>. There are several example where <a title=\"use lean to renew the company\" href=\"https:\/\/staging.opexlearning.com\/resources\/corporate-renewal-waste-and-corporate-turnaround\/2487\/\">lean was used to stimulate corporate renewal<\/a>, such as using <a title=\"use lean to improve medical devices\" href=\"https:\/\/staging.opexlearning.com\/resources\/case-study-improving-a-medical-device-manufacturer\/2581\/\">lean to improve a medical device manufacturer<\/a>, or using <a title=\"lean to improve mattress manufacturer sealy\" href=\"https:\/\/staging.opexlearning.com\/resources\/case-study-improving-sealy-matress-and-bedding-products\/2576\/\">lean to improve the buyout of Sealy Mattresses<\/a>, or using <a title=\"improve automotive aftermarket with lean manufacturing\" href=\"https:\/\/staging.opexlearning.com\/resources\/case-study-improving-the-automotive-aftermarket\/2571\/\">lean manufacturing to improve the automotive aftermaket<\/a>.<\/p>\n<p>One key element is the implementation of <a title=\"stnadardized work\" href=\"https:\/\/staging.opexlearning.com\/resources\/no-standard-then-no-kaizen\/2035\/\">Standard Work<\/a>, which allowed for comparable data, visual management, better metrics, and a better understanding of &#8220;normal&#8221; conditions versus &#8220;abnormal&#8221; conditions.\u00a0 In their words <sup class='footnote'><a href='#fn-2576-1' id='fnref-2576-1' onclick='return fdfootnote_show(2576)'>1<\/a><\/sup>,<\/p>\n<blockquote><p>For example, the absence of consistent data and standards across Sealy manufacturing plants made it difficult to distinguish between efficient and inefficient facilities. Without comparable, objective measures, every plant thought that it was the best one. The KKR and Capstone teams helped Sealy management develop manufacturing metrics that monitored costs and waste in each step of the production process and at each plant.<\/p>\n<p>Today Sealy&#8217;s CEO posts the comparative results and productivity rankings at each facility, which has led to healthy competition among the plants. Better manufacturing metrics identified actionable problem areas and helped drive reductions both in labor hours per bedding unit and in the amount of unused scrap material. For example, by focusing on these areas, labor hours per unit decreased 19 percent and scrap per unit fell 44 percent. At the same time, safety incidents in Sealy plants decreased 22 percent.<\/p><\/blockquote>\n<p>KKR continues,<\/p>\n<blockquote><p>Over the past 20 months, Sealy&#8217;s revenues have increased 21 percent, EBITDA has risen 42 percent, and margins have improved by 241 basis points. At the same time, the company has paid down substantial debt from improved cash flow.<\/p><\/blockquote>\n<p>It&#8217;s clear that the approach to value creation at Sealy is longer-term and through improving how the company operates, instead of financial engineering.\u00a0 And, a key element in improving Sealy is the implementation of <a title=\"lean manufacturing\" href=\"https:\/\/staging.opexlearning.com\/resources\/about-peter-abilla\/what-is-lean\/\">Lean Thinking<\/a> by KKR.<\/p>\n<div class='footnotes' id='footnotes-2576'>\n<div class='footnotedivider'><\/div>\n<ol>\n<li id='fn-2576-1'> Super Return 2006 Presentation <span class='footnotereverse'><a href='#fnref-2576-1'>&#8617;<\/a><\/span><\/li>\n<\/ol>\n<\/div>\n<!--CusAds0-->\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>This article shows a case study of how Kohlberg, Kravis, Roberts &amp; Co. (KKR) was able to create value at Sealy, the world&#8217;s largest manufacturer of mattresses and bedding products (not Luxury Mattress), through the implementation of Lean Thinking in the enterprise. Lean in Private Equity is not new. There are several example where lean [&hellip;]<\/p>\n","protected":false},"author":12327,"featured_media":15346,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[225],"tags":[638],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Lean in Mattress Industry: A Private Equity Case Study<\/title>\n<meta name=\"description\" content=\"Lean in the Mattress Industry has demonstrated big benefits to shareholders and employees. 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