Lean and Job Security

[David Dodd]

A few days ago, we got into a brief discussion in another thread about the use of lean to reduce headcount. This issue is critical to success with lean, so I thought it deserved a separate thread. In the earlier thread, some members of the forum argued that if lean practices reduce waste and make it possible to perform current levels of work with fewer people, most companies will respond by reducing headcount. No doubt, some companies have done this and others will in the future. But this approach is self-defeating and will undermine success with lean.

Lean has now be implemented by many companies around the world, but the best example of a truly lean enterprise is still Toyota Motor Corporation. Last month, Toyota halted production of Tundra pickups and Sequoia SUV's at plants in San Antonio, Texas and Princton, Indiana for three months because of declining market demand. This production halt idled some 4,500 employees, but Toyota will not lay off any of these employees. Instead, these workers will use the "downtime" to improve production processes, take training courses, and even perform community service work. One commentator estimated that the decision to keep these 4,500 employees on the clock at full pay and benefits during the planned 14-week shutdown will cost Toyota at least $50 million. Latondra Newton, general manager of Toyota's Team Member Development Center in Erlanger, Kentucky explained the decision by saying, "This was the first chance we've really had to live out our values. We're not just keeping people on the payroll because we're nice. At the end of all this, our hope is that we'll end up with a more skilled North American workforce."

Now, you can say that Toyota's size and financial strength gives it the "luxury" of making this decision. But, Toyota has made many similar decisions in the past when it wasn't as large or as financially strong. Toyota recognizes that its ability to continuously improve the productivity of its operations depends largely on its people.

That's true in any company that is trying to become lean. You simply cannot achieve long-term success with lean without the active participation of your employees. And you cannot hope to win the support of your employees for your lean efforts if you use lean improvements as the reason for eliminating "unnecessary" people.

[Debbie Goodman]

Point well made David. Hope it doesn't fall on deaf ears.

[rich apollo]

Maybe better to look at LEAN as a way to increase capacity, instead of a way to reduce labor.

[Vahan Panikian]

This is a great post. At Ultimate we never sell our Imposition tools as a labor reducing device. Our goal is to make users work with the resources they have yet with more intelligence. For example we know that imposition is a redundant task, but a very important task to get press ready files, with least amount of waste. Our hot-folders help automate the imposition portion of the workflow. Now the employees could move on to more revenue building tasks or offer new services to existing customer with the freed up time. Bottlenecks tend to frustrate prepress employees and add unneeded stress to the day. The automation relieves the bottlenecks. Work smarter not harder!

[eastppress]

You are so correct about eliminating frustrating aspects of our working lives through Lean. 5-S, cell redesign, and standard procedures have signficiant benefits in safety, wasted walking and ergonomics, and troublesome tasks. The reality is that we must improve: reduce waste in all areas, reduce cycle time, and improve quality. The competition and alternative products (yes, we can also innovate) will overtake those who fail to improve at a rapid pace. That also applies to ourselves as individuals. Those who fail to embrace and champion these new business models will find themselves unmarketable. Will Lean impact job security? ... it will if you consider that your job security is doing the same things the way you've always done them. ... it will likely reduce headcount, but most of that can be done through attrition (especially as the aging population retires.) If you and your company can transform itself with innovation and Lean, you have opportunities to grow and create even greater job security.

[Michael Josefowicz]

Maybe the missing piece is increasing sales and therefore revenue. If lean is adopted as a defensive strategy the only metric is reduced headcount. One way to frame the problem facing printing firms can be seen as decreasing cost in a shrinking market. But, if lean is seen as re investing in people to increase revenue , the incentives to train and retrain and educate the present staff are in place.

In another thread there was a discussion about re-organizing sales. Short story is to provide a career path into "sales." For companies to grow, sales could morph into business development and/or product development. Not to try to compete with web - that's a non starter. But to figure out how print products can be re invented to integrate into the new communication ecology.

The first idea that came up was to comp CSR's with a piece of the action on repeat sales. Then partner a sales person - who does face to face meetings - with a CSR, who does email with the customer and face to face with the plant. That could supply a good business reason for even the most cash strapped shop to invest in their people, instead of getting rid of them.

[David Dodd]

Maybe better to look at LEAN as a way to increase capacity, instead of a way to reduce labor.

Rich,

You've made a really important point. The objective of lean is to reduce/eliminate waste, primarily by reducing/eliminating non-value-adding activities. The total capacity of any process can be divided into three categories - productive (value-adding), non-productive (non-value-adding), and available (what's left). As non-value-adding activities are reduced/eliminated, non-productive work becomes available capacity. So, the effect of lean is to "create" new capacity. What's more, this new capacity is essentially free.