No matter how well you plan, prepare and perform, sometimes things just happen that you do not expect. Sometimes these things are painful and sometimes they are magical. And sometimes, things just get lost in translation. Kaizen events are certainly a great playground for the unexpected. More times than not, the priceless moments on a lean journey for me originate on kaizen events.
Last week, I led an office kaizen event focused on a key customer related process that proved to be a great challenge to improve. The team was diverse in both functional responsibility and heritage. We had one team member from the Ukraine, another from Columbia and one from the Philippines. It turns out to be a great mix of talent and only one member had any previous kaizen event experience.
The first morning we drill through some lean basics to introduce the kaizen approach. We cover a fair bit of information which included seeing muda (waste) to eliminate it. Of course, I stressed that the true learning will be at gemba (the actual place) with discovery and learn-by-doing.
At first, the kaizen team members were a bit on the shy side but by the end of the morning, they were a quite lively group. I love the raw energy that a kaizen event stirs deep within us, along with large bits of anticipation and nervousness. By far, the best feeling is the huge rush of “anything is possible” as the team embarks.
This entire team was extremely eager to start. I ended the morning session and asked if they had any more questions at this point and if they understood the next steps. After a few questions, I asked again, “Where are we going and what are we looking for?” One team member yelled back with high energy and in complete sincerity, “We are going the gumbo and we looking for Buddha!” A hush of silence. Then everyone burst out in laughter. It was a priceless moment. After wiping the tears from my eyes, the translation confusion was politely straightened out.
By no means is this story meant to offend anyone of the Buddhist faith or to make light of religion. To be perfectly clear, lean principles are not focused on looking for Buddha in our process and eliminating it. It is muda we want to eliminate.
Upon reflection on this event, maybe we are looking for Buddha after all; only in the sense that Buddha can refer to “anyone who becomes enlightened”. Isn’t the best place for enlightenment of our process found in gemba? Are we not seeking understanding before we can improve?
Epilogue: This team worked fantastic together during the rest of the week long kaizen event with over 13 aha moments. They reduced the process lead time 70% by Friday without open kaizen homework lists. Even with this huge reduction, the team sees more room for improvement which will continue the kaizen process.
Wednesday, May 23, 2007
Tuesday, May 22, 2007
Lean Grade Inflation
Past headlines have brought to light a suspected phenomenon in our High Schools and Colleges in the United States where it is believed that the grading is too easy resulting in grade inflation. As a results, a higher percentage of students graduate with honors. Just having more honor students is not a cause for alarm but the implication that students are not grasping the subjects yet are giving passing grades is a cause for concern. It is also a great concern that our students may not be fully prepared to meet the challenges to compete in a global economy. From my recent experiences, this same phenomenon is evident in lean transformations.
Several facilities that I have worked on lean implementation along with many visits to numerous plants across the country this past year seem to all have the same grade inflation. For example, the scores for zone areas in 5S are all rated high regardless of what scale system is used yet when I take a gemba walk through the same area, the area is NG (translated as No Good). Could it be an issue calibration of different auditors? Sure. Could it be that waste or problems are not seen? Absolutely. Is it possible that we think something is good enough and not seek the more difficult path to perfection? Yes.
The same could be seen in lean assessments, judging our leanness on a scale. What or who determines the correct measure of leanness? This adds a whole new avenue for debate on if we are lean, lame, limp or lost. (LAME – Lean As Misguidedly Executed as coined by Mark Graban at Lean Blog) (adding to the list: LIMP – Lean, It’s a Manufacturing Program and LOST – Lean, Only Sees Tools).
It is said that “you can’t improve what you can’t measure” which is only true if you create a reliable and consistent measurement system. With grade inflation, I suspect that our measurement system is both unreliable and inconsistent.
In addition, the grade inflation phenomenon occurs in self evaluations and survey data. That is one reason that I tend to take all survey data with a grain of salt. Our self image is usually thought to be greater than what is seen by others. We tend to grade ourselves too high. Just as in the case of school grades, it is not really an issue of high scores as much as it is in grasping the subject or ability to compete. With higher scores we convince ourselves that we are not really that bad. We become comfortable and secure in the higher scores and everyone feels better. In reality, we miss the point.
On a lean journey, we should never be satisfied, never become comfortable, and never feel secure in the status quo. The grade matters less than gaining understanding and the constant effort to improve forever.
Several facilities that I have worked on lean implementation along with many visits to numerous plants across the country this past year seem to all have the same grade inflation. For example, the scores for zone areas in 5S are all rated high regardless of what scale system is used yet when I take a gemba walk through the same area, the area is NG (translated as No Good). Could it be an issue calibration of different auditors? Sure. Could it be that waste or problems are not seen? Absolutely. Is it possible that we think something is good enough and not seek the more difficult path to perfection? Yes.
The same could be seen in lean assessments, judging our leanness on a scale. What or who determines the correct measure of leanness? This adds a whole new avenue for debate on if we are lean, lame, limp or lost. (LAME – Lean As Misguidedly Executed as coined by Mark Graban at Lean Blog) (adding to the list: LIMP – Lean, It’s a Manufacturing Program and LOST – Lean, Only Sees Tools).
It is said that “you can’t improve what you can’t measure” which is only true if you create a reliable and consistent measurement system. With grade inflation, I suspect that our measurement system is both unreliable and inconsistent.
In addition, the grade inflation phenomenon occurs in self evaluations and survey data. That is one reason that I tend to take all survey data with a grain of salt. Our self image is usually thought to be greater than what is seen by others. We tend to grade ourselves too high. Just as in the case of school grades, it is not really an issue of high scores as much as it is in grasping the subject or ability to compete. With higher scores we convince ourselves that we are not really that bad. We become comfortable and secure in the higher scores and everyone feels better. In reality, we miss the point.
On a lean journey, we should never be satisfied, never become comfortable, and never feel secure in the status quo. The grade matters less than gaining understanding and the constant effort to improve forever.
CANDEW Cycle
The kaizen formula of Aha! + Eureka! =Wow! is just part of larger pattern, or a continuous improvement cycle, discovered on my lean improvement journey. At least this holds true from my lean journey experience. It’s the Confused-Aha-Nirvana-Darn-Eureka-Wow Cycle, or otherwise known in the back hills as the CANDEW cycle for short. It appears that we, both as an individual or as a team, pass through these varies stages before achieving actual improvement.
Stage 1: Confused
The confused stage is the beginning point of all continuous improvement where we are actually lost, clueless, and oblivious to the current state. We may think we know the facts but in reality we are blinded by assumption, opinion and arrogance. As we humbly open our eyes and minds by going to gemba, listening to our employees and using data, we start down the path of discovery.
Stage 2: Aha
Eventually, our path of discovery leads to Aha moments. Aha moments are where we see the light, everything clicks and we become one with our current state. We reach a point of genuine understanding. What was once hidden is now in plain sight. Often times, we wonder why we never saw it before now. This Aha Moment could be the view of whole picture or just an element of the current state. In either case, it is found most often in the seams or gaps of the process or between the traditional function silos of a business.
Stage 3 Nirvana
The Aha moment creates the flash of an idea, a vision of paradise or heaven as we clearly see what is possible and how to make it better. This vision is nirvana. A rush of excitement takes over our entire being and it is possible to actually jump for joy. Care must be taken to hold on to this fragile idea for this stage of nirvana is short lived. We will be challenged in the next stage of Darn where our idea or visions of paradise can quickly turn into just an illusion or fantasy.
Stage 4: Darn
The Darn stage is where we stumble and make mistakes. After walking blindly for so long in the Confused Stage, and finally seeing the light in the Aha Stage, we naturally try to run as fast as possible to the light. Since we are not used to running to the light, we can easily fall. In fact, it is not unusual to fall several times in the Darn Stage which makes this the most critical stage. Failure is often a result in the Darn stage and rarely do things go according to original plans. It is at this point most people give up and even question their Aha Moment and Nirvana vision as a neurotic mind trick. In the Darn Stage we may face many difficulties, road blocks and barriers in our path. It takes persistence to continue on the path.
Stage 5: Eureka
As we navigate through the treacherous Darn Stage, we will find it. It being the solution, the way to make our idea work. We find success.
Stage 6: Wow
The Wow stage is where we reflect on our success and share our joy. We share so others may learn and join us on our path of continuous improvement. Many times we discover the total impact of our Eureka moment at this stage. In the Wow stage, we reap the reward of our efforts.
Just as I stated at the beginning, this process is a cycle. If we stay too long in the Wow stage, we quickly find ourselves in the dark again. Everything changes so we must constantly seek improvement. The path of continuous improvement promises no certainty but only opportunity.
Stage 1: Confused
The confused stage is the beginning point of all continuous improvement where we are actually lost, clueless, and oblivious to the current state. We may think we know the facts but in reality we are blinded by assumption, opinion and arrogance. As we humbly open our eyes and minds by going to gemba, listening to our employees and using data, we start down the path of discovery.
Stage 2: Aha
Eventually, our path of discovery leads to Aha moments. Aha moments are where we see the light, everything clicks and we become one with our current state. We reach a point of genuine understanding. What was once hidden is now in plain sight. Often times, we wonder why we never saw it before now. This Aha Moment could be the view of whole picture or just an element of the current state. In either case, it is found most often in the seams or gaps of the process or between the traditional function silos of a business.
Stage 3 Nirvana
The Aha moment creates the flash of an idea, a vision of paradise or heaven as we clearly see what is possible and how to make it better. This vision is nirvana. A rush of excitement takes over our entire being and it is possible to actually jump for joy. Care must be taken to hold on to this fragile idea for this stage of nirvana is short lived. We will be challenged in the next stage of Darn where our idea or visions of paradise can quickly turn into just an illusion or fantasy.
Stage 4: Darn
The Darn stage is where we stumble and make mistakes. After walking blindly for so long in the Confused Stage, and finally seeing the light in the Aha Stage, we naturally try to run as fast as possible to the light. Since we are not used to running to the light, we can easily fall. In fact, it is not unusual to fall several times in the Darn Stage which makes this the most critical stage. Failure is often a result in the Darn stage and rarely do things go according to original plans. It is at this point most people give up and even question their Aha Moment and Nirvana vision as a neurotic mind trick. In the Darn Stage we may face many difficulties, road blocks and barriers in our path. It takes persistence to continue on the path.
Stage 5: Eureka
As we navigate through the treacherous Darn Stage, we will find it. It being the solution, the way to make our idea work. We find success.
Stage 6: Wow
The Wow stage is where we reflect on our success and share our joy. We share so others may learn and join us on our path of continuous improvement. Many times we discover the total impact of our Eureka moment at this stage. In the Wow stage, we reap the reward of our efforts.
Just as I stated at the beginning, this process is a cycle. If we stay too long in the Wow stage, we quickly find ourselves in the dark again. Everything changes so we must constantly seek improvement. The path of continuous improvement promises no certainty but only opportunity.
Thursday, May 17, 2007
Contempt for 5S
There seems to be a swell of support against 5S activities which is certainly not a new phenomenon. The backlash against any attempts to organize areas like a person’s desk or workstation can be powerful, passionate and personal. This 5S backlash easily grows into contempt as we hear about extreme examples of 5S-Gone-Wild. This includes stories of companies that place footprints on desks for everything (computer, keyboards, phones, papers, etc) without regard of actual benefit, stupid rules that limit the number of personal items on a desk to an arbitrary number like 3, or label crazy consultants that have us labeling every possible object on site under the principle of visual management like in this Far Side Cartoon.
With the release of the new book, “A Perfect Mess: The Hidden Benefits of Disorder-How Crammed Closets, Cluttered Offices, and On-The-Fly Planning Make the World a Better Place” written by Eric Abrahamson and David H, Freeman, many supporters of the messy desk lifestyle are united against any and all actions to “fix” what they believe is not broken.
Maybe guilt over not being better organized is a factor that causes people to rationalize the mess and clutter. As pointed out in Mark Graban’s post Not Neatness for Neatness Sake at Lean Blog, it seems that the authors of the book are glorifying messiness.
To get a better insight to their supportive argument that messy is better, read Tom Peter’s Cool Friends interview with David Freeman about his findings. I find it curious that many of the findings in support of disorder are based on surveys which I tend believe are not all together scientific and most likely bias. I do admit that I have not read this book or verified the details on his research so I only present my opinion on the use of survey data as fact.
Take for instant Mr. Freeman’s theory that “People who keep messy desks actually spend less time looking for things then people with neat desks”. And what is the scientific proof cited by the author that supports his theory, “We did a survey for the book that backed this up” along with his comment, “Common sense backs this up.” For me, common sense tells me the direct opposite. I guess even what is considered common sense is up for debate.
My thoughts are that organization and 5S principles are critical to continuous improvement success. As I have learned on my lean journey, we should question all assumptions and actions to eliminate waste. Even activities thought to be lean requirements like 5S should be constantly monitored like any other process for the value of performing the activity. Remember, any activity that adds cost or time without adding value as defined by the paying customer is waste.
With the release of the new book, “A Perfect Mess: The Hidden Benefits of Disorder-How Crammed Closets, Cluttered Offices, and On-The-Fly Planning Make the World a Better Place” written by Eric Abrahamson and David H, Freeman, many supporters of the messy desk lifestyle are united against any and all actions to “fix” what they believe is not broken.
Maybe guilt over not being better organized is a factor that causes people to rationalize the mess and clutter. As pointed out in Mark Graban’s post Not Neatness for Neatness Sake at Lean Blog, it seems that the authors of the book are glorifying messiness.
To get a better insight to their supportive argument that messy is better, read Tom Peter’s Cool Friends interview with David Freeman about his findings. I find it curious that many of the findings in support of disorder are based on surveys which I tend believe are not all together scientific and most likely bias. I do admit that I have not read this book or verified the details on his research so I only present my opinion on the use of survey data as fact.
Take for instant Mr. Freeman’s theory that “People who keep messy desks actually spend less time looking for things then people with neat desks”. And what is the scientific proof cited by the author that supports his theory, “We did a survey for the book that backed this up” along with his comment, “Common sense backs this up.” For me, common sense tells me the direct opposite. I guess even what is considered common sense is up for debate.
My thoughts are that organization and 5S principles are critical to continuous improvement success. As I have learned on my lean journey, we should question all assumptions and actions to eliminate waste. Even activities thought to be lean requirements like 5S should be constantly monitored like any other process for the value of performing the activity. Remember, any activity that adds cost or time without adding value as defined by the paying customer is waste.
Wednesday, May 09, 2007
Seven More Ideas Towards a Healing Workplace Plus One
I liked Jon Miller’s post yesterday Seven Ideas Towards a Healing Workplace and it sparked some of my own ideas on the subject. I think the topic is quite important since we could spend over 11,000 days of our lives at work. I thought I would hitchhike on Jon’s list and add seven more ideas plus one. Side note: Adding one more idea than Jon’s list is not a case of list envy or my list is bigger than your list. I am always challenging myself to do just a little more in the spirit of continuous improvement. I highly respect Jon’s thoughts and insights in making things better!
So here are seven more ideas plus one.
Add some rocking chairs. This is not an early effort to look forward to retirement. Some believe that the rocking motion can be therapeutic. I have even seen rocking chairs at airports and have enjoyed it as I waited to board my flight.
Provide a public puzzle table. Puzzles can relax and re-energize your brain by focusing on a simple challenging task to put the pieces together. You would be surprised to learn that the brain still can solve other problems in the background when you are not thinking about them. Have you ever solved a problem while sleeping, in the shower or driving to work? Same principle applies.
Eliminate or reduce harsh noises. How many facilities use annoying intercoms, buzzers, loud machines, rattling conveyors, etc.? Try standing in the middle of your facility when everyone is gone, the lights are out and all the machinery is shut down. Big difference! Buy a sound meter to measure your noise levels and start the kaizen process to lower the levels.
Play comedies on a big screen TV at lunch. Making people laugh and smile does have a positive affect. Just make sure that you don’t show any comedy that would offend anyone.
Provide a healing atmosphere. Installing a fountain or two can help. The sound of running water is thought to be beneficial to your spirit. You can also green it up. Add plants, fresh flowers around the facility and not just in the office. Put the plants in staircases and the shop floor. Yes, even the shop floor! And you can play classical or relaxing music. Music can lift the spirit, soothe the soul and spark creativity. Even though you could considered this section as three separate ideas (and they are), I lumped them together under the disguise of a single idea.
Get rid of the vending machines. This idea will make me an enemy within this industry and these product companies but most of the items are not healthy including the soda. Replace them with healthy alternatives like water (Add fresh lemon slices!), fruit, etc. Another replacement could be to provide a healthy salad bar cafeteria. Not all companies provide a food service but you should try it. It also keeps people from fighting traffic to go out at lunch.
Wear visible name tags. Some people may not know everyone’s name including visitors, new employees, temporary employees, etc. Nametags help encourage open, friendly communication and people like to hear you call them by name.
And for my bonus idea…
Just ask your employees for their ideas! In the spirit of total employee involvement, open up the topic to your employees. They will certainly add to the list and help implement improvements while feeling positive for being part of the improvement process. Remember, change is best done with people and not to them!
So here are seven more ideas plus one.
Add some rocking chairs. This is not an early effort to look forward to retirement. Some believe that the rocking motion can be therapeutic. I have even seen rocking chairs at airports and have enjoyed it as I waited to board my flight.
Provide a public puzzle table. Puzzles can relax and re-energize your brain by focusing on a simple challenging task to put the pieces together. You would be surprised to learn that the brain still can solve other problems in the background when you are not thinking about them. Have you ever solved a problem while sleeping, in the shower or driving to work? Same principle applies.
Eliminate or reduce harsh noises. How many facilities use annoying intercoms, buzzers, loud machines, rattling conveyors, etc.? Try standing in the middle of your facility when everyone is gone, the lights are out and all the machinery is shut down. Big difference! Buy a sound meter to measure your noise levels and start the kaizen process to lower the levels.
Play comedies on a big screen TV at lunch. Making people laugh and smile does have a positive affect. Just make sure that you don’t show any comedy that would offend anyone.
Provide a healing atmosphere. Installing a fountain or two can help. The sound of running water is thought to be beneficial to your spirit. You can also green it up. Add plants, fresh flowers around the facility and not just in the office. Put the plants in staircases and the shop floor. Yes, even the shop floor! And you can play classical or relaxing music. Music can lift the spirit, soothe the soul and spark creativity. Even though you could considered this section as three separate ideas (and they are), I lumped them together under the disguise of a single idea.
Get rid of the vending machines. This idea will make me an enemy within this industry and these product companies but most of the items are not healthy including the soda. Replace them with healthy alternatives like water (Add fresh lemon slices!), fruit, etc. Another replacement could be to provide a healthy salad bar cafeteria. Not all companies provide a food service but you should try it. It also keeps people from fighting traffic to go out at lunch.
Wear visible name tags. Some people may not know everyone’s name including visitors, new employees, temporary employees, etc. Nametags help encourage open, friendly communication and people like to hear you call them by name.
And for my bonus idea…
Just ask your employees for their ideas! In the spirit of total employee involvement, open up the topic to your employees. They will certainly add to the list and help implement improvements while feeling positive for being part of the improvement process. Remember, change is best done with people and not to them!
Tuesday, May 08, 2007
Simple Kaizen 1
Before Kaizen: What was my problem? My laptop cords and mouse cords gets tangled up in my computer bag.
After Kaizen: What is my simple idea? Attach velcro strips to each cord, wrap and secure.
Result: What is the benefit? Eliminates frustration and time to untangle the cords.
After Kaizen: What is my simple idea? Attach velcro strips to each cord, wrap and secure.
Result: What is the benefit? Eliminates frustration and time to untangle the cords.
Be Careful What You Measure
I was reminded this week of the important lesson to be careful what you measure, measurements drive action and behavior.
The productivity numbers have dropped slightly at the first of the year and not rebounded despite all the continuous improvement efforts. Needless to say, this was not the expected result. Management wanted to know what caused the drop and take the proper countermeasures to reverse the trend.
To add to the complexity, several changes occurred during this time frame regarding the usual suspects of volume, mix, lot size, manpower, new products, methods, etc. There did not appear to be an easy answer to the simple question, “What changed?”
When I observed the processes at gemba, the process flow appeared to be improved yet the numbers told a different story. As one that likes to use data to drive decisions, I dug a little deeper. With a little investigation, I started to analysis the historical data to see if I could determine any patterns or potential causes. Unfortunately, only summary reports were available and the details behind the summary were thrown out every month. Not a bad policy since I was the first to ever request to see this data. The good news is the 5S for this area looks great.
Turning my attention to the spreadsheet used to create the productivity charts, looking for anything abnormal, I noticed that several of the formulas did not make sense to me. Looking closer, I saw that one of the formulas in this year’s spreadsheet pointed to cell in last year’s spreadsheet which turned out to be a blank cell. Apparently, in the process of creating the new 2007 spreadsheet from the old 2006 spreadsheet, the formula did not get properly translated.
A couple of keystrokes later, the formula was corrected. Followed by a weeks worth of clerical effort to restate the year, the productivity measures displayed a more accurate and improved operation.
Although this recalculation of productivity had a positive affect, it is not what I would consider a triumph. Ongoing efforts are still required to truly increase productivity, so it’s back to gemba. However, I am modifying the lesson to “Be careful what and how you measure, measurements drive action and behavior”.
The productivity numbers have dropped slightly at the first of the year and not rebounded despite all the continuous improvement efforts. Needless to say, this was not the expected result. Management wanted to know what caused the drop and take the proper countermeasures to reverse the trend.
To add to the complexity, several changes occurred during this time frame regarding the usual suspects of volume, mix, lot size, manpower, new products, methods, etc. There did not appear to be an easy answer to the simple question, “What changed?”
When I observed the processes at gemba, the process flow appeared to be improved yet the numbers told a different story. As one that likes to use data to drive decisions, I dug a little deeper. With a little investigation, I started to analysis the historical data to see if I could determine any patterns or potential causes. Unfortunately, only summary reports were available and the details behind the summary were thrown out every month. Not a bad policy since I was the first to ever request to see this data. The good news is the 5S for this area looks great.
Turning my attention to the spreadsheet used to create the productivity charts, looking for anything abnormal, I noticed that several of the formulas did not make sense to me. Looking closer, I saw that one of the formulas in this year’s spreadsheet pointed to cell in last year’s spreadsheet which turned out to be a blank cell. Apparently, in the process of creating the new 2007 spreadsheet from the old 2006 spreadsheet, the formula did not get properly translated.
A couple of keystrokes later, the formula was corrected. Followed by a weeks worth of clerical effort to restate the year, the productivity measures displayed a more accurate and improved operation.
Although this recalculation of productivity had a positive affect, it is not what I would consider a triumph. Ongoing efforts are still required to truly increase productivity, so it’s back to gemba. However, I am modifying the lesson to “Be careful what and how you measure, measurements drive action and behavior”.
Tuesday, May 01, 2007
Toyota Releases Temp Workers
Toyota Motor Manufacturing, Indiana (TMMI) officially announced last week, April 25, 2007, their plans to eliminate its “variable workforce” by the end the year, citing low demand for the Toyota Sequoia. The news release added “About 350 temp workers will be affected by the decision” which is a more pleasant way of saying that 350 workers will lose their jobs. The TMMI is located in Princetown, Indiana.
This news flash did not make the major headlines like the recent quarter sales announcements that Toyota passes up GM as the Number one (in sales) worldwide automotive manufacturer. I guess the hype of the Toyota race to unseat ex-goliath GM and the potential effect on the future of GM is more news-worthy. In my opinion, this little news headline tells a bigger story about Toyota.
Although I feel saddened for the 350 families affected by the pain of losing of a job, I also feel hopeful. For one, the announcement stated a timeline “by the end of the year” for the elimination. That is a seven month horizon to ease the burden. From my manufacturing experience, temp workers are typically given little notice that their services were no longer needed. This meant same day or next day notice with the “Thanks for your work, here is your last check and don’t come back tomorrow” speech.
Also noted in the news release, Toyota is working with PMI, the company that provides TMMI with variable work force team members, to find them other assignments. This includes transferring workers to the Subaru of Indiana Automotive plant in Lafayette, Indiana where Toyota has recently begun building the Camry. So far, 17 workers have accepted the move.
All are steps to ease the burden of a job loss, while following the “respect for people” principle of lean which extends to even the I-get-no-respect temp workers. I don’t know all the details on how Toyota is actively working to ease the job loss pain yet I get the impression it would be more than most companies.
Other lean lessons point to the workforce strategies of Toyota in a variable demand market. Despite all the news of Toyota’s popularity and sales growth, some Toyota models decline in sales as with the Toyota Sequoia in this case. How does Toyota balance their workforce in a cyclical industry?
One strategy is the variable (temporary) workforce. The role of the variable workforce is a huge strategic difference from typical Western Manufacturers. This is not to say using temporary employees is uncommon in America, just that we use a lower percentage of temporary employees by comparison. This was a surprising fact I learned on my trip to Japan where temporary employees made up 40-50% of the workforce at companies I toured. With the exception of highly seasonal industries, I’ll bet that most American manufacturing companies that have temporary employees have a much lower percentage.
Does this high proportion of temporary employees strategy work? It appears so, but not without creating other issues. Healthcare coverage, employee benefits, pay structure, training, re-staffing to name just a few. A closer investigation into the pros and cons beyond replacing the term “layoff” with “release” would help determine if this is a better approach. Given the added flexibility, a larger variable workforce is more likely a growing strategy for the future beyond even typical cyclical industries.
This news flash did not make the major headlines like the recent quarter sales announcements that Toyota passes up GM as the Number one (in sales) worldwide automotive manufacturer. I guess the hype of the Toyota race to unseat ex-goliath GM and the potential effect on the future of GM is more news-worthy. In my opinion, this little news headline tells a bigger story about Toyota.
Although I feel saddened for the 350 families affected by the pain of losing of a job, I also feel hopeful. For one, the announcement stated a timeline “by the end of the year” for the elimination. That is a seven month horizon to ease the burden. From my manufacturing experience, temp workers are typically given little notice that their services were no longer needed. This meant same day or next day notice with the “Thanks for your work, here is your last check and don’t come back tomorrow” speech.
Also noted in the news release, Toyota is working with PMI, the company that provides TMMI with variable work force team members, to find them other assignments. This includes transferring workers to the Subaru of Indiana Automotive plant in Lafayette, Indiana where Toyota has recently begun building the Camry. So far, 17 workers have accepted the move.
All are steps to ease the burden of a job loss, while following the “respect for people” principle of lean which extends to even the I-get-no-respect temp workers. I don’t know all the details on how Toyota is actively working to ease the job loss pain yet I get the impression it would be more than most companies.
Other lean lessons point to the workforce strategies of Toyota in a variable demand market. Despite all the news of Toyota’s popularity and sales growth, some Toyota models decline in sales as with the Toyota Sequoia in this case. How does Toyota balance their workforce in a cyclical industry?
One strategy is the variable (temporary) workforce. The role of the variable workforce is a huge strategic difference from typical Western Manufacturers. This is not to say using temporary employees is uncommon in America, just that we use a lower percentage of temporary employees by comparison. This was a surprising fact I learned on my trip to Japan where temporary employees made up 40-50% of the workforce at companies I toured. With the exception of highly seasonal industries, I’ll bet that most American manufacturing companies that have temporary employees have a much lower percentage.
Does this high proportion of temporary employees strategy work? It appears so, but not without creating other issues. Healthcare coverage, employee benefits, pay structure, training, re-staffing to name just a few. A closer investigation into the pros and cons beyond replacing the term “layoff” with “release” would help determine if this is a better approach. Given the added flexibility, a larger variable workforce is more likely a growing strategy for the future beyond even typical cyclical industries.
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