Trim Labor Management's Fat

Oct. 1, 2010
Even a perfectly engineered production process, built on the concepts of just-in-time and Six Sigma, will fail if workers are not trained and encouraged to reduce waste themselves. Here's how individuals and their organizations must adapt.

Conversations about lean environments often focus on the efficient purchase and storage of inventory, but we would be wise to consider the effects of lean principles on labor management as well. The important thing to remember when making the shift to a lean environment is that one's approach toward labor management ought to change along with everything else.

But what does it mean to apply these lean concepts to labor management? The goal of lean is to utilize the minimum amount of effort to produce just enough to meet demand, bringing in new supplies only when they are needed. This ideology would seem to translate easily to labor management: on any given day, there should be just enough workers to handle the day's workload. However, that point-of-view reduces employees to pieces of equipment that can be shifted around or turned on and off, and labor management is much more than that. It's about motivating employees to work at maximum effort and providing incentives to continue working at a high level.

The real question, then, is how people fit into a lean environment. In particular, there are three key ways in which lean principles will have a significant effect on labor management:

  • The metrics of effort and success will differ from a non-lean environment, since the goals for productivity have changed.

  • Employees will be expected to work with greater flexibility and adapt to the unique problems that arise each day due to lean principles.

  • Relationships between co-workers, superiors and subordinates, will be reshaped to emphasize managed cooperation over individualized labor.

A New Look at Productivity

For decades, the assembly line mentality encouraged manufacturers to judge productivity by total output. In other words, how can we position all of our workers and equipment in a way that produces the most output in the shortest amount of time? Overstocked inventory would often be stored for weeks or months at a time in the hopes that the assembly line would improve and more supplies would begin moving through the factory each day.

In new lean environments, however, overstocked inventory would be seen as a short-term waste, as organizations try to receive supplies and deliver products at the precise moment they are needed. Those who once took pride in churning out products with great speed are now being measured by an entirely different set of standards, which are much more complex than before. Successful productivity used to mean simply being faster today than you were yesterday. Now, it's not so simple.

This presents an obvious difficulty for managers when trying to motivate workers. Previously, when it was assumed that faster production would lead to greater revenues, the metrics for a worker's success were simple: work faster, earn the company more money, and you yourself will deserve rewards. Now that the company's own financial metrics have become more complex under lean principles, managers may have a hard time communicating to workers what they must do to be successful.

Perhaps the best way to overcome this obstacle is to teach workers how to measure themselves, not only by their total output but also by the effort required to achieve that output. This inspires creative thinking in each worker.

It is no longer enough for a worker to be satisfied by speeding up his or her everyday processes. The worker must now consider the effort that goes into that process and whether or not the outcome merits the effort. If not, the worker should devise ways to achieve greater output with less effort. This can be as simple as keeping a clean and organized workstation or as complex as speaking with managers about flaws in the design of the production flow.

Let's say workers at an automotive manufacturing facility normally make 50 cars a day. Under lean management, it's not so important that they find a way to make 52 cars a day. Instead, their goal should be to find cheaper and more efficient ways to continue making 50 cars a day. This kind of proactive decision-making is the new metric for judging productivity — a metric that affects the worker's experience in more ways than one.

Lean Workers, Flexible Workers

This emphasis on a new way of thinking has proven to be a problem for many manufacturers. We often hear of experienced workers who cannot, or refuse to, modify their work habits to match a new lean environment, and they often choose to leave the company instead, which exemplifies just how radical a lean implementation can be.

Many longtime employees have settled into the rhythms of earlier traditions, especially with regard to the assembly line. The beauty of the assembly line was that workers didn't need to have many skills. In fact, they only needed to know how to do one thing really well, and then they could pass the product along and perform their skill again for the next product. But lean principles have changed the requirements. Workers who once stood in place and operated presses or drills must now be willing to move around and provide assistance wherever it is needed.

Consider the automotive facility again. In earlier days, workers generally remained at their stations, no matter what. If one station suddenly became backed up, the entire assembly line would come to a crashing halt. All stations would wait for production to begin flowing again. However, a halt in production is the great enemy of lean manufacturing and must be avoided at all costs. An assembler would now be expected to help other assemblers or fabricators or die sanders if that's what it takes to get production back on track as soon as possible.

Clearly, these process changes will require workers to be more flexible and skilled than before. In addition to becoming more familiar with aspects of production not directly related to their skill set, workers must now plan on stepping out of their comfort zone to lend a hand when necessary.

However, many workers are unwilling to take on these new responsibilities. This takes us back to our initial problem of motivation. If managers in a lean workplace are going to convince workers to handle more complex tasks, then they must devise ways to reward flexibility.

An Assembly Line of Ideas

Most importantly, managers will need to establish their authority while simultaneously building an ever-present, supportive relationship with each worker. An important aspect in any lean system is the delegation of duties from one position of authority to the next. Often, ideas on how to improve the company's productivity are generated from a group of experts. In lean management, these are often third party advisers, or “sensei,” who are brought in to assess the situation and report to top management.

With Six Sigma projects, in-house experts are deemed Black Belts, Green Belts, etc. and perform duties similar to those of the sensei. The goal is to determine what must be done to maximize productivity and minimize effort and then pass those solutions to the workers through a series of superiors.

Therefore, tasks are now passed along in much the same way that products were assembled on the assembly line. Rather than some executive manager barking orders from afar, lean management encourages the structured flow of ideas through a chain of command. An executive might give a factory manager some productivity goals for a given quarter. The manager would then assess his or her factory and determine the best way to achieve those goals, passing these ideas along to the floor managers. Those floor managers would then be directly responsible for the productivity of workers in their area.

With this system in place, workers don't feel like they are reporting to three or four different bosses. The top-level management is removed from the picture, leaving workers to deal with only one boss: their immediate superior. This eliminates the confusion that workers sometime encounter when several different bosses unknowingly assign them contradictory tasks, and it allows managers to keep a focused eye on the select few who are their direct subordinates. A simple line of authority like this makes even the largest projects seem manageable for workers and their managers, which is as important as motivation in keeping a lean operation running smoothly.

Motivation, flexibility and direct management must all be present if a lean environment is to be successful. With workers assuming more responsibilities than ever, management must start taking a more personable and inspirational approach to labor management. If workers are expected to stop functioning like machines and start thinking critically, they must be treated differently as well.

Stephen Jannise is the ERP market analyst at Software Advice, a free online resource that helps companies research and evaluate ERP software.

Latest from Facilities Management