This happened to me in my earlier years in manufacturing and I’m finding that it’s not uncommon in many companies. I’d like to share the experience with you:
The Plant Manager’s face has frustration written all over it as he comes into the room as we are about to start our weekly management meeting. As everyone takes their turn giving updates, the Plant Manager reveals the cause of his distress. He had a meeting with his boss and he is being told that labor is too high and it must be reduced. The current headcount is over the budget and the CFO calculates that the extra staffing isn’t justified by the amount of product produced. So the manager tells us that he will be informing all of the department leaders how many people to reduce next week.
As the instructions go out to the leaders, the work force begins to thin. Shortly thereafter, chaos ensues. The activity happening on the plant floor reminded me of a person plugging a hole in a dyke with their finger only to have more holes appear faster and in greater quantity than fingers could fix. The creativity that I saw was driven by panic and desperation. With a smaller work force, leaders were working on the line, people were cutting corners and they were still falling behind on their production.
As the daily production suffers, the overtime increases. Workers are becoming tired and losing hope due to long hours with no end in sight. It’s not only the Production Control department that is getting complaints from the customer, but the Quality department does as well. As the workers are becoming rushed and exhausted, they cut corners. Because of this, they have to spend their time sorting bad product and adding extra inspection, which is using more labor hours.
The moral on the floor plummets. The workforce can’t understand why they are being asked to work beyond their means and they are the ones that have to pay for the decisions that management made. Management would occasionally pressure the department leaders to improve, but they knew that all they were able to do was fight to keep their head above water, there was no time or energy for anything extra.
Does this story sound familiar? This wasn’t an isolated event in my company. It happened on a somewhat regular basis, each time with the same disastrous results. After upper management saw that reducing labor did not drive the profits they were looking for, they would allow the work force to continue, but after time, they would repeat the same cycle. Then we finally broke the pattern and we started to embrace our Lean Journey.
In looking back, we were trying to force the activity by starting with the result. When we actually started removing waste from our process by adopting a commitment to continuous improvement, we began to see the results that we were looking for. As we started to understand our value stream and set targets to reduce our lead time, we found creative ways to eliminate non-value adding activity and ingrained them into our standard work. These creative improvements were done in a controlled way and in the way we chose, not forced on us by emergency situations. Finally, we had happy customers, happy employees and happy management.
It is very important that we understand that in order to excel in manufacturing, we must start with stability and persistently improve our processes and systems in order to achieve the results that we’re looking for. If we focus our efforts on reducing waste through kaizen, we will undoubtedly require less labor. It doesn’t happen in reverse.
When I try to figure out why this is so common, this is one theory that I have. One of the most popular lean concepts that I hear quoted managers is to “Lower the water to reveal the rocks”. I totally support this, but I think that it can be dangerous if misinterpreted. I think it’s possible that management takes this idea and assumes that by “taking away” any extra resources, they will force their people to solve their problems. Lowering the water will expose the problem, but management can’t just leave the ship stranded on the rocks. Most of the time, there are plenty of problems that are exposed in the first place, they just need to be solved. In the beginning, extra labor and inventory are allowing the waste to exist while production continues. The goal is to continuously analyze the wastes and eliminate them using the PDCA method. If as any point, we have trouble seeing waste, “Lowering the Water” in a careful and controlled manner will expose the next layer of waste, but you can’t just assume that everything will take care of itself. It will actually make things worse because the people that are expected to solve the problems are too busy barely getting by (in survival mode).
We must create an environment where people have the opportunity to be successful problem solvers with enough footing to be proactive instead of always fighting on a slippery slope.