Viewpoints: Stable Employment is a Key Lean Element
By Phillip S. Waldrop, PhD
Professor of Manufacturing and MER Steering Committee member
Big Canoe, GA
A fundamental requirement for recovery and growth of manufacturing is a sufficient pool of capable people who are prepared to staff the enterprise in all areas and at all levels, especially those closest to the production shop floor. Numerous organizations – professional, educational, governmental, and media - have been emphasizing their concern with the lack of qualified people to fill an estimated 100,000 currently available manufacturing jobs at a time when over 10 million are unemployed. While the overall unemployment level will hopefully improve, the shortage of qualified industrial professional and technical personnel is projected to worsen.
Product innovation is an important goal in regard to near-term industrial base recovery, but perhaps meaningless if we cannot get the factories set up and affordable, quality products out the door. Attracting capable people to the range of excellent, rewarding careers in the field of manufacturing demands that they are not only made aware of the jobs, education and training, but motivated to pursue them. An improved image of manufacturing is recognized as important, but that image must involve more than insight to clean, high tech modern operations. After years of negative news of offshoring, downsizing, and shutdowns, job security is a big issue in the minds of anyone with the potential to become a future manufacturing engineer, maintenance technician, supervisor, process specialist or production cell team member.
To be world class competitors, manufacturers must be focused on continuous improvement of both quality and efficiency. To SME members that means “Lean”. There are four general aspects of Lean World Class Manufacturing, including Just-In –Time (JIT) production, Total Quality Control (TQC), Total Productive Maintenance (TPM), and - central to the issue here – Total Employee Involvement (TEI).
The four operating principles of TEI include (1) Policies for a stable workforce, (2) Developing motivation, trust, and team spirit, (3) Empowering people, and (4) Team culture. Maslow’s Hierarchy of Needs puts food/clothing/shelter as the fundamental human priority, with security next in line, so the importance of job security is obvious. While we in SME tend to focus attention on technologies and processes, the human aspects can’t be ignored, and the issue of whether the job will be there tomorrow is probably a bigger individual concern than the nature of the job and the working conditions.
Given the shortage of skilled front line workers and leaders, it is critical to the employer to not only hire qualified people, but to then protect their recruitment, selection, and training investment by keeping them on board into the future. So workforce stability, or job security, is an employer/employee win-win situation. It is not a perfect world, and we are talking about industrial management here, not socialism in government, but the concept of lifetime employment can be effective as a strategy as well as a philosophical business culture goal.
Major competitive concerns today are innovation and continuous improvement. Employees who feel secure are freer to become innovative, and if turnover is high then company training effort must be shifted away from continuous improvement in order to initiate new hires. “Lifetime employment” implies that employees will be around for a long time, and so hiring must be more selective. So if we are lucky enough to hire and develop an innovative, productive team-oriented workforce, how can we prevent their loss when we face business downturns?
There are several basic elements that can form an orchestrated plan for layoff avoidance and thus job security and loyalty.
- Get as many diverse ideas on the table as possible, with encouragement of employee contributions as an application of their empowerment and problem solving capabilities.
- Create new markets for your products. Increased sales can of course produce efficiencies and competitive cost- and price-cutting.
- Train for and redeploy people into other areas. A few of the best production employees could, for example, be temporarily transferred into engineering where they could focus on producibility reviews and analysis as innovative continuous improvement. Remember that the best employees tend to be those who are also most capable of adapting to new situations. Further, available time can be used to catch up on and enhance training as an investment.
- Loan employees to other corporate divisions or even other non-competing companies.
- Use under-staffing as SOP in good times, with temporary hires to provide manpower during peaks, and retaining fulltime employees in off-peak times.
- Utilize attrition, retirements, and the option of early retirements.
- Seek profit and salary/wage concessions across the board, but starting with top management. Remember that the line people are the product and service value adders.
Given the current and projected shortfall of good talent for line employees, it makes sense that providing an environment that is stable and secure not only helps retain valuable skill assets, it can also be a means of attracting the best in the face of recruitment/hiring competition.
Phil Waldrop has been a member of SME since 1976, with industry experience ranging from machine operator to director of advance process development. He is a co-author of the textbooks Lean World Class Manufacturing and The Lean World Class manufacturing Enterprise.