Lean Production: Who wins?
Lean production has become dominant world-wide and is constantly changing shape, but this does not suggest that the system benefits all involved. Firstly, this essay will discuss lean production as a current global pattern of work and employment that incorporates just in time production, worker involvement and flexibility. Secondly, lean production has evolved by outsourcing work to other countries as well as increasing competition internally within and organisation and externally on a global scale. Thirdly, this essay will suggest an alternative framework that will address problems associated with lean production, which is the focus of this essay.
Lean production is a Japanese based production system developed by Toyota in the 1950’s. (Pascal, 2002) Basic principles include reducing waste, such as time, space, human effort and machinery, whilst ensuring quality. This approach can be applied to all aspects of a business from design, through production to distribution. Lean production aims to cut costs by making the business more efficient and responsive to market needs. (Pascal, 2002) Lean production achieves this by cutting out all activities that do not add value to the production process, whether it is holding stock, repairing faulty product or unnecessary movement of people and product around the workplace. (Moody, 1997) Some of the most important aspects of lean production include just in time production, worker involvement and flexibility.
Firstly, just in time (JIT) production is based on the demands of the market. Pascal (2002) makes the claim that “JIT production means producing the right item at the right time in the right quantity” (p. 65). Therefore, goods are not produced unless they have been ordered by the customer and as a result it is important to assess how a particular good is produced in response to the actual quantity or quality demanded by the consumer. For example, a car company may look at how many cars have been ordered, whether they can be categorised into similar colours or styles and what the allocated time frame is for task completion. This type of method where products are demand driven are described by Edgell (2006) and Pascal (2002) as being a pull method of production. In contrast to the Fordist era however, products are supply driven. It is important to ensure that, with reduced time frames for delivery and customer demand, the supply of necessary parts arrive just in time for their assembly. (Neilson, 2008; Pascal, 2002). This creates a management by stress approach to dealing with the situation (Moody, 1997).
Management by stress, “a term coined by Mike Parker and Jane Slaughter of Labor Notes” (Moody, 1997, p. 86) is a system run by lean production that “reduce[s] the resources, including labor, needed to produce a given product or service. This is done by a constant process of stretching one phase of production to the “breaking point” by reducing the number of workers and/or the mass of materials available” (Moody, 1997, p. 86). For example, Toyota adopted a 57-second minute (Neilson, 2008; Moody, 1997) where the actual working time of an employee is subtracted away from the formal contract time they are employed for (Neilson, 2008). This means that for every fifty seven seconds out of one minute the worker is working. In reality, only having a three second buffer is very demanding and quite stressful on employees, especially when trying to constantly maintain the high quality and standards expected of them over a long period of time.
Just in time production contradicts just in case (JIC) production, which was developed under the Fordist era. The just in case system is based on production regardless of demand. (Pascal, 2002) High volumes of goods are then produced in advance and because of this it is necessary to employ more people and build additional warehouses for storage. This leads to increased costs and unnecessary waste as described above in the just in time production system. Just in case production awaits the market to pick and choose what is available from the already produced goods. Mass production limits the variety of available goods and any such changes produce unrealistic time frames for production. If consumers needs change in the meantime companies find it difficult to get a return on the remaining products not sold. (Pascal, 2002)
Lean production incorporates two factors of worker involvement. These are responsible autonomy and Kaizen or constant improvement. Responsible autonomy refers to trusting the worker to make the right decisions. The worker needs to adapt their behaviour in ways that are beneficial to the organisation (Neilson, 2008) and their decisions need to coincide with the goals of the organisation. Workers are empowered to be self regulating by taking responsibility for their decisions and actions. Kaizen refers to constantly thinking how a process can become more efficient (Pascal, 2002; Moody, 1997). This is similar to Taylorism where the process is refined by ‘mining the gold in the workers heads’ once to achieve the one best and most efficient way. Moody (1997) also points out that “[lean production] is in fact streamlined mass production that draws more consistently on the knowledge of the workers to do the streamlining” (p. 85). Workers become tailored to be innovative and are constantly thinking of better ways of producing the same item, that is, the gold in the workers heads is mined regularly, which increases real subordination. Workers are seen as a source of productivity gain (Neilson, 2008) and by involving the entire workforce in decision making, regardless of their position, workers feel empowered that their ideas are being used creatively. Worker involvement also directly contradicts the Fordist era where workers are not paid to think. Ideas are generated in small teams and team work often involves convincing other members of the group that your idea for improvement is more efficient than the current process. “[T]he teamwork involved in reaching an agreed-upon objective” (Ohno, as cited in Edgell, 2006, p. 88) counts toward achieving the goals of the organisation.
Flexibility can be categorised into three main parts: machine; product; and worker flexibility. (Pascal, 2002) Flexibility is the ability to expand or contract in response to pressure and therefore requires a company to respond to changes in demand. Machines have to be flexible in order to keep the process continuously flowing. For example, if one part of the machine breaks down then the other parts of the machine continue to work. Due to the uncertainty in customer requirements products need to be flexible to enable change from one product type to another with minimum distraction to performance levels. Having the right equipment will give an organisation more flexibility to make a variety of products, have small processing sizes and quick set up times to respond to the shifts in demand. (Pascal, 2002) When customer demands fluctuate, an organisation needs to have enough worker capacity to withstand the heightened pressure. Worker flexibility requires employing a lot of people on some days and at peak time. Workers need to be flexible not only in terms of time but also flexible in what they do. Their functions are not confined to one singular job but instead they are trained to become highly skilled in numerous jobs. For example, if one person is sick within a team setting then the team need to be adaptable to fill in and resume the work of the absent employee. Workers are employed on an as and when needed basis. This is beneficial for workers when production and demand are high. However, when production is low those workers have to find alternative sources of work, which creates job insecurity for the worker. In reality, employees are then subjected to the will of the organisation and what choices they do have are limited. (Pascal, 2002)
Secondly, outsourcing is associated, again, with cost cutting, value maximisation as well as competition. It is part of the global production system that fragments design, knowledge and conception with manufacturing and production of a product. That is, each part of the process of making a product is split up and segmented into different parts of the world. (Moody, 1997) For example, a company, such as the brand name Nike, may have buildings in America, which is a rich country, where the design of a new product is conceptualised, however, no production is done there; production and manufacturing of Nike products are based in China, which is a relatively poor country. In contrast to global outsourcing, local businesses may not want to outsource their production. They then have to hire the workers, such as cleaners and hire the production assembly staff themselves. They are responsible for all staff employed, which may include providing necessary training programmes or being accountable for health and safety issues. The idea of outsourcing is that it is supposed to be cost effective because companies can specialise in one particular area and they can then in turn relay this cost reduction to their consumers, whilst still maintaining quality. In the long term, specialising on a larger scale means costs are kept to a minimum compared with companies who do not specialise. However, this only maximises company profit and does not always take into consideration fairness for employees.
Specialising in a particular area, where companies can do the whole job, is beneficial for their country if they can retain the work but at the same time it is possible to find exploitation of workers as well. Competition becomes a driver of innovation and if there are several global companies that can all produce the same product they will be competing for that contracts, some of them unfortunately on price and others on the quality. (Pascal, 2002) For example, cleaners employed by the business may become highly skilled as a result because they will receive proper training but is the value placed on cleaners a lot less because there is competition between who is going to get the contract for the cleaning? The competition will drive the prices down and the workers may get paid less or not receive adequate training as a result. The company who hires them may argue that they are not exploiting workers, they are just putting there cleaning contract up for tender. This is an accountability issue that needs to be resolved. Moody (1997) also points out that “the threat of outsourcing [is] the basis of introducing competition between workers” (p. 94). Competition naturally increases the workers ability to try harder and work longer hours. The worker no longer benefits from being flexible but instead they are involved in the drone of constant improvement or as Moody (1997) succinctly puts it, “ jobs are constantly recycled, tightened up [and] loaded up” (p. 88) otherwise they are shipped out.
Thirdly, some of the ideas discussed above regarding lean production suggest that a new framework needs to address some problems with the current forms and patterns of work and employment. Workers are paramount to the success of any organisation; without them it is merely impossible to produce anything. Emphasis needs to be placed on the worker in all instances including the realisation of the following: the false good of flexibility for the worker, competition in order for workers to retain their jobs, accountability for the exploitation of workers through outsourcing and stress by management systems. In addition, legislative changes may include a creating a policy that suggests companies who outsource their manufacturing to other countries need to apply the same rules to those workers, such as the minimum wage, as they would in their own country. Companies who are genuinely interested in reducing cost for the benefit of the consumer and not the exploitation of the worker will not be affected by this legislation. They will instead take into account that countries natural resources as a cost cutting mechanism rather than trying to reduce workers wages to as little as possible.
In conclusion, lean production is a dominant world-wide production system originally developed by Toyota in the 1950’s. (Pascal, 2002) It involves reducing waste through processes such as just in time production, worker involvement and flexibility, in order to be more responsive to the needs of the market. In addition, global outsourcing, competition and employment exploitation go hand in hand but are only beneficial to the organisation. However, a new framework suggests that all is not lost. Workers can benefit from lean production if companies shift their focus of maximising value to the consumer by utilising natural resources instead of workers as a method of cost reduction.
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Moody, K. (1997). The rise and limits of lean production. In Workers in a lean world. London: Verso.
Neilson, D. C. (2008). Toyotism / Lean production: The new dominant paradigm? In LBST101-08B The Nature of Work. Hamilton: University of Waikato.
Pascal, D. (2002). Lean production simplified: A plain-language guide to the world’s most powerful production system. New York: Productivity Press.