SCDigest Editorial Staff
Lean has had a profound impact on manufacturing in dozens of ways (see SCDigest’s resources page on Lean Manufacturing: Lean Manufacturing Resources), but here’s one many may not have expected – it’s actually limiting manufacturing job losses in the face of the deep economic downturn.
The reason is simple: some factories have become so Lean, there simply aren’t many positions that can be eliminated and keep the operations going, even at reduced volume. Another factor: the investment in Lean training and techniques in the workforce can make the long-term cost of layoffs very high for some companies.
While according to employment figures released last week, the US has shed some 1.3 million manufacturing jobs since the downturn, many think that the current state of the economy should have resulted in the loss of even more factory jobs – and that Lean has played a key role in mitigating the damage.
For example, Parker Hannifin Corp. of Cleveland, a maker of a wide variety of motion and control systems, has become so Lean in its operations that many assembly lines run with just a handful of highly trained workers. With that level of “Lean-ness,” it’s hard to furlough anyone, even at significantly reduced production volumes.
The investment in Lean operators is also a factor. Many companies have invested substantial sums in training factory workers in Lean, and those that have made it to this point are skilled and valuable. Letting them go now, even with the potential to be called back as the economy recovers, increases the risk that the employee will be lost forever and the company will have to reinvest in another operator. So, the smart economic decision may be to keep the current employee on the job, even if he or she is under-utilized right now.
Make to Order also Plays a Role
There’s also another related factor that is constraining manufacturing job losses – the change from make-to-stock to make-to-order delivery models, and the related change in terms of US manufacturing work moving more “upstream,” with higher value add.
In the make-to-stock world, there tends to be more workers doing basically the same tasks. So, it’s relatively easy to downside some portions of those workers consistent with the drop in demand. Many of these lower skilled types of manufacturing positions have already moved offshore.
With a Lean, make-to-order model, shop floor tasks tend to become more specialized, making substantial layoffs more difficult to execute. The US now has fewer, but more specialized and skilled shop floor personnel.
(Manufacturing Article - Continued Below)