Mere Mortal Managers

“Preparation” (Page 3 of 5)

Absolutely Never Punish For Lean

If you have never started a conversion to Lean, you have a great opportunity to assess your staffing needs and make necessary adjustments (provided they are necessary), before you begin your Lean transformation. If you are very heavily staffed and natural attrition will not resolve your bloated staffing issues, you must make your cuts quickly. In reality, you probably needed to get rid of some non-contributing dead-weight and lack-luster performers. Now is the time. Don’t over do it as customers can always surprise you with orders beyond your ability to fulfill them, but take this action decisively if you must. We are not advocates of cutting people in “the name of Lean”, but if you know you must remove some excess workforce do it before you even mention the term “Lean Manufacturing”. Once you have stated your intention to transform to Lean you must also commit to a policy of only laying-off or terminating based on the following criteria:

Individual Performance

The employee does not meet minimum company standards of performance and merits termination. This includes all the reasons you terminate any employee except saving labor dollars due to Lean improvements.

Market Performance

If your company simply cannot sustain its workforce based on market changes (i.e., loss of market share, obsolescence of your products, lack of sales, etc.), then you might need to make some individual cuts to keep the company going as a whole.

Natural Attrition

This is the primary method for reducing staff as needed in a Lean environment. People will retire, graduate from college, find other jobs, get sick, die, and basically move on in some way or another. Let them do it.

It is not uncommon to reduce your staff by a quarter, or even up to a third, as you make a full transition to Lean. But be careful with these numbers. It takes time to allow attrition to trim a company by a third and it may never actually need to happen. Almost without exception, when companies become Leaner they reduce lead-times, improve quality, and substantially increase on-time delivery. Any of these benefits may generate increased sales. In other words, you may even wind-up hiring people to meet the demands of increased market share as your Lean efforts make your company more competitive. The hiring of a second, third, or fourth line or shift to deal with increased market share and rising demand is a great problem to have.