Comments on: Is Laying People off Really Anti-Lean?

By: Gajanan K

Gajanan K — Thu, 24 Nov 2011 12:40:39 +0000

Under such condition it can be a duty of human resource manager to develop the skills of employees and refer their names for other organisations or consultancy services.

By: Mikkel Smith

Mikkel Smith — Fri, 25 Feb 2011 17:15:35 +0000

Hi All,

Great post!

For me Lean is all about staying competitive – staying in business!

This means that successful implementation of Lean can lead to too many employees – like if sales doesn’t grove at the same speed as Lean increases the productivity.
Here comes the tricky thing with Lean. The tools in Lean demand a great level of involvement from the organization. Therefore laying off people can shut down the Lean process very fast.

I normally recommend managers in tough businesses (no growth) to set their “first team” all the time. This means that if they work with Lean they should continuously focus on “who is in my first team”. This way they should layoff people “before the next Lean loop” instead of after where things can be connected. I know it is tough – but it is all about staying competitive in business!

Have a great day!

Br
Mikkel Smith
Denmark

By: Ron Jacques

Ron Jacques — Fri, 26 Nov 2010 14:50:56 +0000

I can certainly sympathize with the ideas that layoffs eventually lead to the death of many lean efforts. I have lived to see far to many times in both public as well as private organizations. This stems from the fact that senior management often hears about lean as a tool to cost reduction (better profits) and thereby benefits the company (as well as their own pockets via bonuses) with little regard for those who are reduced or eliminated (bad for their pockets).

Lean as much as it is a tool for improvement also carries a great deal of social obligation (respect for people). Much of senior management would do well to learn and respect this tenant. In organizations where I have seen people redeployed to increase improvement instead of laid off, the rate of return and increase in customer value (speed, quality and value) took off in huge double digit returns. This then put the burden on the sales force (who in the past always complained about late orders, poor quality and other reasons why they couldn’t sell more) to go out and do their jobs and actually create an find customers. Nothing could be so satisfying for a “manufacturing guy” then to shift the burden back to the sales side of the equation and take the heat off “operations”.

More organizations need to adopt the culture, but like our own ethnic backgrounds, there are reasons, beliefs, rituals and celebrations that are centuries old that are passed from generation to generation. So it needs to be with Lean, we need to understand this culture and use it to better ourselves instead as a weapon that is inflicted upon others.

By: Ronald N. Cooke

Ronald N. Cooke — Sat, 14 Aug 2010 19:59:27 +0000

We could think about alternatives, rather than absolutes. The excess labor might be redirected to these activities:
Increasing sales, domestic.
Increased sales, international. Look to emerging markets.
Explore production of different products.
Plant maintenance; landscaping, signage.
Crosstraining.
Job sharing, with reduced hours. Reduced income for all may beat the total loss of income for those who might be laid off.
Product evaluation. Is the slowdown permanent?
Forecasting. Can employees be carried until the market recovers?

It could be that some manufacturing people have education that is underused. Some might be more properly repurposed to work in sales, marketing, or design.

Ronald N. Cooke

By: Steve

Steve — Thu, 15 Jul 2010 13:42:15 +0000

I agree with Russell’s statement. It wasn’t the lean improvements that led to the lay offs but the poor management prior to them. I worked for a company that had a similar situation with having a lot of employees due to the increase in demand, but then when demand suddenly dropped, we were left with a lot of people doing nothing. The organization ended up laying a lot of employees off just to need a lot more the following year for a drastic increase in demand. I wonder if the amount spend on lay offs, hiring & training was more or less than it would have been to keep them on…

In a sense, layoffs are anti-lean in that they work against lean because people will see lean improvements lead to improved efficiency and a decrease in the number of people needed thereby putting their job at risk. However, rather than going out and hiring a bunch of people when demand spikes, if lean is implemented, the company wouldn’t face such a dilemma. Lay offs should be a last resort for drops in demand…

By: Mark

Mark — Tue, 20 Jan 2009 12:07:06 +0000

… and what better illustration of this article than now. The automotive world for certain is in turmoil. Some manufacturers have made ‘drastic’ cuts already, and more are to come. Meritocracy and performance related pay are ideas… but the unionized workforce has the above question very much on their minds. Hang on, it’s going to be a heck of a ride.

By: Chris

Chris — Thu, 03 Apr 2008 20:08:38 +0000

It’s simple really; you have to follow and implement the guiding business principles and match the right number of people to get the jobs done. You can explain to the remaining folks that it is the company’s mantra to ‘take better care of fewer people’. Then, go about doing so. Reward the remaining employees for high levels of performance; ie based on a set ROA figure or some other measureable outcome.

By: Jorge

Jorge — Sun, 10 Feb 2008 21:25:47 +0000

I truly believe that the core of Lean is the respect for people and partners. Use technology to support people, not to replace them!

By: Russell

Russell — Sun, 13 Jan 2008 19:12:43 +0000

The key to this is previous management did not make effective business decisions, Board fired him or her. The Lean process identified the mis management with solid data to drive smart business decisions. I have been in this situation and it was a painful experience but the people who eventually lost there jobs understood it was previous poor management decisions that drove the down sizing not the Lean methodology.

By: John Asher

John Asher — Wed, 12 Dec 2007 02:04:56 +0000

Great post, and certainly a tough decision. However, Lean manufacturing, six sigma, or any other continuous improvement initiative should build morale and empower employees to grow the business.
If the business was in poor shape, transformation experts should be brought in first under that name to “rightsize” the company first, then improve it further with lean and six sigma and put those extra few people into improvement teams until the business can utilize them directly. Actually this is a good training ground for workers.
The post is thought provoking, but laying off people as a result of any improvement initiative is not good. There are times when it must be done, but it is normally management that implemented lean prior to doing what they should have done all along.
Chances are, if this management couldn’t rightsize the company before lean, then the lean probably wouldn’t be successful enough to have that decision.