[PnP-Focus] Process Improvement & Layoffs

You highlight the conflict between process improvement and downsizing.

The article was designed to make you think about
improvement.  If your process improvements lead to layoffs then your
employees may not think much of your improvement efforts. 
It was a warning regarding poorly planned process
improvement efforts.  I have no doubt that on an individual
event-by-event basis you may succeed in an improvement not causing a
layoff but over time, if you consistently increase productivity faster
than your ability to sell the extra capacity, then management will take
the easy route.

The obvious example is when improvement continues to increase
productivity and sales fall thus widening the gap even more
dramatically.  Perhaps you could explain what you do with the extra
capacity that is released and not used to make product?  Lets say over a
five year period where you consistently improve faster than sales.  I
would be interested to understand how management tolerates and
pays for capacity they can't sell.

Chris

BTW: I agree that the primary ones to layoff are managers and inspectors.
Both represent a form of waste where people are underutilized. see
http://www.bizmanualz.com/articles/08-15-05_organizational_structure.html
for "span of control."

Joe Racz wrote:

>Chris,
> I must agree partly with the person's comment below.
>I think a business needs to ask themselves "why are we
>in business?" Is it just to make money, or is it to improve
>our community, or is it to take care of our employees/team?
> Whatever their answer turns out to be will determine the best
>strategy for the company. I do not agree with the mentality of
> "let's make things more efficient so we can downsize." You will
>find out that those company usually aren't around long because
>they concentrate too much on the "BOTTOM-LINE," and not on the 
>balance of the company. Do you want your company to grow, exist
>and keep 400 people employed, or be out of business in 2 years? 
> I have heard the adage "If you are not growing, you are going out of
>business."
>I don't agree with that statement fully however, it has some merit.
>I also have heard the adage "You should always be trying to put yourself out
>of a job." Meaning, by improving processes, you can in essence alleviate
>your duties (Lean Principles). But why would you want to do that?
>If the company doesn't care about you as an important team member and
>decides they no longer need you because you have succeeded your position,
>wouldn't the company be hurting themselves?
> I've said it before (BALANCE) I don't think I have ever seen a true
>quantifiable measurement of morale. 
>(MORALE) It seems to be the cheapest, easiest tool to implement, but the
>hardest to measure.
>It also seems the reason for most inefficiencies and low morale is "you
>guessed it," Poor Management.
>  So, if I had to lay-off people because we suddenly became "efficient," It
>would
>probably be a manager. 
>Talk about a morale boost !
>
> It is our responsibility as managers to make sure our people get rewarded
>for good performance 
>and not penalized.
>
>Joe Racz CQE,CQA,CIT
>Quality Manager
>Precision Graphics Inc.
>21 County Line Rd
>Somerville, NJ 08876
>(908) 707-8880 ext.231  
>
>-----Original Message-----
>From: Chris Anderson [mailto:chris at bizmanualz.com]
>Sent: Tuesday, November 15, 2005 11:26 AM
>To: PnP-Focus
>Subject: [PnP-Focus] Process Improvement & Layoffs
>
>
>
>The last article that I wrote provoked some comments regarding 
>improvement and layoffs.  One readers comments are listed below.  What 
>does everyone else think about the article and the "Iron Law of Layoffs" 
>that was introduced.  The Iron Law of Layoffs was derived from research 
>conducted by M.I.T.  They analyzed a series of projects at different 
>companies and came to the conclusion that managers will revert to 
>layoffs at some point in the future if improvement efforts outrun sales 
>growth.
>
>Does anyone else have any experience to the contrary?
>
>Readers comments:
>
> > I disagree with the blanket statement that if you
> > improve too fast, you'll have to lay off people. One must understand
> > their current state. If they're already short-handed and inefficient,
> > they have a lot to gain with improvements and will likely not lay
> > anybody off. There are numerous other scenarios that dispute this
> > statement also. I'm very familiar and have a bit of experience with
> > lean mfg and six sigma. I don't care for the negative message this
> > sends right off the bat on process improvement. It's not the message
> > we want to be first in peoples' minds when they think of process
> > improvement.
>
>  
>


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