The Wall Street Journal published an article earlier this week that contends lean manufacturing has made it more difficult for manufacturers to lay off employees during recessions.
According to the Journal:
A decade ago, most factories tended to do "batch" work, with large groups of employees churning out endless runs of the same pieces. Since many workers did identical tasks, it was easier for companies to cut people during downturns.That kind of work, which employs more people and includes a larger share of less-skilled positions, has been steadily migrating to lower-cost locales overseas. In the U.S., companies now have new equipment and streamlined operations that require fewer, more highly trained people to make more goods. The sector lost 3.5 million workers -- one in five jobs -- between January 2000 and the start of this recession. Even as employment contracted, production in that same time period rose 10%.
Lean has helped Cleveland-based Parker-Hannifin Corp. avoid some layoffs with a move from batch production to one-piece flow. The large stockpiles of inventory meant the company had to cut more workers during downturns, according to the article.
As reported by the Journal:
Parker's plants today have been largely restructured to create smaller production clusters. Seals for aerosol cans, for example, are only made in numbers that match the flow of orders. Mr. Washkewicz (Parker's chief executive) says those big stockpiles of yesteryear used to mean he had to cut more people, much faster. "In the past, we were trying to adjust to past sins, as well as the current drop," he says.
The article also highlights the importance of skilled labor. At Germantown, Wis.-based Mahuta Tool Corp., for instance, the higher-skilled workers are less likely to lose their jobs during a tough economy.
"The highly skilled person, you're not going to lay them off," says CEO Lynn Mahuta. "You will find other work for them to do."
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Lean Means Fewer Workers to Cut
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