Lean Manufacturing In a Downturn Layoff Environment

Lean Manufacturing in a Lean Economy

June 9, 2003

Companies have many challenges facing them in a slow economy or downturn. Many organizations face multiple layoffs, salary reductions and painful cost cutting measures when an economic slowdown occurs. The challenge for many organizations is how to encourage employees to search for improvements in production while their co-workers are being walked out the door. The production employee views many of the world-class techniques, such as lean manufacturing and six sigma activities as another reason to layoff personnel. So how can organizations champion the vision of lean enterprise when there are eroding sales, and cutbacks in staff and spending?

The uncertainty of a slow economy can present many challenges, but also many unique opportunities. The current economic situation has to be viewed as an opportunity to prepare for the next upturn in sales. This does not mean investing in new buildings or equipment, but investing in the most important asset, the human element. In a battle zone atmosphere there is very little time to spend on training, education, defining and documenting processes, and other improvement activities. Attempting to adopt new methods without coaching can be challenging, especially if no one in the organization has the experience required to implement lean manufacturing.

When the current economic situation is looked at as an opportunity to distance itself from the competition that is when an organization can become successful. What are your competitors doing? In the business world and in life many times analogies are used that relate to the sports world. The successful sports franchises take time to watch video of themselves and the competition to find areas of improvement.

Taking time to visit other organizations that are adopting a world-class approach is a valuable activity during a downturn. Visits with companies further up on the learning curve is a powerful method of demonstration and education for everyone. The learners get knowledge and the teachers get to reinforce the learning for themselves. Here are also some suggestions for activities that will pay huge dividends while companies wait for the next big wave:

Setup reduction.
Quality improvements.
Experimentation with virtual cells.
Cross Training
Organization (5S)
Teambuilding training
Material Handling Improvements
Kaizen Events

Let’s think for a minute what would happen if a world class organization like Motorola decided to get into your business. They have a copy of your customer list and applied the same productive techniques used to manufacture their current product lines. Let’s also assume that their employees are twice as productive as yours, and their lead times are three weeks, while yours is six. What would your organization do differently to compete? This might seem like a far-fetched imaginary scenario but the question needs to be asked. Questions like these are necessary to create the sense of crisis to motivate people and organizations to reach that next level of performance. Even though this scenario may not have happened, a company needs to prepare because it eventually will. It may not be Motorola, but odds are it will be a company that has adopted world-class manufacturing capabilities.

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About the Author

David McBride is co-founder of EMS Consulting Group, a Carlsbad, CA based engineering and management consulting firm. David has a BS in Mechanical Engineering from Ohio State University. He has a successful track record in the development and implementation of FMEA and Design for Manufacturability programs at several organizations and has greatly reduced Manufacturing costs through the utilization of Lean Manufacturing, Kaizen Events, and Manufacturing System Analysis. He has also been highly successful at developing and executing New Product Introduction processes, and Staffing and Capital Equipment Plans.

EMS Consulting Group helps companies implement lean strategies through lean training and lean consulting services. To learn more, read our lean manufacturing case studies or lean manufacturing articles.