Lean Manufacturing, Liberty and Economic Justice

I think that our society has become far too much a consumer society and has lost sight of its role as a producer society. And by producer society, I mean a sustainable production society. One whose techniques don’t wreck the environment via pollution, toxic waste and climate change. I have always felt that real self-worth in a society comes from doing productive work. I am all for unemployment pay when work is not possible, but I am also all for people who set up businesses to employ themselves and others in making needed goods and providing needed services efficiently and profitably. We have lost sight of that.

I also like it when most of the goods and services I need are provided by small local businesses. Small local businesses seem to me to be the essence of a democratic society as small local businesses are unlikely, even collectively to distort and corrupt our national political processes or get us into unnecessary wars. Apart from a car, computer and health care, most of what I buy in the way of food and services is provided by local small businesses. I don’t buy from corporate super markets or branded chain stores.

But there are businesses where economy of scale is unavoidable, like steel, autos, computers etc. In these cases, corporate structure is likely to be large and that scale often ends up driving massive inequality of income and more importantly massive corruption of the political process. It may be on occasion that ‘what is good for General Motors is good for America.’  But often it isn’t. What is good for the tobacco companies kills seven million people each year world wide. What is good for the oil companies may be screwing up our climate.

So what to do about this? Well of course, John McCain had the right idea with the McCain-Feingold Act that limited corporate funding of political candidates. But the Supreme Court blew that away in what I think will be seen as a recklessly destructive action that will damage America for decades.

But there is another angle. While I don’t expect major corporations to become worker owned cooperatives any time soon, if America is to re-establish its manufacturing industries as a source of employment and of national security, then it needs to embrace Lean Manufacturing. This has been defined as: ‘ a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, “value” is defined as any action or process that a customer would be willing to pay for.’

This  technique in many ways originally invented by Henry Ford in the USA,  and was taken to a whole new level by Toyota in the famous Toyota Production System after World War 2 in response to severe shortage of resources in Japan as it re-built its economy. Lean basically suggests you organize manufacturing (though it can apply to any repetitive services provision) around making the customer’s needs central, around profound respect for the employees who do the value add part of manufacturing on assembly lines etc and that you establish standardized processes for everything and let loose the creativity of the value add base level employees to continuously improve productivity, quality, cost and safety.

There is a lot to making this happen and it is not easy or Toyota and other companies who have successfully adopted it would not have competitive advantage from it. And of course, it is completely contrary to the ego-centric CEO and other senior managers who think they create value. Lean only works with what might be called servant leaders who think their main role is to remove the obstacles preventing the workforce adding value. And of course, outside consultants are generally not needed once Lean is established as you don’t ‘do Lean’ to anyone; they lean their processes themselves.

For me, all this has massive political implications. It is a form of profound industrial democracy, though it has to be framed in terms of ensuring the enterprise is competitive in cost, quality, safety and productivity. But once you re-frame corporations as sustainable value creation instruments and re-frame their structure on the basis that it is the folks at the bottom who create the value, then the justification of the whole structure of massive CEO and other senior managers pay and stock options disappears. CEOs and the senior managers, indeed all levels of management have a difficult role but not one that justifies their earning more than say 5 or 6 times their base workers. This is how Japan works and Sweden and many other countries. It is doable.

And once you have lean, you are creating a massive more creative workforce, continually re-inventing the productive process. Of course, you may then be creating reduced employment but if you are leaning your whole economy, if you are leaning government too if you apply the process there, then you can either create new businesses, new activities or maybe you can simply start to work less hours and actually have time to enjoy life. Pretty radical isn’t it. And if you grow employment via the efficiency lean provides, then economic inequality starts to fall as does the need to re-distribute income once folk are earning a decent income from productive value add jobs.

By the way few if any Trade Unions do anything but pay lip service to Lean. They see it as a threat, as a way round them…well thinking that way is a recipe for the demise of manufacturing in the US and they did a pretty good job of it….

To my mind a Lean Society is a more just society, a less wasteful society, a more meaningful society and if applied to government would allow for smarter, leaner, more serving the public oriented government. Lean is a great destroyer of bureaucratic waste.

Personal Footnote: I had some role in introducing Lean Manufacturing into a leading US Auto maker and into the Department of Defense and so I know both that it is possible, that it can have the results I suggest above in reality, but that it is also hard because executive egos don’t sit well with Lean disciplines. Heck they don’t sit well with any form of process discipline, any more than doctors egos sit well with it. Better to kill patients or bankrupt companies that let your ego be unsatisfied. 🙂

If you are interested in what Lean is about see:  http://en.wikipedia.org/wiki/Lean_manufacturing

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About creativeconflictwisdom

I spent 32 years in a Fortune Five company working on conflict: organizational, labor relations and senior management. I have consulted in a dozen different business sectors and the US Military. I work with a local environmental non profit. I have written a book on the neuroscience of conflict, and its implications for conflict handling called Creative Conflict Wisdom (forthcoming).
This entry was posted in Conflict Processes, Economic Conflict, Environmental Conflict, US Political Conflict, Ways to handle conflict and tagged , , , , , . Bookmark the permalink.

3 Responses to Lean Manufacturing, Liberty and Economic Justice

  1. Kyrie Eleison says:

    A nice, brief overview of TPS and its methods. Incorporating this took a lot of time and effort, not so much in the process itself, but in breaking down old habits. It also helps if managers take it seriously when implementing it, instead of just getting all excited about being involved with something buzzwordy and then letting it fall by the wayside.

    Takashi Tanaka is an excellent speaker and a brilliant man:

    http://www.thesource.pdma.org/cmis/browser?id=workspace://SpacesStore/055105a2-136c-4d5f-9e84-fbdeb608d9a6

    • @Kyrie. The biggest obstacle as with the Creative Conflict Model of this blog, is the resistance to standardized process discipline and then putting effort into improving it in a disciplined way. Egos want to wing it…and as you say love buzzwords, and zero sum games with each other. Sustaining it over years is hard. Thanks for the link. I will take a look. What excites me about TPS are the potential political implications of using it to ‘lean’ a whole society and thereby redistribute economic and therefore political power downwards, on an earned, value add basis, not an entitlement way. Not sure what institutions would be need to support this more widely.

  2. We do & more anxious to implement.

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