Lean Production – how to extract more with less?

20th century industrialisation was characterised by mass production of standardized goods on a moving assembly line using dedicated machinery and semiskilled labour. Institutionalised by the Ford Motor Company it led to an unprecedented increase in production and thereby intensity of work for workers. This process was soon copied by other factories in the USA and across the globe. Under Fordism, as it came to be known, the industrial worker had to work at a pace dictated by the speed of the assembly line. Work was repetitive and exhausting. Large and vertically integrated firms were the epitome of Fordism. The model shaped both production relations and employment in post-war Europe as well. This required rigid supervision of the workers on the shopfloor.

The Fordist model of growth became dominant during the post-world war reconstruction period and is often credited with facilitating the long post war boom.

But in the 1960s, the US got into trouble as it tried to finance the Cold War and the War in Vietnam. The world economy had to be re-invented in the 1970s, with the newly industrialising countries, especially in East Asia, gaining greater economic significance.

The growth potential of mass production began to gradually exhaust, with intensified working-class resistance to its alienating working conditions; the market for mass consumer durables becoming saturated; a declining profit rate coincided with stagflation creating a fiscal crisis along with simultaneous European and East Asian expansion threatening the economic and political dominance of the US. The rise of computer technology and improved international telecommunications meant that mass production could be completely reorganised and broken down into specialised production centres brought together through a supply chain.

Production no longer required:

  • centralisation in a few key manufacturing centres – it could be dispersed all over the world.
  • to be large scale as computer-controlled manufacturing techniques could customise production.
  • vast stockpiles of raw material and supplies because computerised logistics could ensure the just-in-time delivery of components custom manufactured.

Instead of being producer driven, production became more consumer-oriented, with consumer driven production chains.

Thus the post-Fordist models of lean production came to exist and can be characterised by:

  • shift from the global north to the global south for lower cost of production and newer markets.
  • the rise of lean, and networked firms that focus on their core competences, build strategic alliances, and outsource other activities;
  • flexible production of differentiated goods based on flexible systems and a ‘flexible’ workforce;
  • increased profits based on permanent innovation and the full utilization of flexible capacity;
  • growing economic polarisation between regular and irregular workers, together with a decline in collective bargaining.

The post Fordist lean method developed at Toyota in Japan devised the just-in-time (JIT) system that allowed automation to be used in a new way: that focuses on continuous improvements by elimination of ‘waste’ (Kaizen).

Kai = change and Zen = good, simply means ‘change for the better’. Kaizen activity can be defined as: Plan → Do → Check → Act. Kaizen is a daily process, the purpose of which goes beyond productivity improvement. This philosophy differs from the “command and control” method in the Fordist model. This includes making changes continuously to improve productivity, monitoring results and then adjusting. Kaizen is used to eliminate what management considers ‘waste’.

Several models have emerged, across countries, to achieve this goal of reducing ‘waste’ which are essentially common in their underlying principles, originating from 3M principle of the Toyota Automobile.

3M – Muda – Mura – Muri

Muda refers to ‘waste’, defined as any activity not directly adding any value to the product.

Muri relates to unevenness. The goal of operations design is to generate a steady, even flow of production. In order to reduce unevenness, the objective is to reduce buffers between processes and, where possible, to eliminate them. Mura translates as overburden of the production process.

To deal with the 3M, a five step process has been formulated which is known as the 5S:

Seiri (Sort): Make work easier by eliminating obstacles.

Seiton (Set in order): Prevent loss and ‘waste’ of time by arranging work spaces in such a way that all equipment is in close proximity. Making workflow easier.

Seise (Sanitation): Clean the workplace.

Seiketsu (Standardize): Standardise the best practices in the work area.

Shitsuke (Sustain): Self-discipline, regular audits, ‘do without being told’

The Japanese model of lean production marks a major shift from the way factories have operated under the Fordist model. Kaizen relies on the self-exploitation by workers.

Fordist ModelToyota Model
1.To increase production, the company would have to either hire more workers and/or install more machines or make the existing workers work longer hours.Kaizen requires every worker to scrutinise their own work and increase their productivity by eliminating ‘waste’. So, the same number of workers work harder in the same time, increasing production. This saves the company monies that it would have otherwise spent on hiring more workers and/or installing machines or paying the workers overtime wages.
2.Productivity is increased through centralised planning for target setting and monitoring of productivity of workers that meant high supervisory costs.Individual productivity is increased in the given limited time by workers by compromising on their leisure and break times.

Workers are pitched against each other and even against their own self to increase productivity.

3.Workplaces were organised by management to ensure productivity and efficient use of space, which too involved cost of specialists.Workers arrange their own workspaces in such a fashion that their movements are restricted to their workstations and breaks between multiple tasks are shorter.
4.Work was organised in such a way that workers could come together, form unions, to question the supervisor or unachievable targets and collectively bargain for improvement of working conditions.This model eliminates the ‘enemy’ on the shopfloor. It transforms the worker herself into the supervisor of herself and her peers, thereby pitching one against the other and destroying the collective identity of workers.

We have seen this kind of a wall in a factory, in a retail outlet in a shopping mall, in a restaurant, in a hotel, even in a hospital or a school. One worker is declared the best worker every cycle e.g., weekly, monthly or quarterly.

The other workers are then competing against the target set by their peer to become the best worker of the next cycle in order to be recognised. Even the worker who holds the ‘best worker of the month’ title has to work harder to retain her position thereby increasing her own workload. For instance, a worker at McDonald’s who served 100 orders in a given week was awarded the best worker of the week. Now, to beat her and be the best worker her peers need to serve more than 100 orders, at the same time she has to outperform her competitors to retain her position and hence has to serve more than 100.

This competition is real today in every workplace given the precarity of the job each worker holds. This breaks trust among workers making it next to impossible to self-organise or even to unionise them. Every worker is desperately seeking recognition from the employer in the belief that in future this could be a reason for regularisation, permanency, promotion or at least a wage increase. Thus, employers now use vulnerabilities and insecurities of precarious workers to extract the most out of them and even pitch them against the regular workers to create insecurity among them. Thus precarity in all forms of employment is not incidental but absolutely essential for this model of production to expand its power.