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A 'lean' Personnel Model
What is done with the extra workers?
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As you implement lean principles in any production environment, processes will quickly require significantly less workers. In effect, processes will become increasingly efficient so that stable demand can be met with fewer and fewer employees. Traditional business practice is to lay off this surplus labor, but this can have a drastically negative affect on any lean continuous improvement program. Fortunately, there is a way to constructively utilize these personnel resources until new business can be brought in to fill system capacity.

A very productive method of getting the most out of this surplus personnel pool is to form an office or department to coordinate future continuous improvement activities. Some organizations call this the 'Lean Office', or Continuous Improvement (CI) Office, or something similar. The CI OFFICE becomes a place where advanced training in lean techniques is performed, a resource for skilled shop floor facilitators, and a pool for trained production personnel who can quickly 'ramp up' for new production opportunities.

A CI office should be designed so that it's structure is flexible, able to absorb excess personnel and deploy it's personnel to either CI or production requirements. To facilitate this, the department can be designed with several (permanent) 2 person teams. These teams are headed by a senior member (an IE or some other lean certified improvement professional), and a junior technical member. There is no recommended limit to the number of teams, but for a high degree of competitive effectiveness, there should at least be 2 or 3 of them. To these teams are assigned an equal number of labor personnel, which have been culled from the production environment via improvement activities.

The responsibilities of these CI teams is first, to provide advanced lean/CI training to their personnel, and second, to utilize these personnel in directed lean improvement projects throughout the factory. The senior members should be experts in lean implementation, and can therefore provide the training in a structured manner. The junior tech personnel can also be utilized for training, recognizing that their experience is somewhat limited, grooming them for the senior positions as rotation and attrition affects personnel levels. The 'directed lean projects' should also be led by the senior members, providing expert guidance in this practical portion of this experience.

One of the first challenges is choosing who will remain in the existing production cells, and which of your workers will be selected for these lean opportunities. The following path may seem counter-intuitive, but is completely in line with lean principles. Also, this solution gives your company an opportunity to balance the workforce with a flexibilty available to most firms.

  1. Workers should only be pulled from a production area after successful lean projects create 'real' labor savings. Determine, as best you can, an acceptable personnel level for the production area, based on the 'average' production rates (no need to overstaff, you can always bring back personnel for production variances).
  2. Choose the best and most motivated personnel to be removed from production and attached to the CI office. Appointments to the CI office should be for a period of 4 to 6 months (in order to get significant training and lean implementation opportunities). After this period, (if new business opportunities are not available), they should be rotated back into production, and the next best personnel should rotate into the CI office. These rotations need not be voluntary (your best personnel are already motivated), and your systems should be stable enough so that they can run efficiently with average-skilled workers (otherwise, you need to redesign your systems!).
  3. One possible breakdown of CI office activity time is 1/4 lean training, 1/2 lean projects, and 1/4 outside activities (working with suppliers, touring other company facilities). This kind of proportion extends not only the depth, but the breadth of experience these personnel will recieve during their CI office rotations.

NOTE: What is being accomplished here is that your systems will have less 'direct' or 'contact' labor. Of course, you are increasing 'indirect' labor, with the view that you will be able to secure new business opportunities (lower prices? move on the competition? expand into new markets?) which you can meet with highly skilled, highly motivated production personnel. In this manner, new business can be realized more rapidly, with greater success and shorter planning horizons.

One of the many benefits of this training & improvement plan is that you have now created a group of 'lean supermen', who will form the basis for a long-lasting, continuous improvement effort on the shop floor (even without the direction of the CI office). The constant rotation of personnel in and out of the CI office (which, with normal/natural personnel attrition at your standard rate, will become smaller and smaller - and remember, you don't have to replace any 'indirect' attrition) will insure a workforce that fully understand the goals and practices of lean mfg, and will support the companies efforts.

Other considerations -

  1. The acceptable or target production personnel levels must constantly be watched and kept up to date (preferably by the Director of CI or Lean Manager)
  2. Eventually, the Lean Office will have very few shop personnel, due to the attrition factor, but will still conduct improvement activities within the cells.
  3. It is recommended that the Senior CI Engineer of each team focus on waste reduction as his primary focus (which is 80% of what lean mfg is) and the Junior CI Engineer focus on other areas, such as implementing flow and pull systems.
  4. It is important to assign the BEST personnel to your CI office initially. These are typically those who have high motivation, critical thinking skills, understand your products and processes, etc... This will help guarantee the success of the effort, and insure the momentum of the program.
  5. The 'rotation' period (within the CI office) ensures that ideas, exposure, and best practices from all areas of the company are adequately circulated (this is truly use of 'intellectual capital').

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