Tuesday, February 4, 2014

Lean and Jobs: They Can Work Together

I am certifiably pro-labor to a fault. That's right, I am the guy who is skeptical of the most time-saving, profit-generating technologies if it means fewer jobs. In fact, in states with favorable union laws, I may even be the guy representing a local trade union and giving major headaches for a manufacturer. That said, I give lean manufacturing two thumbs up!

This week's readings have focused on how organizations, including Starbucks and many hospitals, employed lean techniques to cut costs and deliver higher quality services. What I found especially interesting was how Seattle Children's Hospital was able to cut costs while increasing patient intake. It did so by integrating one of the major themes of the Toyota lean manufacturing system: an emphasis and reliance on existing employees (Weed 2010).

The word "people" is found 35 times in the Toyota article, which makes sense since people are critical to the success of the Toyota Production System. For instance, rule 4 of the Toyota system empowers people to address their own problems, come up with their own solutions, and then check whether such solutions actually work. And throughout this process, individuals are receiving guidance on how they can better test assumptions and identify areas for improvement. Toyota calls this "how people learn to improve." And when it comes time to implement solutions, Toyota empowers the most important stakeholders in an organization, those individuals working on assembly lines, to execute improvements to the organization's efficiency (Spear and Bowen 1999).

This focus on people was apparent in the Seattle Children's Hospital transition to lean techniques, as the nurses and doctors engaged in role plays and brainstormed hypothetical scenarios in order to find improvements to their system (Weed 2010). From a broader perspective, lean management could be a strategy for minimizing the loss of jobs in the entire health care industry. A 2012 article from Becker's Hospital Review talks about how Park Nicollet Health Services had a "no layoff" policy as it was transitioning to more lean strategies. The article talks about how a such a mantra is positive because a) your existing staff are best able to understand and recommend solutions to problems in their respective areas and b) "staff engagement" is improved when individuals are not worried about losing their jobs  with the onset of a new management system (Graban 2012).

The results speak for themselves, as the IU Health system saved 3.5 million dollars in the face of a budget woes in 2009 and even Toyota managed to avoid layoffs during a problematic 2009 while attempting to identify areas for improvement (Graban 2012). As we look to the future of lean strategies, can we expect lean to be a common negotiation point for labor unions and major manufacturers? Could the various methods of improving the flow of business, increasing savings, and the ability to serve larger customer bases lead to a demand for more workers?


Weed, Julie. "Factory Efficiency Comes to the Hospital." 2010 Retrieved from http://www.nytimes.com/2010/07/11/business/11seattle.html?pagewanted=all&_r=0.

Graban, Mark. "Lean as an Alternative to Mass Layoffs in Healthcare." 2012 Retrieved from http://www.beckershospitalreview.com/hospital-management-administration/lean-as-an-alternative-to-mass-layoffs-in-healthcare.html.

Steven Spear and H. Kent Bowen. "Decoding the DNA of the Toyota Production System." 1999. Retrieved from https://cb.hbsp.harvard.edu/cbmp/content/23847295.

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