malvasia bianca

One thing that I never got around to blogging about when I first became lean-obsessed: Toyota never fires anybody. Or something like that; at any rate, one thing that lean bloggers claim is that, for lean manufacturers, employees are a fixed cost instead of a variable cost.

Which has interesting ramifications. In general, it’s a good deal more humane, which I certainly approve of. And it fits in well with constantly asking your employees how to improve matters: if both parties are committed to each other, then it’s natural to see your employees as resources whose insights are to be valued. (Similar to the way they treat their suppliers.) All to the good.

Having said that, there are a few things that I wonder about. In the first place, what if your business isn’t constantly growing like gangbusters? I know, I know, that’s a sign that you can’t possibly be doing lean right, but it still strikes me as conceivable that even the leanest of businesses might have efficiency improvements that aren’t linked to sales increases, or might be hit by an economic downturn that it can’t ride out solely by lowering prices enough to maintain market share. So what do you do? In the former case, you could simply give your employees the excess profits by paying them the same for working fewer hours. The latter case is harder.

At the very least, this suggests that there’s more to this production leveling idea than is obvious at first glance. Even if you have a surprise hit on your hands, a lean company may decide not to provide enough of their product to meet demand, because that could lead to a rate of expansion that would lead to overstaffing in less sucessful times.

That’s one problem; the other is rather darker. I don’t know what matters are like now, but if Womack and Jones are to be believed, not only will Toyota not kick you out, but you won’t be able to leave if you want: salaries are set based on service time with Toyota, not overall skill or experience. So if you change companies, you start again at the bottom of the salary level, which few people are willing to do. And that sucks.

So I’ll go with the Semco model in this regard. You get the same respect for employees, the same benefits of treating them as resources, but without the gilded cage aspects. And they get advantages from an entrepreneurial spirit, where employees not infrequently leave to form companies that turn out to be valued suppliers for Semco; victory all around. They don’t seem to manage their ups and downs quite as smoothly as Toyota does; that’s okay with me (makes them feel more human, at least), and they’re certainly leery about excessive expansion as well. And, I suspect, the highs and lows in Brazil were more extreme than they were in Japan, once the worst of the WWII effects wore off there.