Nike Plans to "Just Do It" with Lean?
Nike is out with its most recent “Corporate Responsibility Report.” As Rachelle Jackson wrote about in the blog I’ve linked to:
“Aside from the [reducing] overtime commitment, they are working to implement human resource management systems in their factories, which includes delivering freedom of association training to contract factories. Nike plans to partner with other brands to jointly monitor up to 30% of their supply chain by 2011. They also plan to roll out lean manufacturing to all contract factories in an effort to raise wages.“
That’s an interesting approach — I assume what is meant there is that Nike will, through productivity improvements, reduce the NUMBER of workers needed, thereby being able to pay those who are left MORE per hour. Sounds good, but do you believe it? Is it OK to layoff employees if you’re doing it to raise the standard of living for those who are left? That’s not really a net improvement for the community, unless Nike can increase sales and production to make up for the efficiency improvements. Interesting to think about.
Nike also talks about doing manufacturing in a way that is good for the environment and for workers, “There are no tradeoffs,” they say.
In the report’s letter from President and CEO Mark Parker, he states:
To deliver these kinds of products and consumer experiences profitably, we rely on operational excellence – managing costs and driving efficiency. We will continue to be very aggressive in pursuing lean manufacturing practices, materials consolidation, focusing on style and SKU productivity, and gaining Supply Chain efficiencies. We look for every opportunity to squeeze more value out of the money we spend, and that means more value for consumers and for investors.
I don’t know if I like the phrase “squeeze more value out.” I like the language and terminology of creating value. Squeezing is something you do to costs, not value, but I’m, once again, nitpicking.
I’ll be optimistic and hope that Nike will implement Lean in the right spirit and with the right kind of positive results that ARE possible. Lean, done in true Toyota Production System style, could be the BEST thing that’s ever happened to the “sweatshop” employees. Truly respecting workers and treating them well could help put away that sweatshop term forever.
As an aside, there are practical economic arguments FOR sweatshops. I wish economists spent as much time analyzing arguem