Lean Insider – Toyota Shifting Production to Lower Labor Costs? It Could Happen
The Lean Insider blog poses an interesting question…. is it keeping with the “respect for people” principle of the Toyota Production System if Toyota wants to move some production away from high-cost NUMMI (in high-cost California). Or, what if Toyota wanted to pull out completely, as rumored here on this other blog.
I'm still chewing on that one. What do you think? Feel free to comment here also. I'll post my thoughts later.
Update: Our friend Ron posted his thoughts at his Lean Six Sigma Academy blog.
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Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation.
He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean.
Mark is also a Senior Advisor to the technology company KaiNexus.
It’s been brought up before in posts about Toyota and temp workers – if a reduction in workforce is due to “lean” or as a result of improvements then yes, it does violate the “Respect for People” principle.
But, like the example of temp workers in Indiana, this is a market dynamics issue. If the market for Tacomas has fallen and Toyota (NUMMI) has tried everything it can do reduce waste and resultant cost, then a reduction is inevitable and would not be a violation of the principle.
I just hope that Toyota, NUMMI, and the UAW truly do everything in their power to drive cost out of the operation and prevent a reduction or outright closure. Use attrition, early retirements, rotating assignments, voluntary relo’s to other Toyota facilities, etc. Try anything and everything – think of at least 7 ways to avoid moving production, right?
Here’s a back-at-ya: Take NUMMI and Toyota out of the article and substitute GM, Ford, or Chrysler. What would we be saying then? Would we be jumping all over GM/Ford/Chrysler management for placing the responsibility squarely on the shoulders of one plant?
The ball is in Toyota’s court. It shouldn’t have been a NUMMI representative saying “NUMMI must improve its competitiveness”. It should have been a Toyota representative saying “WE must improve OUR competitiveness”.
When you talk about “respect for people”, it’s important to keep in mind that the “people” we are supposed to have respect for are not just the NUMMI employees. By shifting production to a lower-cost location, isn’t Toyota showing respect to these people in the lower cost location who are capable and willing of producing quality cars, but haven’t been given a chance? It’s also important to show respect for the investors by helping them earn a fair return on their investment, and to show respect for our customers by giving them a great product at a competitive price.
[…] Mark over at the Lean Blog posted a respect for people question from a question he saw on the Lean Insider […]