Headcount Reduction

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    The food processing company for which I work had its Six Sigma rollout almost one year ago, and thus far it has been pretty successful. The selection of new projects remains something that could be improved upon, and that is why I am posting this message.
    In our packaging area, I have been asked to “Better utilize our packaging labourers using lean tools”. Now, our packaging area is fairly complexe and employs 25 labourers per shift. I worry that (1) the Scope is too large, and (2) With the KPI being fewer labourers, I worry that employees will not wish to cooperate and begin to view our 6s initiative with mistrust.
    Any advice for a “green” Black Belt?



    MR, you’ve got to love those euphemisms. Have you been asked to better utilize your packaging labourers, or to reduce the number? It’s not the same thing.
    Either way, someone needs to sit your management team down and have a little chat. (Preferably someone else. If you decide to try, be very careful.) Are employees mindless tools or chattel to be used and manipulated by management? Or are they just cost structure? It sounds like your management deserves to be viewed with mistrust, hiding behind 6s and using it to do their dirty work.
    If management has decided they want a headcount reduction, management should have the courage and integrity to tell the group, explaining 1) how much headcount reduction is expected, 2) what, if any, options are available for reassignment, early retirement, voluntary unpaid time off, etc., 3) how termination decisions will be made, 4) severence benefits for anyone terminated because their position becomes unnecessary as a result of the project. But that doesn’t necessarily help you with what you need to do.
    The current scope may be too large, but you can narrow it by collecting the data to do a Pareto of where the wasted time and money are in the packaging area, and focusing in on the top one or few things.
    Headcount is an output of scheduling and staffing processes, which you could certainly do a project on if that’s what management wants. Otherwise it’s going to be important to focus on the process metrics of customer value and waste: defects, time, motion, rework, etc. Employees will probably think that some of them are going to get cut, but unless management is willing to honestly face them, you’re probably going to have to just struggle through their resistance.



    Thanks for the advice.
    Anyone else have any thoughts out there?



    All I can add to aBBinMN’s post is start with the provable assumption that close to 100% of all compensated human activity is waste.  See if your management agrees with that approach.  Then avoid making changes that merely shift local efficiencies.
    To paraphrase an ex-colleague, “the machines are running faster so we must be making money.”


    Great Girth

    Rather than trying to force this into a Six Sigma package, why not execute as what it likely is? — a lean project.  Six Sigma makes sense in the application for which it was designed:  a process having a starting point and end point outputting a population having some occurrence of defects (and/or occurrence of units never successfully reaching the end or not reaching the end without in-process rework). 
    When someone suggests, “Hey, why don’t you go improve labor utilization over there” as a Six Sigma project, you have to ask yourself, “Okay, are we talking about a process here that can be mapped as a process?  Is there a defective output? (and) Is there labor currently tied up dealing with this defective output?”  If the answer is no to either of the first two questions, then this is not a Six Sigma project.  If the answer is yes to both, but no to the third, then even if executed perfectly as a Six Sigma project, you will not be able to deliver on the initial request (to improve labor utilization).



    Please make sure (as Great Girth points out that it is a Lean project [actually a VSM project]) that the packaging process is documented and efficiencies, kanbans, cycle times, value added and non-value added activities, etc. are all dcoumented. Once the VSM process is mapped out, you can do current and future state maps and document improvements/savings (if any). You may find that the # of people you have (25) maybe adequate. If so, you do not recommend reduction in headcount. Once the new layout is on paper, you will have to convert that to reality and a lot of training will need to be done. I see the scope at 6 to 9 months at the minimum.
    Good Luck.


    G. Luck

    I faced a similar assignment a few years ago…
    The best approach is to keep it simple by following 6-sigma steps
    1st – Map the overall process ( or processes) in place
    #2 – Compare “as is” and “should be” process maps. Look for possible breakdowns. You may identify process flow obstacles, redundancies, hidden factory, etc…
    #3 – Headcount is function of time available to complete the tasks and the resources X work complexity ( equipments, etc..). Try to measure your process steps timing to get started with
    #4 – Focus first @ the steps which last longer and analyze them.
    ( you may be able to find discrepancies among different shifts, days of the week or even the effects of different luminosity from morning to noon for example…)
    Hope this tips may be useful to get started…



    As was mentioned in an earlier response, Lean Manufacturing & Six Sigma are improvement tool sets – NOT head count reduction tool sets. 
    Once you have utilized either of these tool sets, & for this application I would have to agree you will get more benefit from using the Lean Manufacturing tool set, you can make the proper determination – if the area is over-staffed where can this labor be utilized (work load balancing) or are there opportunities to bring in new products & create a new value stream, etc.


    Dog Sxxt

    Do you think these workers will support you to make themselves jobless?
    Ask you top management what to do with excess labors (if any) after the improvement process. Fire the workers? I will say go fire the managers first because these managers had recruiting workers blindly.



    I’d start with clarification of the project definition – better utilization with what end in mind?  What aspect of the pantheon of Quality, Cost, Delivery, Safety, Health, Environmental – is this about?  All, some, one?
    Starting from there you can look for the best paths to accomplish objective.


    Adam Bowden

    Food Processing Company Hmmmmm
    You could have a short lived job/life if you start cutting heads – I’m guessing that folks there would be pretty P***ed off if there were layoffs and you were directly connected to it – don’t those people use KNIVES and other sharp objects as part of their job.
    Better utilization of Labour is a good thing ! if you can free up and use some of the extra capacity your overhead ammortization is lower and thus your costs go down.  When costs go down it usually means that you can then break into new markets – thus growing your top line (revenue) – go and see your sales and Marketing folks about the possibilites.
    If you ever find out what the hell Bob is talking about (What aspect of the pantheon) let me know – do you process and sell Patheons ?  ;-)

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