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Lean Project on Manpower Cost Reduction

Six Sigma – iSixSigma Forums General Forums Implementation Lean Project on Manpower Cost Reduction

This topic contains 13 replies, has 10 voices, and was last updated by  Leo Orchid 3 years, 3 months ago.

Viewing 14 posts - 1 through 14 (of 14 total)
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  • #54583

    Vineet Aggarwal
    Participant

    Hi,

    My organisation, a news production organisation, intends to reduce cost by reducing manpower in its news production Value Chain. Keeping this goal in mind we have initiated a Lean Project using VSM and have segmented entire Value Chain in 3 areas. 1) News Gathering (Sourcing of News), 2) News Production (Production of News), 3) Logistics (Playing the News On Air). Have conducted various sessions with project team and it was found that the focus area for improvement is News Production at this moment. As of now we have developed a VSM, prepared WBS for News Production Processes and categorized each step (in WBS) into VA & NVA. The project team has also marked each NVA with the type of waste. During Analysis it was learnt that there a need to re-arrange resources and process sequence into Work Cells. My concern is if we have to take some special care before making physical changes to our production line into work cells?

    Need open advice on this.

    Thanks in advance.
    Vineet

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    #196177

    Cyril
    Participant

    The method applied is right. Before creating the work cells, prioritize the sequeces and do impact analysis. This will give you the area and ease of implementation necessary for taking it further.

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    #196195

    Fahd lahrech

    I am sorry but you can’t use VSM for a purpose to reduce manpower. Lean is not about manpower reduction. One thing to consider when changing to cellular layout is ensuring whether they will be product layout or process layout, process layout is the preferred fron tge lean perspective. The other thing to consider is the affinities between your cells, communication, prevention of isolated islands, Swip, one piece flow or pull system, your pacemaker has to be also identified on your process map and work your 1 pc flow from that point downstream. tracing upstream, set your kanban levels, supermarket or sequencial pull. Vam is about time and product flow through the value chain along with info flow. Dont use it for manpower reduction. Instead rely on yamazumi chart to balance your workload and help you operate at takt…. Good luck

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    #196197

    Don Strayer

    You describe a common misunderstanding and abuse of lean. Management has already decided upon a change, such as reducing manpower. They want us to justify their decision and find the best way to do it. The real problem they want to address is hidden. The problem statement is the starting point. A problem is an impediment to achieving business goals. I would hope that your business goals are focused on your mission — growth, value to customers, return on investment. I would hope that your mission is not to employ the fewest people possible. Try to work with management to drill down to the underlying problem rather than accept the assumption that reducing manpower is the goal.

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    #196210

    Vineet Aggarwal
    Participant

    I am sorry its not about reducing the manpower. I meant producing with optimum resources in one area so that freed up resources can be utilized somewhere else in the organisation in order to create balanced work.

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    #196214

    MBBinWI
    Participant

    @founder1 – I’m afraid that you are wrong about this not being possibly about manpower reduction. It SHOULDN’T be about manpower reduction, but the reality is that it often is. Particularly in an organization that is not capacity constrained but is feeling competitive pressure. In that case they don’t need to make more product, as they won’t sell it (at least not in the short-term), rather they need to reduce their costs of operation to keep competitive with other providers. This means that they need to eliminate costs, often that means improving efficiency and eliminate people. Not facing that reality will cause you much frustration over time.

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    #196215

    fahd
    Participant

    @MBBinWI, the reality also shows that a lot of companies do not practice the true Lean/TPS because they miss out on the ultimate objective from lean implementation. Lean is about the people, the customer and the society. You need to overlook the short term goals for the sake of long term vision which part of it is empowering your associates and get them engaged in the continuous improvement and day to day problem solving. Let employee reduction take place through attrition. Try to factor the turnover into your equation while driving continuous improvement. Stop hiring new people instead and if you remove people from certain departments for the purpose of reducing direct labor cost, remember that labor only represent 11-13% of the total conversion cost of the product compared to the overhead cost and material cost which represent a larger portion. if you are overstaffed in a certain area of the plant and you need to deploy those extra staffs (the 8th type of waste = underutilized skills), either take them to another department where they need them or make them part of the quality council. I guarantee that they will bring more to the company working on projects than eliminated from the plant. Without these types of commitments, the lean journey will cause more pain and headaches and may absorb the short term benefits in the long term when you start seeing a spike in attendance issues, call outs, high turnover, HR busy hiring and firing, lack of discipline, poor morale, lack of engagement in ideas and suggestions, in CI, resistance to change, loss of skilled ops etc…. Toyota never fired an employee since world war II and they have more than 250,000 employees. just something to think about

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    #196243

    Vineet Aggarwal
    Participant

    Thanks all and @cyrilsunil, Taking into consideration your advises. Would you suggest some specific tool for impact analysis?

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    #196320

    Kimmy Burgess
    Participant

    Interested in knowing whether you came up with the same results through Cost Optimisation as suggested in the post above as the conclusion reached by your initial efforts ie the changes are required in news production.

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    #199225

    George Nelson
    Participant

    I learn many things about Lean Project on how Manpower Cost Reduction. Thanks for sharing this thread with us.

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    #199229

    Everton da Silva Paula
    Participant

    I would suggest you the Change Management before Lean implementation, the leadership needs to accept and support changes or it will not happen. After that you must sell the long term benefits of it (of course showing some quick gains to avoid loose the momentum) take care of firing people, it will drain all the power of the Lean initiatives, bringing less results than it could or worse, make the initiative die. LEAN/TPS is all about people empowerment, so don’t miss the opportunity to make the difference in the people’s lives.

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    #199398

    Mohan
    Participant

    In the company that I know, recently faced a severe problem due to increased expenses on temporary labor. So I really wonder whether do we have any possible option to apply Lean Six Sigma as a tool for this case ignorer to optimise labor costs and there by increase productivity?

    The company that I was talking about a moderate industry so it has some budget constraints too. Hence what can be the best possible way to apply Six Sigma?

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    #199399

    Katie Barry
    Keymaster

    @maturi.harish Did you see this article we published on this topic? Case Study: Use Six Sigma to Reduce Temporary Labor Expenses – https://www.isixsigma.com/methodology/dmaic-methodology/case-study-use-six-sigma-to-reduce-temporary-labor-expenses/

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    #199408

    Leo Orchid
    Participant

    Actually, you talked about problems with the labors but you didn’t mention the location/country the problem raised. So, first you need to study the labor laws and regulations in the country you are talking about before taking any decision. I think you need to have a team to study this subject. Identify key performance indicators with respect to advantages and disadvantages of increasing and decreasing labor costs. If you talk about Six Sigma, you can apply this concept by using one of its most significant tools DMAIC (Define, Measure, Analyze, Improve, Control). Carefully applying this procedure might solve your problem.`

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