Our Blog

This whole topic has caused me some sleep. I know in our company we have less people after our Lean efforts because we eliminated NVA work. But if we had not made improvements we would have zero employees now. So in our case the answer is "Lean means less jobs but those jobs are now secure".

Without a doubt Lean and Six Sigma have saved jobs in the US. Can you imagine the terrible shape we would be without them?

It is often recommended that companies with Lean Manufacturing initiatives follow a "No Layoff Policy". That's much easier said than done when a company is fighting for its very survival. Offshore manufacturing can be a tough thing to fight competitively, so manufacturers are seemingly forced into Offshoring which is often NOT the right course to follow however, chasing cheap labor is prevalent. LeanSixSigma has to get your cost structure in-line or else.

In the past 15 years, the productivity of the aerospace and defense market has grown more than 3-fold. That is, the revenue per employee has grown. Given that the total market did not increase significantly, this meant there were less jobs. But nobody can say that this productivity improvement resulted from lean. In fact, it is generally agreed that it did not. The aerospace & defense industry has lagged many other markets on lean implementation. How do we know? Because inventory turns, the absolute litmus test for lean implementation, has remained almost flat at less than 4 turns. 
 
So why did productivity increase? Most credit this productivity increase to advancements in technology - machines, systems, and tools. Aerospace is a very machine/tool-centric business. 
 
So did we lose jobs because we became more productive or because of foreign competition? Whenever we see this argument about losing jobs to foreign competition, it always lacks industry-specific information. Aerospace sourcing to foreign countries amounts to less than 10% of our business. Much of that is in "offsets" - business that must be sourced in a particular country in order to get them to purchase our products. Offsets land more business for US companies and in the end increase jobs. Clearly putting more data on the table would either prove or disprove the argument that jobs have been lost to lean.