Don’t wait until all the talent has left before talking about lean production!

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The difficulty in hiring and the high employee turnover rate are becoming increasingly troubling labor issues for society and businesses alike. Meanwhile, lean production is flourishing across various industries in China. More and more enterprises are realizing the importance and urgency of implementing lean production to reduce inventory, shorten production cycles, and cut costs. However, while Chinese companies implement lean production and reap its benefits, they often face the challenge of applying lean production in the face of high employee turnover rates. Looking at the origins and development of lean production, all of its concepts and methods are essentially based on a relatively stable workforce. Neither Japan nor the United States, where lean production is widely applied, has ever really faced the issue of high employee turnover that exists in China at present. It can be said that this is a problem with Chinese characteristics. Therefore, when Chinese companies began to adopt lean production, they quickly realized that a high employee turnover rate had a significant impact on its effectiveness. These impacts are mainly reflected in the following ways: 1. It affects the balance of the production line. Lean production requires that each station on the production line operate at a consistent pace, and employee turnover inevitably affects the balance of the entire production line. 2. Low efficiency in the transfer process: Pre-production preparation is an important aspect of lean production, and the quality of pre-production training is the key factor that affects the successful start of production. Often, even after training the employees properly, they suddenly quit their jobs when production starts, which causes disruptions in the overall production schedule and affects the final production of goods. 3. Training challenges: Lean production lines often require employees to have higher levels of theoretical knowledge and technical skills, which means companies need to invest more resources in training new employees. This is especially true for labor-intensive enterprises, where the task of training staff is even more demanding. What’s even more troublesome is that employees, once they start to become familiar with the concepts, methods, and practices of lean, leave the company soon after. This puts many those responsible for implementing lean strategies in a difficult situation, causing them to lose patience; this is also one of the reasons why many companies give up on lean production. 4. The lean corporate culture leads to frequent employee turnover and recruitment; there is a lack of a sense of belonging and engagement among employees, who are unable to integrate effectively into the strategies and systems of the lean enterprise. It is difficult to establish and maintain a lean culture and an atmosphere of continuous improvement. Over time, many companies end up merely having a \"U\" shape in place, rather than truly practicing lean production. All these effects force those implementing lean production to spend more time figuring out how to adapt it to high employee turnover rates. So, how can we more effectively promote lean production in such situations? 1. Shifting the mindset toward labor: In China, labor is no longer a resource that can be wasted at will. The labor market has shifted from a buyer’s market where factories selected workers to a seller’s market where workers choose the companies they want to work for. Companies must fundamentally change their approach to employment, treating employees as the most important asset of the company and considering labor as a long-term fixed cost that is even more crucial than machinery, in order to maximize the output from human resources! As enterprises, they need to shift from the past extensive management concepts and methods to employee-centered lean management, abandon short-term employment thinking, and fundamentally change their approach to labor force management in terms of concepts, methods, incentives, environment, opportunities, benefits, and other aspects. 2. Fully leverage employee engagement and creativity. The core of lean management lies on the shop floor; emphasis should be placed on employee participation. It is necessary to encourage employees to take the initiative in identifying and solving problems, guide and motivate them to engage in continuous improvement, and by fostering their active involvement, harness their creativity and enhance their sense of ownership. In traditional employee management, employees are often excluded from participating in improvement efforts; they merely carry out the results of such improvements or follow standard procedures, which hinders the widespread adoption and further development of lean production. 3. To strengthen lean concepts and methods, many companies simply think that reducing employee turnover means increasing salaries. In fact, in recent years the difference in salary levels between companies and different regions has become less significant, and the rate of employees leaving due to low salaries is not as high as people might assume. If the company’s salary levels are similar to those of nearby factories, employee turnover is likely related to factors such as corporate culture, career development pathways offered to employees, the level of management within the company, incentive systems, attention to employees’ well-being, goal setting, and shared vision. Based on my many years of experience in management, it focuses more on human-centered approaches, motivation mechanisms, employee involvement, team spirit, and other aspects related to the lean philosophy and methods. Therefore, before implementing lean production, it is essential to provide training on the concepts of lean production to managers and all employees involved, so that they understand the purpose of improvement, its advantages, as well as the current difficulties it presents. It’s absolutely unacceptable to proceed while everyone is confused. Of course, you can’t expect the problems to be solved through just one training session either; continuous training and ongoing promotion of lean production from various aspects are necessary. Of course, the most crucial ones are still senior executives and other managers; if they are not clear, do not understand, or do not provide support, it is useless for employees to make an effort. 4. Improve standardized operations: Since employee turnover is inevitable, it is necessary to find ways to reduce the time required for training new employees after they take over their positions. After employees leave, how can new recruits be helped to get familiar with the tasks of the position as quickly as possible? A very crucial aspect is to enhance the standardization of tasks: on one hand, all tasks must be standardized and documented, with the standardization elements including all information related to that task, such as steps to be followed, time required, rhythm of work, standard quantities of work in progress, operational techniques, precautions, quality requirements, and so on. The more complete the standard operations and standard documents are, the faster new employees can learn. Imagine if these elements were only stored in the minds of employees; then, once they leave, subsequent employees would be unable to access this information, or it would take them longer to master these requirements. On the other hand, the requirements for standardization must be clear and the information easy to understand, so that any new employee can easily grasp the requirements and standards for relevant elements through the standardized operation instructions. Through standardized procedures, new employees can master the operations of the job as quickly as possible, thereby reducing losses. When developing work instructions, operation videos must be provided to help employees more easily master the procedures. 5. Optimize processes to reduce reliance on humans: Simplify and optimize existing processes, and through measures such as automation, reduce the skill requirements and dependence on human labor in these processes. To simplify existing processes, minimize interruptions, backflows, intersections, and sharing, etc., in order to make the processing steps clear and straightforward. At the same time, it is appropriate to use some small and inexpensive automated devices or tools to replace manual labor, thereby reducing the complexity of the tasks for employees (but care should be taken to avoid over-relying on expensive, large, and complex equipment). For areas prone to errors, visualization and error-prevention measures should be employed as much as possible, in order to prevent and reduce unintentional mistakes by employees and to lower the demands placed on people in the workflow. By optimizing processes to enhance their stability and reliability, and by reducing the reliance on individual skills, companies can mitigate the risk associated with frequent staff turnover due to high employee turnover rates, thereby ensuring quality and efficiency. 6. Train multi-skilled workers: Develop workers who are capable of handling multiple machines or workstations (at least each person should be able to operate three workstations), so that when employees at certain workstations leave, these multi-skilled workers can be deployed quickly to fill the vacancies, thereby increasing flexibility in production planning. Faced with the current high employee turnover rate, companies must systematically carry out training and development for multi-skilled workers. The more multi-skilled workers a factory has, the wider its coverage, and the greater its flexibility to adapt to increases or decreases in staff numbers. Companies should also establish corresponding multi-skill worker incentive mechanisms to motivate employees’ desire and motivation to acquire multiple skills. 7. Employ the “U”-shaped production line to arrange production flexibly and reduce the need for a large workforce. Traditional mass-production methods rely on designing large, long production lines with fixed staffing levels; such lines have high capacity but require many workers, with each worker being responsible for only a simple step in the production process. Such large and long production lines often have to manufacture a variety of products, with frequent product changes; if a worker leaves, that position becomes a bottleneck that hinders the efficiency of the entire production line. Lean production methods can be utilized to transform traditional large, long, high-capacity production lines into small, short cell-based production lines that allow for flexible scheduling. 8. Addressing production line bottlenecks following employee turnover: In lean production, once the production process is balanced according to the set rhythm, if employees leave the team, the arrival of new employees will inevitably create bottlenecks at the positions where those employees were working, thereby affecting the overall efficiency of the production line. How can such bottlenecks be resolved as quickly as possible? There are several methods you can try: 9. Use trained multi-skilled or generalists to fill the gaps caused by losses. Establish a “flexible production line”. “The concept of a \"flexible production line\" is to establish an identical backup production line in accordance with standard production line standards, to serve several regular production lines. When there is a loss of employees on the regular production lines, skilled workers with comparable proficiency are first assigned from the \"flexible production line\" to those lines, so as to ensure that the overall balance and production efficiency of the regular lines are not affected by such losses. New employees, on the other hand, are assigned to the \"flexible production line.\" Imbalances in this line can be addressed through inventory buffers or flexible scheduling of working hours. Increase temporary auxiliary staff at the bottleneck stations to achieve overall line balance. 10. Strengthen the development of team leaders: As frontline managers who interact directly with employees, team leaders play a crucial role in managing employee turnover; their skills and management approaches are the key factors in effectively addressing this issue. Training, mentoring, and motivating team leaders is yet another aspect that most companies tend to overlook. Business managers* are accustomed to focusing training and management efforts on middle and senior managers, supervisors, and engineers, leaving the task of managing and mentoring team leaders to the production department. As a result, team leaders become the most crucial yet weakest link in the entire management structure! We are well aware of one thing: the production line is the most important part of the entire company, as it is where real value is created for customers. All other functions are supplementary, and on-site management relies entirely on team leaders. 11. By integrating the principles of lean project improvement, these concepts and methods are applied to the production management system as well as to HR-related employee management practices, in order to address the issue of employee turnover. The previously separate concepts and methods related to lean production, on-site management, quality control, and HR administration are effectively combined into a systematic framework of practices and management strategies, providing practitioners of lean principles and corporate managers with an effective approach to reducing employee turnover. Although employee turnover is a social issue facing China at present, and lean production is not the only solution to this problem, simply implementing lean production is clearly insufficient to achieve the comprehensive benefits it can bring; it may even lead to failure (I am aware of many such cases in which efforts were made with great confidence only to end in failure). Only by combining the concepts and methods of lean production with the actual conditions faced by enterprises, and by continuously improving and developing these concepts and methods, can a path to lean production that suits China’s national conditions be found.