Today’s Lecture: Lean Production & Post-Fordism

1. Today’s Lecture: Lean Production & Post-Fordism

2. Lean Production & Post-Fordism In Previous Weeks… From Fordism to Post-Fordism Reshaping Capitalism to do business in the Global Age Declining Security/ Growing Inequality

3. Lean Production & Post-Fordism 1.0 Fordism and Post-Fordism Compared

4. Lean Production & Post-Fordism Fordism and Post-Fordism Compared

5. Lean Production & Post-Fordism 2.0 A New Business Model? ” Break-up of mass markets for standardized products (niche markets, batch production) Firms forced to become more flexible and responsive to shifting market signals ‘Downsizing’ and a renewed focus on ‘core competencies’ Work outsourced to supplier companies that can produce at a lower cost Microprocessing technology and the digital revolution Information and communications technology permit reorganization of work

6. Lean Production & Post-Fordism ” New digital technologies combine the cost-savings of mass production… …with the flexibility and customized nature of handicraft production 2.0 A New Business Model? Mass Customization

7. Lean Production & Post-Fordism ” 3.0 The Flexible Workplace: Something New? Changes: Lean production: just-in-time production, multiskilling, job rotation, teams, quality management, flexibility, extensive outsourcing, and a host of other efficiency, speed-up innovations “Management by Stress”

8. Lean Production & Post-Fordism ” 3.0 The Flexible Workplace: Something New? Continuities: labour-intensive assembly line, etc. Taylorism

9. Lean Production & Post-Fordism ” 4.0 Globalization The drive to establish a global economy Transnational corporations Businesses increasingly view their interests as global in scope Home markets form one small part of the world market The pursuit of international competitiveness argued to be the most important objective for governments and workers Decentralized (transnational) production sites

10. Lean Production & Post-Fordism 4.0 Globalization ” Hourly compensation costs in U.S. dollars for production workers in manufacturing,2002

11. Lean Production & Post-Fordism 4.0 Globalization ” Theory of “Knowledge Society” Canada and similar countries should develop their strengths (i.e. “human capital”) Part of “creative destruction” process Daniel Bell, The Coming of Post- Industrial Society (1973)

12. Lean Production & Post-Fordism 4.0 Globalization ” Rise of the Service Sector Canada 1951: 47% of workforce in service industries; 31% in secondary (manufacturing) sector 2000: 74% in service industries; 21% in secondary

13. Lean Production & Post-Fordism 4.0 Globalization ” The Knowledge Society: Theory and Reality still some distance to go before this theory is a reality most common male jobs: truck driver, retail salesperson and janitor most common female jobs ; retail salesperson, secretary, cashier.

14. Lean Production & Post-Fordism ” 5.0 A New Work Environment? Some Examples Does work restructuring and modern technology lead to more liberated workplaces?

15. Lean Production & Post-Fordism ” 5.0 A New Work Environment? Some Examples Taylor’s First Principle: “The managers assume…the burden of gathering together all of the traditional knowledge which in the past has been possessed by the workmen and then of classifying, tabulating, and reducing this knowledge to rules laws and formulae”

16. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.1 Manual Work: Automobiles Japanese Production -- flexible, but different? Nissan Sunderland:“there before me was a cleaner and no doubt less noisy version of…Ford’s plant… hordes of young workers swarmed over scores of cars as they moved slowly along the assembly line. Workers performed the same simple tasks over and over again, and there was a palpable sense of stress as workers struggled to get their tasks done within the amount of time it took for a vehicle to pass through their segment of the line.”

17. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.1 Manual Work: Automobiles Nissan Sunderland “Blue Book” – describes Standard Operating Procedures (SOPs) for each job in detail – each job timed to the fraction of a second (each unit called a tac) multitasking rather than multiskilling skilled workers still there, but numbers dwindling “electronic tags” and computer systems enable “mass customization” in context of mass production new workers hired for “stamina”, “dexterity”, etc.

18. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Q: Is service work more liberated from Taylorism than manual work?

19. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Managing the Office: William Henry Leffingwell (1876-1934) “ Many businessmen, after analysing the remarkable results secured by applying Fredrick W. Taylor’s system of scientific management in factories, have asked whether or not similar betterments could not be obtained in offices with the system. Their question can now be answered, for the main principles of the Taylor system have actually been adapted and applied to office work.” Office Management: Principles and Practice. (1925)

20. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Modern Office Work: The Reengineers Reengineering:“radical redesign of a firm’s entire business process to achieve maximum output and quality with the least labour by tightly integrating technology and tasks”

21. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Modern Office Work: The Reengineers Example: Reengineering IBM Credit Corp. Michael Hammer and James Champy,Reengineering the Corporation. (1993) Before: specialists responsible for each stage of business, located in different departments After: specialized departments swept away –”cross functional teams” created – “deal structurer” now responsible for handling entire credit- granting process

22. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Modern Office Work: The Reengineers Example: Reengineering IBM Credit Corp. EXPERT SYSTEMS software programmes thatcan automate much of the decision-making previously made by employees. designed to enable less-skilled to do work previously done by the more-skilled “deal structurers”, “case managers”, etc essentially become competent computer (machine) operators a la Taylor Leffingwell’s Exception Principle applied to a shrinking group

23. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Modern Office Work: The Reengineers Reengineering by 1995 75-80% of US firms reported some implementation and had plans for more since mid-1990s has faded and morphed into: Enterprise Resource Planning (ERP) a sort of hyper-reengineering aims to weld together everything in a business into a giant “mega-process”, largely with the help of very powerful software and networked computer systems

24. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Modern Office Work: The Reengineers Example #2 Call Centres: Stress, Monitoring, Control 3 strands of technology combine: “Knowledge Management”/ “Data Warehousing” data warehouses can include entire history of customer’s relations with business, entire financial history of customer, information about company products that may interest customer or fit customer’s profile Computer Telephony Integration permits exchanges between customer and agent using any combination of media: fax, e-mail, web, telephone Integration of “Front” & “Back” Offices systems electronically tied into other departments: scheduling, purchasing, manufacturing, accounting, etc.

25. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Modern Office Work: The Reengineers Example #2 Call Centres: Stress, Monitoring, Control the managed call– central ambition of management to manage contact between customer and employee from beginning to end try to manage contacts using prearranged formulas use software employing digital scripts sequenced by sophisticated branching techniques

26. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Modern Office Work: The Reengineers Example #2a Xerox Problem: broken photocopiers required too many service calls by high cost technicians Solution: installation of CasePoint “expert system” software in call centre. Software designed to diagnose problem without creative input from call centre employee

27. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Taylorism of Old Economy manufacturing workplace strongly echoed in modern service workplace Some believe the service work takes Taylorism to a whole new level with the monitoring and control of work more complete than ever before So, where’s the room for “good” jobs in there – let’s look at a couple………..

28. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Example #3 Animated Films: Good Jobs and the Global Supply Chain Wild Brain – San Francisco animation studio produced films for Disney and others writers work from home; voice recording done near actor’s home; design and direction done in SF (i.e. a few jobs) Animation work outsourced to large team in Bangalore, India (i.e. most jobs)

29. Lean Production & Post-Fordism 5.0 A New Work Environment? Some Examples 5.2 Service Work Example #4 -- Accountancy MphasiS -- outsourced accountancy based in Bangalore – uses workflow software program with a standardized format that makes outsourcing of tax returns cheap and easy US Tax Returns done in India 25 000 (2003), 100 000 (2004), 400 000 (2005) MphasiS CEO explains: “The accountant who wants to stay in business in America will be the one who focuses on designing creative complex strategies, like tax avoidance or tax sheltering, managing customer relationships…” …..so, how many jobs is that????