Nice blog to see others working the same things I do!

Yes, but this goes for anybody. I work in telecom, and we’ve been subjected to huge pricing pressures over the last seven years. We’ve had layoffs, restructurings, and simply more work piled on our plates with the casual instruction to “work smarter, not harder.” But nobody has come to me and said “Oh, by the way, your salary is going to be cut 10%.” Because I would quit if they did.

In my factory I think the pain is calculating the over time pc rate, it is very labor intensive and with over 2000 workers, it requires a team of people to calculate.

A second problem is as productivity is improved, it is more difficult for factory to re-adjust pc rate once it has been published. As pricing pressure becomes difficult to abosorb, it is difficult for sewing line workers to accept the fact that their piece rate need to chage as well

Before I forget, read The genius of superfactory readers on evolving excellence blog. It’s a post that Bill Wadell wrote about me and the particular idea I’m about to explain to you.

This goes to the heart of my continual assertion in lean circles that not all industries are created equal. Due to inherent differences between classes of industries, they won’t be able to apply lean principles in the model most currently espoused and discussed. For example, agriculture. You cannot pull corn like cars. Does this mean agriculture can’t get leaner? Of course not.

I believe that industries that are “closer to the dirt” like agriculture, apparel and housing (echoing the primary needs as described by Maslov as food, clothing and shelter) will have facets of their businesses that cannot follow the model most currently depicted by Toyota. Lean looks different in different industries. Making single count units to order in apparel isn’t tenable anymore than producing one single serving of corn is. I argue that some industries can never totally eliminate batch production due to fundamental differences inherent to their products.

I’ve been trying to direct the discussion of lean -in this corner of manufacturing- toward exploring what concepts apply to us and which don’t. Some facets are already used by many firms, they just don’t know that’s what it is. We’ve done some of these things well before Lean became known. For example, before 1980, it was largely unheard of for a manufacturer to cut and sew a line without having secured the orders beforehand. That was “lean” and that’s the way manufacturers used to produce.

Rather than using the protocols established by Toyota -such as the disparity you mention with takt time- I think we need to explore what concepts apply to us, what concepts are a force in our industry but not in others, and what it is that we can reasonably accomplish, all while reducing waste. The fact remains, for most cut and sew businesses, at least some batch processing is unavoidable. Ask any farmer. He’ll tell you the same

First, lean is hard enough without having to learn to speak Japanee at the same time. The definition of “jidoka”, as far as I am concerned is “irrelevant”. I have noticed that there are a lot of Lean ‘experts’ who seem to know a lot more about Japanese vocabulary than they do about manufacturing.

Second, piece work is an alluring siren song that manufacturers find hard to resist, but there are huge problems with it. Quality often suffers, for one. The bigger problem is that most companies have much higher overhead costs than direct labor costs. Piece work seeks to optimize direct labor, but does not contribute to overhead cost reduction, and often creates incentives for workers to do things that increase overhead costs. There are very good reasons why the best performing lean companies pay for skills, rather than production.

I don’t know what the change in the cost of living has been since 1995 – but if it went up an average of 2.5% per year, then the comparable 2005 stitchers should be making an average of $12.50 to $14.50 per hour.

What are operators actually getting these days? (And does anybody know what the change in cost of living has been since 2005?)

I concur with Eric H.’s comment above that increased productivity on piece rate increases operator earnings while maintaining unit costs. Also, in the case of a production push that requires overtime, the only additional payment nominally due to the operators is 1/2 of their guaranteed hourly rate – if they’re good enough to be allowed to work overtime, they’re already earning their hourly rate in piecework. The high producers often create enough value in their overtime to eliminate the need for any ‘unearned’ overtime payment, which means that their extra time is essentially free. As long as they’re earning more at piece rate than their guaranteed rate x 1.5, the additional cost is obviated by their productivity.

This is not true in the United States.

You cannot set an arbitrary “artificial regular rate” to avoid paying overtime. A quick Google on “piece rate overtime” will yield loads of information on the topic.

There is much about the FLSA that I don’t care for (especially all the parts about not allowing adults to enter into mutually beneficial contracts) but its still the law and attempts to circumvent it can yield *very* costly results.