Lean organizations in the advanced era of globalization - three types of lean production and their consequences for labor and inequality

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Résumé:

LEAN ORGANIZATIONS IN THE ADVANCED ERA OF GLOBALIZATION – THREE TYPES OF LEAN PRODUCTION AND THEIR CONSEQUENCES FOR LABOR AND INEQUALITY

Thomas Janoski, University of Kentucky, and
Darina Lepadatu, Kennesaw University

Paper prepared for the GERPISA Conference in Puebla, Mexico. June 1-3, 2016

ABSTRACT

Lean production has developed with four major parts: (a) taking a long-term perspective toward market share and hiring employees for the long term, (b) establishing a supply-chain network based on just-in-time-inventory, (c) developing an intensive problem solving culture that often stretches the workforce quite thin for the amount of work that needs to be done, and (d) using teams to their utmost while trusting all employees to make important contributions. There are three distinctive applications of lean production: (1) lean production-1 or Toyotism uses all four elements (the hard supply chain management and constant improvement, and the soft teamwork and trusting long-term employees); (2) lean production-2 or Nikeification uses items two and three but casts off items one and four by off-shoring or outsourcing its production to companies in less developed countries (LDCs) that do not use teams or long-term employment; and (3) lean production-3 or Waltonism involves merchandisers who exert a great deal of pressure on suppliers to produce the lowest cost item possible, and relying on off-shore production that is largely Fordist. These models of lean production are illustrated with Toyota for lean production-1, Nike and Apple for lean production-2; and Walmart for lean production-3. The negative implications for lean production-2 and lean production-3 on the economies of advanced industrialized countries (AICs) are increasing unemployment in manufacturing with growing numbers of lower paid jobs in the service sector. This is also accompanied by a negative balance of trade. The negative implications for (Less developed countries) LDCs for lean production-1 and -2 involve the more intensive and exploitative application of Tayloristic/Fordistic work methods to manufacturing plants in China and Mexico. While lean production-1 results in more favorable and team-oriented work practices, it does have the major disadvantage of using temporary workers (sometimes as much as 30% of the labor force) who can be easily discarded (hence violating point one of lean production). In Mexico, we would expect to see the first model in the new Toyota and existing Honda plants (i.e., better working conditions and less inequality), and the second model in Ford, Chrysler, GM and Nissan plants (i.e., worse working conditions and more inequality). VW is a more complex model closer to but not the same as Toyotism.

Please address correspondence to the first author at 1525 Patterson Office Tower, University of Kentucky, Lexington, KY. 40506-0027. Email: tjanos@email.uky.edu.