How does lean operations interact with how workers are treated? That is the question behind an article in Stanford Business (Lean manufacturing benefits workers and the bottom line, Autumn 2016). Here’s the story in a nutshell. Nike began working with its apparel suppliers to implement lean operations at the suppliers’ factories. This entailed bringing in managers to train them and then supporting them as they began implementing lean assembly lines.
While one side of Nike is doing that, another is going out and auditing suppliers for how well they maintain labor standards. This team is monitoring compliance with local labor laws as well as Nike’s own standards. They are passing out letter grades. Suppliers that are doing well get As and Bs. Those with major violations are getting Cs and Ds.
And, of course, both Nike teams are collecting data: Who has implemented a lean line? Who has cleared up their problems with overtime pay and so on? Some academics get a hold of that data and start to look at whether lean moves the needle on labor standards. (You can find a link to the academic paper here.)
Here is what they found. (more…)