Inefficiency — Not Just The Labor Shortage — Is Breaking your output.
Depending on either your optics or situation you and your organization are either blaming a breakdown within your supply chain or your inability to attract and retain labour as your whoa in your inability to deliver a product or service.
Lots of articles are being published related to the "Great Resignation" and Labour shortages but in reality and numbers don't lie our employment rates are darn near pre-pandemic levels. So what is really happening?
First, on the people side the quote that evokes people departure still rings true ... "People leave Leaders not Companies". I loved the title of one recent article titled "We are not Family anymore" ... how true.
For many years tenant of Lean have constantly voiced that their business is built on the base of "Respect for People" and "Teamwork" ... but look at them now. Those that only mouthed the words but failed on commitment are seeing their employees depart in droves ... sometimes for just a few pennies more per hour. Why?, because companies broke their trust with their employees and now it is payback time.
Of course Covid was an instigator in many ways. Companies pivoted from maximizing growth and profit to fighting for survival. This meant jettisoning people, either aborting or significantly alternating processes. The result was "Change was Constant" and the horizon unpredictable or constantly shifting.
Many of us have starting to hang our hats on the thought that Stability is in sight and a new normal can be defined. We are seeing this as people shift back into the city abandoning Mom and Dad's sofa and renting local apartments the result in rents constantly increasing to beyond pre-pandemic levels. The hospitality industry has re-hired close to 250,000 employees within the last couple of months but with a difference they want to be compensated more. Our decades old pent-up desire for a living wage has come to bear. Although minimum wage is stated around the 15 dollar mark most organizations are now offering 20 dollars or more just to attract someone to interview ... and even then they are being ghosted.
So what to do? I believe we are still at the thin edge of the wedge of inflation. Indeed all of us that have been locked-up for the past couple of years are yearning to get out, mingle with people while dining or listening to music are flocking to local venues and dam the cost we deserve this darn it !!
But the eventual gloom of our credit card bills and negative cash flow in our bank accounts are going to haunt us and once again our society will be shifting with a new focus on Value. As a customer what are we willing to pay for! Yes we are currently being tested as some companies hang onto Covid restrictions and protocols that helped them reduce costs (or did it) like limiting housekeeping in our hotels, increasing accommodation. fee to double the rate of pre-Covid. and even in our grocery stores our shopping basket is much more expensive and you definately know some are in trouble when you see an inordinate amount of marketing for meal kits or access to Ready to Eat prepared meals ... yes the world is still changing.
You really need to pause your organization and evaluate every process step and determine if this is something the Customer is Willing to Pay for. Just how efficient is your process have you found ways to simplify the process steps or have a few run concurrently?
Our customers have caused our Supply Chain problems because you decided to pursue a Low Cost Country sourcing strategy and our customers felt they were getting better value until they can no longer get it ... what an excellent opportunity for local companies to smarten up and get innovative in order to be more cost effective and of course a local source.
And of course i am certain your processes have gotten sloppy and inefficient during Covid and most likely boring for people to staff.
Change and enhance your processes while improving your employee engagement and ownership so the customer see value. If they do ... then so will you.