Managing Headcount in Ugly Times

Organizational attitude can be so, so fickle. First they scream due to lack of labor and then scream louder about the concern of rising costs ... so what do they decide to do? Jettison labor and then as the economy recovers begin screaming again about lack of labor.


Labor is not the issue, it is most likely your process or processes that are impacting your organization. The primary tenant of Lean is to always focus your business through the eye of your customer ... remember that! I think many organizations are blind to that perspective and forget that ultimately the customer will be judging you based on your "value Proposition"



So, focus on your work-force. It is imperative how you communicate to your people. Lean does not directly reduce costs but rather opens up capacity. Unfortunately many of you may need to trim your workforce to match market demand. However, this an excellent opportunity to leverage your human capital.


Do not totally trim your workforce to match the change in market demand. Take some of the folks and divert them into “Action Teams”. Provide them with training and facilitation and provide them with the challenge that they must implement improvement that will more than justify and create ROI greater than their cost to the organization. They can focus on yield improvement through your value stream. I did this in one company when we hit a slump in business … the team of 5 people identified and implemented 2 million dollars of yield improvement within 3 months.


Use your Action Teams to enhance cross-training of your work-force. They can also be an excellent resource to implement your Kanban systems. Do not be afraid to have your operators face customers and suppliers … they will serve you proud. They also have significant “skin” in the game … their jobs.


I had trained one team of operators about the benefits of Kanban and asked them to begin working with a key customer on implementation. Many of them had never been on a plane let alone outside of our plant. Imagine my delight when they returned with an additional 4 million dollars of business they knew we could handle and we were able to delight our customer with increased engagement.


Your business may be in pain and so are your employees along with their personal finances. This is the time for increased communication with your team. Share the good, bad and the ugly with them. Invite your local Bank Manager or Credit Union to come in to speak with your employees about what is happening in the market. Use your daily report-outs to communicate.


This is time for “all hands on deck” … close offices and migrate your engineers and schedulers into the centre of the plant. Put their desks next to machines, cells where they can provide the maximum impact with effective communication. Yes people will complain about the noise, dust, heat, cold … but they decided on a career within your industry. I am always surprised how much improvement this will create within an operation just by relocating folks closer to operations.


This is an excellent opportunity for implementing sustainable change … feel free to contact us for guidance and coaching.

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