Just a thing, I wrote this post in summer 2008, and the crisis was not in all minds.
The goal was to explain there are others way to make profits than just lean sigma. All profit strategies (mass production, chain production, toyota models, ford models) have been chosen by cars companies, according to the crisis they were facing. Studies about other manufacturing areas are missing, so I just talked about car manufacturers.
The following advices are working only for industries similar to car companies in the production plant.
which growth system exist in your market? competition for everyone, competition and consumation, competition and exportation, nationaly coordinated productivity based, nationaly coordinated exportation based (specialisation or price), shortage and investissement and to finish annuity and inequality?
The growth of your market is: changing with competition, with
consumption, with exportation, chaotic (raw material for example), or
depending on savings?
Which benefit strategy you choose? diversity and flexibility, quality, volume, volume and diversity, innovation and flexibility, constant cost reduction. There is also a "new" benefit profit strategy from England, based on short time profitability due to very powerful institutionnal investors, commonly discuss nowadays.
In your market, how is the distribution of income? if depend of
opportunism or power, competition environement. If nationaly
coordinate, coordinate environement, ...
Your market is with hierarchy, exclusion, huge, luxury, closed groups, homogeneous, heterogeneous...
Profitability strategy must take care of the growth and distribution
system of national income, especially the effects on the market AND the
worker IN GENERAL, and of course all the members of your company.
Build a company compromise adapted:eg for cost reduction: work if no conceptual innovation, if no huge variation of production, if workers understand effects of cost reduction in employement and salaries. The market must be product centered and with no or very few hierarchy . The compromise must be create with the workers, the chiefs and the suppliers
. The compromise must be socialy and politicaly accepted.
miracle production systems like the lean production are toyota based systems and are the result of IMVP and MIT studies. They encourage the idea that industries in the 20th century have grown in three steps: craft industries then mass production and finally lean production, which is historically false. Even they are full of statistics and sometimes good ideas, this is bullshit if you are using it when the growth system you are living is not entirely free of compels or not socialy accepted. One side effect european companies have seen is the flee of high qualified workers to others company and an incredible raise of vacancy for no reason.
Cost reduction seems to work only in two environments: shortage and investissement environment because workers must wait before the rise of their lifestyle and high competition market with workers compelled by price competition .Do not forget cost reduction strategy must be chosen by suppliers too...
When finally you will have choose a profitabilty strategy adapted to your market and your environnement, your plant organisation and process will be the origin point, your profitability strategy the end point and everyone will be able to "see" clearly where they are going. Make things clear is important nowadays when nobody knows what tomorrow will be. Offer stability is highly appreciate and counterbalance salary very efficiently.
Remember that all this is based on the observation made by Taylor that a good worker has a productivity four times more than a bad worker. One hundred years later, is it really changing?