By Sarah S-
A company has a competitive advantage over its rivals when its profitability is greater than the average profitability of all companies in its industry. According to Gordon’s book, “there are two strategies to playing the competitive advantage game. One to outsmart your competitors by improving your internal processes or two you can look externally to find lower cost sources. But if employee paychecks were considered a product line, it would rank as one of the largest products at most companies. With that being said, chasing lower wages from country to country wouldn’t be the best solution. Lean strategies in the workplace consist of employees who know the process best to identify unproductive activities and replace them with productive one.” While machines and materials are easily measured, one reason lean strategies are hard to measure in the workforce is because there are so many variables and sectors.
Gordon mentions extending lean concepts into lean labor by evaluating seven wastes of lean; unnecessary transport of people, more people than required for inventory, motion of manual paper processes that could be automated, unplanned absenteeism or few experience/skills to perform a process efficiently, overproduction by using over qualified people for a task, over processing by entering date multiple times, defects that cause quality and performance issues.
I choose this book because over the past 2 years of my MBA program I have heard about competitive advantage over and over again. But Gordon’s book took the concept of competitive advantage and applied it to the internal business practices instead of the business’s product or services. It was a new idea of looking at people as the competitive advantage instead of the product. This related well to some of the subject matter that has been taught over the past 2 years by the MBA program, for example; people are the asset, focus on strengths not weaknesses and spend time with your best people.
Lean labor strategies definitely have its place in the infrastructure of a business especially when you put it up against the competitive advantage most businesses have now that outsource their operations overseas to save on labor costs. I looked at the current company I work for, a lawn and tree company based in Kansas City and its competitive advantage are their people. Yes we have some of the best products out there when it comes to lawn and tree treatments. But no matter how great a company’s product is there are always defects, recalls and sometimes they just fail. In the end how these defects, recalls and failures are handled by its people is what gives a company its competitive advantage. My company promotes its college-degreed associates before its products. The associates come with horticultural and forestry knowledge that you don’t normally find in the green industry.
At Ryan Lawn and Tree you have the production field managers and then you have the administrative office staff that assists field managers and customers. When it comes to the administrative office staff I see a lot of areas where Gordon’s Lean Labor could improve operational productivity. A few of Gordon’s seven wastes of lean stood out in the article. Over processing which is entering data multiple times into different systems can lead to decisions that are made, questions, and then reviewed again because of ambiguous supporting information. My company’s administrative staff spends a lot of time entering in the same data more than once. One of the reasons for this is the computer system they operate on is out dated and second is that the administrative staff tailors its procedures to each field manager instead of having set standards that apply to all. Just fixing this “over processing” would save the company time and money. Ryan Lawn and Tree could use this savings and reinvest it in future acquisitions and innovations.
Another one is overproduction which is using a person too highly skilled for a specific role. This can lead to providing too much information to individuals, causing them to search through this detail for the information they require. Several employees that work in customer service, which is a position that doesn’t require higher education, are college-degreed. This creates an environment of highly skilled workers in positions that for one do not support or harvest a person’s skills or talents, and two are overpaid for the position because of the level of education even though some one without the education and skills could do the job at a lower cost. Here is where I was another opportunity to use the lean labor strategies to increase value from the workforce.
Overall the book was insightful and I agreed with its original outlook at competitive advantage. The lean labor strategies are definitely something business should be aware of and keep an eye on. One thing I think companies have to be careful of is when they take on these lean labor strategies that they don’t start treating every opportunity as a way to cut labor. This tends to lead employees to feel like they are another body and they are expendable. A company will have to watch their approach before practicing lean strategies, especially if it could change the foundation and culture of the company. And lastly, the time and energy that a company might have to put into lean labor strategies might defeat the purpose of lean labor and be unrealistic. Viewing labor as a competitive advantage is great, but at the end of the day the products and services that a company manufactures is just as important.