3 ms·
Suppose we had a shop that produced widgets and it took tasks A, B and C to complete a widget. If the production standards were: it takes 5 minutes per widget f
by vivegi 4y ago
Suppose we had a shop that produced widgets and it took tasks A, B and C to complete a widget. If the production standards were: it takes 5 minutes per widget for task A, 10 minutes per widget for task B and 5 minutes per widget for task C and we had three workers, worker-a assigned to task A, worker-b assigned to task B and worker-c assigned to task C and all of them met the production standards, we would still have waste and inefficiency in the overall system.
Here's why. Task B is the bottleneck and one could never 'ship' on average on any given day, any more than what worker-B would be able to produce. Worker-a would be piling a lot of 'intermediate work product' (or work-in-process) for worker-B while worker-c may be starving for work and will likely be idle. Sure there would be a lot of busy work for workers a and b and a lot of work-in-process, but not much changes in terms of volume of widgets shipped to customers.
If the goal was to achieve the lower cost of production for the same volume, one approach might be to remove worker-c and cross-train worker-a in task C in addition to task A. Now, worker-a can alternate between task A and task C (50% of time between the two tasks) and we would produce the same quantity of widgets as three people were producing earlier.
If the goal was to achieve higher volume at the same (labor) cost of production, one approach might be to train worker's b and c in task B and train worker a in tasks A and C. So, the deployment is {a} -> {A, C} and {b,c} -> {B}. Now, all three workers are occupied the entire time and the rate of production for task B is now doubled i.e, the shop doubles its throughput thereby increasing revenues, profits etc.,
In either case, the pursuit of productivity in itself is not a bad thing. If the firm failed to choose the suitable rational option, in the long run, it would have higher costs of production (and hence eroding margins over time) or a higher price that customers abhor (and hence losing market share), considering other things constant.
This is a management issue. When management prefers the status quo, you have dysfunctions such as worker-a potentially complaining about the effort vs. reward when (s)he is paid the same reward as worker-c ("they have an easier job while I slog my ass off!") or when management doesn't explain the change (i.e., cross-training and the benefits to the company, customers and workers) properly and faces resistance to the change ("what's in it for me?").