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Adopting JIT: implications for worker roles and human resource management.

Adopting JIT: Implications for Worker Roles and Human Resource Management

Japanese achievements in improving the efficiency and effectiveness of production systems have yielded remarkable success and raised a great deal of both interest and concern. Of the many factors that might potentially explain Japanese success, many consider the just-in-time (JIT) production system the most important. Intrigued by the success of the Japanese, many American companies are experimenting with JIT. General Motors, General Electric, Westinghouse, 3M, Harley-Davidson, Black and Decker, and Hewlett-Packard are but a few.

To date, most U.S. companies' efforts to adopt JIT have been limited in scope, emphasizing "obvious" aspects of operations such as reducing setup time or receiving just-in-time deliveries from suppliers. Although results have been generally favorable, a more extensive implementation of JIT offers significantly greater potential benefits. It is obvious that more extensive implementation of JIT will require major changes in many aspects of manufacturing operations management. Less obvious, though equally important, are the changes it will create in worker roles. These changes in worker roles in turn have important implications for human resource management policies and practices. The full potential benefits of JIT can only be achieved by recognizing these implications.

The primary objective of JIT is minimizing waste. In order to do this, each item is to be produced in the exact quantity needed, just in time to be sold or used by the next process. This means that inventory must be decreased significantly either by reducing sources of uncertainty or by designing a more flexible production system than can better adapt to changes. Reducing sources of uncertainty is achieved by improved relationships and better communication with vendors and customers, extensive preventive maintenance and process control, superior quality, and increased worker training. Greater flexibility is achieved by using a pull approach production system, smoothing the production schedule, producing in small lots, shortening setup time, organizing the shop based on group technology, and employing multi-skilled workers. Excellent sources are available for detailed discussion of JIT concepts.

A distinctive characteristic of JIT is the use of the "pull" system rather than the push system that is popular in conventional production. With the pull system, when a station needs components it withdraws them from its preceding stations. Each preceding station then produces the exact quantity to replace the parts withdrawn. In its production, the preceding station obtains the required parts from its own preceding stations. This process starts with the final assembly line and goes back upstream to all the stations, including vendors. The pull approach is accompanied by an information system known as kanban. Kanban conveys the information on required parts to the preceding stations.

Leveling the production load is imperative in a pull system environment. Any fluctuation in production at the final assembly line creates variations in production requirements for preceding stations. Because parts are to be produced just in time, it is impossible to meet a sudden increase in requirements. To prevent disruptions, production at the final assembly line must be leveled. Each type of finished product must be produced at its minimum lot size, ideally a lot of size of one. Production in small lots is economically feasible only if setup time is short. Therefore, reduction of setup time is a major requisite for implementing JIT.

Another major component of JIT is group technology. Group technology involves the use of manufacturing cells and multi-function workers. A manufacturing cell is designed by grouping a series of machines with different functions according to the production steps required for a part or family of parts. A cell is dedicated to the production of a family of parts and often includes all the machines needed for completing production of those parts. As a result, process previously performed at several separate work stations can be performed at one station.

Group technology requires multi-function workers. Workers are trained to handle all types of machines in one cell. This results in a significant reduction of work-in-process inventory and a decrease in lead time. With this approach, management can easily change the capacity of a cell by changing the number of workers assigned to the cell. This increases the production system's ability to react to market needs.

Quality control is very important for successful implementation of JIT. In an environment with no safety stock and a very small cycle stock any quality problem can lead to production disruptions. The focus of quality control efforts is on process control. In order to achieve process stability it is vitally important that equipment function properly and dependably. An extended preventive maintenance program is required to help assure this. The importance of quality is communicated to workers; and they are responsible, to a large extent, for the proper functioning of their machines and the quality of their output.

A full-scale implementation of JIT will require a major overhaul of the production system, which consequently will result in significant changes in worker roles.

One important requirement for full-scale implementation of JIT is an increased level of technical skills and flexibility for workers. Use of group technology and manufacturing cells requires multi-skilled workers. Workers must be assignable to different machines within a cell or to a different cell depending on production requirements for the cell.

In JIT systems, frequent machine setups are necessary. Unlike conventional systems where the operator waits for setup specialists to setup his machine, workers in the JIT system are trained to quickly set up their own machines. Many are even trained in setting up other machines that required more than one operator for setup.

Extensive preventive maintenance is a key component of JIT. Workers are trained and expected to become familiar with their machines and equipment, understand their functions and operations, and be able to perform routine, basic inspection and maintenance.

In addition to increased technical skills, JIT implementation requires other kinds of worker skills. In particular, the JIT worker needs to be a team player with excellent communication and interpersonal skills. In contrast to the conventional production system, the JIT worker (or work station) is not an island surrounded by work-in-process inventory; rather, because of the very low level of inventory as well as the use of the pull system and kanban, the JIT worker has to work in harmony with other workers. To a large extent, the coordination of work activities is dominated by workers' mutual adjustment, instead of the use of direct supervision that is popular in conventional systems. Interaction and two-way communication are needed, as opposed to the taking and giving of orders.

With JIT, synchronized production replaces maximization of efficiency and output as the goal of the system. Producing the right item at the right time is the objective, not producing at the highest speed. This characteristic emphasizes the need for interaction and collaboration among the workers. The focus is on cooperation, not on competition. It is not the individual star performer, rather it is the team player that is needed.

A number of factors in JIT design result in workers' stricter adherence to methods, procedures and schedules. Elimination of waste in JIT means greater synchronization and elimination of variations within production system; and therefore, requires strict adherence to methods and procedures on the part of workers.

Lower work-in-process inventory results in decreased buffer and slack between work stations that may lead to less leeway and personal control for workers. Higher JIT emphasis on high quality and timely production means higher worker discipline and adherence to methods and procedures.

Also, the manufacturing cell arrangement allows more than one machine to be assigned to one worker. This can result in a fuller production load and, unlike the conventional production system where a worker typically runs one machine, does not allow much break time due to the machine cycle. The worker has to synchronize the machines; and to keep them running he may have to move constantly and quickly from one machine to the next. This arrangement can put a much higher demand on the worker and results in more restrictions on worker's time and action.

While traditional American industrial wisdom advocates very narrow job assignments in order to reduce the worker's role, which simplifies management's job in hiring, training, monitoring, and replacing workers, the JIT system expands the worker's role and responsibility and emphasizes its importance. Increased expectations of better judgement and more responsibility follow the broader job assignment and higher skills and training.

In a production environment with minimum inventory, workers' mistakes will disrupt the production process and attract the attention of supervisors and peers. High quality requirements and strict adherence to schedule in JIT enhance the role of the workers. Workers are trained and expected to perform very well. With JIT, workers are multi-skilled, have broader task assignments, do the setup, perform simple equipment maintenance, and interact with others to synchronize the production. This broader role is accompanied by higher responsibility and creates more opportunity for decision-making and judgement.

As inventories are reduced to the bare minimum and items are produced at the right time and quantity, the worker's role becomes more crucial. As inventories are reduced the cushions for covering mistakes are removed. This makes the production system more vulnerable to the poor performance by workers. There is less room for absenteeism, poor performance, defects, late production, etc.

Changes in worker roles and the increased vulnerability of the system to poor worker performance means that a successful JIT application will require a highly dedicated and committed workforce. The popularity of quality circles, long and frequent overtime hours, attending training classes on weekends, and close attention to quality and quantity goals are evidence of Japanese workers' dedication and commitment.

JIT requires-and works effectively only with-dedicated workers who have broad work skills including technical as well as communication and interpersonal skills; who have the discipline to adhere to strict methods and procedures; who are willing to take charge and accept responsibility; and who are committed to efficient and effective production operations.

As has been suggested, the implementation of JIT requires significant changes in workers roles. These changes have implications for a variety of human resource management issues, policies, and practices. Among them are employee motivation, staffing, training and development, and compensation and reward systems. Some of these implications are relatively obvious, others are more subtle. A number are related.

Employee Motivation - Some have argued that the implementation of JIT will enhance employees' interest and involvement with their work and there is some evidence to support this. According to this view, JIT represents a sharp break with the monotony of task-specific jobs. It is argued that the restructuring of jobs necessary for implementation of JIT will provide greater task variety and responsibility. This will result in more interesting and challenging work and, consequently, more motivated employees.

However, the situation may be somewhat more complicated. As Harley Shaiken observed, there are two faces to the JIT system. One is increased efficiency, better quality, and worker involvement. The other, however, is increased pressure, stress, and tightly strung manufacturing. Because of its emphasis on synchronized production and its reliance on strict adherence to methods and procedures, JIT may actually result in increased strictures on worker time and actions. Because it has fewer buffers and less slack, it may allow less leeway and personal control. In some respects it may turn the worker into an extension of a system no less demanding than a busy assembly line.

One cautionary note has been sounded by Nissan's experience in their plant in Tennessee. Some employees there have complained that the production rate is practically burning them out. As one assembly employee there recently said, "At the rate we work most people wonder if they can do this job for 20 years."

This issue may not be restricted to JIT implementation efforts in The United States. According to a recent article by Janice Klein in the Harvard Business Review, "Line operators at Toyota have claimed that the JIT pace led to more major accidents (resulting in a loss of four or more days at work) than in other Japanese automakers and an unusually high number of suicides among the bluecollar workforce."

To date there is not enough evidence to fully evaluate the impact of JIT on employee motivation-especially its consequences over time. The issue clearly warrants additional investigation. If the motivational effects of JIT are not as positive as has been assumed, challenges for other human resource management activities such as staffing, training and development, and compensation will be even greater.

Staffing - Changes in worker roles resulting from a JIT environment have several implications for staffing. One concerns the nature of the qualities sought in prospective employees. New qualities will be sought and some traditionally important qualities will become even more important. In addition, the selection process will need to be more complex.

In order to implement JIT, companies will find it necessary to evaluate applicants' ability and willingness to learn as well as their specific skills. In addition, evaluating applicants' flexibility will assume greater importance. For example, at Diamond-Star, a joint venture between Chrysler Corp. and Mitsubishi Motors Corp., applicants are told they must learn several jobs, make and consider constructive criticism, and submit a stream of suggestions for improving efficiency. JIT will also force increased emphasis on skills vital for effective teamwork. As noted in a discussion of one company's selection process, "If you can't get along with others, you don't get in the door." This increased emphasis on interpersonal skills will not be restricted to employees at the shop floor level. As Robert Hall notes in "Attaining Manufacturing Excellence," "JIT intensifies the importance of these characteristics at the managerial level as well."

Changes in the desired skill mix also have implications for the selection process itself. In most instances, organizations will need to use somewhat different methods for gathering selection information. Methods such as those used at assessment centers will assume increased importance. Organizations will also have to devote more time and effort to selecting employees.

A good example is the selection process at Toyota's new plant in Kentucky. The selection process for a production job at Toyota takes at least 18 hours. First prospective employees complete a general knowledge exam and a test of their attitudes toward work. Then Toyota gives the top 30 percent the kind of scrutiny that most companies use only for selecting managers. The promising candidates go in groups of 12 to an interpersonal skills assessment center conducted by Kentucky State University for a session of problem-solving. The prospective employees may be told that a lawn mower manufacturer has production problems. Successful candidates ask the right questions and work together to find solutions. Prospects also go through a manufacturing exercise, following instructions to assemble an array of plastic pipes. They are then asked to improve on the method they were taught. Reportedly less than 10 percent of the applicants survive to the final stages of a probing interview and a physical exam.

Similar experiences have been reported for a number of companies. This level of detail and care in selection is not cheap. Both Diamond-Star and Mazda say they have spent approximately $13,000 per employee to staff their U.S. plants. Interestingly, neither company spends as much effort finding workers in Japan, where the school system does much of the screening for them. In the U.S., they believe they have to start from scratch.

Training and Development - Training and development plays a pivotal role, from the initial move to a JIT environment through implementation and ongoing operations. Both attitude change and skill development are necessary. All levels of the organization will need to be involved. As Thomas Gunn writes in "Manufacturing for Competitive Advantage," "Time and again, the major impediment to the implementation of world-class manufacturing is people: their lack of knowledge, their resistance to change, or simply their lack of ability to quickly absorb the vast multitude of new technologies, philosophies, ideas, and practices that have come about in manufacturing in the last five to ten years." He further asserts that only education and training can solve this problem.

Before people can be equipped with the skills necessary in a JIT environment they must first understand and accept the need for it. This is the first task for training and development. All levels of the organization must be convinced that change means survival.

Understanding and accepting the need for change is just the first step in a long and difficult process. A key part of the next step is changing attitudes of all the organization's employees. There are a number of the main areas in which employee attitudes must change in order to effectively implement JIT in an organization. These changes are not easy to achieve and they can be threatening to some, especially supervisors.

As attitude-change issues are resolved, the focus of training and development will need to shift. Production workers must be cross-trained to work as a team. This includes skill training to enable workers to perform the multifunction role required by the JIT environment as well as teamwork training. Thus, both technical skills and interpersonal skills are important.

The broadly based training and development effort necessary to support JIT requires a commitment from the organization. The effort, no matter how extensive, cannot be a one-shot affair, and a substantial financial investment is also a necessity for successful implementation. For example, at Mazda's new facility in Michigan all new employees are given three weeks of basic training before any job-specific training. A variety of topics are covered, including interpersonal relations, creativity, quality, and kaizen, or continual improvement. Later, line workers are given five to seven weeks or specific technical training and three or four weeks of on-the-job training. Extensive ongoing training is not restricted to lower-level employees. At Honda's automobile plant in Marysville, Ohio, managers are trained in a wide variety of skills- from quality control leadership to dealing with stress.

Compensation and Reward Systems - Changes in worker roles under JIT also have important implications for compensation and reward systems. Traditional bases for determining wage rates, such as job evaluations, will need to be re-examined. Movement to a JIT environment is also likely to force rethinking of incentive systems.

Given the changes in worker roles prompted by JIT, traditional job evaluation methods for determining wage rates are likely to be less useful. With traditional job evaluation methods, wage rates are assigned to a job based on that's worth as determined by a job evaluation system. The wage is assigned to the job, and as employees move in and out specific jobs their wage rates change accordingly. Traditional job evaluation methods work best with jobs that are relatively stable and narrowly defined. The emphasis is on performing a single, specific job well. This is clearly inconsistent with JIT's emphasis on multifunction workers and continual worker growth and development. In a JIT environment, knowledge-based ( sometimes called skill-based) pay systems are likely to be more appropriate because this approach is geared toward worker flexibility and teamwork, precisely the conditions emphasized by JIT.

Under the knowledge-based approach, pay is based on the highest work-related skills employees possess (e.g., what they can do) rather than on the specific job performed. In this approach, employees begin at a starting rate and earn pay rate increases by learning and demonstrating competence in various work-related skills. Once competence in a given skill is achieved, pay is increased and the employee may be rotated to jobs requiring that skill when necessary.

Motorola has implemented a knowledge-based pay plan at its cellular phone factory in Arlington Heights, Illinois. In doing so it abolished a system of half a dozen pay categories, each with its maximum. Under the new system, all production employees are in the same category and each can qualify in the same category and each can qualify for the highest pay rate, approximately 28 percent higher than some of the old maximums. When workers add new skills, they qualify for a pay increase, but only after they have maintained zero-defect performance for five days. According to Susan Hooker, director of planning, evaluation, and retraining, "The program has been so successful that the rest of the corporation has been learning from the example." Another example of knowledge-based pay is General Motors' new Saturn plant in Tennessee.

Implementation of JIT will also force a rethinking of incentive systems. Incentive pay may be good in batch production where the goal is to make as much as you can, but it is not consistent with JIT where the goal is to make only what is used as it is used. In case studies of two British companies that had implemented JIT, Stephanie Tailby and Peter Turnbull found that both had abandoned piecework incentive plans in favor of other arrangements. Robert Hall has expressed particular skepticism about the compatibility of incentive pay with JIT. In discussing companies that have tried JIT while retaining incentive pay, he siad, "None succeed, and all sooner or later must go through a donnybrook with the work force if they wish to convert to a straight wage plan."

Whether incentive pay should be replaced with some other system tying results (however defined) to rewards is an open question. Hall has observed that none of the earliest American companies deeply into JIT have any special plan for gainsharing, although some of these companies offer profit sharing. Dick Schonberger has suggested the possibility of forming cells and paying a group incentive, with the incentive tied to such factors as quality, precision, and meeting (not exceeding) the daily quota. The objective of such a plan would be coordination and synchronization with a smooth flow of high-quality goods with minimal inventories.

Successful JIT implementation requires expanded workers' roles and the involvement and commitment of all concerned. These changes in turn have important implications for human resource management. Issues concerning employee motivation, staffing, training and development, and compensation must be resolved. Resolving these issues is a prerequisite for realizing the full potential of JIT.
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Title Annotation:just-in-time production system
Author:Johnson, Thomas W.; Manoochehri, G.H.
Publication:Industrial Management
Date:May 1, 1990
Previous Article:Toward higher quality and productivity.
Next Article:Economic expansion in the United States: beyond free market manufacturing.

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