Work, Employment and Society

Today, business organizations are further improving their business and marketing strategies to become established permanently in the market. Many organizations spend a good deal of time, energy and money to come up with solutions, which will help increase their sales and profit from their consumers. Good business and marketing strategies serve as a basis for the success of a business organization in the market, and somehow determine the building up of their brand image and brand loyalty.

However, the success of a business organization is not only dependent on its ability to come up with good and effective business and marketing strategies. In addition to these is the ability of the company to produce high quality products, which determines their brand image. Production is also a basis for the company to gauge market penetration and establishment, for in general, the increase in production means the increase in the demand for the product, which results to increase in the company’s profit and growth. Production is important, for its increase indicates the continuous patronage of consumers for the products of the company, and its success in providing good solutions and services for the consumers. With this importance, it is best to analyze and evaluate the two different production systems, namely, the Fordist production system and the lean production system. This paper will discuss the two systems separately, their traits, advantages and disadvantages, and the characteristics of jobs under the two production systems. In addition, this paper will also tackle the consequences for employees, given the spread of lean production as the dominant paradigm for the production of goods and services.

Fordist Production System

Fordism, or the collective term for the social institutions of mass production, began to emerge in the United States early in the twentieth century and were at the center of a decades-long process of social struggle, which extended into the immediate post-World War II era (Rupert 2006). Through intensified exploration of labor, the system of Fordist mass production might counter capitalism’s endemic tendency toward a falling rate of profit, for the institutionalization of such a system of production required a combination of force and persuasion: a political regime in which trade unions would be subdued, workers might be offered a higher real standard of living, and the ideological legitimation of this new kind of capitalism would be embodied in cultural practices and social relations extending far beyond the workplace (Rupert 2006). The Cold War ideology or Communism, played a crucial role in the political stabilization of Fordist institutions in the United States. This ideology provided the common ground for the de-radicalization of industrial labor unions that could be incorporated as junior partners in a coalition of globally oriented social forces working together to rebuild the “free world” along liberal capitalist lines and to resist the infringement of a presumed Communist menace locally and globally (Rupert 2006). In addition, institutionalized Fordism, enabled the United States to contribute to almost half of the world’s industrial production in the immediate postwar years. It provided the economic dynamism needed to initiate reconstruction of the major capitalist countries after the Second World War, to support the emergence of both the consumer society and the military-industrial complex in the postwar United States (Rupert 2006).

It has been reported that in a Fordist production system, the integration of the industrial system is often discontinuous and subject to delays in the transport chain (’Fluxes in a Fordist and a Post-Fordist Production System’ 2006). Links between different functions generally imply an accumulation of stocks, such as raw materials, parts and manufactured goods, before their usage, including processing, manufacturing and distribution. The high outputs of an assembly line require warehousing of all required parts in the vicinity, and this cannot occur without stable and constant demand, which is assumed to absorb a supply-oriented production. The transport function in the Fordist production system is massively applying economies of scale with accumulation and delays at break and bulk points (’Fluxes in a Fordist and a Post-Fordist Production System’ 2006). On the other hand, in a post-fordist production system, it tends to reduce warehousing and increase the integration between elements of the production system in a complex network of relationships, and this environment, the transport function is closely integrated to the production and the distribution and is the main element in minimizing delays and warehousing (’Fluxes in a Fordist and a Post-Fordist Production System’ 2006).

It has been reported that Fordism refers to the system of mass production and consumption characteristic of highly developed economies during the 1940s to 1960s (Thompson 2006). This system carried an extreme division of labor, making the role of the assembly worker had the lowest status in the factory. Moreover, assembly line work is unpleasant in a mass production environment, is physically demanding, requires high levels of concentration, and is excruciatingly boring. As an example, the Ford Motor Company experienced a very high labor turnover, and according to facts, men work in Ford for only two reasons, one is for wages, and the other is for fear of losing their jobs (Thompson 2006). Moreover, Fordist production processes increase the speed of work and production, but depend on endless repetition of highly specialized tasks, so the workers often do not learn a productive range of skills, thus, Fordist product processes may limit an industry’s flexibility in adapting to changing markets (Saez and Heintz 2006). Today, this model is represented by those companies, which adhere to the basic principles of Ford’s assembly line, but still feel the need to introduce new principles in order to respond to competitive pressure, for under the Fordist model operators were low-skilled, specializing in one job with poor career prospects, and only relief workers were multi-skilled (’The Social and Labor Impact of Globalization in the Manufacture of Transport Equipment’ 2000).

Lean Production System

The manufacturers in the United States have always searched for efficiency strategies, which could help reduce costs, improve output, establish competitive position, and increase market share. In the early times, mass production manufacturing methods common before World War II shifted afterwards to the results-oriented, output-focused, production systems that control most of today’s manufacturing businesses (’Intro to Lean’ 200). After the Second World War, Japanese manufacturers were facing declining human, material, and financial resources, and the problems they face in manufacturing were vastly different from their Western counterparts, which led to the development of new and lower cost manufacturing practices (’Intro to Lean’ 200).

In definition, lean production is an assembly-line manufacturing methodology developed originally for Toyota and the manufacture of automobiles, and also known as the Toyota Production System. Its goal is “to get the right things to the right place at the right time, the first time, while minimizing waste and being open to change” (Malloy 2004). This production system focuses on reducing system response time so that the production system was capable of immediately changing and adapting to market demands, so in effect, the automobiles of the Toyota Motor Company became made-to-order. In addition, the principles of the lean production system enabled the Toyota Motor Company to deliver on demand, minimize inventory, maximize the use of multi-skilled employees, flatten the management structure, and focus resources where they were needed (Malloy 2004). Moreover, in lean production systems, the value of a product is defined solely by the customer, and identifying the value in lean production means understanding all the activities required to produce a specific product, and then to optimize the whole process from the view of the customer. This viewpoint is critically important because it helps identify activities that clearly add value, activities that add no value but cannot be avoided, and activities that add no value and can be avoided (’Intro to Lean’ 200).

Furthermore, a continuous improvement mentality is necessary to reach the company’s goals, and the term “continuous improvement” means incremental improvement of products, processes, or services over time, with the goal of reducing waste to improve workplace functionality, customer service or product performance (cited in “Intro to Lean” 200). Continuous improvement principles, as practiced by the most devoted manufacturers, result in astonishing improvements in performance that competitors find nearly impossible to achieve (’Intro to Lean’ 200). The characteristic of the lean production system thinks more about its customers than it does about running machines fast to absorb labor and overhead, and ensuring customer input and feedback assures quality and customer satisfaction (’Intro to Lean’ 200).

Differences in the Jobs under Lean Production and Fordism

The first difference is shop floor organization in terms of the actual social organization of production and labor-management relations (Dassbach 1994). The shop floor organization of lean production replaces the fundamental characteristics of Fordism, namely its functional specialization, task fragmentation, and assembly line production, with overlapping work roles, job rotation, team-based work units, and relatively flexible product lines (Dassbach 1994). The basic organizational unit on the shop floor is not the isolated, individual worker found under Fordism but rather the work team, so teams are headed by an hourly paid team leader and consist of four to eight workers (Dassbach 1994). In addition, workers are cross-trained and regularly rotated to different jobs, and unlike traditional plants with the influence of Fordism, most workers in lean plants are responsible for performing routine maintenance on their equipment (Dassbach 1994). Workers under the lean production system have a far higher degree of control over both their working conditions and final products, and they are constantly encouraged to make suggestions to improve their job. On the other hand, workers under Fordism production system, some workers are punished by the management, if the standards are not met (Dassbach 1994).

The second difference is the organization of the enterprise, where Fordism has internalized or incorporated previously external activities within the enterprise. Internalization enabled Fordist firms to eliminate market transactions between suppliers, capture or eliminate intermediate profits and extend their span of control over an ever-wider range of activities (cited in Dassbach 1994). This strategy proved to be extremely successful, and highly profitable, as long as sales were expanding, but internalization also had severe and unanticipated limitations, which only became apparent with a protracted downturn in sales (Dassbach 1994).

Moreover, the third and the last differences between Fordism and lean production are interrelated, for one is inventory practices, which directly impacts on component quality, and the other, which is a consequence of inventory practices, is the spatial distribution of production. Fordism’s inventory practices have been characterized as “just in case” while lean production’s inventory practices have been characterized “just in time” (Dassbach 1994). Companies following a Fordist production system have tended to produce and store large stocks of components “just in case” of disruptions in supplies due to strikes, transport problems, shortage of materials and others. On the other hand, under a “just in time” system, suppliers produce components in small batches and deliver these to the main company as needed, often as frequently as two or three times a day. These parts are then assembled into vehicles almost immediately, and not only does “just in time” reduce the capital and the amount of storage space devoted to intermediate inventories, but it also quickly reveals any manufacturing defects so that these can be rectified before the next batch arrives (Dassbach 1994).

Furthermore, there are several advantages and disadvantages associated with each of these approaches. First, appointed team leaders will enjoy the full support of management, but not necessarily that of the workforce they are to lead, while on the other hand, completely elected team leaders may well have the full support of the workers, but may not be in tune with management or may even lack leadership qualities (’The Social and Labor Impact of Globalization in the Manufacture of Transport Equipment’ 2000). Between these two extremes, there are several possibilities, where one is the joint selection of team leaders by a management or trade union committee, and the other one is to obtain confirmation by the workforce once the leader has been appointed, the third is to have a slate of candidates, certified as being acceptable to management in terms of leadership and training capabilities, from which one could then be elected by the workforce (’The Social and Labor Impact of Globalization in the Manufacture of Transport Equipment’ 2000).

Consequences for the Spread of Lean Production System

There are several consequences in terms of applying a lean production system in a company. It has been argued that a mass organization system in contrast to the lean production system is more complex, both vertically and horizontally, in terms of information sharing and decision-making (Chun and Zhiang 1999). This makes the lean production system less complex, for in their search to incorporate employee information and opinion into the operation and decision-making process, they seek to reduce both the vertical and horizontal complexities of an organization, thus having more participative-like management, and employee input is required and valued explicitly by upper management (Chun and Zhiang 1999). In terms of formalization, or the standardization and specification in rules and procedures within an organization, lean production systems in less formal, which gives the employees the chance for cooperative work and multiple job skills and expertise (Chun and Zhiang 1999). This would lead to the ability of the employees to develop multi-tasking skills, and the chance to learn new jobs and skills. This would in turn, increase the productivity of the company and the employees’ loyalty, in providing them with new information. Moreover, the openness and team-based approach of lean producers are the most important features of their decentralization, and being decentralized, more people can make decisions in the organization (Chun and Zhiang 1999). This would enhance the ability of the employees to participate in the problem solving and decision-making process of the company, offering creative tension, in which workers may have ways to address the challenges faced by the company (Chun and Zhiang 1999). In addition, participating in the decision-making process in the company would enhance teamwork and communication. With effective communication, information can be dissipated properly to the employees, which increases the involvement of the employees to the different problems of the company. In this way, they can express their views and give out suggestions to further enhance the development of production and employee matters.

However, despite the advantages obtained by employees under lean production systems, stress is often experienced. It has been reported that the lean workplace is subjected to constant stress as teams or individual workers are forced to speed up assembly lines, reducing the number of workers, and taking away materials (Yates 2001). In addition, workers learn as many routine jobs as possible, so that management would not have problems, in the event that some team members are absent from work, and inventories are kept to a minimum, further stressing workers who can no longer rely upon stocks of spare parts to keep production up when problems occur (Yates 2001). Furthermore, this system aims at the maximum extraction of labor from human labor power, which compels workers to work with peak intensity for as many hours as possible (Yates 2001). This pressures the employees to work, which could somehow create tension in the workplace. Tension can somehow be helpful to extract and enhance the capabilities of the workers, but if it is always present, then it can disrupt the work ethics of the employees, leading to decrease in productivity and interest to work.

Conclusion

The two production systems, namely Fordist and lean production systems are significant to evaluate the productivity of business organizations. The Fordist production system is mass production, while the lean production system is assembly line manufacturing. Both of these production systems have their advantages and disadvantages, depending on their product, target market, production strategies and time frame. With the advantages seen by most companies in the implementation of the lean production system, many organizations are adopting it, and these advantages contribute to the gain in profit and increase in productivity of the company. However, the lean production system also has its setbacks and disadvantages, by subjecting the employees to continuous stress and tension in the workplace, which is not healthy for both the employees and the management. With this, it is best to further evaluate the implementation of these production systems in a company, keeping in mind the benefit of the company and employees as a whole.