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UpFront/Ideas & Opinions | Sep 6, 2012 | 14219 views

A Lean Production System is Bad for Workers

A Delhi professor's thesis reveals how the Japanese lean production system ends up reducing permanent employment and denying workers a better life
A Lean Production System is Bad for Workers
Image: Amit Verma
Professor Annavajhula J C Bose, Shri Ram College of Commerce (SRCC), Delhi

I

n 1936, Charlie Chaplin released his movie Modern Times. The film starts with the shot of a herd of jostling pigs followed by a frame that captures a swarm of workers entering a steel factory. It makes a telling statement on the similarity in the behaviour of animals and humans. The movie then goes on to tell the story of Chaplin, whose job as a factory worker involves tightening nuts on a piece of machinery on the assembly line. After a few hours, as the line accelerates and work picks up a frenetic pace, Chaplin suffers a nervous breakdown, creates terror on the floor and ends up in hospital. Three quarters of a century later, nothing seems to have changed.

Sitting in the library of Delhi’s Shri Ram College of Commerce (SRCC), Professor Annavajhula J C Bose says the human mind goes through severe stress when it has to do the same task over and over again for more than eight hours a day and for over 350 days a year. Repetitive function, along with a punishing work environment and ridiculously low wages, saps a worker mentally and physically. “It is no surprise that these factories need young guys who can slave that much. But, by the time you are 35, you are done,” he says.

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Bose is associate professor in the department of economics at SRCC. Over the past 10 years, he has trawled the factories and villages of Gurgaon, Noida and Faridabad to study the condition of workers in one of the largest automobile clusters in India. In his PhD thesis, which he submitted in July, Bose has uncovered shocking realities of the life of a worker and the pitfalls of following the Japanese lean production system blindly.

In the past four years, there has been an alarming rise in industrial conflicts in the National Capital Region. Skirmishes between workers and the management at Honda, Maruti Suzuki and Pricol factories have led to the loss of hundreds of jobs and many lives. What has caused such catastrophe? Bose blames it on the much-touted Japanese lean production system that, he says, has failed to deliver on its promised benefits. Not just in India but across the world. “People said there will be innovation in the automobile industry all over the world and they talked about lean production as its basis. A lot of people also said the industry will be the bellwether of employability in terms of labour relations,” says Bose. He, along with a few researchers, decided to check if there was any empirical evidence to back this claim.

What they found was startling. During the golden era of capitalism in the 60s and the 70s, all top Japanese companies ensured job security, wages based on seniority, enterprise unionism and consultative decision making—components that make up labour-friendly working conditions. They quickly junked the model when economic recession set in in the 1990s. What they proposed instead was a restructuring, dubbing it the ‘Japanese style of management in a new era’ and throwing job security and seniority-based pay system out of the window. According to the new principle, each firm should figure out how to separate ‘stock’ and ‘flow’ workers and decide pay strictly on the basis of performance.

Bose contends that this new form of lean production led to the rise of exploitation of contract labour. He explains how. On the pretext of maintaining a flexible workforce, the owner of a unit creates a fake contractor from among the supervisors and managers. The contractor is not registered as it would entail valid records, regular wages and other entitlements. He then informs the labourers that they are contract workers, pays them a pittance and never makes them permanent. “Doing field research on this is very difficult. Nobody wants to talk about the contractors. My own sense tells me they are dangerous people,” adds Bose.

This article appeared in the Forbes India magazine issue of 14 September, 2012
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Comments (19)
Y Hemanth Kumar May 26, 2014
First of all i think , Lean, is misunderstood by Professor Annavajhula J C Bose. If he had understood it correctly, his article would not have CREATED so much of waste that we all are doing by trying to spend our time commenting on the article and adding NO VALUE to the article.
Deepak Chaudhury Jul 20, 2013
Well first of all the name of the article is shocking, but as you read along you discover that the issue mentioned in the article has nothing what-so-ever to do with Lean.

Lean is a management philosophy, and to put in the simplest form - a way of gradually focusing the entire work force on waste identification and elimination in the business processes, and there by creating a culture of continuous improvement and learning.

What is clear from the article is that the company and management are saying that they are implementing lean, where as they are actually doing the reverse. The reason for that might be - first, they do not understand what LEAN is - then this is not the problem of LEAN.

Second they know what LEAN is, but they have no idea about how to implement it. And in the process create their own management system and call it LEAN - which results in a workplace that is self-restricting and self-destructing; which again has nothing to do with real LEAN - it has to do with proper understanding of how Lean can be useful in your environment.

As somebody has mentioned correctly, the naming of the article somewhat diminishes the credibility of the article. I would say the author's understanding of Lean is questionable. Obviously the problems raised in the article are eye opening, real and needs attention, but they have nothing to do with Lean.
Vineet Dutt Dec 25, 2012
I would agree with others - this has nothing to do with lean and somewhat diminshes the credibility of your article.

However you do raise some very valid points - you should adjust the context of your findings to more accurately reflect your research...
Saptarshi Sep 18, 2012
Ignorance is bliss

Enough has been said and written about industrial relations. Labor laws their interpretations, examples opinions from various named and unnamed industry sources have led to destructive distillation of this 'matter', so much now I wonder if there is any fruitful essence left. If there were so much of wisdom in the ecosystem, one ponders how IR issues surfaced round the year (last) at a steady frequency much like Salman's Id block-busters! Hit stories.
And now Dr. Bose from SRCC goes oriental in his analysis. The Japs have got it wrong he says! While the article is pitched using 'Modern Times' which is far from the land of the rising sun, I wonder what exactly is the bloodline of this viral accusation! Chaplin's hit aimed at the Fordist regime, Taylorism if one would say. And lean manufacturing is common place to any manufacturing and business process. Japanese belief systems are approaches, mainly, disciplined ways to go about achieving such ends. Dr Bose should have, while he waited at the gates of Maruti's manufacturing facility, tried to appreciate basic lexical meaning of terms which are often peppered in conversations as "concepts". Who would not want maximum resource utilization to run a production facility? Who would not want to reduce waste so that throughput of an assembly line goes up and there is maximum efficiency? Putting an acronym to things (5S, 2S, Kaizen etc.) and also focusing on basic elements of shop floor management to end up doing better is 'Modern Times' (pun intended!). And it requires due diligence, quite a bit of discipline and dedication to roll out these simple commandments of overall good manufacturing/operations practices.

You visit the TVS Motor Company manufacturing plant at Hosur, Tamil Nadu and you would realize what good manufacturing practices are. Swarms of workmen get down from the company buses and queue up to enter the factory. It would be a horrendous mistake to draw comparison with Charlie Chaplin and a cinematic 'herd of jostling pigs'! Employees in TVS queue up to deposit their mobile phones before entering the unit. Stealing from Arindam Chaudhari I am tempted to ask "Dare to think beyond the Japs"! The learned doctor has been myopic about his evaluation of Japanese work practices. He has made a heady cocktail of incorrect assessment and ill-informed concepts. Nowhere does TPM, TQM talk about contract labor usage. No where do they talk about short circuiting work through trainees at half the compensation.

If you visit the TVS Motor Canteen at Hosur you would see the intent to follow guidelines. The President sits with employees for his lunch. No one chooses best lunch buddies there! Sequentially people take their meal portions and occupy tables serially. Employees and managers alike wash their plates preliminarily and then leave the canteen. Outsiders and guests enter only with lunch coupons duly signed. And it’s a sumptuous meal I tell you. There are even options for diet meals for employees and managers conscious of their waist-lines!

Who says education or lack thereof is the fulcrum for good manufacturing practices? Who says Indian units are just looking at low hanging production fruits to be eaten using oriental 'chop-sticks'? Why is the need felt to drown in self-pity and then cry foul regarding the Japanese way of life? Employees of TVS Hosur unit sit after their shifts to draw up QC Story and talk about what contributions they have made to manufacturing lines and product quality. How they have affected and effected QCD parameters! They use OHP sheets and present using OHP and Vice-Presidents of various departments chair those sessions. Quarterly awards have been instituted. Employees participate in national level QCC and Productivity Council competitions and 'fly international' to present their case, present their contribution towards business outcomes. Truly, for these employees, the 'labor pain is worth the birth'!

I wonder how we would ever progress with negative intent. The Delhi professor has hardly a ring side view into Indian auto industry and yet some macro criticism of reputed organizations and their manufacturing facilities have been so easy to voice. And sadly enough he has even questioned the Japanese philosophy without understanding its bare essence. Without learning the grammar of the language, our learned Doctor writes a prose, now that really can be 'painful'.

IR is not equal to shop floor manufacturing practices; the later would be management, the earlier would be an art. And there is no scope here of generalizing things. Who would have stopped us to apply these management principles without being sly in the art of man management? Or maybe the Doctor wants to say that its only the Japanese cloak that hides the dagger of exploitation and subversive tactics leading to factory operations? Indian organizations running on conventional methodology are puritans, sans any ills? He would not have waited outside factories run by traditional Marwari business families. He would not have waited outside European industries who have milked money out and then dumped their units. Has Dr. Bose heard of Bhopal Gas Tragedy? UCIL? Dow Chemical Company? Why does he not talk about Hindustan Motors, the grand old lady of Indian Automobile Industry? The unit which used to roll out the beloved 'ambassador' is now coughing, struggling to stay alive! Who owns this mammoth manufacturing facility? And trust you me, Dr. Bose, it’s not some oriental gentleman. Its a Birla group company! Incidentally TVS Motor Company is headed by Venu Srinivasan, an Indian passport holder.

Let the concepts work their magic, doctor, let believers apply and better themselves. For as the English would say, ignorance is bliss and in the land of the blind it’s dangerous to be one-eyed!
Prof R K Gupta Sep 15, 2012
I am also from corporate sector background with more than 35 years industry management experience. Indian baniyas have been exploited labor for hundred years. Every where story is same. In connivance with corrupt politicians of India, these so called MNCs are allowed to do loot and plunder. The local industrialists are no less.
I am shocked to see such sketchy and superficial contents of this article which are known to every one every where sinne last 2 decades.What is research in it that merits PhD level work? Perhaps Forbes should improve their publishing standards. The contractorship labor system has nothing to do with lean manufacturing.The whole contents of this article are messy and worthless. I am sorry but I am greatly disappointed.Truth is bitter.
Manoj Khare Sep 11, 2012
Dear Sir, no doubt an illuminating aspect of the crisis that seems to persist in the factories in NCR. I am sure there are HR and IR issues which have been mishandled by the Suzuki management, as they are unmindful of the indian cultural sensitivities. However, to call it a design flaw may be going too far. What it points to is a criminal lack of institutional mechanisms in the region. Governments, happily collecting taxes from such setups do not seem to have functioning safety valves that would prevent escalation of conflicts to such limits. Large scale contract labour under the guise of trainees is surely an aspect that could not have gone un-noticed if there was someone doing their job at Suzuki plant or at the state labour department.

This has nothing to do with lean, but I too noticed SE Asian workforce as much more flexible and hard working than indian. Whether that needs to change, and if so, how, are issues for the institutional members to decide. Yet, these are big questions for India's ambition of promoting industrialization of the country.
Mahesh Khairnar Sep 8, 2012
I strongly agreed on the statement of Vinod
Ajcbose Sep 8, 2012
I want to make a correction in that I prefer to use "New Fordism" as a vulgarized form of lean production model. My plea to anybody is simply this: say something on the basis of actual observations and fieldwork rather than theoretical models.
A.k.bhandari Sep 7, 2012
The article gives a glimpse of the situation in the manufacturing sector in one of the Auto hubs of India.However the situation is no different and potentially more dangerous in process industries.A Maruti like situation in a critical process plant can not only stop production but can also cause irreparable damage to the unit and in some extreme case create catastrophic situation for the employees as well as the living population in and around the unit.
Having worked in large Process Plants for over 35yrs. I have experienced changes in the work culture , industrial relations , contract labor ,external environment etc. and there effect on the performance of the plants. I have seen how committed management with the support of the State can transform a sick organisation in to a profitable organisation and continuously grow.On the other side I have also seen that how a most efficient unit becomes a sick unit over a period of time due to poor management , excessive external intervention etc.
I would like to document my experience for the benefit of working professionals.However being a shop floor professional almost throughout my carrier I am finding difficult to do it.
May be Professor Bose or someone else interested in studying and document it .In such a case I can provide the necessary inputs and collaborate.
Vinod Grover Sep 7, 2012
The researcher is confused. He has no understanding of Lean. He thinks bad management practices in Indian firms are part of Lean manufacturing.
Do all the companies practicing Lean in Japan/ US employ trainees/ contractors at 20% of wages? If they did, would they be allowed to get away – like the Indian companies do?
Mark Graban Sep 7, 2012
Lean manufacturing is NOT about workers doing the same thing over and over for 8 hours. In a Lean environment, workers are cross trained and rotate jobs often - and they are engaged in problem solving and process improvement (using their brains, not just their backs).

The professor (or the article) is really off base.
Response to Mark Graban:
A.j.c. Bose Sep 8, 2012
Please read my papers, "Worker Voices in an Auto Production Chain" in August 18 and 25 issues of Economic and Political Weekly. These papers give you the realities that I have documented. I am once again making a point that there is a lot of hype about lean production which is not seen in the workplaces. It is high time managers and engineers gave an honest account of how they fabricate quality without quality of employment in their factories.
Response to Mark Graban:
A.j.c. Bose Sep 8, 2012
Response to A.j.c. Bose:
Mark Graban Sep 10, 2012
I'm not suggesting the labor practices in the article aren't happening (I trust your first hand reporting). My point, as others are commenting, is that these practices cannot legitimately be called "lean" as in the Toyota Production System.
Yogesh Sep 7, 2012
Here I have remembar the drama of Mahabarat - In Mahabharat One charater "Dhutrasht" He was already blind and another is "wife of Dhutrasht - Gandhari" she desided I will live as blind and she was weare black cloths on her eyes. - They both was not constrative on child and what heppen - Create Mahabhart.
Our Inidan Law is very strong but money maker uitilize it. We are too large but helpless. Only one thing I will never take wrong decision for me and my inida.
Kevin Hop Sep 7, 2012
This article has nothing to do with lean manufacturing. It lacks any credible references to anything lean. It would be wise for the author to first learn and read the dozens of excellent books out there on lean. Then to go and experience it in an actual lean environment for at least a few weeks. Actually practice the principles. Then he can write accurately about it. Who did fact checking on this?
Op Goel Sep 7, 2012
The article appears not to focus on title, but on HR strategies, Work Force Attitudinal problems, circumventing labor laws/ lower productivity of Permanent workers in comparison to others viz contract workers, though compensation package costing company is much higher for permanent workers than that of other workers.
Solution is to analyse labor laws, easy implementation of rules in labor laws regarding willful carelessness, avoiding work accountability, and employers real exploitation.
The labor laws for these purposes need to be integrated and rationalized objectively, with out favoring labor or employers. The opportunistic political populism and vote caching at the cost of hampering National wealth creation is deplorable.
Benjamin Scherrey Sep 6, 2012
Geez - this has NOTHING to do with Lean. I've never seen mention in any lean process book to not hire permanent people and make everyone contractors. These factories certainly have labor relation problems but lean is not part of it.
Dishin Soni Sep 6, 2012
Very alarming situation for the developing country who have no expertise to evaluate the systems to be adopted from the developed countries. On the very first stage, we need to create a group of institutions who themselves are experts of the world business environment and who are committed to work for the betterment of the ground level people. This is the immediate need of the time to address the alarming situation. Kudos to Mr.Bose for his work in this direction.
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