Aug 27 2013

Piecework and Excellence Cannot Coexist | Bill Waddell

See on Scoop.it – lean manufacturing
“There are only a few absolutes when it comes to lean but one of them is that there has never been a company that achieved true manufacturing excellence that paid its folks on a piecework system.  It can’t happen – ever – period.  Either you want to make the right product at the right time … or you just want to make a whole lot of stuff.  You can’t have it both ways.”

Michel Baudin‘s insight:

A couple points that could be added are:

  1. The administration of piece rates is expensive, because you not only have to develop, maintain and monitor rates for every single task but you have to do with caution as people’s livelihoods are at stake and it is easy to start a mutiny.
  2. Tensions inevitably arise between operators who do a manual task at a speed they can control and those who run machines with automatic cycles they cannot change.

In the 1990s, I was surprised to learn that 2/3 of factory workers in Germany were still paid on a piece rate, which I was told after observing an operator getting furious at a machine that he couldn’t get to start because of a faulty safety latch. I also learned the piece rates are not set by the company directly but by an external organization called REFA that is accredited for this purpose by the unions. In that plant, everybody was producing to 140% of the standard, the performance that generated the maximum income for the operators.

See on www.idatix.com

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