In the blog it is often useful to cite an extreme example to make a point. Such is the case when I use this article from PrintWeek take exception to the use of temps – especially using them in the name of being lean. Thankfully, few companies have taken the view of people as cannon fodder to be expended in the pursuit of the top line – all else be damned – as Precision Printing (the company cited in PrintWeek). These guys are proud of the fact that they have tied their temp agency into a rather crude capacity planning model and have automated the process of having a temp agency shuttle people in and out of their plant – essentially treating people like just another item on a Bill of Material.
Let me make a few disjointed observations regarding the use of temps …
Value is Temporary but Waste is Forever
Strikes me as rather telling that most companies who regularly use temps use them in front line production roles, but you rarely see them used to work as managers, directors, VP’s or CEO’s; in fact they are rarely used as supervisors, planners or schedulers, quality inspectors or in just about any other non-value adding role. Nope – temps are for creating value for customers. The thinking appears to be that any warm body meeting the minimum criteria provided to the temp agency can create customer value sight unseen; but non-value adding waste can only be created by uniquely qualified, carefully screened, hand chosen and well paid folks. Explain that one.
The boys over at PrintWeek write that using temps is good because:, “It enables you to pay only for staff earning you money, whereas in the bloated pressrooms of the past, staff were often kept on in case they were needed – a wasteful and expensive policy.” How exactly, I wonder, do all of those jobs too specialized to be trusted to temps earn you money? By that logic you ought to rent a manager – anyone with a degree in management - by the hour to make critical decisions, then send them packing once the decision is made.
The Supremacy of Sales
“Ramping up production to meet last-minute orders or larger jobs,” requires temps, so they say. Turning last minute orders or larger jobs down just isn’t in the cards, apparently.
The single biggest driver of manufacturing inefficiency is the common, and complete, disconnect between sales and the rest of the business. It is far too normal for sales to be tasked with selling as much as it can, whenever it can, of anything it can, to whoever it can. Whether those sales are even remotely aligned with capacity is not a concern. In fact, when those “last-minute orders or larger jobs” came in, putting the factor into a very cost ineffective position – having to work overtime, expedite materials, bring in temps that inevitably put quality and productivity in serious jeopardy, the sales people who brought in the work were undoubtedly paid a commission – perhaps even a bonus – for doing so.
It is tortoise and hare thinking. The good, truly lean companies don’t forecast. They plan. Sales and production are parties to an integrated business plan, with pricing used as the mechanism to keep the company on track. Slow and steady growth is the objective, and on a trajectory that keeps sales aligned with continuously increasing capacity, putting the entire company in a constantly most profitable balance. The alternative is the misguided belief that all sales are inherently good and that manufacturing must somehow drag the huge cost pit of a factory up the mountains and down into the valleys to keep up with wherever sales take them.
The biggest problem with the rampant use of temps is the blatant lack of respect for the people involved. It is little more than outsourcing HR when a temp agency is used, and is resorting to trial and error for the most fundamentally important task of the business when handled by a temp agency or in house.
The people who work there are the essence of the business. The quality of the products, the overall costs, levels of value provided to customers and the very ability of the company to succeed in the long run are driven almost entirely by the skills, work ethic, intelligence and personal values of the people who work there … all of the people … not just the self-described smart ones in management. You can’t just bring in a steady stream of warm bodies off of the street – people you make no commitment to and who, in turn make no commitment to you – and churn them through jobs that are at the very heart of the vale proposition and expect good results. How many temps really participate in and contribute to kaizen events?
There are some – usually isolated – cases in which temporary employees make sense. For the most part, however, using temps is little more than a poor practice, often well rationalized but poor nonetheless, driven by very short term thinking.