NICT and Lean Production
David Cayla
University Of Angers
11-06-2015
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The “Solow Paradox”
➣ Robert Solow (1987):
“You can see the computer age everywhere but in the productivity statistics” (1987)
.⚊ Form 1976 to 1991, the part of O-technologies in the capital of US industry increased from 3% to 15%.
⚊ “Office technologies” are mostly used to treat information and to facilitate communication (computers, fax machines, photocopiers…)
⚊ This sort of investment increased even more rapidly in the late 1990s and beginning of 21st century, with the boom of internet and cellular phones.
⚊ In 1991, they represented 9% of the capital value in the petroleum industry, 25% in electronics and 32% in printing and publishing industry.
⚊ In a study published in 1998 and that concerned 380 firms among the 1000 of the Fortune list, Brynjolfsson and Hitt have shown that the most decentralized firms do train more their employees and do invest more in ICT.
⚊ So, the productivity paradox can be explained by the fact that changes in organizational forms only occurred in the late 1980s, 10 years after industrial firms start to invest in O- technologies.
1992 1997
Autonomous teams 40,5% 38,4%
TQM 24,5% 57,2%
Job rotation 26,6% 55,5%
Quality circle 27,4% 57,7%
None 36% 15,0%
Diffusion of innovative managerial practices in the US during the 1990’s (Osterman 1994 and 2000)
⚊ During the 1990’s, American industries worked hard on imitating Japanese management (cf. previous presentation), but not entirely. They don’t try to imitate the life employment policy, but team work and job rotation are massively used in the US factories. Quality circles are however less dominant.
Source: Pill and MacDuffie (1996)
% of corporations that adopted
bonuses for
Blue-collars White-collars
Japan Trans USA Japan Trans USA Corporation benefits 83 50 52 83 62,5 56
Individual
performances 50 0 4 50 12,5 4
Age in the firm 50 0 0 50 0 4
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Did American factory management really changed during the 1990’s ?
➣ For P. Askenazy, the Lean production is a productive system that implement a “new Stakhanovism”.
➣ Like Stakhanovism, the consequences of the new production model are ambiguous (Kleber Legay 1937).
⚊ Womack-Jones-Roos (1991) “We believe lean production will become the standard global production system of the twenty-first century. That world will be very different, and a much better place”
⚊ Skorstad (1994): “Lean production would mean further deterioration of conditions of work especially the part of it that fosters and triggers off workers resistance”
➣ For P. Askenazy, the change in the organizational form of firms (from fordism to lean production) can be seen in the number of industrial injuries and occupational diseases.
➣ Work intensification and changes in the management in a firm will produce more accidents because workers must adapt to the new organizational form
➣ When work is becoming more intense, occupational diseases should increase.
➣ From the graphs, it appears that a lots of changes in the American industry occurred in the late 1980s.
⚊ The manufacturing sectors and the services are the one that were the most impacted.
⚊ According to Askenazy, the decrease of industrial injuries and occupational diseases after 1994 is mainly due to new legislations of the Clinton administration and to the pressure of the insurance companies)
⚊ Assumptions:
1. The firms where industrial injuries suddenly rise changed their management practices
2. The changes in management were made in order to implement the Lean production model.
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Lean Production vs. Line Production: A Comparison
➣ It is possible to divide the manufacturing sector into two sub- sectors:
1.The sector that had an accident shock between 1984 and 1990. This sector represents 154 industries over 240 and concerned 7.3 million of workers in 1983.
2.The sector that didn’t have any accident shock over the period concerns 86 industries over 240 and 3.1 millions of workers.
➣
Constantly between 1983 and 1994, the sector with accident shocks
:⚊ Offered wages 20% higher
⚊ Is more intensive in production workers (lower supervision rate)
⚊ Is more intensive in material equipment
⚊ Has an investment rate 35% higher
⚊ Is more open to international trade
⚊ Is more productive (value added per worker 25% higher).
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The role of O-technologies in management
changes
➣
The impact of O-technologies is however not obvious in the statistics.
⚊ Some industries like apparel or primary and fabricated metal were deeply reorganized… although the part of O- technologies in their capital is low.
⚊ This fact confirms the idea that O-technologies and NICT are not the main cause of the “New economy”… also it helped the Lean Production model to gain in efficiency.
➣ Ex: the productivity gap in the publishing sector (a sector where the O-technologies are important) between the re- organized and the non re-organized firms is more important than it is in the whole industry.
➣ One explanation: the rate of re-organization of a sector does not depends on the use of NICT but on other external factors such as world openness, competitive pressures, consumer demand (ex. of apparel and metal industries are revealing).
Conclusions: lessons from American industry
⚊ Investing in new technologies is not sufficient to improve the productivity and efficiency in firms (Solow paradox).
⚊ A change in technologies needs a management adaptation.
The organizational environment must be coherent with its technical tools.
⚊ Strangely (1), the Japanese model was NOT invented in order to use efficiently the NICT (Toyota model was invented during the 1950’s!!). But it happened to be very efficient when combined with NICT.
⚊ Strangely (2), the firms where the lean production model were implemented first are NOT the firms where the NICT investment was the most important… but the firm that suffered the most of competitive pressures.
