Kanban cards in a flow with people represented on the cards

Lean Manufacturing The Dark Side of Lean

Human Kanban

By Jon Miller Updated on January 25th, 2024

Kanban is a material and information flow management tool. They are typically cards attached to containers of parts. The cards contain information about the parts and these cards are reused, traveling with parts. Kanban are used to control the minimal amount of inventory in the system. It is based on a formula that takes into account usage, lead-time to replenish, and a safety factory based on known or probable breakdowns in the system.

Seasonal Changes and System Improvements in Kanban

Quantities of cards are added or removed based on seasonal changes in demand. Quantities of cards are also removed to make it harder to meet deliveries if there are problems, in effect exposing weaknesses. Kanban is used as an improvement tool with the aim of removing all slack from the system by eliminating the need for a safety factory through root cause countermeasures of the breakdowns in the system.

Satake’s Analysis: Temporary Labor in Japanese Manufacturing

The paper ”Human Kanban” and its Countermeasures in the Toyota Production System” by Hiroaki Satake, Professor of Economics at the Fukui Prefecture University addresses the problem of the rapid increase in temporary labor in the Japanese manufacturing industry. The Japanese title is “ningen kanban to Toyota seisan houshiki no taiousaku” in The March 2005 issue of the Ohara Social Problem Research Center Magazine No. 556 (Ohara Shakai Mondai Kenkyuujo Zasshi No. 556 2005.3)

The Rising Cost of Labor and Its Impact in Japan

Satake cites a 1995 Nikkeiren report that credits the increase in part-time and temporary labor to the rising cost of labor in Japan and the challenge for Japanese industries to remain competitive. In Japan, there is a 30% difference in labor cost between a regular employee and a non-regular or temporary employee due to taxes and social insurance.

Satake also cites the magazine Economist May 11, 2004 issue that there are 4,500,000 Japanese workers between the ages of 15 and 34 who work in contract or temporary labor. The gap in lifetime earnings (to age 60) between this type of worker and a regular employee is estimated at approximately $1,400,000 (160,000,000 yen).

Comparing Japanese Part-time Employment Trends with Other Countries

Doing a bit of my own research, I found that over 25% of the Japanese workforce was engaged in part-time employment in 2004 according to the OECD (Organization for Economic Cooperation and Development) statistics. Only the Netherlands and Australia have higher percentages though the absolute number is less and neither of these are the industrial powerhouse that Japan is. This number is 13.2% for the United States.

Human Kanban: Worker Movement in Toyota’s Production System

Multi-process handling and moving workers from production line to production line based on demand fluctuations is a feature of the Toyota Production System and Lean manufacturing. In the 1970s due to Toyota’s product strategy and swings in demand, this system required the movement of workers from one factory to another based on demand. Satake says this was criticized as “human kanban” in those days due to the disruption this caused to people’s lives.

The human kanban system at Toyota was to move people from low-demand production lines to high-demand production lines. In Toyota’s words, quoted from Satake’s paper, it was to move people “when needed, where needed, as many as needed”. This is a direct application of the production control principle of just-in-time manufacturing to manpower allocation.

Critiques and Improvements of the Human Kanban System

According to Satake the criticism of the human kanban system was limited to the movement of people between factories, not between production lines in a factory. This included both regular and term labor. Toyota recognized this as a problem and made efforts to level their labor requirements through heijunka to stabilize the lives of their employees’ families.

Contemporary Views on Human Kanban and Labor Instability

He says that today the Japanese area is no longer as critical of the “human kanban system” as they were in the 1970s. Yet Satake concludes that in Japan today the manufacturing workforce is comprised of more term and contract labor. “To put it bluntly, they are seen as disposable”, says Satake.

Satake asks what is the value of reducing inventory to become just in time if this only eliminates the cushioning effect inventory has on-demand variation, resulting in job instability. He calls on people in production control positions to make further efforts at heijunka in order to minimize the impact of swings in customer demand on demand for labor.

Kamata’s Insights: The Human Cost of Lean Manufacturing

Investigative journalist Satoshi Kamata provides a more personal view of the dark side of Lean and how labor is viewed as disposable. Kamata worked for six months in 1973 as a “term laborer” assembling transmissions at Toyota and wrote and wrote about it in a book called Jidosha zetsubo kojo–Aru kisetsuko no nikki (Auto Factory of Despair: The Diary of a Seasonal Worker). This book was translated into English as Japan in the Passing Lane.

Toyota’s Evolution and Kamata’s Observations Over Time

Toyota has been improving quality, cost, delivery, safety, and working conditions steadily for 50 years. What would today’s investigative journalists learn from term laborers? Kamata returned to Toyota City and wrote an article titled November 1, 2004, Shukan Kinyobi magazine Toyota: Suicide and Worker Depression at the World’s Most Profitable Manufacturer. Kamata is critical of how Toyota’s drive to profitability through reduced labor costs was then and still is dehumanizing.

Kamata makes some comparisons between 1973 and 2004:

1973: Toyota had 41,000 employees and 3,000 term laborers.
2004: Toyota had 65,000 employees and 10,000 term laborers
1973: Monthly wage including overtime and night shift allowance was 79,000 yen (approx. $720) a month.
2004: Monthly wage was 254,430 yen (approx. $2,300) according to a newspaper ads Toyota runs for “term employees”.
2004: Toyota’s profits had increased more than 30-fold since 1973.

Kamata is critical of the union and Toyota, claiming that a typical response to wage complaints to the union local is “Find me a company that will hire you for the wages you’re being paid now” and that Toyota constantly uses the language of crisis and competition as reasons they do not raise wages. The results of wage 2006 negotiations between Toyota and the workers’ union are consistent with this.

Quoting Kamata:

“The conversation among my friends turned to an accident one early morning in May, where a 33-year old worker was crushed to death in a metal press, followed by talk of suicides, some from overwork, among elite technicians in the development division and among leaders of the labor union. Over the last decade, they said, they’ve seen a dramatic increase in depression among their coworkers.”

Comparing Labor Practices: Japan vs. United States

In the United States labor unions are still strong enough to prevent abuse of contract workers who are de facto full-time employees. The Wash Tech union’s victory over Microsoft is a recent example. In Japan, the company unions largely have no teeth, and unlike in the United States, it is not easy for workers to switch from one full-time job to another several times in their career.

Consequences of the Human Kanban System in Modern Japan

The human kanban system in Japan supports the profitability of Toyota. As more industries emulate Toyota and adopt TPS in Japan, this style of non-regular, part-time, and term employment will become more common. In Japan today the reduced job security and economic stability of families due to just-in-time labor and the human kanban system are social ills resulting from the dark side of Lean.

Tomorrow: Lean Production Does Not Respect People.

Jon Miller

Jon has dedicated his 25+ year career to the field of kaizen, continuous improvement, and lean management. Jon spent the first eighteen years of his life in Japan, then graduated from McGill University with a bachelor’s in linguistics.

Ann Hamon
May 25, 2021 - 11:24 am
Reply

The dark side of Japan’s Lean is very scary. We can practice and do lean without stressing people out about their jobs. I can see, where Japan may have a problem in not giving their workers respect, I believe a lot of this attitude coming from the way most of Japan grew up- All work-No play. They have a good concept, but need to respect their workers.