Q. 124  Shojinka or Flexible staffing is an approach that is often utilized in Lean Management. What are the criteria that help us decide whether flexible staffing is suitable and must be pursued? Please explain with examples.  

 

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In today's competitive business environment, Productivity is one of the key differentiator on how you position yourself versus your competition. In simple terms, Productivity is doing "MORE" with "LESS" i.e. minimum inputs and maximum outputs.

 

A well devised Productivity Management Principles, irrespective of industries, will not only ensure organization's profitability but also can be translated to benefit their customers by providing a more competitive and aggressive pricing against your competition.  

 

How to do more with less? ... And the guiding principle is "Shojinka" - Japanese term which has its origin to Toyota's lean manufacturing principles.

 

Shojinka Explained - Having its origin from a manufacturing industry, Shojinka is a form of flexible manufacturing where the number of workers varies to match demand requirements. Simply stating - "Flexible Staffing" to map to your demand requirements.

 

An example that I could relate to is outlined as below -

 

Hypothetical Background -

-    Company ABC - An Outsourcing company which has its expertise to handle Customer Care business for its clients.

-    Client XYZ – XYZ is a Computer Manufacturing Company and has their presence spread across multiple geographies i.e. US, EMEA and Asia Pacific operations.

 

Vendor ABC Company has signed up an agreement with Client XYZ to take care of Customer Care business for their client across all geographies.

 

Scope of Work –

Providing support for “EMAIL Queries” only i.e. end customer complaints of client XYZ will be handled by Company ABC.

 

Billing –

Client pays vendor basis per email / query based transaction

 

Other Parameters -

-    Customer Relation Management [CRM] tool and Email Management System is same across all the regions

-    Nature of queries are same across all the regions i.e. Where is my Order?, I want to Return and get an Exchange on my Product, I want a Refunds, My Order has a Missing part etc.

-    Policies and Procedures and Cross functional stake holders vary and are region specific.

 

To start off, basis the volumes of queries expected for each region, a head count assessment was made and separate teams were set up to support each geography. Agents were trained on all tools, processes, policies and procedures for their respective regions.

  

An interesting Operational Challenge

 

Post operations kicked off, Company ABC was posed with a unique challenge. The Volumes for APJ seemed to be far too high from January to June followed by EMEA from August to November and with US taking its Peak during its Thanks Giving and Christmas.

 

While the driving factor for the volumes were driven by numerous backend reasons like Local Government regulations, End of Year transactions, Black Friday Sales etc., there seemed to be a spike in head count request for each of these regions during their peak period.

 

Challenges:

 

-    Incremental Head Count Cost which can impact ABC profitability. Cannot be billed back to client owing to SOW

-    Hiring, Training and Ramp costs.

-    Challenges to have additional resources ready to map to peak seasons.

-    Non utilization of resources post peak periods

 

Shojinka Comes to Play

 

Company ABC, used the Lean Management Principles to address the issue and Shojinka [Flexible Staffing] was here to address their issue.

 

To put it simply, the peak seasons for each geography was not overlapping and what the company had to plan was how to cross utilize the resources across geographies so as any incremental head count requirement could be minimized.

 

What was required from ABC to achieve this?

 

-    A very strong MIS to Mangement team which provides forecast for each region by month / week etc., This enables to plan for head count for each region mapping to their peak seasons and see from where the demand could be met.

o    e.g. US region has its low season from Feb onwards and the considerable portion of their head count can be used to support APJ.

 

-    Identification of motivated workforce from current teams who have the ability to learn and get trained on cross functional processes

 

-    Cross training on Processes, Policies and Procedures so as agents are familiar with other region practices

 

-    A strong “Knowledge Base” or “Play books” that cross trained agents can refer during their support to other regions. The Play book should be designed, updated and support to cover policies, procedures, localized tools, escalation points etc., which the agents can simply refer to address queries from other regions.  

 

-    Standardized Tools, CRM systems across regions (same in this case and if different, has to be cross trained and the Play book should be updated to support the learning’s)

 

-    An upfront cost to be budgeted as part of their overall finances which should include cost of training the agents, internal automation tools (as applicable) which can act as Play Books to enable “Self-Help” for agents and agent motivational cost as relevant.

 

A systematic implementation of Shojinka principle should enable company ABC to drive its productivity focus of doing more (i.e. handling more demand across regions) with less (existing cross trained agents) and any incremental head count requirements hired should act as business enablers than remaining as unutilized resources.

 

From an employee perspective, it should act as career progression options owing to enhanced skill sets.

 

To Summarize

 

Shojinka refers to "Flexible staffing" to map to your demand requirements.

 

As an organization, you should look at following criteria if this Lean Principle is suitable or can be pursued

 

a.    A clear understanding of demand forecast which should help to know when and where to staff.

b.    Ability to cross-train your work force so as they can move in and work as demand fluctuates

c.    Standard tools and Standardized Processes.

d.    Clearly documented “Play books” which should cover all aspects of the process to enable Self-Help of work force 

 

Question: Shojinka or Flexible Staffing is an approach that is often utilized in Lean Management.  What are the criteria that help us decide whether flexible staffing is suitable and must be pursued? Please explain with examples.

 

Answer:

 

Flexible staffing is an arrangement wherein each staff member is trained in multiple disciplines and acquires multiple skills to be able to undertake the function in that production area where the production volume is high. In other words, it is an arrangement wherein the staff members are adjusted depending upon demand requirements of the production area.

 

The criteria to decide whether Shojinka is suitable are:

 

At the individual level:

 

01: Whether the institution has effective training plans/programs to train each of the staff member in multiple skills and disciplines to enable him to undertake a function in any/all production areas.

 

02: Whether each staff member has the requisite adaptability and the resourcefulness to work in any of the production areas.

 

At the team level:

 

 

01: Whether the team is capable of adjusting and accommodating the multi disciplinary and the multi skilled staff members to fulfill any role that is assigned to him/her.

 

At the process level:

 

01: Whether each stage of the production/ process is sufficiently standardized to ensure that the staff member clearly knows what each job role entails and the job rotation can be done without impeding production.

 

At the system level:

 

01: Whether the system is designed to operate in various configurations to meet the flexible staffing necessitated due to production volume.

 

At the management level:

 

01: Whether the management has a clear understanding of the demand requirements and the necessary arrangements required to ensure that there is a balanced production volume and certain production areas do not fall behind.

 

That each of the above considerations is important in deciding the suitability of Shojinka. but it is the collective consideration of the above factors which would be determinative.

Shojinka is a Japanese word born from Toyota's Lean Manufacturing Principles and one of three three similar words which are related in concepts but with different meanings on shop floor.

1. Shojinka: it refers to 'flexible manufacturing' or flexible manpower/staffing' and it reflects the efficiency of production line with any number of workers and fluctuation in demand. 

 

2. Shoninka : it refers to  'manpower saving'. in other words we can say that by doing some modification and improvement in work procedures, machines or any equipment , free the whole unit of manpower or free any person from that workplace or production line which were having having more manpower before modification, and get the same or more output with less manpower.

 

3. Shoryokuka: it refers to  'labor saving' . it shows some partial improvement of manual labor by adding some automation or any system which reduces the efforts that were putting more before and output was less. so by adding some  modification if we are getting more output from same person means we are saving labor or time and did not remove the entire person as in Shoninka.

 

Shojinka has two main elements :

1. workers are multi-skilled and can work at different station as per requirement to meet higher production demand or to balance line in case of any manpower is not available. 

2. Assembly line is U shaped or circular instead of linear which have several benefits in terms of saving of transportation, manpower time saving as input and output of the final product are at same location and all worker working at same place leads to space saving as well as utilization of time efficiently in case of fluctuation of demand and it allows manpower to see starting and end stage of any product at a single location which saves time without walking entire length in case of linear line of production. 

 

Requirements of Shojinka: 

 

1.  Upper management or managers must have a clear understanding of demand as well as line capacity to fulfill the requirement.

2. The design of the system should be easily operative in various worker formats and in fluctuation of demand of the products.

3. Processes and procedures must be highly standardized so the output can be meet as per demand regardless of who is doing the work. In other words workplace should be process oriented not people oriented.

4. the most important factor that worker must be highly cross trained in various discipline  either horizontal or vertical skill up to support the demand fluctuation as well as cost saving by doing more kaizen and other productive activity.

5. Team should have information about the production as per demand so that they can give their best to cop-up the situation as per their skill and can meet the requirement.

 

Advantage of Shojinka:

1. Staff will be flexible means all are trained in all or most of the level to cop-up the situation which allows them to work according demand fluctuation.

2. Flexible workforce helps to remain high efficiency under any production demand.

3. When demand is low, it allows the workforce to work on various improvement projects as they are well trained in all areas. 

4. Workers  can work according to demand on any level of production if they are informed timely and trained in all level of production depends on requirement and skill set of the individual.

 

For example it will be more helpful in those industries of which demands fluctuates as per season like Air conditioner demand is more in summer and cold drinks and ice cream demands are more in summer as compared to winter. Automobile manufacture also use as demand fluctuates as per festivals or in case if any other competitor enters into the market. for example if any new model is launched by any automobile manufacturing company then its demand will be high in initial months and later on it slows down.  if the same is forecasted accurately and informed to shop floor timely then team con work accordingly to meet the requirement as per demand.

it can be used in automobile industry to reduce waste and can be used for improvement in case of fluctuation of demand. 

 

As the term explains flexible staffing, the top criterias to allow / support this method are:

- Demand & Capacity : High visibility on Demand & Capacity model is required to understand and predict the demand and deployment of the right individuals (who are cross skilled). Like when a process is on high demand then only addional staff is required to support.
- Skill Matrix : Staff should be skilled on cross funtional processes, this can be managed by creating and managing Skill matrix of the staff. Support provided by the additional staff (Cross functional) does match the skill set for the particular demand.
- Calibration & Knowledge testing : Calibration of the cross skilled staff to be auited on timely basis to ensure output. As they might forget process / steps during the course of non production within that process.
- QMS & Documentation : strong QMS system to support the staff on reference guides and SOP to ensure updated process steps & details are being followed. New requirements might have built in a more vibrant process.

The following Japanese words related to “handling of manpower” in production process according to the organizational requirements;

Shojinka: This is the Japanese word that originated from the lean manufacturing principles of Toyota. When we translate from Japanese to English, it gives direct meaning of “Various people”, shortly it can be “Vary people". i,e Flexible manpower lines maintain productivity with fluctuating demand. 

Shoninka: It means “Manpower saving”, by providing machines / equipment in order to free one or two operators:

Shoryokuka: It means “ labour savings” partial removal or combining two operations by automation to support the process

Productivity = outputs/ inputs i.e it is a measure of efficiency of production line. More often the Shojinka is defined as having to main categories; first, the workers are multi skilled and they can perform in multiple workstations at a time in a production line. The second is, the line should be designed in a way to accommodate or vary people based on the fluctuating customer demand.  In simple words; Shojinka can be defined as “ability of a production line can be balanced when the production volume goes up or down"

Demand Vs Supply:

Shojinka techniques developed based on the Demand Vs Supply and no excess production as they considered as an inventory by deploying flexible machines and man powers.

Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. The capacity is normally developed based on takt time:

Takt time: Available production hours per day / customer demand per day (Generally it is calculated on annual basis with full speed of line capacity). When the demand fluctuates, the organizations have some broad questions;

·         How to absorb the fluctuations in demand that will occur over next 12 months?

·         To what extent should inventory be used for this purpose

·         Can demand fluctuations be met by varying size of workforce (Shojinka?)

·         Why not absorb the fluctuations by changing activity rates and varying work hours( overtime)

·         Why not outsource to maintain a stable work force and let suppliers change activity rates to absorb demand fluctuations?

·         Will the organization lose orders if doesn’t meet all demands? Should the organization adopt this policy?

Each of these choices determine the moves of the organizations. The organizations will adopt basically three strategies of planning to managing supply

·         Chase strategy: - when demand fluctuates, the organizations should adjust the capacity to match the demand as close as possible. E.g seasonal business demand like sale of apparels during festivals

·         Level strategy: - a firm maintain constant capacity over a period of time, irrespective of fluctuations in demand; e.g When more investment or skilled labour required, this strategy will apply

·         Mixed Strategy: Individual firms devise infinite combinations of the above strategies based on the situation.

Shojinka is suitable to apply when organization adopts chase strategy.

Flexible manpower line:

The production line is designed in such way to meet the changing production requirements: Before designing of any production capacity, the following parameters to be considered;

            Takt time : Net production time / Customer demand

            Cycle time : Net production time / No.of Units produced

No. of stations / Operators: Cycle time ( Work content) /Takt time

In the competitive market, the organization has to prepare some strategy to prevent the business loss and shojinka is a solution for the flexible manufacturing;

Calculating Manpower / machines:

             The following formula will help us to determine the manpower / machine requirements to meet the demand;

                        Overall cycletime / Takt time = Manpower / machines

Cycle time is the sum of the processing time to complete one unit of assembly

Examples: 

Case: 1

Overall cycle time: 240 secs

Takt time: 80 secs

No of manpower = 3

So, we can use the manpower formula and assign no. of operators based on the demand

Case: 2

When demand goes down, we can remove the manpower and he can be used in other machines/ assembly lines;

Overall cycle time : 240 secs

Takt time : 120 secs

No of manpower : 2

When the demand low, we reduce 30% manpower and two manpower will produce the output to meet the low demand.

Shojinka demands employee training, multiskilling to manage / operate different machines / practical standard operating procedure in place for flexible manpower line.

Advantages of Flexible manpower line:

·         Avoid overproduction

·         Better usage of capacity

·         Smooth material movement

·         Kaizen culture

Disadvantages of Flexible manpower line:

·         Design of production process is complicated as the forecast are not realistic

·         Require high skilled operator

·         Not suitable for small, medium size industries

Conclusion in my purview:

At the present time, most of the industries look for outsourcing when the demand peaked up. The peak demand may not be long-lasting, as the demand lows they withdrawn the order from the supplier. This will affect the supplier relationship in long term. However, organization should design flexible manpower line to the peak volume and if the demand is lower,  the assigned manpower can be used in another production area, provided if they are competent. But practically it is complex in real time production situation. Industries, normally extend their work hours to meet the peak demand and cut off the extra hours if the demand goes down. If the forecast is realistic, the cell design is flexible to manpower, Shojinka is a best tool to apply.

 

           

 

 

 

 

 

The chosen best answer is Mathi's. He has provided a detailed description and a brief example. Suggested reading - Prashanth's answer for a detailed example and Mohiuddin's answer for how different levels come into play with Shojinka. Vastupal outlines some clear advantages of Shojinka. Every answer to this question has some unique points mentioned. Happy Reading (and learning!)