Read the following article:  http://kevinmeyer.com/blog/2011/01/productivity-rules.html.  Then, post your comments below.  Be sure to consider the following in your posting:

Discuss the pros and cons of Bill Waddell’s position on the make-up of labor in manufacturing,

Do you agree or disagree with his position?  Why or why not?

REPLY TO 

Bill Waddell’s position is that to truly cut inefficiencies and reduce labor costs, the company should consider cutting the indirect labor or paying them less instead of focusing solely on the inefficiencies and cost of direct labor. He says that indirect labor positions were created just so people could get promoted and that the pay is out of balance because the indirect labor is paid more than direct labor even though they have less to do with the making of the actual product. The pro to Waddell’s position would be that labor costs would indeed be cut if positions that were created solely for the purpose of providing promotional opportunities were eliminated. However, the con to his argument of eliminating supervisors and engineers is that without the indirect labor the business would not run. It would be like having a bus full of people without a bus driver, a route planner, a maintenance technician, etc. The indirect labor would have no one to drive them, they would sit around without understanding the purpose of why they are there. The company needs someone to lead it, to make decisions, to analyze opportunities, to make sure everyone knows what to do, when and how.

I disagree with Bill Waddell’s position when he says that most, if not all, of the indirect labor is a waste of money. I think there is value in knowledge capital and it often takes a lot of investment in training and a lot of experience in order to make sound decisions that keep a business running effectively, which should be compensated at a higher level than someone who knows how to push buttons and operate a machine. Positions should only be created because there is a need for them, and that is where I agree with Waddell. Positions shouldn’t be made just to retain someone, there should be a business need. Waddell believes the focus for labor costs are focused primarily on direct labor and therefore attempts to minimalize the contributions of the indirect labor, but I believe he has never experienced the pressures and stress that the indirect labor force often has to manage so that direct labor can keep their jobs. I believe that a holistic approach to both direct and indirect labor must be taken if a company truly wants to eliminate unnecessary waste and inefficiencies in labor costs.