A few weeks ago, I wrote about the lean transformation at Joseph Abboud. Unlike most American apparel makers, they’ve kept their production in the US instead of outsourcing, and reaped the benefits of shorter supply chains and faster customer service.
The company is in the news again today, receiving credit for its lean transformation efforts. But what struck me was the attitude of the CEO, Marty Staff. In a world in which "maximizing shareholder value" (and we can argue what that really means, when Bob Nardelli walks away with $210 million for mediocre performance) is the focus of business leaders, Mr. Staff says that he
regards his Whaling City employees, their salaries, raises and bonuses, and their job security, as his primary responsibilities. "So, we need to be as resourceful as we can to ensure the factory is vibrant and in existence in the years to come."
But he doesn’t stop there. Mr. Staff goes on to say that despite the many changes the company is making,
one of the changes not in store, however, is the addition of multiple shifts. "We’re a one-shift factory," Mr. Staff said, explaining how that fits with the family orientation of its mostly Portuguese workforce.
How refreshing to see a leader not only focus on the business side of lean (reducing waste, providing faster response time, etc.), but recognize that respect for employees is at the core of lean. Without that respect, there’s no chance for lean initiatives to take root and succeed in any company.
From a traditional business perspective, running a one-shift factory must seem insane. Lower utilization of assets drives up the cost of goods sold and makes it more difficult to compete on price with Asian countries running double and triple shifts. But as this blog has often pointed out, there are significant off-balance sheet benefits to keeping production in the hands of skilled, experienced, local hands.
Joseph Abboud’s CEO gets that. And his respect for employees and their needs is eloquent testimony that lean is not just about "maximizing shareholder value."