Why we apply lean in China?

I got some information about why South China short for labor for a long time, but I lacked of time to summarize the information because I was busy with MBA course. The original information is talking about the problem of future development of China, it covers all the range of resource which is important of continuous development of China included manpower, natural resource and policy of government. From here, I only summarized some points which related to lean manufacturing and shown us why it would be important in China near future.

As we knew, the objective of applying lean manufacturing in company is eliminating wastes and shift the resource to create more value for development. Let us focus on labor intensive manufacturing industry in China, I think it is also the most important industry in last 20 years in Pearl river delta of South China. The such kind of industry was going through a high speed development but is faceing a serious problem in labor shortage in recent years. Lean helps the company to save resource and the manpower is the most important of resource in labor intensive manufacturing. Therefore, let's us have a scan what are the causes of labor shortage and see is that lean manufacturing a solution on it.

1. Family planning:

We called that "one child policy" in China and meant one family only can has one baby. In period around 1950-1970, recommended by Chairman Mao, government encourage family to have more child. It was becuase China lost many many poeple after the war, at that moment, all kind of development needed manpower. 30 years later, the population of China growed in high speed. Afterward, in 1980, government turn around to setup "one child policy" to control the high speed of population increasing. We look backward, born rate increase is one of the factor, on the other hand, low dead rate is also the factor why the population increasing. When a country became more stable and without influence from war, the average year of life changed from 35 to 68, from year 1949 to 1980. The "one child policy" also "helps" the country aging in these 20 years. A simple thinking, two people "produced" one people but the population keep stable and a light increasing, it means the people is aging in high speed as well. Therefore, the range of golden labor dismissed and keeps decreasing today.

2. Expansion of college:

Look at the data below, in 1998, the number of college matriculation is 1,080,000. In 2006, the number ramp up to 5,300,000. The number of matriculation keeps increasing and meant more people went into college for professional education. However, do we need that so many professional manpower in short time? Can our society absorb those professionist in a short time? So many people became "double lost" in recent moment, double lost meant "lost job" and "lost education" after they just graduated from college. It is no way to let them back to factory be a operator. The expansion of college absorbed part of people in such low born rate and make the problem more seriously. From here, I am not object the people to learn more knowledge and I always encourage my friends to have continuous education all the time oppositely. However, expanding the matriculation too fast will influence the whole structure of manpower in society. One old Chinese saying, "too many is similar to not enough".

3. Price of food:

Started from 1998 for several years, the production of food decreased continuously. It made government nervous, and then the food prices was increased including rice, oil, meal and vegetable. There were also some policy setup to encourage the people to stay in agriculture such as low taxation for agriculture. The people stay in home village can earn more than working in factory. Offcause, most of people work on farm are aged people, but it also attract part of the young people to stay in their home village to help their family.

Due to the reasons above, it forms a labor shortage in Pearl river delta zone, even in overall manufacturing environment in China. In recent years, I am studing lean concept and finding a way to support the manufacturing industry. Those concepts of eliminating wastes, create value, continuous flow, JIT and takt time can help the labor intensive industry to defense the impact of long term labor shortage in later 20 years. Think that in another way, why Japan and US push so much for lean? It is because they faced the similar problem 10 or 20 years before, and they believed Lean is the solution to sustain their competition ability. Review ourselves in China, so many companies still know nothing about lean manufacturing. Now, it is the best time to find a continuous improvement tools to defense the long term issue. And, it is never too late to do so.