China currently occupies an undisputed place among the world economic powers, even, according to the latest statistics, it will catch up with the US in the next 10 years.
China's growth is based on industrial production (they call themselves the "World Factory") where we can see the assimilation and operation of the most modern organizational theories: lean management, balance scorecard, strategic plans and innovative organizational structures.
This applies to companies with 50 to 300,000 workers as well as low-tech and high-tech companies.
Next to this meteoric growth hides the exploitation and growth of an illiterate generation planned so that it can supply the needs of a consumer world.
Lean Manufacturing or "lean manufacturing"
It is a management philosophy focused on the reduction of 8 types of "waste": overproduction, waiting time, transportation, excess processing, inventory, movements and defects, and underutilized human potential.
By eliminating waste, quality improves and production time and cost are reduced.
Lean tools include continuous analysis processes (kaizen), “pull” production (in the kanban sense), and “failsafe” elements and processes (poka yoke).
The factories in China have successfully implemented lean manufacturing, guaranteeing constant cost reduction.
Balance ScoreCard and strategy implementation
The BSC is a revolutionary tool to mobilize people towards the full fulfillment of the mission by channeling the specific energies, skills and knowledge of the people, in the organization, towards the achievement of long-term strategic goals.
It guides current and future performance to align individual, organizational and interdepartmental initiatives, and identifies entirely new processes to meet customer and shareholder objectives.
BSC turns vision into action using a coherent set of indicators grouped into 4 business categories: financial performance, customer insight, internal business processes, and learning and growth.
All companies have their BSC to achieve their goals in the next 5 years.
Organizational structures
Circular organization charts
Formed by a central square, which corresponds to the highest authority of the company, around which concentric circles are drawn, each of which constitutes a level of organization. In each of these circles, the immediate leaders are placed, and they are linked with lines, which represent the channels of authority and responsibility.
- They point out very well the importance of hierarchical levels.
- Eliminate, or at least diminish, the idea of higher or lower status.
- They allow to place a greater number of positions on the same level.
Recruitment of personnel (engineers and managers) and growth within the company
Companies in China make the first contact with students from different branches in the last year of study and most of these, just received, already have between two to three different offers (such as Google or Apple).
All companies have a system so that their hierarchical personnel know the organizational culture of the company and its development program within it.
The average age of the engineers at the factory where I stayed did not exceed 28 years.
Innovation, quality and continuous improvement
China has the stigma of the "copy country". Design and innovation is done in other countries and China, as the "world factory", is responsible for its production at lower cost, low or medium quality and on time shorter.
Nowadays, companies know that producing at low cost will not guarantee the sustainability of companies. India and Africa will have cheaper labor costs in the future and only innovation, quality and continuous improvement can guarantee the future of Chinese industry.
To do this they are recruiting entire R&D departments and are continually improving their quality and technology controls.
But alongside this modern management there are still phenomena that remind us of the darkest times of civilization…
Five Star Factory versus the "Old Plant"
Most factories have two plants:
The five-star plant: created in recent years, these plants meet all the requirements that international companies ask for today in order to supply them.
In this plant are the entire management campus, marketing offices and between 20 and 30% of production.
The operators do not work more than 10 hours a day, they have a day of rest, a minimum wage according to the law and additional overtime pay; all the rules of hygiene and safety of the workers are fulfilled and it complies with the laws of care of the environment.
But 10 km from this plant is what they call "the old plant", where foreign buyers do not have access.
In the "old plant" there are no rules. 16 hours of work per day, 6 days a week (or 7 days when there are special requests), there is no additional payment for overtime, children from the age of 15 work, there is no social security, no health works are paid.
Workers receive a shared room with three other workers, and three meals a day.
- There is a rotation of 15% to 30% of workers annually.
- According to statistics in China, 50% of the operators who work with chemicals or toxic materials in these plants will suffer terminal illnesses before reaching the age of 50.
Creation of a generation of illiterates
The government grants 9 years of compulsory education for every child. Later, families have to pay a very high annual fee to continue their studies and be able to get a degree.
This policy is not a matter of the country's lack of resources to promote education, but rather a system prepared to continue guaranteeing the large number of workers that the country needs.
Children who finish their compulsory studies have only three options for the rest of their lives: agriculture, construction jobs or factory workers.
With the continuous growth of the economy today there is a lack of workers in these tasks; In the city of SHENZEN alone, a million operators are missing today.
Workers union:
It is a forbidden word within the "old plants"
In recent times, stories have been heard of groups in different factories, but the government is concerned with not giving it place or simply eradicating them.
My question to each manager of the factories where I was was:
How can you live in that dissonance?
What can be done to reverse this situation?
The response I received from all managers was one: " the customer is god ":
For business owners, it is not their fault, but ours, for everyone who buys an item made in China.
Consumerism has led us to make each person want to pay the lowest possible price to buy a product.
The client does not care who does it but the cost, even if it means violating all social laws.
There is only one condition: not in our own country.
We all know that behind every product we buy from China, there are 15-year-olds who work 16 hours a day. There is exploitation of people, but do we really care?
Would we allow factories in our country to treat workers in this way?
Most likely, the answer is negative.
As the capitalist saying goes: we are all socialists with our mouths out but nobody really wants to bear the cost that a fairer society implies.
Foreign companies want to produce cheaply to increase their profits; If in China it was expensive, they would go to India, or Africa, or any other country that is willing to do anything (including the exploitation of people) to offer the lowest price of production.
Their response is always the same: they point to us as the absolute culprits in this tragedy.
They probably say it to clear their conscience, but there may be some truth to what they say.
Today in Israel more than 70% of the products, clothes and toys in a house come from China.
If "the customer is God", what are we willing to do to change the situation?
