April 2000, Vol. 123, No. 4
the new economy
Worker's voices and attitudes
Book reviews from past issues
Clothing the new economy
A Stitch in Time: Lean Retailing and the Transformation of Manufacturing—Lessons from the Apparel and Textile Industries. By Fredrick H. Abernathy, John T. Dunlop, Janice W. Hammond, and David Weil. New York, Oxford University Press. 1999, 368 pp. $35.
I was going to find someone else to review this book. But, as I was scanning it for something intelligent to say to a reviewer, I got drawn into it. A Stitch in Time is disguised as a case study of garment making; it actually is quite a bit more. It is a microcosm of the changing nature of bringing Old Economy goods to the retail consumer through tightly connected, information rich, New Economy "channels."
Too many analyses have presented models of "Old Economy versus New Economy" that seem to inhabit different planets. If one’s view falls into one orbit, there is a brave and prosperous New Economy, whose digitizable GDP will surely surpass even today’s wildest speculation, jostling aside an Old Economy from which the agriculture, mining, and construction sectors will virtually disappear and manufacturing will continue to shrink. Those in a different orbit see a New Economy whose critical products seem to be glitches, bugs, IPOs, and a scheme of planned obsolescence that would shame the designer of the tailfin, arrayed against an Old Economy relegated to producing such old-fashioned frills as steel, food, cars, and flushing toilets.
A Stitch in Time presents a more nuanced view. Yes, there is increasing value in the creation, distribution, and manipulation of information—but this does not occur in a vacuum. What this Information Age activity enables is a fundamental, much more consumer-oriented, change in the way old-fashioned consumer goods are produced, distributed, and sold. In this study the goods are clothes.
Abernathy and his colleagues propose first that "The retail, apparel, and textile sectors are increasingly linked as a channel through information and distribution relationships." [Emphasis added.] Second, in the apparel industry, "the key to success is no longer solely price competition but the ability to introduce sophisticated information links, forecasting capabilities, and management systems. [Emphasis again added.] Their third proposition is that "The assembly room—the traditional focus of attention for [apparel] industry competitiveness—can provide competitive benefits only if other more fundamental changes in manufacturing practices have been introduced. As these propositions suggest, the avatars of the New Economy—information and information systems—are finding their value in producing one of the Old Economy’s first products, textiles and apparel.
The authors of this book are quite clear about the costs and benefits of the application of new economic propositions to the apparel channel. The sophisticated inventory management of "lean retailing" reduces total inventory costs, but shifts a significant part of the cost from one part of the channel (the retailer) to another (the manufacturer). Some new methods of production can only work in certain circumstances: modular assembly of garments only makes the most sense where replenishment capacity and short production cycles matter. Demand forecasting remains an inexact science. Tidy logistical plans can still be jammed by random factors from snowstorms to traffic jams and it makes a much bigger difference to a retailer depending on just-in-time replenishment.
Beyond the clear and accessible discussions of the new management technologies of inventory control, production engineering, demand forecasting, and distribution logistics, I found the shop floor-level descriptions of the apparel channel fascinating. At the retail store, far less time, space, and money is tied up in onsite inventory, but floor staff must now do much of the materials-movement tasks involved in getting goods from the truck to the shelf overnight. I was astonished by even the outline of the processes involved in making a generic white dress shirt, and nearly awed when I realized that this complex industrial engineering is needed for each of the more than 6,000 items that are carried by the average retail business unit.
A Stitch in Time succeeds as a case study of the evolution of lean retailing and rapid replenishment logistics in the garment trade. More broadly, it is a work that demystifies the impact of the Information Age economy on real production processes.
Richard M. Devens
Office of Publications
Bureau of Labor Statistics
Workers' voices and attitudes
What Workers Want. By Richard B. Freeman and Joel Rogers. Ithaca, NY, Cornell University Press, 1999, 226 pp. $39.95, cloth; $17.95, paper.
Professors Richard B. Freeman, of Harvard University and the National Bureau of Economic Research, and Joel Rogers of the University of Wisconsin-Madison, have produced a wonderful book reporting on research they directed into What Workers Want, the Worker Representation and Participation Survey (WRPS). The project received funding from four foundations: the Russell Sage Foundation, the Joyce Foundation, the Aldred P. Sloan Foundation, and the Spencer Foundation. The survey was conducted by Princeton Survey Research Associates in two "waves" over several months in late 1994 and early 1995.
The authors correctly term the study "the most extensive analysis of American worker attitudes toward workplace relationships and power in more than twenty years." It was intended to introduce the voices of workers themselves into policy debates on labor law that had previously been dominated largely by politicians, labor and management interests, and academic theorists. The WRPS was also designed to inform the work of the Commission on the Future of Worker-Management Relations, often referred to as the Dunlop Commission after its Chairman, Harvard professor and former Labor Secretary John T. Dunlop.
Unlike so much of social science writing these days, this book is readable: clear, concise, and even witty. The process by which the views of workers were obtained (including, remarkably, some 15 percent of respondents who identified themselves as managers) is laid out in a candid and transparent manner.
As to the findings, what DO workers want? Here’s a portion of the overall conclusion of the book:
"Workers want ‘more’—more say in the workplace decisions that affect their lives, more employee involvement at their firms, more legal protection at the workplace, and more union representation. Most workers reported that existing institutions—from unions to [employee involvement] committees to government regulations—are either insufficiently available to them or do not go far enough to provide the workplace voice they want. A substantial number of nonunion workers want the benefits of unionization. An even larger number would like to see some sort of employee-management committee, with varying degrees of independence from management, at their workplace. Irrespective of the workplace organization they desire, however, most workers do not believe that, under current U.S. policies, they can get additional input into workplace decisions that they want. They believe that management is unwilling to share power or authority with them. And management generally agrees… Perhaps surprisingly, [this book] has shown that employees can specify with some precision new forms and attributes of workplace organization and ways to enforce regulations. Employee desire for additional voice and input into workplace decisions is not inchoate but well-formed and practical enough that it could readily guide business, union, and political leaders in modernizing our labor-relations system."
Some of the study’s conclusions have been subject to misunderstanding or misreporting. For example, prior to the publication of the book, the authors reported their findings on employee desires for labor-management "cooperation." They found that a large proportion of workers would prefer an organization "that management cooperated with… but had no power to make decisions," as against "one that had more power, but management opposed." Some press reports then concluded that this meant employees do not want strong unions, an interpretation that was both incorrect and misleading. Lost in the initial reaction to this finding were at least two significant corollaries: workers believed that a cooperative management was necessary for them to have genuine influence over decisions, and they wanted the organization speaking for them to have considerable independence in its composition, orientation and the process by which conflicts are resolved.
The problematic relationship between employee involvement (EI) and the union representation is examined in more detail in Chapter 5. The authors conclude that EI does not undermine support for the union at unionized workplaces, but that it seems to reduce the workers’ desire for unionization at nonunion firms. Employers who adopt advanced human resource practices help to reduce, but do not eliminate, the gap between the input workers want to have and what they actually possess (the so-called "representation/participation gap").
The WRPS also measured worker satisfaction with government regulations affecting the workplace. The study found a high degree of dissatisfaction with the outcomes when workers had recourse to the courts or to administrative agencies to deal with alleged violations of the law. In follow-up discussions, "most reacted favorably to the idea of arbitrating disputes at their workplace." The desirable features of such a dispute resolution system, as revealed in further probing by the questioners, include joint establishment by labor and management, joint funding (with or without a contribution from government), expert assistance to workers preparing their cases, and rather limited government review of arbitral decisions. Further, workers also favored the use of workplace committees to help enforce labor standards. This idea has been largely implemented in Canada and has been advanced in proposed Federal legislation in the United States.
One might ask how a telephone survey could elicit such detailed, sophisticated views on complex issues such as arbitration systems and employee committees for enforcement of workplace standards. Further, what weight should policymakers assign to opinions on such matters by ordinary workers, for heaven’s sake!
As mentioned above, one of the sterling characteristics of What Workers Want, and the underlying research on which it is based, is the remarkable success the researchers had in eliciting informed responses. Chapter 2 spells out in considerable detail the development and conduct of the study, not only what questions were asked but how they were arrived at—massaged, debugged, and fine-tuned through the attentions of thoughtful persons on all sides of the union-management divide. Clearly the WRPS was designed to be fair and nonpartisan, and to be perceived as such. Moreover, follow-up questioning was supplemented by the mailing to participants of detailed information regarding issues such as arbitration systems. The participants reviewed the documents provided and thought carefully about the issues before responding to the "second wave" of interviews.
Perhaps the greatest contribution the authors make to the human resources field is this: They give the lie to the elitist notion that workers are somehow incapable of examining their workplaces and their roles in them. Of course workers are the best people to consult on how to do a job better. But they also can assess and intelligently articulate their views on how to improve the quality of work life and, not incidentally, the quality of the labor-management relationship.
In sum, attention should be paid to this book by policymakers and everyone else interested in the workforce and workplaces of the 21st Century. What Workers Want is admirable for how clearly it lets workers’ voices be heard, as well as for the rationality it brings to a policy debate often characterized by partisanship and intransigence.
Joy K. Reynolds
Industrial Relations Specialist
Formerly with the
U.S. Department of Labor
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