| May 19, 2012 | 10 users online |
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OBSERVER COLUMN FOR FRIDAY, APRIL 10, 1998 The Hanes Closure: A vote of confidence in Jamaican Management? Utterance by Leahcim Semaj The closure of the Hanes Plant in Sandy Bay, Hanover on Monday has generated maximum media coverage and concern. I have heard a number of live radio interviews with company officials. All the interviewers tried to get the Sara Lee officials to tell them what was wrong with Jamaica that necessitated the closure. One official could not comply. She kept making very general statements and saying how good the Jamaican workers were and that the company’s action was only a "business decision". She insisted that she would not be dragged into politics, not by those in government or by those who wish to be the government. This response has not satisfied the quest for answers and the need to place blame. It may be that we are asking the wrong questions so we are getting the wrong answers. Global Operating Principles In the 1980's, several Sara Lee Corporation (SLC) operating companies developed and published their own "international operating principles". In 1992 guidelines were written for their suppliers/contractors. In 1994, focus was placed on world-wide employee relations issues for owned and supplier facilities; "new" Global Operating Principles and Supplier Selection Guidelines were drafted based on existing division practices. Global Operating Principles and Supplier Selection Guidelines were approved by SLC senior management and introduced in 1995. Issues addressed in the Global Operating Principles were: * Ethical Practices * Laws and Regulations * Environment * Community Relations * Corporate Contributions * Political Activity * Communications * Working Conditions and Workplace Safety * Employment and Employee Training and Development * Employee Recognition, Empowerment and Treatment * Respect for Diversity * Hours of Work and Age of Employment * Compensation and Benefits Sara Lee set out minimum standards that applied to the firms from which they sourced their products. This included all contractors, joint venture partners and suppliers of goods and services. THE PLAN TO OUTSOURCE Sara Lee Corporation currently produces goods through 986 companies in 52 countries and sells products in 140 countries. Almost 3 million people are employed world-wide making products for SLC. In 1996, SLC decided that their future growth would be achieved through contractors. This meant a steady reduction in the number of factories they actually owned and operated. This model epitomises the New Work Order. NIKE and Bugle Boy now outsource all their production. Once you find contractors that can meet your standards, world class companies have proved that identifying the essential core of your business facilitates the highest productivity. The rest can then be outsourced. For example, last year British Airways began outsourcing cargo and baggage handling, some accounting and even the flying of some routes. They now realise that the essence of being an airline is the operation of reservation and traffic scheduling systems. For SLC it was now time to catch up. BEST PRACTICES On February 20, 1998, Sara Lee hosted a "Best Practices Meeting" at the Wyndham Rosehall Hotel. A team of senior managers was in attendance. All the local companies that produced products for Sara Lee gathered to share the procedures and ideas that work well in their factories. All the companies were meeting and exceeding the standards and criteria set by Sara Lee. I was invited to present a seminar on effective means by which performance and production can be rewarded. I was also privileged to learn of some of the great milestones that the local managers had achieved. We saw data on world class, in-house management training programmes that had significantly reduced staff turnover. Team sewing had been effectively introduced increasing productivity to and beyond world standards. One company even saved money by importing 9 buses to transport their workers daily. Incentive programmes were devised to encourage perfect attendance. Imaginative interventions such as managers helping workers to take care of their business by making phone calls for them while they were at work. We heard about in-house health clinics that provided Pap smear tests, STD and birth control counselling and referrals to doctors. Other plants were providing in service training for all workers, including basic literacy. TEMPORARY SET BACK I am not surprised at Sara Lee’s decision to cease operating the Sandy Bay factory. It was obvious to me that the Jamaican plants and their managers have reached world standards in their operations and production. Sara Lee can rely on their contractors to consistently supply the volume and quality that they need. I believe that the jobs lost in Sandy Bay are temporary. Other contractors will soon absorb these well-trained workers, thus expanding their own capacity. What we now need is the government’s assistance in strengthening this sector. One of the main ways to increase productivity is to remove the income tax on overtime work, so the machines can be run for longer hours. These workers compare themselves to their relatives who work in tourism who earn tax-free gratuities. Both are critical foreign exchange earners. Should they not get the same incentives? There is also need for better public transportation and housing for workers. The plan to build more Freezone factory space in Montego Bay is a mistake. Move the factories to where the workers live. If the government really cares about this sector, now is the time to do the right things.
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