Employees' pay is tied to their actual productivity—and that means allowing for bad days and, consequently, some inventory build-up
Manufacturing philosophy has undergone a revolution in the past few decades emphasizing continuous improvement, low-inventory techniques, and increased collaboration, cross-training, and problem-solving by workers. In the 1990s, the American economy steadily trended toward lower inventory levels and higher firm and labor productivity.
This piece originally appeared in Stanford Business Insights from Stanford Graduate School of Business. To receive business ideas and insights from Stanford GSB click here: (To sign up: https://www.gsb.stanford.edu/insights/about/emails)