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6 Simplifying Operations

6.1 Catalog Cleanup

6.1.1 The Method

Cleaning up a company’s catalog is an important task aimed at improving inventory management and reducing costs. Given the repercussions of catalog cleanup, namely a reduction in offerings, this task should fall to an individual with significant strategic responsibilities for the company’s development. To clean up a company’s catalog, here are some steps to follow:

  • Analyze the existing catalog : The first step is to analyze the current catalog, ensuring that all products manufactured by the company are listed and that indicators such as sales, profitability, stock levels, and market demand are attached to each product.
  • Define selection criteria: Once you have reviewed the company’s entire product offering, you can define selection criteria to eliminate products that do not add value. These criteria may include obsolete products, slow-moving products, products costly to store, or products that do not meet quality standards, etc.
  • Develop a removal plan: After defining the selection criteria, a removal plan must be developed to take products out of the catalog. This plan should include deadlines for product removal, methods for liquidating excess stock (ideally selling the merchandise), processes for informing customers, and methods for still producing necessary spare parts for equipment repair (after-sales service[1]).
  • Review the catalog regularly: Once the catalog cleanup is complete, it is important to regularly review the catalog to maintain company standards.

When cleaning up a company’s catalog, it is important to consider customer needs as well as company objectives. By removing products that do not meet company standards[2], the company can free up storage space and reduce costs while increasing the availability of the most in-demand products. Furthermore, by reducing product variety, the company can focus on its competitive advantages and maximize its profits.

6.1.2 The BCG Matrix

The BCG matrix, also known as the growth-share matrix, is a strategic analysis tool developed by the management consulting firm Boston Consulting Group (BCG). This matrix is used to evaluate a company’s product or service portfolio and make decisions regarding resource allocation ([Gra 23]; [Ore 23]; [Raj 23]).

The BCG matrix is based on two main dimensions ([Gra 23]; [Ore 23]; [Raj 23]):

  1. Market growth rate. This dimension evaluates the expected growth of the market in which a particular product or service is offered. A rapidly growing market generally offers better revenue opportunities.
  • Relative market share. This measures the market share held by the company in a specific market segment. A high market share can indicate a strong competitive position.

As shown in Figure 1, based on these two dimensions, the BCG matrix classifies a company’s products or services into four categories ([Gra 23]; [Ore 23]; [Raj 23]):

Figure 1: Illustration of the BCG Matrix [Raj 23]

  1. Stars, which are products or services with a high market share in a rapidly growing market. They generally generate significant profits and often require additional investment to sustain their growth.
  • Cash cows, which are products or services with a high market share in a slow-growing or stagnant market. Although they do not show high growth potential, they still generate stable profits and can be used to finance other investments.
  • Question marks, which are products or services with a low market share in a rapidly growing market. They have high growth potential but require significant investment to increase their market share and achieve star status.
  • Dogs, which are products or services with a low market share in a slow-growing or stagnant market. They generally do not generate significant profits and may be considered unviable in the long term.

The BCG matrix helps companies make strategic decisions regarding investments, divestments, or resource reallocation. For example, profits generated by cash cows can be reinvested in stars to stimulate their growth, while dogs may be considered for eventual elimination from the product portfolio.

After-sales service must still be considered because, depending on legal standards or contracts, the company must retain the know-how to be able to deliver spare parts for a certain period. As previously explained (cf. chapter 6.1), although the production of spare parts is generally not strictly mandatory, it may be regulated, encouraged, or contractually required in various contexts to ensure the availability of spare parts, consumer safety, and sustainability. Specific obligations vary depending on laws, industries, and countries. It is therefore essential to consult local and sectoral regulations for precise information on this subject.

Once products are classified in the BCG matrix, a choice can be made regarding which products to eliminate.

6.1.3 Who is Responsible for the Cleanup Task?

Within a company, the responsibility for catalog cleanup can fall to different departments or teams, depending on the company’s organizational structure and the nature of the catalog. Generally, several departments must collaborate for the cleanup to be carried out efficiently.

In many companies, the sales department is responsible for catalog management. It may be tasked with ensuring that the products or services listed in the catalog are up-to-date, correctly described, and correspond to the company’s current offerings.

The marketing department can also play an important role in catalog cleanup by being responsible for optimizing product descriptions, adding new features, or highlighting the most relevant products for customers.

The logistics department can also be involved in catalog cleanup, particularly in companies with physical inventory. It can ensure that obsolete or out-of-stock products are removed from the catalog and that new arrivals are added.

In companies that use a content management system or an online platform for their catalog, the sales department may be responsible for maintaining and updating the catalog and ensuring that information is correctly entered, while the IT department must ensure that the catalog’s functionalities work correctly and that technical problems are resolved.

Given the various stakeholders in inventory management, it is therefore advisable to form a dedicated team responsible for catalog cleanup. This team should be composed of members from different departments, such as sales, marketing, operations, and IT, working together to review the catalog.

The decision regarding the elimination of certain products from the catalog is highly strategic, as it will influence the company’s revenue and activities. Therefore, it is important that choices concerning catalog cleanup are validated by members with high decision-making power.

6.2 Improving Existing Processes

6.2.1 Is Immediate Improvement Beneficial?

It is possible to realize that the company, as it stands, is not optimally organized. It will therefore be necessary to ask whether it is preferable to improve existing processes immediately or if this improvement should be integrated into the organization’s future development (refer to chapter XX).

This choice will primarily depend on the following criteria:

Will the improvement of existing processes be useful from a development perspective? If so, does it require a significant, lengthy, and costly reorganization?

If not, then it is highly probable that there is an interest in quickly optimizing existing processes.

However, if the current improvement is not useful from the organization’s development perspective, a balance must be struck between the costs and benefits of the existing situation. Indeed, even if the current improvement is not intended to last, it can still prove profitable, even if only in the short term.

The longer the new strategy takes to implement (refer to chapter XX on planning the implementation of the new strategy), the more sense it will make to already improve existing processes.

6.2.2 How to Proceed?

Without claiming to be exhaustive, various steps can be useful for improving production processes in a company, namely:

  • Analyze existing processes. Conduct a detailed analysis of current production processes to identify weaknesses, bottlenecks, and inefficiencies. It is important to highlight the steps that take the most time, wasted resources, or redundant activities.
  • Involve employees. Employees directly involved in production processes have valuable expertise. They can provide crucial information on existing problems and opportunities for improvement. It is advisable to consult them so that they can share ideas and suggestions for optimizing processes.
  • Use continuous improvement methods. Usable methods include Lean Manufacturing (see chapter 6.2.2.1), Kaizen (see chapter 6.2.2.2), or Six Sigma (see chapter 6.2.2.3). These approaches provide tools and techniques to reduce waste, improve efficiency and quality, and optimize workflows ([Ama 20]; [Pla 17]; [Van 21]).
  • Automate and use technology. Certain tasks can be automated to increase efficiency and reduce human error. By investing in appropriate technologies such as automated machines, production management software, or control and monitoring systems, it is possible to increase efficiency in the long term.
  • Optimize planning and inventory management. Effective planning and optimized inventory management can reduce waiting times, minimize storage costs, and prevent shortages or overstocks. By using accurate forecasting methods, implementing just-in-time inventory management systems, and optimizing replenishment processes, performance can be increased.
  • Establish Key Performance Indicators (KPIs). Defining relevant KPIs to measure and monitor the performance of production processes can be useful. These may include metrics such as cycle time, overall equipment effectiveness, scrap rate, labor yield, etc. Regularly monitoring these KPIs and using the data allows for informed improvement decisions.
  • Train and develop staff. Staff training and development improve their skills and expertise. Well-trained employees will be better able to optimize processes, detect potential problems, and propose innovative solutions.
  • Encourage innovation and creativity. Foster a culture of innovation within the company by encouraging employees to propose improvement ideas, experiment with new approaches, and share best practices. To maintain interest in innovation, it is important to reward contributions and achievements related to improving production processes.

Every company is unique, so it is important to adapt this advice to the specific situation and consider the company’s characteristics and needs to implement effective production process improvements.

6.2.2.1 Lean

Lean Manufacturing ([Lik 04]; [Ohn 88]; [Wom 07]), also known as Lean production or simply Lean, is a management approach that aims to maximize customer value while minimizing waste and inefficiencies. It is a system that originated in the Toyota Production System, developed by the Japanese automaker Toyota in the 1950s and 1960s. TPS became the benchmark for Lean Manufacturing and has inspired many companies worldwide.

Lean Manufacturing aims to eliminate the superfluous and simplify the necessary. This method is based on several key principles:

Elimination of waste: Lean identifies eight types of waste, also known as “Muda” in Japanese, which include overstocking, unnecessary movement, quality defects, waiting times, unnecessary motion, overproduction, over-processing, and untapped talent. The goal is to eliminate this waste to optimize process efficiency.

Continuous flow: Lean aims to create a continuous and regular production flow, avoiding stops and interruptions. This reduces waiting times, inventory, and production lead times, leading to better responsiveness to customer demands.

Demand-driven production: Rather than producing based on demand forecasts, Lean favors production driven by actual customer needs. Products are manufactured only when demand arises, which reduces inventory and overproduction.

Continuous improvement: Lean encourages the continuous improvement of all processes and activities. Teams are encouraged to identify problems, propose solutions, and implement changes to increase quality, productivity, and efficiency.

Respect for people: Lean emphasizes respect for employees by encouraging participation, autonomous decision-making, and recognition of individual contributions. It also encourages the development of employees’ skills and knowledge.

Standardization of processes: Lean promotes the establishment of standardized norms and procedures to ensure consistency and facilitate continuous improvement. Standards help identify deviations and resolve them effectively.

The application of Lean Manufacturing results in several specific practices and tools. Among the most common are:

Value-added: Identify activities that add value for the customer and eliminate those that do not.

Value stream mapping: Visualize and analyze production and information flows to identify waste and opportunities for improvement.

The 5S: A method for organizing the workspace efficiently and eliminating unnecessary items. The five S’s represent Sort (Seiri), Set in Order (Seiton), Shine (Seiso), Standardize (Seiketsu), and Sustain (Shitsuke).

Kaizen: The philosophy of continuous improvement, where small improvements are made regularly and systematically.

Just-in-Time: Producing goods or services just when they are needed, thus avoiding excessive inventory.

Kanban: A visual management system that regulates production flow based on actual demand.

Jidoka: A concept that allows machines and operators to detect quality problems as soon as they occur, to resolve them quickly and prevent defects.

Lean Manufacturing has been adopted by many companies worldwide, across different sectors, because it helps reduce costs, improve quality, increase responsiveness to customer demands, and enhance overall operational efficiency.

6.2.2.2 The Kaizen Method

The Kaizen method ([Bha 12]; [Ima 92]; [Ima 97]; [Wom 90]) is a Japanese concept that focuses on continuous improvement in all aspects of life, whether personal or professional. Kaizen is composed of two Japanese words: “Kai” meaning “change” and “Zen” meaning “good” or “better.” It is therefore a management philosophy that encourages small, regular positive changes with the goal of achieving significant long-term improvements.

The Kaizen method was developed in Japan after World War II, when the country sought ways to improve its productivity and competitiveness. It was popularized by renowned Japanese companies such as Toyota, which successfully implemented this approach.

The fundamental principle of Kaizen is the belief that every individual, regardless of their hierarchical level, can contribute to continuous improvement. It encourages the active involvement of all members of an organization, from management to front-line employees, in the improvement process. This approach values everyone’s ideas and contributions and creates an environment conducive to innovation and problem-solving.

The Kaizen method is based on several key principles. First, it emphasizes the importance of process standardization. By establishing clear standards and ensuring they are consistently followed, organizations can more easily identify deviations and opportunities for improvement.

Next, Kaizen encourages the use of tools and techniques such as PDCA (Plan, Do, Check, Act) or DMAIC (Define, Measure, Analyze, Improve, Control) to solve problems and implement changes. These structured approaches help break down complex problems into more manageable steps, thus facilitating their resolution.

Another important aspect of the Kaizen method is the notion of eliminating waste. It encourages the identification and removal of anything that does not create added value for the customer. This includes waste of time, resources, materials, unnecessary movements, etc. By reducing this waste, organizations can improve their efficiency and profitability.

The Kaizen method also emphasizes a culture of continuous improvement. It encourages organizations to establish an environment of trust where employees feel comfortable proposing improvement ideas and questioning existing processes. Training and skill development are also encouraged to enable employees to adapt to changes and acquire new knowledge.

It should also be noted that the Kaizen method is not limited to production processes or manufacturing companies. It can be applied in all areas, such as services, healthcare, education, etc. Its objective is to encourage continuous improvement in all human activities.

In conclusion, the Kaizen method is a powerful approach that promotes continuous improvement at all levels of an organization. It encourages the active participation of all members of the organization, process standardization, waste elimination, and a culture of continuous improvement. By adopting this approach, organizations can achieve significant incremental improvements, strengthen their competitiveness, and stimulate innovation. The principles of Kaizen can be applied in many contexts and continue to bring tangible benefits to individuals and organizations worldwide.

6.2.2.3 The Six Sigma Method

The Six Sigma method ([Geo 03]; [Har 00]; [Pyz 09]; [Sum 06]) is a quality management approach that aims to improve processes and reduce variations and defects. It was originally developed by Motorola in the 1980s, then popularized by General Electric. Since then, many companies worldwide have adopted this method to improve their operational efficiency and customer satisfaction. The ultimate goal of Six Sigma is to achieve a performance level where only 3.4 defects per million opportunities occur.

The Six Sigma methodology is based on a structured, data-driven approach to problem-solving and continuous improvement. It uses a combination of statistics, process analysis techniques, and project management tools to identify the root causes of problems and implement effective solutions. Here are the key steps of the Six Sigma methodology:

Define: This first step involves clearly defining the project objective and identifying customer needs and expectations. It is essential to define Key Performance Indicators (KPIs) and map the existing process.

Measure: In this step, precise measurements are collected to evaluate the current performance of the process. Data is analyzed to quantify the extent of variations and identify opportunities for improvement.

Analyze: An in-depth analysis of the data is performed to identify the root causes of problems and the factors contributing to variations. Statistical tools such as Analysis of Variance (ANOVA) and Pareto charts are often used at this stage.

Improve: Based on the analysis results, solutions are developed and implemented to eliminate the root causes of problems. Techniques such as Plan-Do-Check-Act (PDCA), Design of Experiments (DOE), and simulation can be used to test solutions and optimize processes.

Control: Once improvements have been implemented, control mechanisms are established to monitor process performance and ensure that the gains achieved are maintained. Tools such as statistical control charts are used to monitor variations and detect deviations.

It should be noted that the Six Sigma methodology relies on two main improvement approaches: DMAIC (Define, Measure, Analyze, Improve, Control) for existing problem-solving projects, and DMADV (Define, Measure, Analyze, Design, Verify) for projects involving the design of new processes or products.

6.3 Meeting Needs

For a company to operate sustainably, its needs must be met. A company’s needs can be either material or human.

6.3.1 Material Needs

Identifying a company’s material needs involves several steps:

  • Analysis of activities and processes. It is necessary to understand the company’s activities and processes. Therefore, identify the different steps involved in each process and note the equipment required at each step.
  • Evaluation of existing resources. Secondly, the material resources currently available in the company must be inventoried. An inventory of equipment must be established, and its condition, use, and capacity must be evaluated.
  • Market research and benchmarking. Thirdly, market research to identify the latest trends and the most appropriate equipment for the sector of activity can be useful for development. Studying the practices of similar companies helps determine commonly used equipment.
  • Employee consultation. Involving employees in the process of determining material needs can be relevant because they can provide valuable information on the equipment needed to improve their efficiency and productivity.
  • Growth forecasts. The company’s growth forecasts must be taken into account. If expansion or increased production is planned, these factors must be considered when determining material needs.
  • Consultation with specialists. Calling on experts in the field of activity or specialized consultants also provides advice on the most suitable equipment and technologies for the needs.

Once the aforementioned steps have been completed, the company’s material needs should be precisely determined.

The question then arises as to how to meet the company’s material needs. Indeed, these can be obtained through purchase or through in-house transformation. The reasoning for choosing between the two aforementioned possibilities is similar to the reasoning opposing “make or buy” (cf. chapter).

6.3.2 Human Needs

After determining the material needs for the company’s operation, it is then necessary to focus on human resource needs. To determine a company’s human needs, here are some steps to follow:

  • Analysis of activities and objectives. Revisit the analysis of your company’s activities, its short- and long-term objectives, as well as its overall strategy, but this time, focusing on the different departments, processes, and functions necessary to achieve the objectives.
  • Evaluation of current staffing. Secondly, evaluate the company’s current workforce, including the number of employees, their skills, roles, and responsibilities. This step also helps identify strengths and gaps in the current structure.
  • Workload forecasts. The projected workload based on projects, activity cycles, growth forecasts, and strategic changes must also be taken into account. Therefore, estimate as precisely as possible the human resources needed to meet needs based on the specificities, required skills, and demands of the project(s).
  • Identification of necessary skills. Thirdly, comes the crucial step of identifying the specific skills and qualifications required for each position and function. Technical knowledge, behavioral skills, certifications, and necessary training for each role must be integrated into this identification.
  • Skills gap analysis. This is achieved by comparing employees’ current skills with those needed to achieve the company’s objectives. Skill gaps and deficiencies must be identified to determine if there is a need to recruit new talent or train existing staff.
  • Succession planning. Particular attention must be paid to key positions within the company. This allows for the development of a succession plan to ensure that qualified employees are ready to take over in case of departure or promotion.
  • Study of the organizational structure. The current organizational structure must be studied to ensure it is optimized and that responsibilities are distributed effectively, while identifying any potential problems of workload overload or imbalance between different functions.
  • Stakeholder consultation. Inevitably, managers and employees involved in the process of determining human resource needs must be included. Their contribution can provide valuable information on the specific needs of each department or function.
  • Analysis of labor market trends. Labor market trends, skill shortages, demographic changes, and technological developments could affect human resource needs. These elements must therefore be taken into consideration.
  • Budget planning. The company’s budgetary constraints when evaluating human resource needs are also an element not to be overlooked. The cost of hiring new employees or training existing employees must be estimated.

By combining the various aforementioned steps and regularly evaluating human resource needs, it will be possible to more precisely determine the staffing and skills necessary to support the company’s growth and objectives.

6.4 Acquiring Required Skills

The different steps described in the previous chapter (see chapter 6.3) allow for an inventory of all the skills necessary for the proper functioning of the company.

The question now arises as to how to react if there are missing skills or if some are no longer useful.

6.4.1 Training (In to In)

To address a skill gap, the first possible reaction is to train an internal person within the company. Training an employee internally offers several advantages compared to external hiring. Here are some of the benefits:

  • Reduced costs. Internal training is generally less expensive than external hiring, as it eliminates recruitment fees, recruitment agency commissions, and costs associated with onboarding a new employee.
  • In-depth company knowledge. Internal training allows an employee to acquire in-depth knowledge of the company, its culture, processes, and values. This facilitates their adaptation and allows them to become operational more quickly.
  • Alignment with company culture. Internally trained employees generally have a better understanding of the company’s culture and are more likely to conform to it. They are already familiar with the company’s standards, policies, and values, which facilitates their integration and commitment to the various tasks to be performed.
  • Development of specific skills. Internal training allows for the development of specific skills necessary to meet the company’s needs. Training can be customized based on the company’s and employee’s needs, focusing on the skills required for a specific position.
  • Employee retention. When an employee is trained internally, they feel valued and invested in by the company. This can strengthen their sense of belonging and loyalty to the organization, which reduces employee turnover and promotes talent retention.
  • Continuity and knowledge transfer. By training employees internally, continuity and knowledge transfer are ensured within the company. Trained employees can share their expertise with other team members, which strengthens the organization’s overall capabilities.

There may obviously be situations where external hiring is preferable, particularly when specific skills are not available internally or when the company wishes to bring in a new set of ideas and perspectives. However, internal training offers many advantages and can contribute to the company’s long-term growth and success.

6.4.2 Hiring (Out to In)

As previously explained, when there is a lack of skills within the organization, one possible solution is to hire personnel with the desired skills.

Hiring a new employee rather than training internally also offers certain advantages. Here are some of them:

  • Specialized expertise and skills. External hiring allows for recruiting individuals with specific skills and expertise that may be necessary to meet the company’s needs. This can include advanced technical knowledge, experience in a specific field, or expertise in emerging technologies.
  • New perspectives and ideas. Hiring new employees from diverse backgrounds can bring fresh perspectives, ideas, and approaches to the company. Their external experience can stimulate innovation and foster creativity within the organization.
  • Reduced learning curve. Hiring a qualified professional can reduce the time needed to reach a high level of productivity. Unlike internal training, where the employee must learn the company’s specific skills and processes, a new employee can become operational more quickly by bringing their pre-existing skills.
  • Team renewal. External hiring can help rejuvenate and diversify the existing team. The arrival of new people can stimulate team dynamics, foster collaboration, and encourage knowledge sharing among members.
  • Acquisition of new resources. External hiring can enable the company to acquire new resources, such as professional contacts, networks, or relationships with potential clients. These resources can contribute to the company’s expansion and growth.
  • Avoid overloading existing employees. Internal training can require additional time and effort from existing employees, who may already be busy with their usual responsibilities. External hiring can relieve this additional workload and allow current employees to focus on their primary tasks.

It is important to note that every company and situation is different, and there may be specific advantages to external hiring or internal training depending on the company’s needs and objectives. It can also be beneficial to find a balance between the two approaches, combining external hiring and internal training to make the most of available resources.

6.4.3 Laying off / Reassigning (In to Out)

If an employee, although entirely recommendable, no longer has a place within the organization and cannot, despite specific training, be useful in another position, it is preferable to try to reassign them to another company.

Aside from the purely human aspect, reassigning an employee to another company rather than simply laying them off offers certain advantages, including:

  • Maintaining positive relationships. By helping an employee find a new job in another company, the employer demonstrates support and commitment to their professional well-being. This can preserve positive relationships between the employee and the organization, which can be beneficial if there is a need to collaborate in the future or if you wish to maintain a good reputation as an employer.
  • Strengthening the employer brand. By helping an employee find a new job, the image conveyed as an employer is that of an organization concerned with the well-being and development of its employees. This can attract quality candidates in the future, as they see that great care is taken of employees, even when they leave the company.
  • Extended professional network. By helping an employee find a new job in another company, the professional network expands. The employee can become a positive ambassador for the company, which can help develop partnerships or create collaboration opportunities in the future.
  • Reduced impact on the employee. Termination can have a significant emotional and financial impact on an employee. By outplacing them in another company, this negative impact is reduced because the employee is offered a smoother transition and continued financial security. This can help the employee bounce back more quickly and mitigate the stress associated with job loss.
  • Respect for company ethics and values. If the company values employee well-being and is committed to acting ethically, outplacing an employee in another company is consistent with its values. This can strengthen the company’s reputation as a responsible employer that cares about the well-being of its employees.
  • Minimizing legal disputes. In some cases, termination can lead to costly legal disputes for the company. By helping the employee find a new job, you reduce the risk of potential litigation, as the employee will feel supported and have fewer reasons to sue the company.

It is important to note that outplacement in another company may not be possible in all situations, depending on individual circumstances and available opportunities. However, when feasible, it can be a beneficial approach for all parties involved.

6.4.4 Replacing

When a company wishes to replace one of its employees, it is important to weigh the advantages and disadvantages.

Indeed, as explained in Chapter 6.4.2, hiring a new employee can offer advantages, but many disadvantages must also be considered, including notably:

  • Recruitment and training costs. Replacing an employee can be expensive in terms of recruitment, selection, onboarding, and training for a new staff member. Costs for job postings, interviews, reference checks, and initial training must be taken into account.
  • Loss of knowledge and expertise. The departure of an employee can lead to the loss of knowledge and expertise accumulated over time. Even with a smooth transition, there will always be a certain period during which the new hire must adapt and learn the specifics of the position.
  • Temporary disruption of productivity. The replacement process can lead to a temporary decrease in team productivity. Other team members may have to take on an additional workload while the new employee adapts and becomes familiar with their responsibilities.
  • Risk of recruitment error. There is always a risk that the new employee will not meet expectations or will not integrate well into the team. A poor selection can result in a loss of time, money, and resources for the organization.

It is important to consider these advantages and disadvantages when deciding to replace an employee. Each situation is unique, and it is essential to properly assess the needs.

6.5 The various alternatives

In the previous chapter, the various alternatives between training, hiring, terminating/outplacing, and replacing were presented. Each of these choices has advantages and disadvantages.

6.5.1 Risks

The risks inherent in each option must obviously be taken into consideration, as they can have a significant impact on the organization.

Indeed, there are several risks associated with keeping an undesirable employee within an organization, including notably:

  • Impact on team morale. The presence of an undesirable employee can have a negative impact on the morale and motivation of other team members. This can lead to a decrease in productivity, an increase in stress, and a general sense of disengagement.
  • Deterioration of the work environment. An undesirable employee can create a toxic work environment. Inappropriate behavior, such as bullying, harassment, or constant conflict, can disrupt team dynamics and create an atmosphere unfavorable to collaboration and creativity.
  • Loss of productivity. When an undesirable employee is kept in the organization, it can lead to a decrease in overall productivity. This can occur due to interpersonal conflicts, a lack of cooperation, or poor performance by the employee concerned.
  • Company image. If inappropriate behaviors or problems related to the undesirable employee become known to the public or clients, it can damage the company’s image. This can affect the organization’s reputation and impact the loyalty of clients and business partners.
  • Legal risks. If the undesirable employee engages in illegal behavior or behavior that violates the company’s internal rules, it can lead to legal risks for the organization. This can include lawsuits for harassment, discrimination, violation of labor laws, etc.

It is important for an organization to quickly address issues related to an undesirable employee to minimize the risks mentioned above. This may involve disciplinary measures, additional training, mediation, or, in some cases, termination of the employment contract. But, on the other hand, parting ways with an employee who adds value to the company can also carry certain risks, namely:

  • Loss of specific skills and knowledge. An employee who adds value to the company may possess valuable skills, knowledge, and expertise that are essential to the smooth functioning of the organization. By losing them, the company risks a decrease in its ability to perform certain critical tasks or maintain a certain level of performance.
  • Reduction in productivity. If a value-adding employee leaves the company, it can lead to a short-term decrease in productivity. The time required to recruit a competent replacement, along with the onboarding and learning process for the new staff member, can lead to a slowdown in activities and a loss of efficiency.
  • Effects on team morale and engagement. The departure of a high-performing and well-liked employee can have a negative impact on the morale and engagement of other team members. This can generate a sense of insecurity or demotivation, especially if the reasons for the departure are not clearly communicated or are perceived as unfair.
  • Loss of client or partner relationships. If the employee leaving the company maintained close relationships with key clients, partners, or suppliers, their departure may lead to a loss of these business relationships. This can have a negative impact on the company’s activities and require additional efforts to re-establish these ties.
  • Company image. If the departure of a value-adding employee is poorly managed or perceived as a sign of problems within the organization, it can affect the company’s image. It can also damage its ability to attract and retain talent in the future.

It is important to carefully evaluate the advantages and disadvantages of parting with a value-adding employee before making a decision. In some cases, it may be possible to find alternative solutions, such as revising working conditions, reassigning responsibilities, or negotiating new contractual terms, to address concerns while retaining the employee in the company.

6.5.2 Flexibility

By training employees rather than replacing them, they do not lose their previous skills but acquire new ones. They therefore increase their competencies and are more flexible, which offers various advantages:

  • Adaptability to change. In a constantly evolving business environment, employee flexibility and versatility are essential. When employees are trained to hold different roles or perform various tasks, they are better able to adapt to organizational changes, new technologies, market requirements, and fluctuations in demand. This allows the company to remain agile and react quickly to challenges and opportunities.
  • Optimization of human resources. Flexible and versatile employees allow for better use of the human resources available within the company. They can be assigned to different teams or projects based on needs, which optimizes efficiency and minimizes costs related to external hiring or outsourcing.
  • Operational continuity. By training employees in various skills and responsibilities, the company reduces its dependence on a single individual for specific tasks. This ensures greater operational continuity, even in the event of a key employee’s departure. Internal training promotes the creation of a pool of internal talent capable of taking over and maintaining operations without major interruption.
  • Strengthening engagement and motivation. Offering internal training and skill development opportunities sends a positive message to employees. It shows that the company values their professional growth and invests in their long-term success. As a result, employees are more likely to be motivated, engaged, and loyal to the company, which can improve talent retention and reduce costs associated with recruiting and training new employees.
  • Innovation and creativity. Flexible and versatile employees are able to combine different perspectives, skills, and knowledge from various areas of the company. This fosters innovation and creativity by encouraging the exchange of ideas and facilitating the emergence of innovative solutions. When employees are trained in various fields, they are more inclined to propose original ideas and contribute to the company’s growth.

In short, flexible and versatile employees, supported by internal training, offer a large company greater agility, better resource utilization, operational continuity, increased employee engagement, and an environment conducive to innovation.

6.5.3 Weighing the options

The choice between internal training, hiring, terminating, or replacing an employee depends on several factors specific to each situation and each company. Here are some elements to consider when making a decision:

  • Assessment of skills and needs. It is important to evaluate the current skills of employees and compare them to the current and future needs of the company. If the necessary skills are already present internally, training may be a viable option. Otherwise, hiring or replacement may be considered.
  • Availability of resources. Available resources must be taken into account, including budget, time, internal expertise, and recruitment opportunities. Internal training may require investments in time and resources, while hiring may involve additional recruitment and onboarding costs.
  • Degree of urgency. The speed with which the necessary skills must be acquired or changes must be made are also important criteria. If the need is immediate and there is not enough time for internal training, hiring or replacement may be preferred.
  • Internal growth potential. Another relevant element is the growth and development potential of current employees. For employees with the potential to develop and acquire the required skills in the long term, internal training can be beneficial for their professional progression.
  • Impact on corporate culture. There is a potential impact of each option on corporate culture and employee motivation. Excessive termination or replacement can lead to instability and a climate of mistrust, while internal training and development can strengthen employee engagement and loyalty.
  • Cost-benefit analysis. The potential costs and benefits of each option must be balanced. Training, recruitment, termination, and productivity costs must be considered, as well as the long-term benefits related to talent retention and internal skill development.

6.5.4 Consequences

In light of what has been explained previously, it seems clear that internal training is often the best choice.

However, it is essential to evaluate each situation individually, taking into account the specific needs of the company, its culture, its resources, and its short- and long-term objectives. In some cases, a combination of different approaches may be the best solution, such as internal training for some employees and external hiring for others.

[1] The production of spare parts is generally not mandatory under law, but it may be regulated or encouraged in certain contexts. Laws related to the availability of spare parts vary by country and industrial sector.

Certain industries, such as automotive and aerospace, may be subject to specific regulations requiring manufacturers to provide spare parts for a minimum period after the production of a model has ceased.

Consumer protection laws in some countries may require manufacturers to make spare parts available for a specified period after the initial sale. This aims to ensure that consumers can repair and maintain their goods.

The focus on sustainability and the circular economy has led to laws and incentives encouraging the provision of spare parts to minimize electronic and product waste.

Products posing a risk to consumer safety are frequently subject to specific regulations regarding spare parts, requiring their approval or compliance with strict safety standards.

Obligations to provide spare parts can also arise from contracts and warranties between manufacturers and consumers, creating contractual obligations. In our view, this is the most frequent case of an obligation to produce spare parts.

[2] A company may impose certain standards on itself to ensure its smooth operation, compliance with current laws and regulations, and to promote a culture of integrity and responsibility. For example, there may be ethical, safety, quality, environmental standards, etc. Standards can evolve, so it is important to keep the catalog in line with the company’s standards.