Teams are “Us” – Part 2: What’s a Team To Do?

Teams are “Us” – Part 2: What’s a Team To Do?

“If you want one year of prosperity grow grain. 

If you want ten years of prosperity grow trees. 

If you want one hundred years of prosperity grow your people”

— Confucius (~ 500 BC)

I formed my first JIT/TPS/Lean team a little over a quarter-century ago. Time really does fly – unfortunately. Since that time, I have formed/created/sponsored well over a hundred such teams, probably closer to two hundred. I don’t know for sure since I did not keep a list. I should have.

In this series of posts, I am going to try to pass on some of the more important things I have learned about teams over the years. I am not trying to tell anyone what to do, just a little bit of what I have learned. And what I have learned was definitely influenced by the business environments that I worked within. Your environment may be much different than what I experienced. But I think that much of the basics will be very applicable, no matter the environment. Besides, one of the primary goals of a team is to change/transform that environment – for the better.

But what is “better”? This is a very important question that must be established upfront. You shouldn’t form a team and then randomly start looking for something to improve. Random improvements can, at best, give you random outcomes. The definitions for “better” and “improve” must be ingrained in everyone’s psyche right from the beginning.  There must always be a clearly defined focus as to what you and your organization want to achieve over time.

I know that many (if not most) companies have tried to tackle this challenge by creating a “Mission” and “Vision” statement for their organizations. This exercise is usually done by upper management, over a several day period, usually at an off-site location. Sometimes this effort is very successful. Most of the time it isn’t. I have participated in this ritual on several occasions at several companies. They were always rolled out with great fanfare to all employees and framed copies were hung in every front lobby and cafeteria. But I don’t remember what was in a single one of these documents.

But some companies have done this successfully. And people remember what is in the document. Toyota is one of those companies.

Toyota calls theirs “True North”.

The oldest version of “True North” can be found in the roof of the basic TPS House:

TPS House

Goal: Highest quality, lowest cost, and shortest lead time.

This is the most common version of “True North” that you will find out there. And I have covered this extensively in previous posts. But it is very, very important to understand that these three variables are interdependent and not independent of each other. It is equally important to grasp that this goal must apply to the system as a whole, not necessarily to individual processes within the system. Ohno had trouble convincing his people of this truism within his own plant.

There are, of course, several variants of “True North” even within Toyota itself. One approach, which was picked up by Womack in Lean Thinking, is the “pursuit of perfection”. While “perfection” is a goal that can never be reached, it emphasizes the philosophy that you should not focus on past/current accomplishments but always strive to move one step further in your drive to that nirvana of “perfection”. For it is a fact that if continuous improvement is not “continuous”, entropy will take over and those past/current accomplishments will inevitably deteriorate and fade away.

The Toyota Supplier Support Center (TSSC), located in Erlanger, Kentucky, also has a slight variant of “True North”. I was fortunate to have Mr. Hajime Ohba, President of TSSC, visit one of my facilities and spend a day listening and learning from him. I was also lucky enough to visit the TSSC Erlanger headquarters shortly after that.

Mr. Ohba made a point of stressing “True North” up front, before getting into any details on TPS. His first comment describing “True North” was:

What We Should Do,

Not What We Can Do

In other words, “True North” must be our guide when determining what we must do as we strive to improve and become better. Mr. Ohba then outlined three guiding principles to achieving customer satisfaction that are at the heart of “True North”:

  • Zero defects
  • 100% Value added
  • 1×1 flow, in sequence, on demand

Under the philosophy of TPS, this is a description of “perfection” for production (of anything). Everything we do should be focused on approaching these three criteria. We may never get there but every step we take will get us closer to “highest quality, lowest cost and shortest lead time”.

And these three criteria are not mutually exclusive. They are interdependent variables. 1×1 flow will enable us to better see and eliminate defects. Eliminating defects will get us closer to 100% value added. Eliminating non-value added process steps will get us closer to 1×1 flow. And so on…

But most importantly, these are guidelines that can be understood, with some degree of training, by everyone. And that includes teams.

This gets us back to the principle I formulated in my very first post for this website:

Thus the underlying principle behind TPS/Lean is the systemic creation of the shortest possible lead time for the continuous flow of materials and information in order to generate the highest quality and lowest cost.

But how do we accomplish this underlying principle? The generic answer given by most Lean/TPS practitioners is “eliminate waste”! But this generic answer inevitably leads to the elimination of generic wastes. That’s not good enough. Remember what I pointed out at the beginning of this post: “Random improvements can, at best, give you random outcomes”. Thus Mr. Ohba’s warning: “Not What We Can Do”.

No, the best method to achieving this underlying principle is to strive for perfection as defined by TSSC’s three criteria. This eliminates the waste that matters. These three criteria will inevitably lead us to “shortest lead time” and “continuous flow”, the guiding principles underlying the foundation of Lean/TPS. And these principles will, in turn, invariably lead us to “highest quality and lowest cost”. Thus Mr. Ohba’s: “What We Should Do”.

Or, as the great management guru, Peter Drucker, said:

There is nothing quite so useless, as doing with great efficiency, something that should not be done at all.”

But there is one factor that we should always be focused on in our Lean transformation. Of all the things that we can measure, this is the one measurement of paramount importance. This measurement will tell us if we are being successful in applying TSSC’s three criteria. What is it? It is right there in the underlying principle stated above:

Lead time!

Lead time will tell us if our efforts to improve our processes are being effective. If our system lead times are continuously becoming shorter and shorter, we are being effective in improving our system processes. Successful application of TSSC’s three criteria will always result in shorter lead times. And shorter lead times will always result in “higher quality and lower cost.

But we also know that, if we follow the basic Lean/TPS philosophy, higher quality inevitably leads to lower cost. So our final result is lower cost. And top management always perks up when those two words are uttered! But that’s not what we should be focused on. As Taiichi Ohno says in his book Toyota Production System:

“One of the main fundamentals of the Toyota System is to make “what you need, in the amount you need, by the time you need it,” but to tell the truth there is another part to this and that is ‘at a lower cost’. But that part is not written down. …I have been telling people that they must not put ‘at a lower cost’ first.”

Put Lead Time first! That keeps the focus on the processes and the entire system. In the Forward section of the book, Mr. Ohno outlines this very succinctly:

“All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added waste.”

So this is what our teams should be working on. This is what our teams should be trained to do. This is what our production system should be focused on. This is Lean in its purest form. If you do this, you won’t be counted in that 75% of companies that reportedly fail at Lean.

Next: how teams work.

(Note: you can find a copy of Mr. Ohba’s 2002 presentation to AME here.)

4 thoughts on “Teams are “Us” – Part 2: What’s a Team To Do?

  1. I understand your concern about when management coming up with Mission/Vision statements on their own. In my feedback to your previous article the “North Star” and “Strategy” I refer to are the Mission and Vision. I would always provide them to my teams. I think the difference is that I’d meet individually with many of the prospective team members beforehand to discuss the issues such that I could consider and sometimes incorporate their points of view in putting together these them together. The reason I took this role was that on the first few times I put teams together they weren’t very good at being able to distill everyone’s perspectives into elements sufficiently focused to guide progress.

    By the way, in putting together our Supplier Development strategy I set the North Star goal as Cost Reduction (sorry, that’s what purchasing people do) but established the Strategy as lead-time reduction based on my research. One of the first tasks I gave to my Supplier Development group was establish the definition we’d use for lead-time. I sat through the first half-hour of the team’s discussion to make sure it was properly aligned — even though there were disagreements — and then left the room saying I’d be back in two hours and expected the team to have a consensus definition. That’s where MCT came from. And it has really stood the test of time. A really good team effort.

    1. With the exception of “Cost First”, we seem to have undergone a similar learning experience with respect to Teams. I think you will find my subsequent musings about the vital importance of developing a robust “Team Charter” to fit right in with your observations.

  2. Reducing the lead time is the first thing ,but there are seven kinds of wastes ,they all do something with Time Reducing as you mentioned. which is the first ,the second ,how do we make the improving sequence? , I hope you could give some clear principle, if not , every one wants to take their own idea! tks!

    1. Bingli, very good question! But remember that Ohno said there was nothing magical about there being seven wastes other than the number “7” itself (see “What is Waste – Part 1”). So, there is also no preferential sequence to which waste to tackle first, second, etc. It all depends on the nature of the system you are trying to improve. First, as you say, try to determine what is having the biggest contribution to your lead time. For high volume/low mix (HVLM) systems, “inventory” tends to be the biggest culprit, but not always. For high mix/low volume (HMLV) systems, “wait” can often be the biggest waste. But this is just the first step.

      Let’s suppose “inventory” is the biggest contributor to lead time. Does that mean you immediately start reducing inventory? No, not necessarily (not what you can do). This is where the “five whys” come in handy. Ask: “why” is inventory so large? Is it because finance says large production runs are more economical in order to achieve low fully absorbed unit costs? If the answer is “yes”, then you know the real waste is “overproduction”, and you tackle that problem. Or, is it because you need a large inventory to buffer the system from frequent process defects? If the answer is “yes”, then you know the real waste is “defects”, and you tackle that problem. Once you start solving the root cause problems (what you should do), then you can start reducing inventory and bring your lead time down.

      If it ends up you don’t know “why” your inventory is so high, then start reducing inventory until problems become visible (interruptions to flow). Then you will know “why” and you can start fixing that problem. Then reduce inventory some more until you find the next “why”. If you continue doing this you will begin approaching Mr. Ohba’s “True North” of 1 x 1 flow, 100% value add and zero defects – or “shortest lead time, highest quality and lowest cost”.

      Or, you can take the “exciting” approach and just implement 1 x 1 flow (e.g., create a manufacturing flow cell) and you will immediately find all the “whys” all at once. Your line will be down for a while, but you will know “what you should do”. I have done this many times, but only for processes that are relatively stable at the start.

      I hope this was helpful to you. Let me know.

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