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Toyota’s True North Concept

This month’s question deals with the concept of True North in lean implementation and has four parts. 1) What is the role of True North in Lean Thinking? 2) How do we define the concept? 3) In what way does it contribute to lean results? and 4) Can lean be done without True North? I will deal with these four parts to the question one by one in the paragraphs below.

True North is one of the common buzzwords of the past decade used to help explain parts of the Toyota Production System or Toyota Way. For starters I am not a big fan of buzz words like True North. The problem is that these terms can often obfuscate as often as they help to clarify. This one however is fairly harmless and probably does some good. The term itself is not really part of the original Toyota Production System. Old timers like Taiichi Ohno never used the phrase and I never used it in my time with the company either. The concept it embodies however is quite simple for the most part.

The role of True North inside Toyota is similar to its basic meaning in English. True north (geodetic north) refers to the direction along the Earth’s surface towards the North Pole. In reality the geodetic north differs from magnetic north, and grid north etc. but that is not really necessary for our question here (click here for description). In navigation or in Lean implementation you need a way to get from point A to point B without getting lost. It is easy to move between two points if you are familiar with the terrain and the distance is fairly short. In real life and in lean implementation however this is not always the case. It is easy to get lost, sidetracked, disoriented, or tired and confused. To help in navigation it helps to have a fixed unchanging point for reference i.e. True North. The same basic need exists in lean implementation.

Now lets move onto the definition of the term. As I mentioned earlier the term True North is fairly new (past dozen or so years) with respect to the Toyota Production System. Inside of Toyota in Japanese there has long existed the phrase “aru beki sugata” which roughly translates as “ideally the way things should be”. That phrase was used frequently by many different people in the company when I was an employee. It was a natural part of the corporate language regarding how we wanted things to be in certain circumstances (production, HR, development, purchasing, engineering, etc.). The particular phrase True North in English started to be used fairly often in presentations made by the Toyota Supplier Support Center (TSSC) in North America in the past decade. The following graphic is the one most commonly used in terms of definition.

In other words in production for example an ideal state would encompass customer satisfaction with zero defects, 100% value added work, lot sizes of 1, and production in sequence and on demand. Employee development would entail physical and mental safety, job security, and professional challenge. It reflects not what we can do but what we should do. It should occur with everyone every minute of every day. In reality of course no one is near this level of performance (certainly not Toyota). However as a reference point I think this notion certainly has some value.

So how does this concept contribute to lean results as asked in the original question? Well it depends upon your point of view. Some proponents of True North will have you believe it is an actual compass point to use in your lean journey and this is perhaps the key to obtaining results. In contrast I think it is merely a nifty chart and catchy buzzword that just helps explain the concept of True North with respect to Lean Thinking inside of Toyota. It alone does not produce any results. Its chief importance is in communicating the notion that there is an ideal state to shoot for and it is not subjective or changing all the time…Just having the chart or concept straight in your mind however does not make you any more likely to obtain results. Just like having a good compass or GPS device does not make me any more likely to win the next version of the Iditerod Great Sled race up in Alaska.

The final part of the question asks if Lean can be done without True North and this answer again depends upon what is meant by the question. In the narrow sense yes you can accomplish Lean without the True North concept as expressed above…after all the chart in question is only about a decade old and old timers like Taiichi Ohno did not use it during their heyday when spectacular improvement results were achieved. However in a broader sense I do think that you need something akin to either the phrase we used in Japan “aru beki sugata” or True North in English for Lean to flourish. In order to align people you need a concept and a reference point that is solid like True North or some other analogy. Plus everyone who ever worked at Toyota from 60 years old to today can glance at the chart and at some level say “yeah that is basically what we were working toward in an ideal sense in production”.

The only minor problems I have with True North as depicted above is that it leaves out any mention of profit or growth although you could of course argue that those will naturally fall in place if you follow the path to True North. Quality is expressly mentioned but productivity in indirectly reference by the 100% value added comment. The other nit picky criticism I have is that like most things in TPS this chart relates to the Production part of Toyota’s Way. It does not directly tie in very well to product development, engineering, IT, HR, purchasing or other functions. Of course it can be extrapolated to work in those ares it just takes some translation work. This chart and term in English (True North) was mainly used by the Toyota Supplier Support Center for work in the supply base for communication and explanation reasons. For that purpose it certainly has some value in addition to the ones I mentioned above.

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