from our weekly newsletter, The Visual Thinker

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This is Part 3 of a 3-Part Series. Read Parts 1 | 2 | 3.

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Our discussion continues, the center of which is the question: “What does growth mean for my company?” The power of that single issue was brought home to me in spades in 2004 when, as a Shingo Prize Examiner, I went with a site team to the Delphi facility in Delnosa, Mexico to validate and verify a very impressive improvement profile described in the Achievement Report. The report read like a lean playbook, with all the requisites. Quick changeovers, one-piece flow, quality-at-the-source, and cellular design were solidly in place—along with dramatic reductions in lead time, throughput time, accidents, defects, and, of course, costs—and the associated increases in productivity, customer satisfaction, revenues, and profit margin.

The Achievement Report also shared a crystal-clear manufacturing vision for operational excellence, captured in a five-point progress model. More needs to be said about that model because of what happened next on the visit. The five-point Operational Excellence system was developed by Delphi corporate, under the driven leadership of J. T. Battenburg (chairman- CEO-president of Delphi Corporation from 1998 to 2005)—and with the very active participation of a number of retired Toyota senseis, one for each Delphi division. It was a jewel of a model, following the classic TPS profile, with dozens of Delphi sites working themselves into a lather to raise their score by even 0.08 (which was considered a very impressive annual gain).

Land Ahoy!

By the end of 2003, every Delphi plant across all divisions had achieved a score of 4.5 or better in all the core TPS elements. At that year’s annual meeting, Battenberg shocked everyone when he announced that he was satisfied and therefore retiring the 5-point framework. We can imagine, can’t we, the palpable sense of relief in the audience: “We’ve made it! We’ve arrived!”

But Battenberg had a different agenda in mind. What he said next showed his true colors as what I call a barracuda leader—nice as pie on the outside but hungry on the inside, and always looking for lunch. In effect he said: “Finally we are ready. Now: Let’s grow! I want 30% more of everything. Standing next to me are our Toyota senseis. They have gotten us this far. Now, continue to work with your sensei—and do everything he tells you to. I want 30% more of everything!

The TPS deck of cards, so to speak, was about to be thrown into the air, and when the cards came down, things would be radically changed. By design.

Back to the Delnosa site… Our exam of the facility showed a plant that had indeed increased throughput and productivity by leaps and bounds over the numbers in the site’s Achievement Report, submitted less than a year before. But there wasn’t a cell in sight. What we examiners saw did not match the report. Was it fabricated—full of misrepresentations? No. But the changes mandated by Battenberg had been swiftly and decisively made. No one waited for the permission of The Shingo Prize to proceed. Yamada-san, the sensei linked to Delnosa, had ordered, for example, the immediate de-coupling of previously takt time-driven cells. That was just the beginning. Fondly and closely held beliefs about what TPS was supposed to look like were thrown out the window, leaving an operational profile we examiners had never seen before in a prize-worthy plant.

The facility had turned its back on one-piece flow. The de-coupled cells were laid out in assembly lines—again. Long ones. The result? A 30% increase in throughput, with no diminishment in previous quality, on-time delivery levels, safety, or cost.

How could this be? A complete contradiction of fundamental TPS principles and a reversion to the past! But the truth is more riveting than that. A successful company is nothing if it is not alive, vital, robust, and always seeking its next breakthrough. This site had no artificial allegiance to a model—TPS or otherwise, including what others may think it was supposed to be or do.

What Does Growth Mean For You?

The breakthrough companies in the world are not in the business of implementing TPS. They are in the business of discovering what they need to gain greater stability, expansion, profit margins, and prosperity. They repeatedly ask the same driving question: “What does growth mean for us?” And then they go after it. They are in the business of growing.

Is that a process or a destination? Respond as you will as long as you also recognize that there are no limits to the answer.