In Lean Management, there is a concept called True North. Like the North Star for a sailor, it embodies an ideal, a vision for the business. While both the sailor and the business always strive towards that distant point and use it as an orientation, they will never be able to reach it. This ties in with the idea of continuous improvement: Always strive for perfection, even though you are always fully aware that you will never reach it.
True North is traditionally associated with targets influenced by the customer. In Lean Management, the customer is always put first and all targets should thus be based on their wishes. In an industrial environment, typical elements of such a vision are zero defects, a perfect delivery performance or 100% customer satisfaction. However, connecting to my opening post, I believe that environmental and social aspects should also be taken into consideration when in comes to target setting (I’ll call these “global targets”).
Let me take you through some examples. Let’s say our traditional True North target is to have 100% delivery performance, i. .e always shipping the requested quantities to our customers and making sure these deliveries arrive exactly at the time the customer requested. In a traditional Lean environment, all activities in the business would be streamlined towards reaching that target. This could include activities like matching production output to customer takt on a smaller scale, but also e. g. bringing the company closer to the customer’s location in order to reduce supply chain risks.
If we extend this traditional Lean target of “100% delivery performance” towards a more global approach, we might e. g. include an additional dimension: “100% delivery performance with zero green house gas emissions” Activities would then extend to issues like modes of transportation (How to avoid airfreight? Is transport with electric vehicles an option?) or frequency of shipments (How can we balance minimum stock levels, minimum transport frequency and minimum risk for the customer?).
In this case, most elements of the global target match the traditional True North target nicely. Of course, there may be cases in which these targets actually oppose one another. While of course customer targets should still be at the core of every business’s strategy, we need to make sure social and environmental impact is always considered beforehand.
Customer targets should still be at the core of every business’s strategy. However, we need to make sure we always consider the social and environmental impact beforehand. If in doubt, let global targets succeed customer targets. Of course this generates a target conflict potentially harming the business. Obviously, not all customer wishes should be rejected – if there are no more customers left, even the most idealistic targets cannot be reached. Instead, businesses should learn to nudge their customer base towards those global targets little by little. They might lose customers on the way, but they are very likely to gain new ones, too.
What is your take on this? Do you believe customers need to accept cuts in order to minimize global impact? Or is there a way to align both customer and community targets?