Toyota Production System

1. Just-in-Time: The Foundation of Toyota's Production System

"Just-in-time" means that, in a flow process, the right parts needed in assembly reach the assembly line at the time they are needed and only in the amount needed.

Revolutionizing production flow. Just-in-Time (JIT) is the cornerstone of the Toyota Production System, aiming to eliminate waste by producing only what is needed, when it is needed, and in the quantity needed. This approach drastically reduces inventory, minimizes storage costs, and exposes inefficiencies in the production process.

Implementing JIT. To achieve JIT, Toyota:

• Reorganized factory layouts to create a logical flow of materials
• Reduced setup times to allow for smaller batch sizes
• Implemented a pull system where downstream processes signal their needs to upstream processes
• Developed close relationships with suppliers to ensure reliable and timely deliveries

The JIT system requires a high degree of coordination and discipline throughout the supply chain, but its benefits include improved quality, reduced costs, and increased responsiveness to market demands.

2. Autonomation: Intelligent Automation with a Human Touch

Autonomation changes the meaning of management as well. An operator is not needed while the machine is working normally. Only when the machine stops because of an abnormal situation does it get human attention.

Empowering machines and workers. Autonomation, or "automation with a human touch," is the second pillar of the Toyota Production System. It involves equipping machines with the ability to detect abnormalities and stop automatically, preventing the production of defective items and freeing workers to focus on more value-added tasks.

Key aspects of autonomation:

• Automatic detection of defects or abnormalities
• Immediate stoppage when problems occur
• Clear signaling systems (e.g., andon boards) to alert workers
• Empowerment of workers to stop the production line when necessary

This approach not only improves quality but also enhances worker engagement and responsibility. By combining human intelligence with machine efficiency, autonomation creates a more flexible and responsive production system.

3. Elimination of Waste: The Key to Cost Reduction and Efficiency

The Toyota production system, with its two pillars advocating the absolute elimination of waste, was born in Japan out of necessity.

Identifying and eliminating waste. The relentless pursuit of waste elimination is central to the Toyota Production System. Waste, or "muda" in Japanese, is defined as any activity that does not add value to the product or service from the customer's perspective.

Toyota identified seven types of waste:

1. Overproduction
2. Waiting
3. Transportation
4. Over-processing
5. Inventory
6. Motion
7. Defects

By systematically identifying and eliminating these wastes, Toyota was able to significantly reduce costs, improve quality, and increase efficiency. This approach requires continuous observation, analysis, and improvement of all processes, fostering a culture of lean thinking throughout the organization.

4. Kanban: A Visual Tool for Managing Production Flow

A kanban always accompanies the goods and thus is the essential communications tool for just-in-time production.

Simplifying production control. Kanban, meaning "signboard" in Japanese, is a visual system used to manage and control the flow of materials in a JIT production environment. It serves as a simple yet effective communication tool between different processes in the production line.

Key elements of the kanban system:

• Cards or signals that authorize production or movement of materials
• Strict rules governing the use of kanban
• Continuous reduction of the number of kanban to expose inefficiencies

Kanban helps prevent overproduction, reduces inventory, and improves the overall flow of materials through the production process. It also empowers workers to manage their own work and promotes a culture of continuous improvement by making problems visible.

5. Continuous Improvement: The Pursuit of Perfection

It is said that improvement is eternal and infinite. It should be the duty of those working with kanban to keep improving it with creativity and resourcefulness without allowing it to become fixed at any stage.

Kaizen culture. Continuous improvement, or "kaizen" in Japanese, is a fundamental principle of the Toyota Production System. It involves making small, incremental changes on a regular basis to improve efficiency, quality, and working conditions.

Key aspects of continuous improvement:

• Engagement of all employees in improvement efforts
• Focus on process rather than results
• Encouragement of experimentation and learning from failures
• Regular reflection and sharing of best practices

This approach fosters a culture of innovation and adaptability, allowing Toyota to continuously evolve its production system and maintain its competitive edge. It also empowers workers at all levels to contribute to the company's success, enhancing job satisfaction and productivity.

6. Production Leveling: Balancing Demand and Capacity

Production leveling is much more advantageous than the planned mass-production system in responding to the diverse demands of the automobile market.

Smoothing production flow. Production leveling, or "heijunka" in Japanese, is the practice of balancing production by both volume and product mix. Instead of producing large batches of a single model, Toyota produces smaller batches of different models on the same line.

Benefits of production leveling:

• Reduced inventory and capital costs
• More flexible response to customer demand
• Smoother utilization of labor and machines
• Reduced burden on upstream processes and suppliers

By implementing production leveling, Toyota was able to achieve greater efficiency and flexibility in its production system, enabling it to better respond to market fluctuations and diverse customer needs.

7. Flexibility in Production: Adapting to Market Changes

The Toyota production system has been thorough in removing waste, inconsistency, and excess from production. It is by no means a passive or defensive management system.

Agility in manufacturing. The Toyota Production System emphasizes flexibility to adapt quickly to changing market conditions. This flexibility is achieved through various means, including multi-skilled workers, adaptable machinery, and quick changeover techniques.

Key elements of production flexibility:

• Cross-training workers to perform multiple tasks
• Designing machinery for quick setup changes
• Implementing small-lot production
• Maintaining close relationships with suppliers for responsive sourcing

This flexibility allows Toyota to efficiently produce a wide variety of models in varying quantities, responding effectively to market demand without excessive inventory or capacity.

8. The Power of Observation and Questioning

Stand on the production floor all day and watch - you will eventually discover what has to be done. I cannot emphasize this too much.

Genchi Genbutsu. This principle, meaning "go and see for yourself," emphasizes the importance of direct observation in problem-solving and improvement. Ohno encouraged managers and engineers to spend time on the factory floor, observing processes firsthand and asking questions.

The "Five Whys" technique:

1. Identify a problem
2. Ask "Why?" five times to dig deeper into the root cause
3. Each answer forms the basis for the next question
4. Continue until the root cause is identified
5. Develop and implement countermeasures

This approach promotes a deeper understanding of processes and challenges, leading to more effective solutions and improvements.

9. Respect for People: The Human Element in Manufacturing

Management's responsibility is to identify excess manpower and utilize it effectively. Hiring people when business is good and production is high just to lay them off or recruiting early retirees when recession hits are bad practices.

Valuing human capital. The Toyota Production System places great emphasis on respecting and developing people. This includes not only workers but also suppliers and customers. The system recognizes that engaged, skilled, and empowered workers are crucial for continuous improvement and long-term success.

Key aspects of respecting people:

• Job security and long-term employment
• Continuous training and skill development
• Empowerment to stop production and suggest improvements
• Teamwork and mutual assistance

By investing in its people and fostering a culture of respect and collaboration, Toyota has been able to maintain high levels of productivity and innovation, even in challenging economic conditions.

10. Learning from Ford: Adapting and Evolving Mass Production

I believe Ford was a born rationalist - and I feel more so every time I read his writings. He had a deliberate and scientific way of thinking about industry in America.

Evolving mass production. While Toyota learned much from Ford's mass production system, it also recognized the need to adapt these principles to suit Japan's unique economic and cultural context. Ohno studied Ford's ideas closely but developed a more flexible and efficient system suited to producing a variety of models in smaller quantities.

Key adaptations of Ford's system:

• Emphasis on flow rather than large batch sizes
• Focus on eliminating all forms of waste
• Development of flexible production lines
• Implementation of pull production based on actual demand

By building on Ford's foundations while innovating to meet new challenges, Toyota created a production system that has significantly influenced manufacturing practices worldwide.

Last updated: January 25, 2025