The Toyota Production System

The Toyota Production System

Introduction

Today, automobile manufacturing is still the world's largest manufacturing activity. Forty years ago, Peter Drucker dubbed it "the industries of industries." After First World War, Henry Ford and General Motors' Alfred Sloan moved world manufacture from centuries of craft production (led by European firms into the age of mass production.) His production innovation was the moving assembling line, which brought together many mass-produced parts to create automobiles. Ford's moving assembly line gave the world the fullest expression yet of the Second Industrial Revolution and his production triumphs in the second decade of the 20th century signaled the crest of the new industrial age. Largely as a result, the United States soon dominated the world economy.

Production methods

The craft producer uses highly skilled workers and a simple but flexible tool to make exactly what the customer asks for. Few cars provide current day examples. The problem with this kind of production is the cost, which is usually too high for most of the consumers to afford. Then, mass production was developed at the beginning of the twentieth century as an alternative. The mass-producer uses narrowly skilled professionals to design products made by unskilled or semiskilled workers tending expensive, single-purpose machines. These churn out standardized products in very high volume. Because the high cost of the machinery and that it is so intolerant of disruption, the mass-producer keeps standard designs in production for as long as possible. The result: The customer gets lower costs but at the expense of variety and by means of work methods that most employees find boring and dispiriting.

The Toyota motor corporation, by contrast, combines the advantages of craft and mass production, while avoiding the high cost of the former and the rigidity of the latter. Toward this end, they employ teams of multi-skilled workers at all levels of the organization and use highly flexible and increasingly automated machines to produce volumes of products in enormous variety. Perhaps the most striking difference between mass and Toyota production system lies in their ultimate objectives. Mass-producers set a limited goal for themselves-- "good enough," which translates into an acceptable number of defects, a maximum acceptable level of inventories, a narrow range of standardized products. Lean producers on the other hand, as the Toyota system, set their sights explicitly on perfection.

Toyota Production System

After Second World War, Eiji Toyoda and Taiichi Ohno at the Toyota motor company in Japan pioneered the concept of Toyota Production System. Its story has been intensively researched and painstakingly documented, yet what really happens inside the company remains a mystery. Here's new insight into the unspoken rules that give Toyota its competitive edge.

Companies that have tried to adopt the system can be found in fields as diverse as aerospace, consumer products, metals processing, and industrial products. The companies that first mastered this system were all head - quartered in Japan. However, many Western companies now understand Toyota Production System, and at least one is well along the path of introducing it. Superimposing this method on the existing mass-production systems causes great pain and dislocation. Manufacturers around the world are now trying to embrace this innovative system, are finding the going rough.

Following their own internal efforts to benchmark the world's best manufacturing companies, GM, Ford, and Chrysler have independently created major initiatives to develop Toyota-like production systems.

What's curious is that few manufacturers have managed to imitate Toyota successfully -even though the company has been extraordinarily open about its practices-. Hundreds of thousands of executives from thousands of businesses have toured Toyota's plants in Japan and the United States. Frustrated by their inability to replicate Toyota's performance, many visitors assume that the secret of Toyota's success must lie in its cultural roots. But that's just not the case. Other Japanese companies, such as Nissan and Honda, have fallen short of Toyota's standards, and Toyota has successfully introduced its production system all around the world, including in North America, where the company is this year building over a million cars, minivans, and light trucks.

So why has it been so difficult to decode the Toyota Production System? The answer, we believe, is that observers confuse the tools and practices they see on their plant visits with the system itself. That makes it impossible for them to resolve an apparent paradox of the system-namely, that activities, connections, and production flows in a Toyota factory are rigidly scripted, yet at the same time Toyota's operations are enormously flexible and adaptable. Activities and processes are constantly being challenged and pushed to a higher level of performance, enabling the company to continually innovate and improve.

The system actually stimulates workers and managers to engage in the kind of experimentation that is widely recognized as the cornerstone of a learning organization. That is what distinguishes Toyota from all the other companies.

The Toyota Production System and the scientific method that underpins it were not imposed on Toyota -they were not even chosen consciously-. The system grew naturally out of the workings of the company over five decades. As a result, it has never been written down, and Toyota's workers often are not able to articulate it. That's why it's so hard for outsiders to grasp.

There are four principles-three rules of design, which show how Toyota sets up all its operations as experiments, and one rule of improvement, which describes how Toyota teaches the scientific method to workers at every level of the organization. It is these rules -and not the specific practices and tools that people observe during their plant visits -that in investigators opinion-, form the essence of Toyota's system.

Rule 1: How People Work

Every activity is specified. Toyota's managers recognize that the devil is in the details; that's why they ensure that all work is highly specified as to content, sequence, timing, and outcome. For example, when a cat's seat is installed, for instance, the bolts are always tightened in the same order, the time it takes to turn each bolt is specified,