Toyota's Secret Weapon: Lean Production and the Toyota Production System

Toyota: The World's Most Profitable Automaker

Toyota is the world’s most profitable automaker. Its “secret weapon” is lean production — the revolutionary approach to business processes that it invented in the 1950s and has spent decades perfecting. Today, businesses around the world are trying to emulate Toyota’s remarkable success by working to implement the company’s radical system for speeding up business and service processes, reducing waste, and improving quality. It is a system that is derived from balancing the role of people in an organizational culture that expects and values their continuous improvements, with a technical system that is focused on high-value-added “flow.”Toyota first caught the world’s attention in the 1980s, when it became clear that there was something special about Japanese quality and efficiency. Japanese cars were lasting longer than American cars and required much less repair. By the 1990s, it was apparent that there was something even more special about Toyota compared to other automakers in Japan. It was the way Toyota engineered and manufactured the autos that led to unbelievable consistency in the process and product. Toyota designed autos faster, with more reliability, yet at a competitive cost, even when
paying the relatively high wages of Japanese workers. Equally impressive was that every time Toyota showed an apparent weakness and seemed vulnerable to the competition, Toyota fixed the problem and came back even stronger.Much of Toyota’s success comes from its astounding quality reputation. In 2003, Toyota recalled 79 percent fewer vehicles in the United States than Ford and 92 percent fewer than Chrysler. According to a 2003 study in Consumer Reports, 15 of the top 38 most reliable models from any manufacturer over the last seven years were made by Toyota/Lexus.The Toyota Production System (TPS) is Toyota’s unique approach to manufacturing. It is the basis for much of the “lean production” movement that has dominated manufacturing trends for the last 10 years. Lean manufacturing is a fivepart process that includes defining customer value, defining the value stream, making it “flow,” “pulling” from the customer back, and striving for excellence. To be a lean manufacturer requires a way of thinking that focuses on making the product flow through value-adding processes without interruption (one-piece 4flow), a “pull” system that cascades back from customer demand by replenishing only what the next operation takes away at short intervals, and a culture in which everyone is striving continuously to improve.TPS evolved to meet the particular challenges Toyota faced as it grew as a company. It evolved as Taiichi Ohno, Toyota’s plant manager who was assigned to improve Toyota’s manufacturing process in 1950, and his contemporaries put these principles to work in the shop through years of trial and error. Out of the rubble of WWII, they accepted the challenge of matching Ford’s productivity “with a creative spirit and courage,” solved problem after problem, and evolved the new production system.

When applying TPS, you start with examining the manufacturing process from the customer’s perspective. The first question in TPS is always “What does the customer want from this process?” This defines value. Through the customer’s eyes, you can observe the process and separate the value-added steps from the non-value added steps. You can apply this to any process — manufacturing, information or services.

1. Kaizen is the heart of the Toyota Production System.

2. Like all mass-production systems, the Toyota process requires that all tasks, both human and mechanical, be very precisely defined and standardized to ensure maximum quality, eliminate waste and improve efficiency.

3. Toyota Members have a responsibility not only to follow closely these standardized work guidelines but also to seek their continual improvement. This is simply common sense - since it is clear that inherent inefficiencies or problems in any procedure will always be most apparent to those closest to the process.

4. The day-to-day improvements that Members and their Team Leaders make to their working practices and equipment are known as kaizen. But the term also has a wider meeting: it means a continual striving for improvement in every sphere of the Company's activities - from the most basic manufacturing process to serving the customer and the wider community beyond.

1. Based on the corporate philosophy of 'customer first' and 'quality first' since its founding, Toyota Motor Co., Ltd. won the Deming Application Prize in 1965 and the Japan Quality Control Award in 1970, following the introduction of statistical quality control (SQC) in 1949, and has conducted Total Quality Management (TQM) based on the unchanging principles of 'customer first', kaizen (continuous improvement), and 'total participation'.

2. In addition, since the launch of the Creative Idea Suggestion System in 1951, the number of suggestions made has steadily increased, and the system has supported flexible responses to changes that involve monozukuri (conscientious manufacturing), making substantial contributions to the company's development.