The Toyota Production System: keeping quality and killing waste
Toyota is known for its reliable cars among the general public, but it has also been known in management circles for its unusually productive use of people. Rather than considering people to be lazy and expensive, best replaced by machines, Toyota’s labor strife has been rare, and the “line people” are part of the quality process. The company’s last strike — its only strike — was in 1950.
Many credit Toyota’s success to the Toyota Production System, established by Taïchi Ohno and Shigeo Shingo through the late 1950s, 1960s, and 1970s. It incorporates Jidoka, just-in-time production, and kaizen:
Kaizen is essentially continuous improvement; the basic idea is that small-scale changes to the process will have big effects over the long run. Toyota constantly seeks input from its employees and suppliers, and is biased to implementing any changes — even if managers don’t think it will help, if it’s at least neutral in cost, they will try it (and usually put the person who suggested it in charge of implementation). It also leads Toyota to “tweak-on-the-go” — implementing ideas even as production continues, or stopping the line momentarily to put an improvement into place.
Jidoka is not letting a defect go from one machine to the next; it adds the ability to detect unacceptable quality during the process of production rather than waiting until the end, when it may be hidden. The name is a Japanese pun on the term “automation,” adding the character for a person into the middle. Jidoka was used to make Toyoda power looms before the first Toyota car was created; it both reduces costs and increases reliability.
Just-in-time production is having parts ready just as they are needed, rather than maintaining inventories across an assembly plant and in warehouses. Most writers tend to focus on the cost savings from having less capital tied up in inventory under this system, but there is another advantage: engineering changes (to increase reliability or functionality, or to cut cost) can take effect much more quickly, since stockpiles of parts do not need to be cleared out; and problems with individual parts can be detected much more quickly since they are used closer to the time they are made.
One key to Toyota’s success with this method has been pushing responsibilty downwards and empowering low-level employees to set order priorities, dispatch people to particular jobs, and authorize overtime as needed.
Some have criticized just-in-time production as simply pushing inventories from the car factory to the supplier’s warehouse, but ideally this does not happen. The down side is that any problem with a part may quickly shut down all downstream factories.
The Toyota Production System was partly a result of Ohno and Shingo's observations of American production. They saw problems with Henry Ford’s treatment of people as machines at best, and enemies at worst. (Henry Ford had hired mercenaries to go into workers’ homes to make sure they were living as good Christians, and give them beatings if they were suspected of union sympathies.) Aside from the humanitarian issues, Ford did not use the knowledge or expertise of its workers; Toyota would lead the world in that regard.
Pareto charts are one way to find solutions to quality issues
Ohno and Shingo also read the works of American and Japanese management experts, including Ishikawa, Deming, and Juran. They were impressed by the statistical quality control and quality circle approaches. Years before Pehr Gyllenhammar was to turn Volvo around, using similar techniques, Toyota organized around team development and cellular manufacturing. Using people as people, rather than ornery machines, also allowed for more flexibility than Ford's more automated approach would allow. This was to make rapid changes easier, also helping quality and increasing responsiveness to competitors.
More specifically, Toyota tries to cut anything but the absolute minimum of equipment, materials, parts, and people; everything else is “waste.” One example is trying to cut the time it takes to convert the line from one model to another, for short runs — on the same assembly line; sometimes, the company uses people rather than robots for their greater flexibility. That has a secondary advantage, which is that robots never make suggestions about process improvements.
Long before it became popular to do so, Toyota let anyone stop the line if they spotted a defect or quality problem, so that, instead of making many more defective parts or cars and fixing them later (or letting customers do it), they could fix the problem right away — putting quality before production. Even today (2018), many competitors pay lip service to the idea but find it hard to put into practice.
Those who are interested in the original work of Taiichi Ohno and Shigeo Shingo may be interested in Ohno’s book, Toyota Production System.
The following sections are also found in the history page.
Toyota Motor Corporation today
In April 2002, Toyota adopted the 2010 Global Vision, a vision for meeting mobility needs in a way that respects our earth and all people. It is made of long-term policies centered on the basic theme of 'innovation into the future.' Four key themes based on trends seen as developing from 2020 to around 2030 are:
- Toward a recycle-oriented society
- Toward the age of IT and ubiquitous networks
- Toward a mature society (the decline of nationalism and war and the rise of respectful exchange of ideas)
- Toward motorization on a global scale (societies with little private transport gaining more)
These are linked to the pursuit of a new global image for Toyota with four key components: kind to the earth, comfort of life, excitement for the world, and respect for all people. The encompassing motto of "innovation into the future" is "working with passion and dedication to create a prosperous society."
David Zatz, PhD, has also written histories of the Chrysler minivan, Dodge Viper, and various Jeeps. He teaches at the FDU School of Public and Global Affairs, and continues to do consulting with Toolpack.