A special report on TPS, commemorating the 50th anniversary this year of the passing away of Toyota

founder Kiichiro Toyoda.

Making Things:
The Essence and Evolution of the Toyota Production System.
Founder
Kiichiro Toyota

What is TPS? Is it a collection of tools and methods? Is it a way of thinking? How can it adapt to
the challenges of the 21st century?

On March 7, 2002, a group of experts on TPS gathered to discuss these

questions at a special conference titled Making Things 21C, held in Nagoya
Japan.

Toyota President Fujio Cho opened the conference with the observation
that making things is a fundamental human activity. It is the act of giving form to
a dream, creativity itself. Cho reminded the audience that Toyota founder Kiichiro
Toyoda was a practical engineer who believed in getting his hands dirty. He was
also a practical businessman who realized that the key to increased profit was
reduced costs. His most famous innovations just in time and jidoka do more
than simply eliminate waste and improve quality. They bring the manufacturing
TMC President Cho
process into crisp focus, exposing problems as they arise. They are therefore the
scientific basis of kaizen, continuous improvement, and the bedrock of the
Toyota Production System (TPS).

Just in time and jidoka

expose problems as they arise.
Following President Chos keynote speech, Tokai Gakuen University Professor Kazuo Koike reminded the audience of
manufacturings core role in adding economic value. Regarding the contribution of Kiichiro Toyoda, Professor Koike ex-
plained how manufacturing requires mastering uncertainty, examples of which include creatively solving unpredictable
problems of product quality and machinery. Koike described the ability of TPS to deal with changing market demand as
particularly impressive in this respect. As an example, if a production line needs to reduce production volume by 20%, it will
use 20% fewer workers and decrease the takt* time by 20%. This is accomplished by giving each remaining worker addi-
tional tasks so that it takes longer to complete one cycle. Such an adjustment requires managing five factors: (1) selection
of equipment; (2) determining equipment position, distance and safety; (3) reorganization of jobs (4) teaching standardized
tasks; and (5) experience of each worker with the preceding and following jobs on the line. Through such complex coordina-
tion, Toyota attains remarkable flexibility.

An afternoon session devoted to the Essence and Evolution of TPS was

led by Tokyo University Professor Takahiro Fujimoto, with panelists from industry
and academia. Fujimoto began by noting the exceptional performance of Toyota,
the creator of the global de facto best practice in manufacturing, and a company
that has been profitable every year for half a century. The question then be-
comes, why Toyota? Fujimoto sees the answer in Toyotas leaders approach
to car manufacturing itself which in its requirement of harmonizing and integrat-
ing a huge complex of factors is fundamentally different from making many other
products such as personal computers. Through insistence on a hands on
approach and sheer tenacity, Kiichiro Toyoda and his fellow Toyota pioneers
forced the evolution of a system that today has the resilience of a living thing.
"Essence and Evolution of TPS" Session

Chukyo University President Eiji Ogawa differentiated two types of

change management which characterize Toyota and TPS. One is the kind of incremental change usually associated with
kaizen. The other is the abilility to achieve paradigm shifts throughout the organization. TPS not only manages skills at the
worker level within the company as in the example of adjusting takt time to increase or decrease production volume
but also manages knowledge transfer through the orchestration of complex cooperation between Toyota and its partner
companies. In TPS, innovation is driven by the ideal of eliminating waste. When taken to its logical conclusion, this extends
beyond the company and its manufacturing process to include the outside world.

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 TPS as a system of training.
Hajime Ohba, general manager of the Toyota Supplier Support Center** in Kentucky, talked of the successes and
difficulties in transferring TPS to other companies. Many firms have doubled productivity in the short run, but few have been
able to evolve by continuing to apply the principles of TPS, Ohba observed. He interprets their difficulties as primarily a
failure to apply TPS as a system of training. To sustain success, it is necessary to nurture the workforce, to create a
culture where people internalize the knowledge of TPS. People must also strive to design new machinery and new prod-
ucts. The organization must develop the ability to evolve, to improve by changing its own system of operation.

Nampachi Hayashi, Executive Advisory Engineer of Toyota Motor Corporation, learned about TPS directly from the
legendary Taiichi Ohno, one of the systems originators. Hayashi emphasized the importance of imbuing the entire corpo-
rate culture with the TPS way of thinking. Kaizen consciousness must be the mindset of all employees. Regarding the
evolution of TPS, Hayashi explained that it is not simply a matter of adopting IT or other new technologies. Rather, TPS
evolution depends on persistent efforts toward improvement across the board. For example, just-in-time production must
extend from the customer all the way back to the supplier.

Kaizen consciousness
must be the mindset of all employees.
In the discussion that followed, panelists agreed that the key to success with TPS is to understand and apply the
basic principles on a comprehensive basis, not make localized corrections, as outside consultants mistakenly tend to
recommend.

Susumu Uchikawa, president of Kanto Auto Works, Ltd., noted that manufacturing is an activity that depends on the
intervention of human knowledge. He said that TPS is a system that combines skills and intellectual aspects but that it is
intellectually difficult to internalize the primary paradigm shift of downstream pulling upstream. Uchikawa noted that it is
normal for people to think they are not making any mistakes, to think they are getting what they need, in the quantity
needed, when they need it. But that assumption is flawed.

The biggest problem is thinking you are okay.

Hayashi told the audience that to avoid this trap you must doubt your assumptions. You must ask why? why? why?
You must understand that intellectual humility is the key to strength. Indeed, the biggest problem is thinking you are okay.
Evolution, Hayashi pointed out, has to be pursued at a deep level, as an ongoing project. When you run up against obsta-
cles, you cannot blame circumstances for your failure. You must take responsibility yourself. After all, if you were playing
golf, you wouldnt blame the green or the ball. Hayashi warned that evolution in TPS should not be confused with the
simpler idea of progress: Evolution requires trial and error, challenge and failure. It requires getting down to the nitty-gritty,
going to the source to find the facts. And unlike revolution, it is a continuous human endeavor that builds on the past.

Toyota Honorary Chairman Shoichiro Toyoda, Kiichiros son, closed the conference, encouraging the audience to
have confidence in the natural human ability to solve problems, transcend cultural differences, and create a better society in
the 21st century.

Toyotas expanding overseas manufacturing and marketing operations are driving the company to find ways of
assuring that its values, beliefs and business methods, known as the Toyota Way, are effectively transmitted and shared. To
help achieve this, Toyota established in January 2002 the Toyota Institute, a training center for executives and middle
management. Just as Kiichro Toyoda, Taiichi Ohno and other Toyota innovators created a learning organization that
constantly challenged assumptions and sought new solutions in manufacturing, Toyotas current leaders must develop the
companys teaching skills to spread the Toyota Way worldwide.

*takt time: The time it takes for each worker to complete his or her job cycle, therefore the rate at which vehicles are
produced by the line.

**Toyota Supplier Support Center: Established by Toyota in 1992, TSSC assists North American manufacturers who seek to
raise productivity, improve quality and strengthen their competitiveness by helping them implement their own version of the
Toyota Production System.

Report compiled April 1, 2002, Public Affairs Division, Toyota Motor Corporation.

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