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The Toyota Production System

Koromo, Japan, October 1949. Passenger car production restrictions were lifted in post-war Japan. In 1945, Kiichiro Toyoda had challenged his company to "catch up with America," but it was clear that Toyota could not catch up by adopting America's mass production model. Mass production meant making thousands of identical parts to gain economies of scale, but materials were scarce, orders were spotty, and variety was in demand. Economies of scale were simply not available.

Kiichiro Toyoda's vision was that all parts for assembly should arrive at the assembly line "Just-in-Time" for their use. This was not to be accomplished by warehousing parts; parts should be made just before they are needed. It took time to make this vision a reality, but in 1962, a decade after Kiichiro Toyoda's death, his company adopted the Toyota Production System companywide.

Taiichi Ohno

Taiichi Ohno was a machine shop manager who responded to Kiichiro Toyoda's challenge and vision by developing what came to be known as the Toyota Production System. He studied Ford's production system and gained insight from the way American supermarkets handled inventory. To this he added his knowledge of spinning and weaving and the insights of the workers he supervised. It took years of experimentation to gradually develop the Toyota Production System, a process that Ohno considered never-ending. He spread the ideas across the company as he was given increasingly broad areas of responsibility.

In his book, Toyota Production System, 2 Ohno calls the Toyota Production System "a system for the absolute elimination of waste." He explains that the system rests on two pillars: Just-in-Time flow and autonomation (also called Jidoka).

Just-in-Time Flow

It is important to note that Just-in-Time flow went completely against all conventional wisdom of the time. Resistance to Ohno's efforts was tremendous, and he succeeded because he was backed by Eiji Toyoda, who held various senior management positions in the company after his cousin Kiichiro left in 1950. Both Toyodas had brilliantly perceived that the game to be played was not economies of scale, but conquering complexity. Economies of scale will reduce costs about 15 percent to 25 percent per unit when volume doubles. But costs go up by 20 percent to 35 percent every time variety doubles.3 Just-in-Time flow drives out major contributors to the cost of variety. In fact, it is the only industrial model we have that effectively manages complexity. 4

Autonomation (Jidoka)

Toyoda automated looms could operate without weavers present because the looms detected when anything went wrong and shut down automatically. Autonomation, or its Japanese name Jidoka, means that work is organized so that the slightest abnormality is immediately detected, work stops, and the cause of the problem is remedied before work resumes. Another name for this critical concept, and one that is perhaps easier to remember, is "stop-the-line."

Ohno called autonomation "automation with a human touch." He pointed out how the related word "autonomic" brings to mind another way to look at this concept. Our bodies have an autonomic nervous system that governs reflexes such as breathing, heartbeat, and digestion. If we touch something hot, our autonomic nerves cause us to withdraw our hand without waiting for the brain to send a message. Autonomation means the organization has reflexes in place that will respond instantly and correctly to events without having to go to the brain for instructions.5

Shigeo Shingo

Shigeo Shingo was a consultant who helped Ohno implement the Toyota Production System at Toyota, and later helped companies around the world understand and implement the system. Those of us who implemented Just-in-Time manufacturing in the early '80s fondly remember the "Green Book,"6 the first book on Just-in-Time published in English. It was not a good translation, and the material is heavy and technical, but it is a stunningly insightful book.

Shingo covers two major themes in the book: nonstock production and zero inspection. A careful look shows that these are actually the engineering equivalent of Ohno's pillars of the Toyota Production System.

Nonstock Production

Just-in-Time flow means eliminating the stockpiles of in-process inventory that used to be made in the name of economies of scale. The focus is on making everything in small batches, and in order to do this, it is necessary to be able to changeover a machine from making one part to making a different part very quickly. In software development, one way to look at set-up time is to consider the time it takes to deploy software. Some organizations take weeks and months to deploy new software, and because of this they put as many features into a release as possible. This gives them a large batch of testing, training, and integration work to do for each release. On the other hand, I expect the antivirus software on my computer to be updated with a well-tested release within hours after a new threat is discovered. The change will be small, so integration and training are generally not a concern.

Zero Inspection

The idea behind autonomation is that a system must be designed to be mistake-proof. There should not be someone looking for a machine to break or testing product to see if it is good. A properly mistake-proofed system will not need inspection. My video cable is an example of mistake-proofing. I can't plug a monitor cable into a computer or video projector upside down because the cable and plug are keyed. So I don't need someone to inspect that I plugged the cable in correctly, because it's impossible to get it wrong. Mistake-proofing assumes that any mistake that can be made will eventually be made, so take the time at the start to make the mistake impossible.

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