How Toyota Changed The Way We Make Things

Summary

The Toyota Production System, pioneered by Kiichiro Toyoda and Taiichi Ohno, revolutionized car manufacturing through 'Lean Manufacturing' and 'Just In Time' inventory, inspired by a supermarket visit. This system, combined with 'Kanban' and a focus on continuous improvement ('kaizen'), enabled Toyota to produce high-quality, affordable cars efficiently, leading to its global success and influencing industries beyond automotive production.

Takeaways

• 🚗 Toyota pioneered the 'Lean Manufacturing' philosophy, which focuses on efficiency, cost-effectiveness, and quality.
• 🏭 Post-WWII Japan's scarcity of resources led to the necessity of creative manufacturing approaches, including Toyota's innovative production methods.
• 🔧 Toyota's founder, Sakichi Toyoda, started with a loom business, but it was his son Kiichiro who established the motor company in 1937.
• 👀 The concept of 'Just In Time' (JIT) was inspired by the supermarket model, where production is aligned with consumption to minimize waste.
• 📝 The 'Kanban' system, developed by Taiichi Ohno, is a visual scheduling method that predates bar codes and helps in managing inventory flow.
• 🛠 Ohno observed inefficiencies in American car production, particularly the practice of repairing defects after production, which he sought to avoid.
• 🔴 The 'Andon' cord system allows any worker to stop the assembly line to address quality issues, fostering a culture of continuous improvement.
• 🔄 'Kaizen' is the principle of continuous, incremental improvement that has become a hallmark of the Toyota Production System (TPS).
• 📈 Toyota's production efficiency enabled them to produce a car every 1.6 man hours, significantly outpacing competitors during the oil crisis era.
• 🌏 The TPS has been emulated by various industries globally, including aerospace, technology, and healthcare, demonstrating its broad applicability.
• 🛣️ The oil crises of the 1970s highlighted the appeal of fuel-efficient Japanese cars, boosting Toyota's market position in the U.S.

Q & A

What is the significance of Toyota's 'Lean Manufacturing' system?

Toyota's 'Lean Manufacturing' system, also known as the Toyota Production System, is significant because it revolutionized the way products are made by emphasizing efficiency, reducing waste, and focusing on continuous improvement. It has been widely emulated by companies around the world across various industries.

How did post-World War II Japan's economic situation influence Toyota's approach to manufacturing?

Post-World War II Japan faced a scarcity of materials and resources, which forced Toyota to be creative and efficient with the limited supplies they had. This situation led to the development of the 'Just In Time' system, which aimed to minimize waste and maximize the use of available resources.

Who founded Toyota Motor Corporation and when was it established?

Kiichiro Toyoda, the son of Sakichi Toyoda who had started a loom business, founded Toyota Motor Corporation in 1937.

What was the inspiration behind the 'Just In Time' system developed by Toyota?

The 'Just In Time' system was inspired by a visit to a supermarket, specifically a Piggly Wiggly, where Taiichi Ohno was struck by the efficiency of customers choosing exactly what they wanted, when they wanted, and the idea of producing only enough parts to replace what was used in the next phase of production.

What is 'Kanban' and how does it relate to the Toyota Production System?

'Kanban' is a sign-based scheduling method developed by Taiichi Ohno as part of the Toyota Production System. It shows the status of goods in, goods in production, and goods out, and is considered a precursor to modern bar codes.

How did the Toyota Production System address the issue of defective cars in the production line?

The Toyota Production System addressed the issue of defective cars by implementing a cord at every station that any worker could pull to stop the entire assembly line if they spotted a problem. This encouraged immediate problem-solving and prevented the same mistake from recurring.

What is 'kaizen' and how is it related to the Toyota Production System?

'Kaizen' is a Japanese philosophy of continuous, incremental improvement. It is a core component of the Toyota Production System, which emphasizes the importance of constantly seeking ways to improve processes and products.

How did the oil crises of the 1970s impact Toyota's success in the United States?

The oil crises of the 1970s led to higher gas prices, making fuel-efficient Japanese cars, like those produced by Toyota, much more appealing to American consumers who were looking for cheaper-to-run alternatives to their gas-guzzling vehicles.

What is the significance of Toyota's achievement of producing a car every 1.6 man hours in 1972?

Producing a car every 1.6 man hours in 1972 demonstrated Toyota's exceptional efficiency in manufacturing, which was significantly lower than their competitors. This efficiency was a direct result of the Toyota Production System and contributed to their competitive advantage.

Which other industries have adopted principles from the Toyota Production System?

Industries such as aerospace (Boeing), technology (Intel), and healthcare (a Canadian hospital reducing ER wait times) have adopted principles from the Toyota Production System, highlighting its broad applicability and influence beyond the automotive industry.

What is the broader impact of the Toyota Production System on global manufacturing?

The Toyota Production System has had a profound impact on global manufacturing by changing the approach to making things, emphasizing the avoidance of waste, the combination of craft with mass production, and the pursuit of constant improvement.

Outlines

00:00

🚗 Toyota's Lean Manufacturing and Just In Time Innovation

Toyota's success in the automotive industry is attributed to its pioneering 'Lean Manufacturing' system, which emphasizes efficiency, cost-effectiveness, and quality. The company's history dates back to post-WWII Japan, where scarcity of resources led to creative solutions. Toyota's founder, Sakichi Toyoda, and his son Kiichiro, who established the motor company, adapted to these challenges. The turning point came in the 1950s when Eiji Toyoda and Taiichi Ohno visited the U.S., inspired by the supermarket 'Just In Time' model, leading to the development of Toyota's production system. This system eliminated waste by producing parts only as needed, and introduced the 'Kanban' scheduling method, precursor to barcodes. Ohno also emphasized quality control by allowing workers to stop the assembly line at any point to address defects, fostering a culture of continuous improvement known as 'kaizen'. Toyota's production efficiency grew exponentially, with a significant increase in vehicle production from 1962 to 1972, and their cars became more appealing during the oil crises of the 1970s. The Toyota Production System (TPS) has influenced various industries, including Boeing and Intel, and even healthcare, demonstrating the universal application of its principles.

Keywords

💡Lean Manufacturing

Lean Manufacturing is a philosophy derived from the Toyota Production System, focusing on maximizing efficiency and minimizing waste in production processes. It is central to the video's theme as it highlights Toyota's innovative approach to manufacturing that has been emulated globally. The script mentions that this ethos is aimed at making products 'faster, cheaper, and better,' illustrating its significance in Toyota's success and its impact on the broader manufacturing industry.

💡Just In Time (JIT)

Just In Time is a production strategy that Toyota pioneered, which involves producing only the necessary parts when they are needed, thereby reducing inventory costs and waste. The video script describes how this system was inspired by a supermarket visit, where Ohno observed customers selecting items as needed. This concept is pivotal to the Toyota Production System and is exemplified in the script with the phrase 'only enough parts were produced in the first phase to replace what was used in the second, and so on.'

💡Kanban

Kanban is a scheduling system developed by Taiichi Ohno, which uses visual signals (such as cards) to manage production and inventory levels. It is a key component of the JIT system and is mentioned in the script as 'a sign-based scheduling method which shows goods in, goods in production, and goods out.' It is significant in the video's narrative as it represents an innovative method for streamlining production and is considered a precursor to modern bar codes.

💡Kaizen

Kaizen is a Japanese term meaning 'continuous improvement' and is a fundamental aspect of the Toyota Production System. The video emphasizes its role in fostering a culture of ongoing refinement and betterment within the company. The script states that 'combined with a culture of continuous, incremental improvement -- called `kaizen' -- the Toyota Production System built a brand known for making reliable and affordable cars,' showcasing its importance in Toyota's manufacturing ethos.

💡Eiji Toyoda

Eiji Toyoda is a key figure in the development of the Toyota Production System. The script notes that he, along with a veteran loom machinist, visited the Ford's River Rouge plant and was instrumental in shaping Toyota's manufacturing philosophy. His insights from the U.S. visit, particularly the supermarket experience, directly influenced the creation of the JIT system.

💡Taiichi Ohno

Taiichi Ohno is credited with the development of the JIT system and Kanban within Toyota. The script describes his visit to a supermarket as a pivotal moment that inspired the 'supermarket formula' for production, and his introduction of the 'pull cord' concept to stop the assembly line when defects were spotted, which is a hallmark of the Toyota Production System's focus on quality control.

💡Model K truck

The Model K truck is an example of Toyota's early innovations in response to material shortages during wartime. The script mentions that 'the number of headlamps on its Model K truck was reduced to one, and it only had brakes on one of the axles' to conserve resources. This instance illustrates the company's history of creative problem-solving and resourcefulness.

💡Piggly Wiggly

Piggly Wiggly is a supermarket chain in the U.S. that played a significant role in inspiring the JIT system. The script recounts the story of Ohno's visit to a Piggly Wiggly, where he was struck by the efficiency of customers selecting items as needed. This visit is a critical narrative element in the video, as it led to the development of a production method that would revolutionize manufacturing.

💡Ford's River Rouge plant

Ford's River Rouge plant in Michigan is mentioned in the script as a place that impressed Eiji Toyoda and Taiichi Ohno with its scale, yet also highlighted the impracticality of replicating such a system in cash-strapped post-war Japan. The visit to the plant is a key turning point in the narrative, as it led to the realization that a different, more resource-efficient approach was needed for Toyota.

💡Pull cord

The pull cord is a safety mechanism introduced by Ohno, allowing any worker to stop the entire assembly line if a problem was spotted. The script describes this as a method to encourage workers to address issues immediately and prevent them from recurring. This concept is integral to the video's message about Toyota's focus on quality and continuous improvement.

💡Kaizen

As previously mentioned, Kaizen is a philosophy of continuous improvement that is deeply embedded in the Toyota Production System. The script refers to it as part of the company's culture, which, combined with the JIT system and other innovations, has built Toyota's reputation for producing reliable and affordable cars. It is a recurring theme in the video, emphasizing the importance of ongoing refinement in manufacturing processes.

Highlights

Toyota was the first company to produce more than 10 million cars a year, demonstrating exceptional manufacturing capabilities.

The success of Toyota is attributed to its pioneering 'Lean Manufacturing' system, which has been widely adopted globally.

Post-WWII Japan faced economic challenges, including scarcity of steel and metals, compelling companies like Toyota to innovate.

Sakichi Toyoda initiated a loom business, but it was his son Kiichiro who established Toyota Motor Corporation in 1937.

Toyota adapted to material shortages during the war by reducing features like headlamps and brakes on their Model K truck.

The concept of 'Just In Time' production was inspired by a supermarket visit by Eiji Toyoda and Taiichi Ohno in the U.S.

Ohno was influenced by the supermarket model, leading to a production system that only produced parts as needed.

The 'Kanban' system developed by Ohno is a sign-based scheduling method, considered a precursor to barcodes.

American car companies' practice of full-tilt operations and post-production repairs was critiqued by Ohno for causing more problems.

A cord was installed at every station to allow any worker to stop the assembly line if a defect was spotted, promoting teamwork and problem-solving.

The implementation of 'kaizen', a culture of continuous improvement, contributed to Toyota's reputation for reliability and affordability.

Toyota's production efficiency enabled them to produce a car every 1.6 man hours, significantly lower than competitors.

The oil crises of the 1970s made fuel-efficient Japanese cars, like those produced by Toyota, increasingly appealing to consumers.

Toyota has manufactured over 250 million vehicles, setting a benchmark for the automotive industry.

The principles of 'Lean' from Toyota Production System have been applied beyond automotive, including in aerospace by Boeing and technology by Intel.

A Canadian hospital utilized Toyota's system to reduce emergency room wait times, showcasing the system's versatility in different industries.

The Toyota Production System has transformed global manufacturing practices and the approach to product creation.

Toyota's story exemplifies the pursuit of better production methods and continuous innovation in manufacturing.

Transcripts

Toyota knows how to make cars.

It does it so well it became the first company to produce more than 10 million a year.

Its success is rooted in a special system and began what is now known as ‘Lean Manufacturing’,

an ethos emulated by companies around the world to make products faster, cheaper

and better.

Following the Second World War, Japan was left in a precarious economic position.

"Steel and other metals are scarce"

Already disadvantaged by lacking natural resources, materials were hard to come by and companies

had to be creative to compete.

Toyota’s founder Sakichi Toyoda had started a loom business, but it was his son Kiichiro

who founded the motor company in 1937.

They were used to working within narrow margins - as the shortage of materials increased during

the war, the number of headlamps on its Model K truck was reduced to one

and it only had brakes on one of the axles.

The turning point for Toyota's Production System would come in the early fifties, when Kiichiro's

cousin Eiji would travel to the U.S. with a veteran loom machinist, Taiichi Ohno.

They visited Ford's River Rouge plant in Michigan and were impressed by the scale of the operation,

but knew that in cash-strapped Japan companies didn’t have the resources for such a system;

Having months’ worth of stock sitting in a warehouse would tie up precious capital

they didn’t have.

Instead, what truly impressed Ohno was a visit to a supermarket, a Piggly Wiggly, according

to legend... Japan didn’t really have self-service stores at this point - and he was struck by

the way customers could choose exactly what they wanted, when they wanted.

He decided to model his production line on a similar idea; With a "supermarket formula,"

only enough parts were produced in the first phase to replace what was used in the second,

and so on.

This is where the ‘Just In Time’ system really took shape.

Toyota was able to eliminate much of the waste in Ford's system,

making smaller numbers of parts to be used when it

needed them, allowing the company to operate on a tighter budget.

As part of this Ohno developed ‘Kanban’ - a sign-based scheduling method which shows

goods in, goods in production, and goods out. It’s now seen as a precursor to bar codes.

Ohno and Toyoda also noticed that American car companies were still employing many of

Henry Ford’s early production techniques -

They kept operations at full tilt in order to maximize efficiencies of scale, and then

repaired defective cars after they rolled off the line.

Ohno believed this caused more problems and didn’t encourage workers, or machines, to

stop making the mistake.

So he placed a cord above every station which any worker could pull to stop the entire assembly

if they spotted a problem. The whole team would work on it, to prevent it from happening

again.

As teams identified more problems, the number of errors began to drop dramatically.

Combined with a culture of continuous, incremental improvement -- called `kaizen' -- the Toyota

Production System built a brand known for making reliable and affordable cars.

But Toyota was also getting good at producing cars quickly.

In 1962, the company had produced one million vehicles.

By 1972, they had produced ten million.

It was around that time the efficiencies of their factories enabled Toyota to produce

a car every 1.6 man hours - much lower than their competitors in the U.S., Sweden and

Germany

And as the oil crises of the decade sent gas prices higher, cheap-to-run Japanese cars

became much more appealing to Americans, whose powerful, but gas-guzzling vehicles suddenly

became very expensive to run.

Today, Toyota has made over 250 million vehicles…

Others have looked to them to learn the lessons of ‘Lean’- combining craft with mass production,

avoiding waste, while striving for constant improvement.

Boeing is perhaps the most famous, restructuring a plant to better suit TPS.

Intel is another long-time lean ambassador, and is exploring the principles in the context

of AI and IoT.

A Canadian Hospital even used Toyota’s system to decrease wait times in its ER.

The Toyota Production System changed not just how cars are made globally but how we approach

making things full stop.

It also showed there is always a better way to make a product.