Toyota Production System

Taiichi Ohno, former executive vice president of Toyota Motor Company, presents the management philosophy behind what became one of the most influential manufacturing systems of the 20th century. The book traces the development of the Toyota production system from its postwar origins through its maturation during Japan's high-growth era and its vindication during the economic crises of the 1970s.

Ohno opens with the 1973 oil crisis, which collapsed Japan's economy to zero growth. While most companies struggled, Toyota sustained greater earnings than its competitors in 1975, 1976, and 1977, drawing widespread attention to its methods. Ohno frames the core problem that had long shaped Toyota's thinking: Japan needed to cut costs while producing small numbers of many types of cars, making American-style mass production unsuitable. In the slow-growth era, systems aimed at producing large lot sizes only generated waste.

Ohno credits Toyoda Kiichirō, Toyota Motor Company's first president, who declared in 1945 that Japan's automobile industry must "catch up with America in three years." Ohno recalls learning that one American worker's productivity equaled that of nine Japanese workers and reasons that the gap could not be explained by physical effort alone. Japanese workers, he concludes, must have been wasting something. This insight became the starting point of the Toyota production system.

The system rests on two pillars. The first is just-in-time: The right parts reach the assembly line exactly when needed and only in the amount needed. The second is autonomation, or automation with a human touch, meaning machines detect abnormalities and stop automatically. Just-in-time led Ohno to reverse the conventional flow of materials: Instead of earlier processes pushing parts forward, later processes go to earlier ones to withdraw only what is required. The tool for communicating this information is the kanban, a tag or card specifying what parts are needed and in what quantity. Autonomation originated with Toyoda Sakichi, founder of the Toyota enterprise, whose auto-activated weaving loom stopped instantly when a thread broke, preventing defective products. Ohno extended this principle to all Toyota machines and manual production lines, instructing workers to stop the line whenever an abnormality appeared. Rather than passing costs to consumers, Toyota accepts that the market sets the price and focuses on reducing internal costs.

Ohno traces the system's step-by-step evolution. He introduces the practice of asking "why" five times as its scientific basis: Each successive question about a problem uncovers a deeper cause until the root issue is found. He categorizes seven types of waste: overproduction, waiting, transportation, processing itself, inventory, movement, and making defective products. Standard work sheets, built around cycle time (the time allotted per unit based on daily demand), work sequence, and standard inventory, make processes visible and repeatable. Ohno stresses teamwork over individual output, arguing that a production line's success depends on coordinated group effort rather than any single worker's speed.

The kanban idea came from American supermarkets, where customers take what they need and stores restock accordingly. Around 1953, Toyota first applied this system in its machine shop. Six rules govern kanban use, including that the later process picks up only the indicated number of items, the earlier process produces only what is withdrawn, nothing moves without a kanban, and defective products are never sent forward. Implementation met enormous resistance, as reversing the production flow contradicted conventional wisdom. Ohno proceeded incrementally: starting in the No. 2 production department in the late 1940s, extending to the Motomachi plant in 1959, and reaching the main plant's forging and casting operations in 1962 to make kanban company-wide. He credits Toyota's top management with quietly supporting him despite many complaints. Toyota spent years teaching cooperating firms, or suppliers, its production methods before introducing them to kanban, beginning with nearby firms and gradually expanding outward.

Production leveling, the practice of spreading production evenly rather than running large batches of a single model, proved essential to kanban's success. At Toyota's Tsutsumi plant, Coronas, Carinas, and Celicas are assembled in alternating sequence rather than in consecutive blocks. Quick die changes are a prerequisite: Toyota reduced changeover times from hours in the 1940s to as little as three minutes by the late 1960s.

Ohno develops the system's broader implications for management. He argues that production plants should function like an autonomic nervous system, making decisions at the lowest level without directives from central planning. He cautions against letting computers dictate production, noting that excess information generated too quickly causes confusion and waste. Toyota's information system sends the daily sequence schedule only to the final assembly line; kanban then communicates production needs backward through earlier processes, suppressing unnecessary information. The author distinguishes three categories of worker activity: waste (needless movement to eliminate immediately), non-value-added work (necessary under current conditions but targetable for elimination), and value-added work (processing that changes the shape or character of a product). He warns against "apparent increases in efficiency," such as producing more than demand requires, and insists that true efficiency means reducing workers to match required production. He further distinguishes between "labor saving" and "worker saving": Partial automation that saves 0.9 of a worker saves no actual cost, because at least one full worker must be freed for redeployment.

Ohno devotes a chapter to the system's genealogy through its two foundational figures. Toyoda Sakichi spent his life developing increasingly sophisticated looms, culminating in the auto-activated loom that embodied the principle of giving machines human intelligence. An account describes the young Sakichi watching a neighbor's grandmother weave all day, gradually understanding the machine's operation, an approach Ohno connects to Toyota's practice of observing the production floor directly. Sakichi traveled to America in 1910, witnessed the early automobile age, and later instructed his son Kiichirō to invest the proceeds from selling a loom patent to England's Platt Brothers in automobile research. Kiichirō rejected importing American mass production wholesale, instead combining die presses with hand-finishing and developing Japan's own steel and casting capabilities. Ohno frames the progression from Sakichi to Kiichirō to the present as a "dialectic evolution" rooted in Japanese creativity.

The author examines the Ford production system as the foundation of modern automobile manufacturing. Both Ford and Toyota systems are based on work flow, but Ford's promotes large lot sizes and generates inventory while Toyota's eliminates overproduction through just-in-time withdrawal. Quoting from Henry Ford's 1926 book Today and Tomorrow, Ohno highlights Ford's philosophy that wasting material means wasting labor. Ohno contends that Ford's true intention was to extend synchronized work flow from the final assembly line to all earlier processes, but that Ford's successors misinterpreted the system, adopting the principle that larger lot sizes were always better. As General Motors under Alfred P. Sloan Jr. introduced market diversification through multiple models and annual changes in the 1920s, Ford's successors failed to adapt the production system accordingly.

Ohno closes with the challenges of surviving in a low-growth economy. The 1973 oil crisis forced Toyota to reduce production for the first time since the 1930s, revealing that autonomated machines still required fixed numbers of operators even when demand fell. This led to organizing production lines so that varying numbers of workers could handle varying levels of demand, requiring improvements in plant layout and multi-skilled training. The author argues that anyone can raise productivity during growth, but raising productivity when quantities decrease is the true test. The Toyota production system, he maintains, is not a passive management strategy but a revolution in thinking whose strength lies in making waste immediately visible. Ohno urges managers and workers to practice "reverse common sense" and inverse thinking, expressing confidence that the system, born of necessity in Japan's constrained postwar market, has grown beyond Toyota to become a uniquely Japanese production system.