Basic Assumptions Behind the Toyota Production System

TOYOTA PRODUCTION SYSTEM AND KANBAN SYSTEM

Many people may immediately associate the Toyota produc­tion system with the kanban system. While this is not wrong, it is not exacdy accurate.

The kanban system is one of the methods of control utilized within the Toyota production system (the way we make things). One cannot discuss the kanban system out of context. If anyone tries to imitate that system without regard to all the factors con­tributing to its success, then his or her efforts will be in vain.

The Toyota production system is unique and unparalleled. The thinking behind it and the method of implementation have been perfected after long years of trial and error.

In a nutshell, it is a system of production, based on the phi­losophy of total elimination of waste, that seeks the utmost in rationality in the way we make things. We call this the Toyota-style production system or the Toyota production system. Hereafter, we shall use the term Toyota system to represent it.

Only when the Toyota production system in its totality is sat­isfactorily conducted, can there be effective utilization of the kan­ban system. Without changing the method of making things, it is impossible to engage in the kanban system.

Please take note of this fact before proceeding further in this > luptcr.

unsound ideas, their shortcomings result not from neuroses or so-called ^aracial* characteristics, but from economic, social, and political conditions. Their views, like these con­ditions, are subject to change.¹¹

Far from being punitive, the emphasis was to be on positive reform, that is, on instigating change that would eliminate the mil­itarism that had become endemic and deeply rooted in Japan before and during the war. At the time of the surrender, over 320,000 Japanese people were political prisoners, and more than 600,000 had lost their civil rights for political reasons.¹² A system of secret police, of neighborhood associations, of thought control laws, and of employer-controlled labor organizations, allowed the Home Ministry and zaibatsu (the huge business combines) to keep tight control. In fact, much of this oppression was directed at labor, specifically for the purpose of keeping it low-paid. It was clear that political and economic reform was urgently needed.

Less than three weeks after Japan surrendered, the country was occupied by the American armed forces. The Occupation period, which lasted from 1945 to 1952, was one of great stress and rapid change for the Japanese people and, of course, left a lasting mark. The central figure in the Allied Occupation was the Supreme Commander for the Allied Powers (SCAP) — General Douglas MacArthur. MacArthur had spent the previous fourteen years in Asia, mostly in the Philippines, without once returning to the continental United States. Nevertheless, his prior experience with Japan was limited to a few visits. Although the Occupation was officially an Allied affair, with MacArthur under the orders of the thirteen-member-nation Far Eastern Commission, the truth was that the Occupation was American-run, and the general was in command.

The situation he faced upon his arrival in Japan was far from easy. To begin with, the Japanese government had surrendered while it still retained a considerable amount of control over the populace. Many of the people responsible for the war still held positions of high authority and hid themselves well by changing jobs and destroying evidence of their complicity in the war. Very few Americans spoke Japanese, so SCAP ('SCAP' was used to denote MacArthur's headquarters organization as well) relied on the Japanese government to enforce its decrees and could not always check that instructions were followed. Almost every reform attempted encountered great resistance. Often records were destroyed or instructions deliberately misconstrued and not fol­lowed. For example, undemocratic organizations, such as employer- controlled work councils, that had been Ordered abolished were often replaced by similar bodies with different names run by the same people as before. In addition to all this, the economic cir­cumstances of the people were very bad. One quarter of all the housing in Japan had been destroyed; in some of the larger cities, almost half of the housing lay in ruins. Twenty-two million people were homeless. Rampant inflation meant that, for example, one rice ball cost almost ten times the average daily laborer's wage.⁹ Unemployment was close to thirty-three percent, and industrial activity was less than ten percent of its 1935-37 level. Com­pounding this, the zaibatsu were hoarding many essential supplies for sale in the highly lucrative black market.

Over the next seven years, some very significant reforms were made, all consistent with the Occupation's overall mission to instill democratic values in Japan. These reforms included:

A new constitution. The best-known provision of the new American-written constitution is Article 9, which renounces the right to make war:

Art. 9. Aspiring sincerely to an international peace based on justice and order, the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes.

In order to accomplish the aim of the preceding para­graph, land, sea, and air forces, as well as other war poten­tial, will never be maintained. The right of belligerency of the state will not be recognized.

⁴ IUd„p. 90.

AN OUTLINE OF THE TOYOTA SYSTEM

We have prepared a chart to provide a bird's-eye view of the Toyota system. It is reproduced on the following page.

An ideal condition for manufacturing is where there is no waste in machines, equipment and personnel, and where they can work together to raise the added value to produce profit. The most important concern for us is how closely we can approach this ideal.

To make the flow of things as close as possible to this ideal condition — whether they be between operations, between lines, between processes or between factories — we have devised a sys­tem in which the materials needed are obtained just-in-time — that is, exacdy when needed and in the quantity needed.

On the other hand, for this ideal condition to occur in the line operations, including machines and equipment, if there is abnormality, everything must be stopped immediately at the dis­cretion of the worker or workers involved. (Machines must be endowed with the same faculty.) The reasons for the occurrence of abnormality must be investigated from the ground up. This is what we call automation with a human touch.

We believe it is best to manufacture everything in a balanced manner. This load-smoothing production serves as the base for the two pillars of the Toyota system, namely the just-in-time and automation-with-a-human-touch approaches.

CHARACTERISTICS OF THE TOYOTA SYSTEM

Now that we have a general notion of the structure of the Toyota system, we may proceed to enumerating the characteristics of this system. In this way, we shall be able to discern the basic ideas behind the Toyota system.

A Company-Wide IE Activity Directly Connected with Management

There is no specific formula for a manufacturing method that can apply to all products in all processes. Therefore a product may be manufactured by one worker in one company while at another