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.
Good video. I worked at one of their plants as a co-op production engineer in college. A lot of the concepts they go over in the video was taught to us during our training at Toyota.
‘The Machine that Changed the World’ is an excellent and much deeper study of lean manufacturing.
Any other recommended videos on cool manufacturing systems?
These guys eat, sleep, and breathe lean manufacturing. They also developed a new program called Fame AMT for future technicians. It’s really cool, check it out if you get a chance.
The next after them in line would be Motorola with the six sigma system. it’s close to the same, but has the prominent feature of statistical analysis built into it. Driving changes from math based decisions.
Someone please correct me if I'm wrong, but I've heard that lean systems just don't work well in the US, even though many companies try to emulate it. The main reason being that in Asia, many cities have developed entirely to be manufacturing cities, and even if you need to ship a part from one city to another, that can be achieved in a few hours due to proximity. In the US, manufacturing is a lot more decentralized, with parts being sent from one state, to a different state, back to the original state, and then to a final state for final assembly, all which takes days.
In my personal criteria, Toyota leads the mass manufacturing industry. Amazing short video.
Great video. I'm a fan of Tesla and their idealism, but why didn't they emulate Toyota's methods in their ramp up?
Toyota process engineer here. AMA