Independent University, Bangladesh

Lean Manufacturing, Just in Time and Kanban:

Case Study of Toyota Production System (TPS)

Course: MBA-512 (Sec-02)

Submitted To:
Prof. Dr. Md. Mamun Habib
School of Business
Independent University, Bangladesh

Submitted By:

Group: G

Name ID

A.F.M. Shafiul Alam Siam 1810516

Mashiur Rahman 2031299

S M Nafiz Imtiaz 2010691

Nehabul Haque Niloy 2010507

Submission Date: 3rd January, 2021

 Letter of Transmittal

3rd January, 2021

Prof. Dr. Md. Mamun Habib
Professor
School of Business
Independent University, Bangladesh

Subject: Submission of Semester Project Report on “Lean Manufacturing, Just in Time and
Kanban: Case Study of Toyota Production System (TPS)”

Dear Sir,
It gives us an immense pleasure to submit our Semester project report on “Lean Manufacturing,
Just in Time and Kanban: Case Study of Toyota Production System (TPS)” to you which we
have prepared by performing twelve weeks semester to fulfill the requirement of this assignment.
Here is the report that we assigned on the topic as per your instructions. The assignment has been
completed by the knowledge that we have gathered from the courses and mostly from the case
study. We are thankful to you for all your support, information, and knowledge you have provided
us throughout this semester.
We have tried our hard level best to complete this report meaningfully and correctly, as much as
possible. We do believe that our tiresome effort will help you to understand the overall scenario of
this topic. In this case, it will be meaningful to us,
Sincerely yours,
………………..

Name ID

A.F.M. Shafiul Alam Siam 1810516

Mashiur Rahman 2031299

S M Nafiz Imtiaz 2010691

Nehabul Haque Niloy 2010507

Independent University, Bangladesh.

i|Page
 Executive Summary

In this paper, we discussed and described about “Lean Manufacturing, Just in Time and Kanban
System Case Study of Toyota Production System (TPS)”. Today, many manufacturing companies
must follow the all new technology and tools for efficiently and effectively to present themselves
a good competitor in the global economy. The key competitive factor is able to cope up in the fast-
paced environment. The faster a business responds to its customers, the more profitable it shall be.
Also, the ability to manage inventory to coincide with market demand or changing product
specifications can substantially boost profits and improve a manufacturer’s competitive position by
reducing inventories and waste. Lean manufacturing is an efficiency-based production system on
optimizing flow to minimizing the wastage and using advance methods to improve manufacturing
system by modified or change pre-existing models like craft system, mass production. Essentially
it involves having the right items with the right quality in the right place at the right time. The
Toyota production system is a way to make products, whereas the Kanban system is the way to
manage the Just-in-time production method. It is a tool to achieve just-in-time production. The
Kanban is sent to the people of the preceding process from the subsequent process. Nowadays,
more and more firms are considering the JIT approach in response to an ever more competitive
environment. It is a way to achieve high velocity manufacturing. The Toyota Production System of
the Japanese technology is a comprehensive production management that has been shared to the
modern world after 100 years of initial invention. The Toyota Production System is so efficient that
it uses less of everything compared with traditional mass production. Manufacturers and industries
around the world- far beyond the auto industry have embraced this innovative system and attained
huge success. The global adaptation has changed everything: the nature of work, the fortune of
companies, even the fate of nations because this production system developed by Toyota Motor
Corporation has outcomes of best quality, lowest cost, and shortest lead time through the
elimination of waste.

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 Contents
Introduction....................................................................................................................................................... 1
Lean Manufacturing System ......................................................................................................................... 1
Just-In-Time .................................................................................................................................................. 2
Kanban System ............................................................................................................................................. 2
Case Study ........................................................................................................................................................ 4
www.ijsetr.com ................................................................................................................................................. 4
I. INTRODUCTION .................................................................................................................................... 4
II. JUST IN TIME SYSTEM......................................................................................................................... 4
III. JIT ENVIRONMENT ........................................................................................................................... 5
IV. JIT AS A CONTROL TECHNIQUE .................................................................................................... 5
Copyright @ 2019 IJSETR. All rights reserved. .............................................................................................. 5
Figure1. Kanban Manufacture ......................................................................................................................... 6
Figure3. Development of Toyota ..................................................................................................................... 6
Figure 4. Background Knowledge of Toyota. .................................................................................................. 7
Figure5. Background of Toyota . ...................................................................................................................... 7
VII. CONCLUSION ..................................................................................................................................... 8
VIII. REFERENCES ..................................................................................................................................... 8
Analysis & Findings: ...................................................................................................................................... 10
Conclusion: ..................................................................................................................................................... 12
Reference ........................................................................................................................................................ 13

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Introduction

The Toyota Motor Corporation is a main worldwide endeavor, producing the eleventh biggest incomes in the
globe, and speaking to the third biggest vehicle producer on the planet, after General Motors and the German
gathering Volkswagen (Crown Motors). Toyota, these days is a main retailer all through the world, particularly
inside the United States, and this driving position has been accomplished because of the organization's expanded
capacity to comprehend the requirements of the market and adjust to them.

Today many companies follow the new technology and tools for efficiency and effectively to present
themselves as a good competitor in the global economy. Lean manufacturing is an efficiency-based system on
optimizing flow to minimize the wastage and using advanced methods to improve manufacturing system. The
Toyota production system is a way to make products, whereas the Kanban system is the way to manage the
just-in-time production method.

Lean Manufacturing System

Lean manufacturing also called lean production, which was originally introduced by Toyota after the second
world war. It is based on the idea of eliminating any waste in the industry such as any activity or task that does
not add value and requires using up resources. According to research conducted by the Lean Enterprise Centre
(LERC), it was found that fully 60% of production activities in a typical manufacturing operation are waste,
they add no value at all for the customer.

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Just-In-Time
Just in time manufacturing is Japanese management philosophy used in manufacturing. It is a workflow
methodology which aimed to reduce flow times within production systems, besides response times suppliers
and to customers. A true JIT must have following methods like- physical organization & discipline, elimination
of defects, setup reduction, small lot sizes, multifunctional works and control by visibility. Moreover, JIT also
provides an environment in which products are manufactured in an easiest way.

Kanban System
Kanban is an inventory control system used in Just-in-time manufacturing. A Kanban system ideally controls
the value chain from the supplier to the end customer. Actually Kanban (kahn-bahn) is a Japanese word which
means “visible recode” or “visible part”. It is a design system for lean manufacturing and just-in-time
manufacturing. Taiichi Ohno, an industrial engineer at Toyota, developed Kanban in the early 1940s to improve
manufacturing efficiency. It was created as a simple planning system which aim was to control and manage
work and inventory at every stage of production. Kanban is one method to achieve JIT. By Kanban system
Toyota achieved a flexible and efficient just-in-time production control system that increased productivity with
lower cost of raw materials, semi-finished materials and finished products. A Kanban system ideally controls
the entire value chain from the supplier to the end customers. In 2004 David J. Anderson firstly applied the
Kanban concept to IT, Software development and knowledge work in general. The Kanban method is a process
to gradually improve whatever we do like software development, staffing, marketing and sales etc. In fact, any
business function can be benefited from applying the principle of Kanban Methodology. Six core practices of
the Kanban method are:

• Visualize the follow of work

• Limit Work in Progress
• Manage Flow
• Make process policies explicit
• Implement feedback loops
• Improve collaboratively

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Though the efficient production system, inventory management and controlling system introduced by Toyota,
at present almost all manufacturing firms trying to improve these techniques for getting better result and
achieving efficiency in the competitive environment.

3|Page
Case Study

ISSN 2319-8885
Volume.08,
Jan-Dec-2019,
Pages:498-502
www.ijsetr.com

Lean Manufacturing, Just in Time and Kanban: Case Study of Toyota

Production System (TPS)
ARKAR HTUN1, CHO CHO KHAING2, THIN THIN MAW3
1
Dept of Mechanical Engineering, Technological University, Magway, Myanmar, Email: arkarhtun.mech@gmail.com.
2
Dept of Mechanical Engineering, Technological University, Magway, Myanmar, Email: chokhaing1@gmail.com.
3
Dept of Mechanical Engineering, Technological University, Loikaw, Myanmar, Email: nawthu@gmail.com.

Abstract: In this paper, describes about “Lean Manufacturing, Just In Time and Kanban System Case Study of Toyota Production
System (TPS)”. Today, many manufacturing companies must follow the all new technology and tools for efficiently and effectively
to present themselves a good competitor in the global economy Lean manufacturing is a efficiency based system on optimizing
flow to minimizing the wastage and using advance methods to improve manufacturing system by modified or change pre-existing
ideas. Essentially it involves having the right items with the right quality and quantity in the right place at the right time. The
Toyota production system is a way to make products, whereas the Kanban system is the way to manage the Just-in-time production
method. It is a tool to achieve just-in-time production. The Kanban is sent to the people of the preceding process from the
subsequent process. Today, more and more North American firms are considering the JIT approach in response to an ever more
competitive environment. It is a way to achieve high velocity manufacturing.

Keywords: Lean Manufacturing, Just in Time, Kanban system, Case Study, Toyota Production System.

I. INTRODUCTION the right place at the right time. JIT Manufacturing tries to
Lean manufacturing is the basic techniques for improve the smooth the flow of materials from the suppliers to the
production rate with the minimum available resources. This customers,thereby increasing the speed of the manufacturing
concept is comes out after the World War 2. This
manufacturing, an approach that depends greatly on flexibility
and workplace organization, is an excellent starting point for
companies wanting to take a fresh look at their current
manufacturing methods. The basic approach to the “Just-in-
Time” (JIT) production system is to reduce product costs
through the elimination of waste. In a production facility
waste can be defined as defects, stockpiles, queues, idleness
and delays. The ability to manage inventory to coincide with
market demand or changing product specifications can
substantially bost profits and improve a manufacturer’s
competitive position by reducing inventories and waste. Just
In Time (JIT) is a management philosophy, an integrated
approach to optimize the use of a company’s resources,
namely, capital, equipment, and labor. The goal of JIT is the
total elimination of waste in the manufacturing process. [14]

II. JUST IN TIME SYSTEM

Just-In-Time (JIT) manufacturing is a Japanese management
philosophy applied in manufacturing. Essentially it involves
having the right items with the right quality and quantity in

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process.The objectives of JIT is to change the manufacturing • Total Quality Management (TQM)
system gradually rather than drastically: • Total Productive Maintenance (TPM)
• To be more responsive to customers, • Total Employee Involvement (TEI)
• To have better communication among departments • Supplier Partnership
and suppliers,
• To be more flexible IV. JIT AS A CONTROL TECHNIQUE
• To achieve better quality, In daily operations, JIT provides useful control methods.
• To reduce product cost. The characteristics of a JIT control technique include uniform
loading, repetitive processes, pull system, using production
III. JIT ENVIRONMENT cards, and synchronized production.
In addition to philosophical concepts, JIT also provides an • Pull System
environment in which products are manufactured in a • Uniform Loading
simpler way.
• Production Card
• Repetitive Manufacturing
• Synchronized Production

Copyright @ 2019 IJSETR. All rights reserved.

5|Page
 Lean Manufacturing, Just in Time and Kanban: Case Study of Toyota Production System (TPS)
V. KANBAN SYSTEM
Kanban (kahn-bahn) is Japanese word that when translated
literally means “visible record” or “visible part”. The kanban
system is based on a customer of a part pulling the part from
the supplier of that part. The customer of the part can be an
actual consumer of a finished product (external) or the
production personnel at the succeeding station in a
manufacturing facility (internal).
Figure1. Kanban Manufacture [6]
VI. CASE STUDY OF TOYOTA PRODUCTION
SYSTEM
After Second World War, Eiji Toyoda and Taiichi Ohno at
the Toyota motor company in Japan pioneered the concept of
Toyota Production System. The rise of Japan to its current
economic preeminence quickly followed, as other companies
and industries copied this remarkable system. Manufacturers
around the world are now trying to embrace this innovative
system, but they are finding the going rough. The companies
that first mastered this system were all headquartered in one
country-Japan. However, many methods on the existing mass-
production systems cause great pain and dislocation. Toyota
Production System is, where it came from, how it really
works, and how it can spread to all corners of the globe
Western companies now understand Toyota Production
System, and at least one is well along the path of introducing
it. Superimposing this for everyone’s mutual benefit. The
global adaptation, as it inevitably spreads beyond the auto
industry, will change everything in almost every industry-
choice of customers, the nature of work, the fortune of
companies, and, ultimately, the fate of nations. Perhaps the
best way to describe this innovative production system is to
contrast it with craft production and mass production, the two
other methods humans have devised to make things.[17] The
production system developed by Toyota Motor Corporation to
provide best quality, lowest cost, and shortest lead time
through the elimination of waste. TPS is comprised of two
pillars, just-in-time and jidoka, and often is illustrated with the
“house” shown at right. TPS is maintained and improved
through iterations of standardized work and kaizen.
Development of TPS is credited to Taiichi Ohno, Toyota’s
chief of production in the post-WW II period. Beginning in
machining operations and spreading from there, Ohno led the
development of TPS at Toyota
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throughout the 1950s and 1960s, and the dissemination to the
supply base through the 1960s and 1970s. Outside Japan,
dissemination began in earnest with the creation of the
Toyota- General Motors joint venture NUMMI in California
in 1984.
Figure2. House of Toyota Production System [11]
The concepts of just-in-time (JIT) and jidoka both have
their roots in the prewar period. Sakichi Toyoda, founder of
the Toyota group of companies, invented the concept of jidoka
in the early 20th Century by incorporating a device on his
automatic looms that would stop the loom from operating
whenever a thread broke. This enabled great improvements in
quality and freed people to do more valuecreating work than
simply monitoring machines for quality. Eventually, this
simple concept found its way into every machine, every
production line, and every Toyota operation. Kiichiro
Toyoda, son of Sakichi and founder of the Toyota automobile
business, developed the concept of JIT in the 1930s. He
decreed that Toyota operations would contain no excess
inventory and that Toyota would strive to work in partnership
with suppliers to level production. Under Ohno’s leadership,
JIT developed into a unique system of material and
information flows to control overproduction. Widespread
recognition of TPS as the model production system grew
rapidly with the publication in 1990 of The Machine That
Changed the World, the result of five years of research led by
the Massachusetts Institute of Technology. The MIT
researchers found that TPS was so much more effective and
efficient than traditionalmass production that it represented a
completely new paradigm and coined the term lean production
to indicate this radically different approach to production. [11]
Figure3. Development of Toyota [11]
 Lean Manufacturing, Just in Time and Kanban: Case Study of Toyota Production System (TPS)
A. Production Methods
The craft producer uses highly skilled workers and a simple
but flexible tool to make exactly what the customer asks for
one item at a time. Few exotic sports cars provide current days
obvious: Goods produced by the craft method— as
automobiles once were exclusively—cost too much for most
of us to afford. So mass production was developed at the
beginning of the twentieth century as an alternative.[17] The
mass-producer uses narrowly skilled professionals to design
products made by unskilled or semiskilled workers tending
expensive, single-purpose machines. These churn out
standardized products in very high volume. Because the
machinery costs so much and is so intolerant of disruption, the
mass-producer keeps standard designs in production for as
long as possible. The result: The customer gets lower costs but
at the expense of variety and by means of work methods that
most employees find boring and dispiriting.
[11] The Toyota motor corporation, by contrast, combines the
advantages of craft and mass production, while avoiding the
high cost of the former and the rigidity of the latter. Toward
this end, they employ teams of multi-skilled workers at all
levels of the organization and use highly flexible and
increasingly automated machines to produce volumes of
products in enormous variety.
Figure 4. Background Knowledge of Toyota[11].
The Toyota Production System is also defined as Lean
Production because it uses less of everything compared with
mass production half the human effort in the factory, half the
manufacturing space, half the investment in tools, half the
engineering hours to develop a new product in half the time.
Also it requires keeping far less than half the needed inventory
on site, results in many fewer defects, and produces a greater
and ever growing variety of products. Mass-producers set a
limited goal for themselves good enough. Production
methods, which translate into an acceptable number of
defects, a maximum acceptable level of inventories, a narrow
range of standardized products. Lean producers on the other
hand, set their sights explicitly on perfection. [18]
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Figure5. Background of Toyota [11].
B. Basic Idea and Framework
The Toyota production system is a technology of
comprehensive production management the Japanese
invented a hundred years after opening up to the modern
world. The basic idea of this system is to maintain a
continuous flow of products in factories in order to flexibly
adapt to demand changes. The realization of such production
flow is called Just-in-time production, which means
producing only necessary units in a necessary quantity at a
necessary time. As a result, the excess inventories and the
excess work force will be naturally diminished, thereby
achieving the purposes of increased productivity and cost
reduction. [5] The basic principle of Just-in-time production
is rational that is, the Toyota production system has been
developed by steadily pursuing the orthodox way of
production management. With the realization of this concept,
unnecessary intermediate and finished product inventories
would be eliminated. However, although cost reduction is the
system’s most important goal, it must achieve three other sub-
goals in order to achieve its primary objective. They include
• Quantity control, which enables the system to adapt to
daily and monthly fluctuations in demand in terms of
quantities and variety;
• Quality assurance, which assures that each process, will
supply only good units to the subsequent processes.
Respect-for-humanity, which must be cultivated while the
system utilizes the human resource to attain its cost objectives.
It should be emphasized here that these three goals cannot
exist independently or be achieved independently without
influencing each other or the primary goal of cost reduction.
All goals are output of the same system; with productivity as
the ultimate purpose and guiding concept, the Toyota
production system strives to realize each of the goals for
which it has been designed. Before discussing the contents of
the Toyota production system in detail, an overview of this
system is in order. The outputs or result side as well as the
inputs or constituent side of the production system are
depicted.[17] A continuous
 Lean Manufacturing, Just in Time and Kanban: Case Study of Toyota Production System (TPS)
flow of production, or adapting to demand changes in
quantities and variety, is created by achieving two key
concepts: Just-in-time and Automation. These two concepts
are the pillars of the Toyota production system. AWDJust- in-
time basically means to produce the necessary units in the
necessary quantities at the necessary time. Automation
(“Jidoka” in Japanese) may be loosely interpreted as
autonomous defects control. It supports Just-in-time by never
allowing defective units from the preceding process to flow
into and disrupt a subsequent process. Two concepts also key
to the Toyota production system include Flexible work force
(“Shojinka” in Japanese) which means varying the number of
workers to demand changes, and Creative thinking or
inventive ideas (“soikufu”), or capitalizing on workers
suggestions.[20]
To realize these four concepts, Toyota has established the
following systems and methods:
• Kanban system to maintain Just-in-time production
• Production smoothing method to adapt to demand
changes
• Shortening of set-up time for reducing the production
lead time
• Standardization of operations to attain line balancing
• Machine layout and the multi-function worker for
flexible work force
• Improvement activities by small groups and the
suggestion system to reduce the work force and increase
the worker’s morale.
• Visual control system to achieve the Automation
concept
• Functional Management system to promote company-
wide quality control. [11]
VII. CONCLUSION
The key competitive factor has become speed. All else
being equal, the faster a business responds to its customers,
the more profitable it is. In high velocity manufacturing,
everything is moving. Machines, people, funds and materials
are constantly moving. Therefore, inventories in storage or on
the shop floor are moving inventories rather than sitting
inventories. Inventories are stocked only for a very short time,
and will move to other locations only moments after being
stocked. The conditions of high velocity manufacturing
include flow manufacturing, line balancing, level schedule,
and linearity. Toyota Production System and more
importantly its core elements “Kanban” and “Jidoka”
systems. Toyota Production System has not encountered
many such incidents which directly pose a threat to the
existence of Just-in-Time System in Toyota and other
manufacturing firms in Japan. Most of the time, Toyota has
suffered a lot due to these shortages from its supplier. But no
one is to be blamed for it because most of the shortage
occurrences were due to natural disasters or unforeseen
events. Japan is located on one of the most active seismic
plates of earth crust. So it will naturally make it prone to such
disaster events across Japan. This has also given a spark by
respected scholars in Japan and across the globe, why
8|Page
Toyota is not making any efforts to combat such situations for
future and secondly, it should move towards other production
systems.
VIII. REFERENCES
[1] Adler, Paul S. and Robert E. Cole, ‘Designed for
Learning: A Tale of Two Auto Plants.’Sloan Management
Review, Vol. 34, No. 3 (Fall), pp. 85-94, 1993a.
[2] Adler, Paul S., Barbara Goldoftas, and David I. Levine,
‘Ergonomics, employeeinvolvement, and the Toyota
production system: A case study of NUMMI's 1993 model
introduction’, Industrial & Labor Relations Review, 50(3):
416-437, Apr. 1997.
[3] Barnard, Chester, The Functions of the Executive, 1938.
Barley, Stephen R., “Images of Imaging: Notes on Doing
Longitudinal Field Work”, Organization Science, Vol. 1 No.
3, August 1990.
[4] Boccard, Ronald R., Push vs. Pull: Is One Better than the
Other?, Production & Inventory Management Review &
APICS News. 10(2): 39-40, Feb.1990.
[5] Cusumano, Michael, The Japanese Automobile Industry:
Technology and Management atNissan and Toyota, Harvard
University Press, 1989.
[6] Deleersnyder, Jean-Luc, Thom J. Hodgson, Henri Muller,
and Peter J. O'Grady, ‘Kanban Controlled Pull Systems: An
Analytic, Approach’, Management Science. 35(9): 1079-
1091. Sept. 1989.
[7] Hayes, Robert, and Gary Pisano, “Beyond World-Class:
The New Manufacturing Strategy”, Harvard Business
Review, January-February 1994.
[8] Hirano, Hiroyuki, JIT Factory Revolution, Productivity
Press, 1988. Hopp, Wallace and Mark L. Spearman, Factory
Physics: 2nd Ed., McGraw-Hill, 2000.
[9] Jaikumar, Ramachandran and Roger E. Bohn, ‘A
dynamic approach to operations management: An alternative
to static optimization’, International Journal of Production
Economics, 27 (1992) 265-282.
[10] Krafcik, John F., ‘Triumph of the Lean Production
System’, Sloan Management Review, Fall 1988, page 41-52.
Lawrence, Paul and Jay Lorsch, Organizations and
Environment, 1967.
[11] Monden, Yasuhiro, Toyota Production System : An
Integrated Approach To Just-In-Time 2nd Ed. Norcross, Ga. :
Industrial Engineering and Management Press.
[12] Sarker, Bhaba R., “Simulating a Just-in-Time
Production System”, Computers & Industrial Engineering,
16(1): 127-137. 1989.
[13] Spear, Steven J. “Essence of Just-in-Time: Imbedding
diagnostic tests in work-systems to achieve operational
excellence, The,” Production, Planning, and Control,
(forthcoming) and HBS Working Paper 02-020.
[14] Fujimoto, T. (2011). Supply Chain Competitiveness and
Robustness: A Lesson from the 2011 Tohoku Earthquake and
Supply Chain “Virtual Dualization”. Manufacturing
Management Research Center.
[15] Just In Time. (2016, September 29). Retrieved
November 25, 2016, from Toyota Global: http://www. toyo
taglobal.com/company/vision_philosophy/toyota_production
_system/just-in-time.html
[16] Kubota, Y. (2016, April 19). Japan
Earthquakes Rattle Toyota’s Vulnerable
Supply Chain. Retrieved September 10,
2016, from The Wall Street Journal:
http://www.wsj.com/ articles/japan-
earthquakes-rattle-toyotas-supply-chain-
1460986805 57
[17] Lu, D. J. (1989). Kanban/Just-In-Time
At Toyota: Management Begins at the
Workplace. Productivity Press. Marksberry,
P. (2013). The Modern theory of the Toyota
production System: A Systems Enquiry of the
World's Most Emulated and Profitable
Management System. Taylor and Francis
Group.
[18] Mclnnis, K. R., & Gross, J. M. (2003).
Kanban Made Simple: Demystifying and
Applying Toyota's Legendary manufacturing
Process. American Managemnet Association.
Monden, Y. (2012). Toyota Production
System: An Integrated Approach to Just-In-
Time. Taylor and Francis Group.
[19] Nishiguchi, T., & Beaudet, A. (1998,
October 15). The Toyota Group and the Aisin
Fire. Retrieved September 25, 2016, from
MIT Sloan Managemnet Reviev: http:// sloan
review.mit.edu/article/the-toyota-group-and-
the-aisin-fire/ Nishiguchi, T., & Beaudet, A.
(1998). The Toyota Group and the Aisin Fire.
Sloan Management Review.
[20] Tajitsu, N., & Yamazaki, M. (2016,
April 17). Toyota and Other Major Japanese
Firms Hit by Quake Damage, Supply
Disruptions. Retrieved September 8, 2016,
from
Reuters:http://www.reuters.com/article/us-
japan-quake- toyota-idUSKCN0XE08O.

9|Page
Analysis & Findings:

The Toyota Production System of the Japanese technology is a comprehensive production

management that has been shared to the modern world after 100 years of initial invention. The
Toyota Production System is so efficient that it uses less of everything compared with traditional
mass production:

• ½ human effort in the factory,

• ½ manufacturing space,
• ½ investment in tools,
• ½ engineering hours to develop a new product,
• In ½ time.

After research of 5 quality years by the Massachusetts Institute of Technology (situated in

Cambridge, Massachusetts, USA), researchers concluded that Toyota Production System was so
much more effective and efficient than traditional mass production. The principles of Lean
Production were first introduced by the MIT researchers in their book The Machine That Changed
the World (1990). The writers studied several other manufacturing systems and wrote the book
based on their different observations at Toyota.

So why was the term ‘’Lean Production’’ entitled to TPS? To know the answer, we have to look at
the 2 pillars of Toyota Production System which stands as- Just-in-time & Automation concepts.
It was found that this way of manufacturing always maintains a fluid flow of products in factories
in order to flexibly adapt to demand changes simultaneously (Just-in-time production) that means
producing only required units, in required quantity at required time. It uses Kanban which is
Japanese word means “visible record” or “visible part”. The Kanban system is based on a customer
of a part pulling the part from the supplier of that part. The customer of the part can be an actual
consumer of a finished product (external) or the production personnel at the succeeding station in
a manufacturing facility (internal).

10 | P a g e
And Automation (“Jidoka” in Japanese) as autonomous defects control. It supports Just-in-time by
never allowing defective units from the preceding process to flow into and disrupt a subsequent
process. As a result, to that, the surplus inventories & the surplus labor will be naturally crossed
out thus, scoring the increased productivity and cost reduction. Cost reduction along with three
other sub-goals include:

1. Quantity Control: Enables the system to adapt to daily & monthly fluctuations in demand.
2. Quality Assurance: Assures each process to deliver only good units to following process.
3. Respect for Humanity: Morally utilizing & capitalizing on workers suggestions.

Today, manufacturers & industries around the world- far beyond the auto industry have embraced
this innovative system and attained huge success. This remarkable system is example to scholars
globally get to read onto their text books. The global adaptation has changed everything: the nature
of work, the fortune of companies, even the fate of nations because this production system
developed by Toyota Motor Corporation has outcomes of best quality, lowest cost, and shortest
lead time through the elimination of waste. The legendary management approach is often pictured
and titled as “House of Toyota Production Systems.”

Figure : House of Toyota Production System

11 | P a g e
Conclusion:

Today, many manufacturing companies must follow the all new technology and tools for
efficiently and effectively present themselves a good competitor in the global economy. The key
competitive factor is how speedily you are coping in the fast-paced environment. The faster a
business responds to its customers, the more profitable it shall be. Also, the ability to manage
inventory to coincide with market demand or changing product specifications can substantially
boost profits and improve a manufacturer’s competitive position by reducing inventories & waste.
In high velocity manufacturing, everything is moving- machines, people, funds and materials are
constantly moving. Therefore, inventories in storage or on the shop floor are moving inventories
rather than sitting inventories. Inventories are stocked only for a very short time, and will move to
other locations only moments after being stocked. The conditions of high velocity manufacturing
include flow manufacturing, line balancing, level schedule, and linearity. Toyota Production
System and more importantly its core elements “Kanban” and “Jidoka” systems. Toyota
Production System has not encountered many such incidents which directly pose a threat to the
existence of Just-in-Time System in Toyota and other manufacturing firms in Japan. Most of the
time, Toyota has suffered a lot due to these shortages from its supplier. But no one is to be blamed
for it because most of the shortage occurrences were due to natural disasters or unforeseen events.
Japan is located on one of the most active seismic plates of earth crust. So, it will naturally make
it prone to such disaster events across Japan. This has also given a spark by respected scholars in
Japan and across the globe, why Toyota is not making any efforts to combat such situations for
future and secondly, it should move towards other production systems as well.

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References

▪ Ponomareff, (2018, Sep 20). A step by step guide to the Kanban system:
https://amp/s/kanbanzone.com
▪ Malloy and Daniel, (2020, April 15). https://searcherp.techtarget.com
▪ Stevens, (2020, April 23). What is just-in-time Inventory Management.
https://www.business.org
▪ Cusumano, Michael, The Japanese Automobile Industry: Technology and Management
at Nissan and Toyota, Harvard University Press, 1989
▪ Monden, Yasuhiro, Toyota Production System : An Integrated Approach To Just-In-
Time 2nd Ed. Norcross, Ga. : Industrial Engineering and Management Press.

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