News & Politics

How Toyota Changed The Way We Make Things

by Bloomberg Originals

📚 Main topics

Toyota’s production systemAfter World War II, shortages and limited resources pushed Toyota to find ways to manufacture cars efficiently without holding large stocks of parts. 0:35
Just-in-Time productionInspired by a supermarket’s system of replenishing what customers had taken, Taiichi Ohno developed production that made only enough parts to replace those already used. 1:06
Kanban and stopping to fix problemsKanban helped signal the flow of goods, while cords at assembly stations let workers stop the line when they spotted an issue so the team could address its cause. 2:08
Growth and wider influenceToyota’s efficiency helped it scale production and appeal to American buyers during the oil crises. Companies including Boeing and Intel, as well as a Canadian hospital, have applied lessons from its system. 3:12

✨ Key takeaways

Waste reductionProducing parts as needed helped Toyota avoid tying up scarce capital in warehouse stock and reduce waste. 1:37
Quality through teamworkStopping the line to fix mistakes encouraged teams to prevent recurring problems rather than simply repair defects later. 2:38
Continuous improvementKaizen—incremental, ongoing improvement—helped Toyota build a reputation for reliable, affordable cars. 2:38

🧠 Lessons learned

Adapt methods to your constraintsToyota took inspiration from Ford’s scale but developed a different approach suited to Japan’s limited resources. 1:06
Empower people to improve the processGiving workers the ability to stop production made it possible to identify and resolve problems as they occurred. 2:38

🏁 Conclusion/next steps

A model beyond carmakingThe Toyota Production System influenced manufacturing and other fields, showing that there is always a better way to make a product. 3:43

News bloomberg wall street business news Toyota cars Japan Henry Ford assembly line Manufacturing production Boeing Intel Camry American cars Then This Happened

Transcript excerpt

0:03 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.

0:35 "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.

1:06 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

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