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Overview

A famous ad slogan from the 1990s was “The car in front is a Toyota.” The company has been known for its quality products and innovation, which continue to be valued worldwide. One of the reasons for this success is the legendary production system called TPS (Toyota Production System), also referred to as lean production, which has since been adopted by other industries such as design, programming and start-up management.

These key points give you the inside scoop on how lean production came to be and explain in detail how this system helped skyrocket Toyota to global success.

In this article, you’ll also learn that Toyota runs out of stock on purpose and why every Toyota employee can stop a production line. You’ll also find out why other car companies don’t like to fix their mistakes.

Big Idea #1: From the “horseless carriage” to the modern assembly line, the automobile industry has evolved.

The automobile industry has changed a lot since Karl Benz patented the first car in 1886.

The automobile industry is the largest manufacturing activity in the world. It has been that way for a long time and it’s due to craft production, which means that carmakers customize cars for customers. However, this was slow and expensive, so few people could afford cars; only 1,000 were produced yearly.

Today, only luxury cars are produced via craft production. In general, the industry has moved to mass production. Inspired by Henry Ford, this change came about at the end of the twentieth century.

Henry Ford sought to make cars faster and easier to produce. He realized that by separating the car into parts, he could make production more efficient.

Development of the assembly line further accelerated the manufacturing process. An early assembly line was a moving belt with workers stationed at different spots along it; each worker performed one or two simple tasks, over and over again. These basic tasks didn’t require highly specialized skills, and in fact, many assembly-line workers were immigrants who spoke little English.

Automation of the production process made it so that cars could be mass-produced. This made customization less important, but it also meant that anyone could drive or repair a car by following a standard manual.

Big Idea #2: Assembly line production grew in the US and in Europe, but the process wasn’t foolproof.

With the innovation of mass production, more and more cars were produced. This led to a flood of cars being sold worldwide at cheap prices. By the early 1930s, 90% of those cars were made in America.

Most of these cars came from three major American car companies: Ford, Chrysler and General Motors. Henry Ford’s assembly line process dominated the industry for about fifty years, but then European companies began to compete; Germany founded Volkswagen, France Renault and Italy Fiat.

As European companies began to innovate, Ford, Chrysler and General Motors lost their leadership positions. Even the assembly line became obsolete in comparison.

The problem was that mass production had strict rules and offered little reward to workers who performed the line’s boring, repetitive tasks. As you might expect, employment turnover was high.

An assembly line also had the problem of being unstoppable. If a worker found an issue with their part, they might not report it because there was no time to fix it. Also, managers were measured by how many cars they could produce in a certain amount of time so workers would ignore flaws as long as possible to meet quotas.

Whenever a car was assembled, it had to be inspected. If the inspector found a defect or problem, he would fix it and send the car back on its way through the assembly line. However, even though there were many inspectors inspecting each vehicle that came off of the assembly line, they couldn’t catch every problem. Sometimes cars would have to be taken apart completely and reassembled again before being sent out onto the market.