The Toyota Management System – Toyotism and Impacts on Business

Toyotism” is a name for the Toyota Production System, which was put in place by Japanese automaker Toyota after the Second World War. At that time, Japan was faced with starting their economy from square one, and Toyota, run by Sakichi Toyoda, his son Kiichiro Toyoda, and engineer Taiichi Ohno developed a strategic vision to redeem the economy by selling cars to Japan and America. This vision was inspired in part by the works of William Edwards Deming and the writings of Henry Ford.

Toyota actually got the idea for its system of low inventories and reduction of waste not from Ford, but...

from visiting an American supermarket during a Toyota delegation visiting the U.S. in the 1950s. The Toyota delegation actually found many of Ford’s methods ineffective, even though Ford was the industry leader at the time. But they were quite impressed by a Piggly Wiggly supermarket, which only restocked goods once they had been bought by customers.

Toyota was inspired to apply this concept of reducing inventory, holding it to a level that was needed for a short period of time, and then reordering as a way to avoid waste. Toyota’s simple, efficient system of enterprise also consisted of reducing costs, maintaining optimal quality of products throughout the production chain, and making cars and their parts on demand (which came to be known as “just in time” production).

Toyotism also takes into consideration the opinions of the plant operators, having them participate in diagnosis of problems and solving them. In fact, Toyota strives for an integrated corporate culture that considers all concerned parties, including plant workers and engineers. This system permits a certain amount of breaking down of walls between functions and responsibilities, which tends to build confidence among workers, who know that their opinions are important.

The concepts inherent in the Toyota Production System is largely responsible for making Toyota the top carmaker in the world and a leader in manufacturing, production, and innovation. While many American businesses have tried to imitate Toyota’s approach to production, at times they have simply attacked high inventory levels without understanding the reasoning behind the just in time concept, and have experienced problems as a result.

Toyota’s ethic is to base management decisions on a long-term view, even if that comes at the expense of short-term profits, and this can be hard to swallow for many American businesses that focus on short term goals. The keys to success with the Toyota method are learning to recognize waste, avoiding becoming a slave to routine, and implementing practical problem solving techniques that involve line workers as well as white collar workers.

Two major sectors that have tried to benefit from implementing Toyota style management include construction and health care. The results have been uneven, and may be due to cultural differences between East and West, or due to a theory that “copying what works” is sufficient to reinvent a corporate culture without making the necessary changes in the philosophy that underlies those methods. But no one can deny how successful the Toyotism culture has been for its inventors.

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