The Toyota Economic System

Book 2 is structured as a step-by-step guide through the principles and techniques of TPS. It focuses on the principles (the why) and the techniques (the how) for each of the elements of just-in-time (system efficiency), jidoka (process efficiency), heijunka (level production) and standardized work. The goal is to set up a system that cohesively works towards the systematic elimination of waste, not as a prescribed recipe to be clear, but as a series of actions and corresponding effects working as a system toward an ideal.

Every organization is unique and requires a tailored approach that fits its particular needs. What to do and where to start varies based on the circumstances. However, there are constant core principles that need to apply to the specifics of any situation. For example, we need to eliminate changeover time to leave batch production, and the rate of supply needs to match the rate of pull to eliminate inventory. TPS requires a level of technical expertise, from the pace of work to equipment layout, that cannot be left to chance.

Companies often begin change-management initiatives without addressing these kinds of questions around work design and organization. The effort and the intentions are commendable but often fail to successfully implement TPS. We must set up the environment to drive the right behavior long term. At Toyota there is a saying: “We must act ourselves into changing.” Imagine how hard it would be to find problems quickly in a large pile of inventory, or create a steady flow of production with machines that stop frequently.