Page 36 - Toyota Under Fire

THE MOST ADMIRED COMP ANY IN THE WORLD

The Toyota Production System and
Toyota Business Practices

Those with at least a passing knowledge of Toyota’s approach to
manufacturing will recognize the origin of the now famous andon
cord in Sakichi Toyoda’s “mistake-proof” loom. The andon cord
is pulled by a worker in a production plant to stop the assem-
bly line as soon as an error is detected (all of Toyota’s automated
equipment also has built-in error detection that will shut down
the machine automatically). The basic philosophy of immedi-
ately identifying and eliminating mistakes and waste has been a
core pillar of the company from the very beginning.
The shift from looms to motor vehicles was driven by Sakichi
Toyoda’s son Kiichiro, on the advice of his father. Sakichi believed
that the firm needed to expand into other areas of manufacturing.
In 1929, Kiichiro began traveling to the United States and Britain
regularly, ostensibly to negotiate licensing terms for the company’s
loom technology. In reality, he was also learning all he could about
automobile and machine tool factories to help guide him in setting
up the automobile division at Toyoda Loom Works, which he did
in 1933. By 1937, Toyota Motor Company (today known as Toy-
ota Motor Corporation or TMC), was the center of the business.
It was Kiichiro Toyoda who, in a key document in the late
1930s laying out Toyota’s operating philosophy, first penned the
words “just-in-time,” describing a continuous flow of materi-
als from raw materials to the customer. The theory was put into
practice under the leadership of another iconic figure in Toyota’s
history, Taiichi Ohno, who tried his first “pull system,” building
in response to customer pull, in 1948 and who first put into a
plant, by 1953, what some now call a “supermarket.”

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