Page 37 - Toyota Under Fire

TOYOT A UNDER FIRE

Ohno’s supermarket idea was inspired by a conversation with
a friend who had recently visited the United States and described
the American self-service supermarket. Before the widespread
availability of refrigeration, inventory control in the grocery busi-
ness was critical. Food spoiled quickly, and so grocers needed to
keep a close eye on their inventory, keeping only enough on hand
to meet a few days’ demand. In modern terminology, supermar-
kets needed just-in-time inventory management, and that’s ex-
actly what they had.
The nascent Toyota Motor Company had a problem similar
to that of supermarkets. While there was no danger of Toyota’s
inventory spoiling, the company simply didn’t have the funds
to keep inventory on hand. As a small outfit, it needed to con-
serve its very limited working capital as much as possible. Like
American supermarkets, where goods like milk are put up on the
shelf only in the quantity needed to replace what the customers
take away, Toyota factories would eventually have internal “su-
permarkets” that replenished parts on the assembly line as they
were needed.
The combination of Sakichi Toyoda’s emphasis on elimi-
nating mistakes and Kiichiro Toyoda’s emphasis on and Taiichi
Ohno’s innovations in just-in-time inventory formed the basis of
what has become known as the Toyota Production System (TPS).
TPS, as it evolved and was refined over the course of the next 80
years, is the blueprint that guides Toyota’s operations from sup-
pliers to manufacturing to delivery of automobiles and service
parts to dealerships. Above all, it focuses on the relentless pursuit
of quality and the elimination of waste through continuous im-
provement by all workers and managers. That sounds like com-
mon sense today, but it was and is revolutionary. The dominant
model of manufacturing systems before Toyota’s rise as a global

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