Book Of The Week: Toyota, the lean, keen car-making machine

Toyota: People, Ideas and the Challenge of the New

By Edwin M. Reingold

(Penguin Books, pounds 16.99)

WALKING INTO a Toyota factory for the first time is a daunting experience. Everything seems to flow like clockwork. One cannot help but be amazed by the system that makes it tick so relentlessly - seemingly without human effort. In other Japanese factories there are lots of teams busy working on problems and walls full of visual information on everything from training and skills to how many problems occurred that day. One sees far less of this at Toyota, the emphasis is on the system - the Toyota Production System (TPS) - now widely recognised as the most efficient manufacturing system today.

It was not always this way. What one now sees is the result of 50 years' hard work by extraordinary people who tell their stories in this book. For the first 20 post-war years Taiichi Ohno, architect of TPS, inspired and pushed his staff to their limits to overcome the constraints of traditional manufacturing. His ideas were so radical he faced enormous opposition from colleagues. But step by step he put the pieces of his system together. Amazingly, nothing was in writing until they had to start teaching suppliers in the early 1970s.

Ohno was convinced the industrial world had taken a wrong turning in the 1920s. He was inspired by Henry Ford's original plant at Highland Park, where every machine, from raw material to finished product, was lined up in process sequence. A single car, the Model T, was made in hours. As soon as it came to making a range of products this practice was uniformly abandoned (even by the later Henry Ford) and the machines were in separate departments, which made large batches of each part in turn.

That kept the machines busy but stretched the time from start to finish from hours to months. So products had to be made to a forecast months ahead and sold to customers from stock. Forecasts were wrong and customers had to accept what was on offer. This is still the case in most businesses today.

This was fine, as long as the market grew and the company could sell all it could make. Ohno saw this would end and the waste in this batch production system would become a problem again.

So he determined to find a ways to remove the waste by successively overcoming the constraints to producing in process sequence again. The most famous example is reducing time for changing over a production line die from eight hours to less than 10 minutes. As he did so he found he could quadruple productivity and cut throughput times and defects by 90 per cent. This allowed the factory to respond very quickly and to make only the cars the customer ordered. Toyota was the first agile producer in the world.

Other industries looking for a new business model have also begun to follow Toyota's example. Aerospace and construction are learning how lean production, as the generic version of TPS became known, can have the same dramatic effect in their industries. Once you learn to distinguish steps that add value for the end customer from those that add only cost, and begin to optimise the sequence of steps, you quickly see the potential Ohno sought.

Toyota is driven by a determination to root out every form of waste and TPS was only the start. At the same time, other less well- known pioneers inside Toyota were putting together a radically different way of managing product development, a customer responsive ordering system and a new model of supplier co-ordination. Their stories are as fascinating as Ohno's.

So are the struggles to transfer their systems to the rest of the world. What became the Toyota business model formed the basis for Toyota's dramatic climb to number three in the world automotive makers' league. The rest is history - Toyota is now a global concern challenging hard for the top position during the next decade.

Having defined the model for the industry to follow Toyota now wants to be one of the first to redefine the product for a greenhouse constrained world. This book is not another guide to just-in-time, Kanban or TPS, or a dry company history. Neither is it an exhaustive analysis or critique of Toyota. What it offers is a glimpse behind the mask at the key people across Toyota that made it what it is today - in their own words. Here you get an accurate picture of what it feels like inside Toyota. The true mark of a Toyota person is that they are quietly very aware of the extraordinary example they have created but they also realise how much more there is to do.

Toyota is well down a path that others are just beginning to follow.

Professor Daniel T Jones

The reviewer founded the Lean Enterprise Research Centre at Cardiff University Business School, and is the author of `Lean Thinking'