Toyota begins to rethink the Toyota Production System

The Toyota Production System (TPS) was probably one of the most important developments in logistics in the latter half of the 20th century.

A set of ideas that gave the world phrases such as ‘Just-in-Time’, ‘Kaizen’ and ‘Kanban’, was described by one American author as “the machine that changed the world”.

However, it appears that it was very much of the 20th century and that its fate in the 21st may be very different. Toyota certainly appears to think so.

Speaking at the publication of the car manufacturer’s annual results, the President of Toyota, Akio Toyoda, discussed the future of the company and its core TPS concept. He described an immediate future of “embarking on our battles in a world of unknowns”. In such a world “what will be required….is anticipating customer needs and providing customers with more personal mobility in a more direct and timely manner. In other words, it will be a world in which the services that are needed are provided when needed and only in the amount needed. Such is precisely a world of ‘just in time’, as found in TPS”.

This suggests a fairly dramatic re-orientation of TPS away from the management of inventory and capital fixed assets.

Mr Toyoda’s recognition of the significance of such a re-orientation is reflected in his comment that he has “decided to ‘redesign’ Toyota from a car-making company into a mobility company. A mobility company is a company that provides services related to movement for people around the world.” Last week, the company bought a share of the web-based taxi service ‘Grab’ to further this vision.

Japanese companies have a tendency to be a little rhetorical when outlining their strategic vision, however in this case it is probably justified. The automotive world is changing. At the operational level the instant movement of data in huge volumes across supply chains demands a rethink of the principles of a Toyota Production System that revolves around the physical representation of information such as the Kanban. At the strategic level, the architecture of the automotive supply chain is changing, with the assembly plant less fundamental to the sector. The rethinking of TPS is a bright indicator of the magnitude of this change.

Source: Transport Intelligence, June 19, 2018

Author: Thomas Cullen


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