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What Really Makes Toyota’s Production System Resilient

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Summary

This article discusses how Toyota has been able to better weather the supply chain disruptions of the past few years than many of its competitors, despite their commitment to lean production methods. It explains how Toyota’s approach to inventory planning, with strategically sized inventories in the right locations, safety stock that factors in the risk of disruption, and a nuanced view of lead times, has enabled it to remain resilient. It also highlights the importance of trust and collaboration with suppliers, the focus on learning and continuous improvement, and the fact that the Toyota Production System is an organizational culture as much as it is a factory operating system.

Q&As

How has Toyota fared better than its competitors during supply chain disruptions?
Toyota has fared better than its competitors during supply chain disruptions by maintaining strategically sized inventories in the right locations to act as a buffer to meet changing demands, safety stock that factors in the risk of disruption, and a nuanced view of lead times.

What aspects of Toyota's production system make it more resilient?
The less understood aspects of Toyota's production system that make it more resilient include strategically sized inventories in the right locations to act as a buffer to meet changing demands, safety stock that factors in the risk of disruption, and a nuanced view of lead times.

How does Toyota approach inventory planning?
Toyota takes a strategic approach to inventory planning, which includes strategically sized inventories in the right locations to act as a buffer to meet changing demands, safety stock that factors in the risk of disruption, and a nuanced view of lead times.

What is Toyota's approach to dual sourcing?
Toyota takes a very different view of dual sourcing: Having two suppliers means it can enjoy resilient capabilities. It might source a steering wheel for one model family exclusively from one supplier and a steering wheel for another exclusively from a second supplier. The two suppliers would then compete constantly for the next design as new models enter production, but they would compete more on innovation and capabilities than on price.

How is the Toyota Production System (TPS) focused on learning and continuous improvement?
The Toyota Production System (TPS) is focused on learning and continuous improvement at multiple levels. At the shop floor, the emphasis is on frontline problem-solving skills. This is supported by a hierarchy of team and group leaders with greater expertise and the ability to teach. The learning extends to supplier support as well, and when Toyota invests the effort to help suppliers fix problems, it also learns their production processes. TPS is also an organizational culture, with its core philosophy to motivate and develop people so that they can surface and solve problems quickly and build a culture of continuous improvement.

AI Comments

👍 The article provides a comprehensive overview of Toyota's production system and its resilience in the face of disruption. It is an excellent example of how a system can be adapted and innovated to meet changing needs.

👎 The article does not address the ethical implications of Toyota's production system or the long-term environmental implications of its practices. It should have included more information on the sustainability of its operations.

AI Discussion

Me: It's about how Toyota's production system is resilient. It focuses on how the company is able to manage supply chain disruptions and maintain its just-in-time and lean production methods. It talks about how Toyota has strategically sized inventories, factors lead times into its inventory planning, and has multiple suppliers as a source of resilient capabilities. It also talks about how Toyota has built trust with its suppliers and emphasizes learning and continuous improvement.

Friend: That's really interesting. It seems like Toyota's approach to production is really effective and resilient. It's good to see that they are taking the necessary steps to ensure that their production system is able to adapt to different disruptions.

Me: Yes, definitely. It's also encouraging to see that Toyota puts a lot of emphasis on building relationships with its suppliers and fostering trust. That's something that other companies should take note of.

Action items

Research the Toyota Production System and its core values to better understand how it works and how it can be applied to other businesses.
Develop a strategy for dual sourcing components to ensure resilient capabilities and reduce costs.
Establish trust-based relationships with suppliers to ensure that they are invested in the long-term success of the business.

Technical terms

Just-in-time: A production and inventory control system in which materials are delivered and components are manufactured just as they are needed in the production process.
Lean production: A production system that seeks to eliminate waste and maximize efficiency by reducing the amount of resources used in the production process.
TPS (Toyota Production System): A system of production and inventory control developed by Toyota that emphasizes efficiency, quality, and cost-effectiveness.
Safety stock: A reserve of inventory that is kept on hand to ensure that production can continue in the event of a disruption.
Lead time: The delay between ordering a part and receiving it.
Dual sourcing: A strategy of having two suppliers for a given part or component.
Just-in-case: A production and inventory control system in which materials and components are stockpiled in anticipation of potential disruptions.