Toyota Production System In A Nutshell

The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible. 

Understanding the Toyota Production System

The TPS is based on underlying principles called the Toyota Way:

Continuous improvement 

  • Challenge – or the courage and creativity to meet challenges and realize their long-term vision.
  • Kaizen – or the continuous improvement of business operations.
  • Genchi Genbutsu – which advocates going to the source to fact-find and make informed decisions.

Respect for people.

  1. Respect – every effort is made to respect and understand each other. This means taking ownership of personal work and building mutual trust.
  2. Teamwork – employees must be stimulated to achieve personal and professional growth. Opportunities for such growth should be shared throughout the organization to maximize performance.

The two core concepts of the Toyota Production System

Toyota bases its philosophy on two concepts:

  • Jikoda” – a Japanese word loosely translated to “automation with a human touch”. For Toyota, this means that automated systems (machines) must be built and improved by hand until they are reliable and safe. Machines built by hand to very high standards become simpler to use and less expensive to run. This results in simple, slim, flexible, and lean manufacturing processes that are adaptable to fluctuating production volume.
  • The “just-in-time” (JIT) concept – where each part of the manufacturing process produces what is needed for the next process to facilitate continuous flow and improve productivity. Toyota describes the JIT concept as making only “what is needed, when it is needed, and in the amount needed.”

The three categories of waste products in the Toyota Production System

In the introduction, we noted that the elimination of waste was integral to lean manufacturing at Toyota.

Waste that can potentially hinder process improvement is divided into three categories.


Mura is translated as unevenness, non-uniformity, and irregularity. When a production line work station has a higher capacity than other stations, waste in the form of overproduction and delay-causing bottlenecks occur. Muri can be mitigated by using Kanban or Just-In-Time manufacturing to limit the accumulation of excess inventory.


Muri encompasses overburden, excessiveness, unreasonableness, or something that is beyond one’s power. Muri is evident when machines or human operators are forced to work beyond their capacity. Machines inevitably fail, causing delays and costing money. Overworked employees cause a lack of productivity owing to illness and absenteeism. 


Muda is defined as wastefulness, uselessness, and anything that hinders the creation of value that the customer is willing to pay for. Muda Type 1 processes do not add value directly but are required by law – such as the passing of safety tests and emissions standards. However, Muda Type 2 processes are non-value-adding activities that are also unnecessary. 

These activities are further categorized into seven types of waste:

  • Transport – or wastage resulting from the excess or unnecessary movement of people, tools, equipment, or products.
  • Inventory – excess inventory can lead to an inefficient allocation of capital or occupy valuable space that could be better utilized elsewhere. Large amounts of stock sitting idle is also prone to damage or spoilage. Here, defects are also more difficult to detect and address.
  • Motion – this is wastage that results from walking, lifting, reaching, double-handling, and so forth. Motion should be limited or redesigned to increase occupational health and safety and improve productivity.
  • Waiting – this includes people waiting for materials or equipment. It also includes equipment waiting because of input delays caused by uneven production.
  • Overproduction – or the manufacturing of a product or component before it has been asked for, required, or ordered. This results in excess inventory and increases lead-time.
  • Over-processing – defined as doing more work or adding more product features or steps than is necessary. In manufacturing, this might encompass the over-engineering of a solution or adjusting a component after it has been installed.
  • Defects – or products not fit for use that must be scrapped or reworked. Both outcomes require an extra allocation of resources which reduces productivity and profit margins.

Key takeaways:

  • The Toyota Production System is a pioneering form of lean manufacturing developed by the Toyota Motor Corporation.
  • The Toyota Production System is based on continuous improvement and respect for people. In manufacturing, it favors just-in-time (JIT) production and automation with a human touch.
  • The Toyota Production System categorizes waste into three categories: Muri, Muda, and Mura. Each category is defined by specific adjectives that clarify potential sources of process inefficiency.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"