Toyota Production System (TPS)

Quick Definition

Synonymous with Lean Manufacturing and Lean Production, the Toyota Production System is a manufacturing methodology developed over a 20 year period by Toyota of Japan. In the most simplistic definition of TPS all manufacturing activities are divided into adding value or creating waste. The goal of TPS is to maximize value by eliminating waste.

Expanded Definition

Taiichi Ohno is generally credited as being the father of TPS. Mr. Ohno was the Vice President of manufacturing for Toyota and the driving force behind the creation of Toyota Production Systems. The first documentation of TPS was a paper presented in August 1977. TPS has since been codified in several books.

TPS is a system that was developed initially to account for the specific issues facing one company. The revolutionary ideas and concepts pioneered at Toyota have been used in many other organizations and industries throughout the world. Value is truly the central focus of TPS. By defining and understanding value, TPS has evolved to help companies maximize value. In this system all activities relating to the manufacturing process are classified as adding value or waste.

The goal of companies using TPS is to provide the exact quantity, with the exact quality, exactly when the customer wants it. The tools used to identify and minimize non-value adding activities make up TPS. However TPS is not a static system, rather it allows for continued change and improvement. Perhaps the true brilliance in TPS is not the tools and techniques in existence, but the underlying system that allows for new techniques to be understood and created.

Defining value can be one of the most difficult tasks a company can undertake. TPS has addressed this issue with a very elegant solution; value is an item or feature for which a customer is willing to pay. When this metric of value is implemented it allows companies using TPS to have an exceedingly clear vision when analyzing an activity or process. No organization likes waste, however it is difficult to eliminate waste if it cannot be identified. The Toyota Production System forces companies to ask, “Would someone pay for this?” If the answer is no, then it's waste.

Once waste has been identified, it can then be eliminated. Tools to eliminate waste have evolved around the most common areas of waste or “muda” as it is called in TPS. The Toyota Production System further defines waste as activities that consume time, resource and/or space but do not add value. The seven categories of muda are identified as:

Poka Yoke, or error proofing, is a technique to eliminate the waste of defective product by not producing it in the first place. As defective product is identified, the root cause of how the product was made defective is determined, and then a poka yoke is created to ensure that cause can not occur again. Excess inventory is typically minimized by manufacturing from a pull system. As product is sold to the end customer a Kan-Ban system pulls replacement product through the system. By building as a direct result of customer activity, waste in the form of excess inventory is minimized or eliminated. Wasted time typically refers to set up and die change applications. SMED (Single Minute Exchange of Die) techniques are used to minimize time lost to production changeovers.

Although techniques such as Poka Yoke, Kanban, and SMED are concrete well understood techniques to minimize waste and eliminate errors, they are components of the overall TPS. These techniques are not the definition of TPS rather they are a result of TPS. By codifying and understanding the relationship of manufacturing practices and end customer value TPS allowed Toyota to grow into a world class manufacturing company.


Companies that pursue and emulate TPS best practices have seen much success as a result of this highly effective manufacturing philosophy. Some of the benefits include:

The TPS is a system that has given companies a blueprint for manufacturing excellence.

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