Taiichi Ohno’s Lectures

I recently purchased an excellent book titled Taiichi Ohno’s Records: Founder of the Toyota Production System written by Dr. Mitsumasa Kumazawa. The book was published in 2011 by Sankeisha Co., Ltd. Kumazawa-san, age 70, is a longtime professor (recently retired) of industrial engineering and production management. He had the good fortune of meeting Taiichi Ohno in 1977 and recording lectures he gave at the Chubu branch of the Japan Society of Industrial Management at Nagoya Institute of Technology soon after publication of his book, Toyota Seisan Hoshiki. To my knowledge, three out of the four lectures (Chapters 3, 4, and 5) lectures have not previously been translated into English in whole or part.

In the Introduction (Chapter 1, p. 1), Kumazawa-san said:

For the author, who had been in contact with the Toyota Production System and Taiichi Ohno since those days, these manuscripts and audio tapes were so close to him that he did not realize their value, and for a long time they were left in a corner of his laboratory.

It was not until the early 2000s Kumazawa-san realized the value of the material that he had, especially with regard to:

…in recent years, after going through the bubble economy, its collapse, and the financial crisis, I have come to think that Taiichi Ohno’s ideals and ideas have not been fully adopted by companies such as Toyota.

It appears that Kumazawa-san thinks that Toyota did not fully utilize Ohno-san’s ideals (his vision) nor his ideas. This, however, could be a mistranslation. Kumazawa-san could instead be referring to other companies that seek to emulate the Toyota Production System but did not fully adopt it, and this in turn helped contribute to Japan’s “bubble economy, its collapse, and the financial crisis.” Either way, Ohno-san’s ideals and ideas were expansive and difficult for anyone to realize, perhaps even Toyota.

Kumazawa-san goes on to describe that he obtained permission to publish the materials from Ohno-san’s wife in 2005. But she passed away before the book was published, so Ohno-san’s son gave final permission. Kumazawa-san lightly edited some sections of Ohno-san’s lecture notes and transcribed audio tapes to make it easier to understand.

What follows below are selected quotes by Taiichi Ohno that I found to be both new and interesting, followed by critical commentary. The quotes are presented in the order of the sections in the book. Please carefully study them. Note that all translations are made using Google Translate technology as it existed as of late August 2024. Skilled human interpretation of Japanese to English language would almost surely produce better results.

Chapter 2 – Toyota Production System

This chapter is a lecture given by Taiichi Ohno in November 1980 at the International Conference Decision Models for Industrial System Engineers and Managers (DMISEM) at the Asian Institute of Technology in Thailand. It is based on the Japanese language draft of Ohno-san’s invited lecture, written by Ohno-san himself. As such, it is free of external editing and differs from the English-language paper that was published in the conference proceedings.

• “I devised various methods to make products with high work efficiency using old machines. I came up with ideas, had the workers try them, and tried out the results. There was a lot of resistance from the workers. I got together with the workers and coached them one-on-one on the methods I had come up with. Although I received a lot of opposition and criticism, I did not give in and continued to move forward step by step, convincing the workers and managers on the factory floor, so it took seven or eight years just for the machine shop.” (p. 5)

Comment: To succeed as a coach, the coach must have a practical vision in mind for doing the work differently than how it is currently done. And coaching must be one-on-one to help people overcome their individual barriers. Too often in Lean world, coaches do not have practical vision in mind for doing the work differently than how it is currently done and they often prefer to coach in batches rather than one-on-one. The latter is likely because of a lack of a practical vision and unfamiliarity with the work. Consequently, they cannot be very successful in helping people overcome their barriers to working in a new way.

• “I believe that inventory control is not equal to production control, but is included in production control. I believe that inventory control cannot exist apart from production control. The role of production control is to meet customer delivery dates and production schedules imposed on each process by deadlines, and this difficulty is covered by products that have just been made (just-in-time), using products made in the past. In other words, I believe it is a mistake to try to cover up poor production control with inventory control. My basic belief is that if production management is truly done, inventory management is not necessary.” (p. 8)

Comment: That’s probably big news to a lot of people! In most companies, production control is poor, and so significant efforts are made to control and manage inventory. A better way is for inventory control to be subsumed into production control via kanban.

• “Interest in the Toyota Production System is growing, and more companies are adopting it. As the founder [of TPS], I am very happy about this. However, when I look at these works, I see that many of them imitate only the form and movements of KANBAN, for example, without fully understanding the true principles and content. A company’s production system is not made up of information alone; it also has physical parts that perform work and production actions.” (p. 10)

Comment: The same problem exists 50 years later. People imitate TPS without understanding its principles and practices. Kanban is information, which is metaphysical, that in turn initiates “work and production actions” in the material world.

• “The name ‘Toyota Production System’ was first coined by the Toyota Motor Corporation Education Department.”

Comment: These words were in a note by Kumazawa-san. It is an interesting origin story that I thought was worth including here.

Chapter 3 – Exploring New Directions in Future Production

This chapter is a lecture given by Taiichi Ohno on 28 April 1981, after his retirement from Toyota. The text of the lecture, titled “Exploring New Directions in Production,” was not organized into distinct parts, so Kumazawa-san added chapter titles and subsections for convenience and to make it easier to understand. The same was done for Chapters 4 and 5. Ohno-san introduces himself to the audience this way:

• “I am Ohno, as you have just introduced. I am an advisor for Toyota Automobile and also the chairman of Toyota Boshoku, and the chairman of Toyoda Gosei deals in auto parts. It is not a big deal, I am the chairman of both companies, and my mind is very confused. It happens to take about an hour to go to either company by car, so on days when I go to Boshoku, I have to say the exact opposite even if it is the same thing, or when I go to Toyoda Gosei, even if I say the same thing as Boshoku, it sounds completely strange, so I use the hour I spend commuting to switch my mind. Therefore, even today, my mind is confused and there is a risk that my talk will go in a strange direction, so I would like you to listen to what I say appropriately.” (p. 21)

Comment: What an interesting introduction! Indeed, Ohno-san’s talk does seem a bit confusing. This might have been on purpose to see who could follow his thinking. Those few that could follow would likely strive to recreate TPS in their company. The many that could not follow would likely keep doing what they have always done. Ohno-san points out the absurdity of traditional production and the sensibility of TPS in ways that sometimes invert them which can cause confusion (i.e., traditional production is absurd but seems sensible though it is not, while TPS is sensible but can seem absurd though it is not). In his talk, Ohno-san spends much of the lecture talking about “arithmetic management” (management by arithmetic), which he despises because it leads people (even Toyota workers and leaders) to a direction that is opposite to both TPS and the “limited [quantity] production” that today’s competitive buyers’ marketplaces demand (i.e., make only what you can sell). “Arithmetic management” is the old way of production management which he exposes as a ridiculous way to think and organize work because it causes companies to make more than they can sell. Overall, I rate his lecture as remarkable and worthy of great study, and Ohno-san as a deeply insightful teacher of arithmetic as applied to business.

• “… it is important to produce a limited quantity as cheaply as possible…but if you think about how to make things cheaply first, it becomes ridiculous. In order to make things cheaply, you need to increase productivity or mass-produce them to make them cheaper. If you think about making things cheaply or making them first, you will end up making things that don’t sell. I think it’s easy to make things even if you know they won’t sell.” (p. 22)

Comment: Ohno-san is adamant, here and elsewhere in the lecture, that people continue to be fooled by the arithmetic that says the more you produce the cheaper the item is. That is true under the conditions of a sellers’ market, where overproduction is not a problem because everything made can be sold. But the arithmetic is wrong under the conditions of a buyers’ market because items that are overproduced cannot be sold or are sold at a loss. Throughout the lecture, Ohno-san emphasizes the importance of both cost reduction and obtaining profits for the work of providing goods to customers.

• “This is a phrase that is often used abroad, but there is a proverb that says that the smaller the number of people who divide the pie, the larger the share each person gets, and it is used. If you think about this in a Japanese way, you might think that it would be better to make the pie bigger, and this phrase is created. I think that the smaller the number of people who divide the pie, the larger the share each person gets. I think that the fact that the larger the pie, the larger the share each person gets is completely unrelated, but I think that Japanese people are very good at arithmetic, and they feel that it is the same as an opposite expression. For example, if you divide 15 by 5, it becomes 3, and if you divide 30 by 10, it also becomes 3. They think that it is the same. After all, arithmetically, it is the same, but I think that there are relatively few people who think that it is completely different in terms of thinking. As I said earlier, during the period of high economic growth [sellers’ market], it may have been possible to make this pie bigger, but as I said at the beginning, in the current situation [buyers’ market], since the amount to be produced is fixed, it may not be possible to make the pie bigger. There may be cases where it is possible, but it is not possible. Even though we don’t have any intentions, we tend to think that the pie should be bigger. I call it arithmetic management, to put it bluntly. There is too much arithmetic management in Japan. It is better to divide this pie among a small number of people, and I think you will understand this if you talk about it in other places.” (pp. 24-25)

Comment: This is another brilliant example of Ohno-san’s thinking that follows along the lines of his well-known analysis of the transpositions of the simple formula “Price = Cost + Profit” that was described in his book, Workplace Management (pp. 21-22). In a non-competitive sellers’ market, it is easy to increase the size of the pie, but not so in a competitive buyers’ market. If you try to grow the size of the pie in a buyers’ market, you end up overproducing (excess supply) and suffer losses on what you cannot sell or which can only be sold by heavy discounting. This produces financial losses that erode profit — even though the overproduced quantity was produced at lower cost due to higher volume. Inventory may be an asset but losses are still losses. Generation after generation of top CEOs and CFOs do understand this. Consequently, they produce goods as if there is a sellers’ market when they are in fact supplying a buyers’ market. This is delusional. Business leaders should manage production to the market that exists, not to a market that does not exist (see REAL LEAN, Volume Two, Chapter 5, “Manage to the Market,” 2007).

• “…there are hardly any monopolies these days. Generally, there are many competitors and the price is decided by the customers. Therefore, how to make the original price as cheap as possible is how to make a profit, and 5 minus 3 is 2, which is profit.” (p. 30)

Comment: One of the things that CEOs love to do is create monopolies (sellers’ markets via patents, mergers, etc.) so that they do not have to be troubled with prices being decided by customers (buyers’ market). It is much easier to add profit to one’s costs rather than figure out how to reduce costs to make profit. This is largely driven by the traditional CEOs’ view that lower-level employees are not hard working, they are not creative, they make too many mistakes, and they are paid too much. So, the only good way to make profit is to add it to one’s costs. The thousands of corporate consolidations over the last 50 years give you an idea of how repulsive buyers’ markets are to CEOs. It is hard work, so it is best to just avoid it.

• “…if you ask ‘why, why, why’ as many times as possible for the results of one phenomenon, you will find the true cause… we tend to easily assume that the cause is due to the result or phenomenon, and we may take action on the result instead of the cause, which is a mistake that we must be careful about.” (p. 36)

Comment: Most people stop at the 5th why simply because Ohno-san called it “5 Whys.” Do not stop at the 5th why; keep going until you’ve discovered the root cause. This will help avoid future losses. Also, people’s problem-solving tends to focus on effects, not causes. This guarantees future losses.

• “So anyway, [Shigeo] Shingo from the Efficiency Association named this the single changeover. In the end, it’s done within 10 minutes. Shingo used to play golf. I think the word ‘single’ probably comes from golf, and it means someone with a score of 9 or less.” (p. 39)

Comment: An interesting anecdote. “Score of 9 or less” means a golf handicap of 9 or less (how many strokes above par in an 18 hole round of golf).

• “Nowadays, we try to do changeovers instantly, and even if we can’t do it instantly, we have to do it in seconds if possible.”

Comment: In the early 1990s, so-called “world-class” set up times were 9 minutes or less. Generally, people were able to get machine setups down to 5 to 7 minutes. This is what kaizen consultants from Toyota and Toyota-affiliated companies taught. It is interesting to learn that back in 1981, Toyota was doing machine changeovers in a second or a few seconds. The kaizen consultants clearly did not reveal all their secrets. Instead, they coached people in the idea of single-minute changeover and let them later figure out for themselves the need for one-second changeover and how to do it.

• “In general, machines that are considered high performance are no good in our case, because they are big ships and big guns, and they have to be flexible, but this is ultimately due to limited production. In other words, the American mass production system, which was developed in the United States, reduces the cost of the product by mass-producing a limited number of products. It is said that the American mass production system has reached its limit, and when you can sell as many as you make, the American production method is advantageous, but when you make many different products and the quantity is almost always limited, the American way of doing things is no longer applicable in the United States. I think that in the future, it will become like the Toyota Production System, and in the next 10 years, in our company, I think that American high performance machines will not be of much use in Japan, so there is no point in making so many. Having said that, if we just assumed it would be done using that expensive machinery, then it would become something outrageous.” (p. 41)

Comment: “Big ship and big guns” are a metaphor for the expensive machine tools used to make large volumes of automotive parts via mass production for a limited line of automobile products. Thus, long run times are needed to compensate for long machine changeover times. This is acceptable for a sellers’ market in America. Toyota needed different types of machines to produce limited quantities of parts for a more diverse line of automobile products serving buyers’ markets worldwide. Today, despite facing buyers’ markets, companies still buy “big ships and big guns.” That’s “outrageous.”

• “I happened to be reading a little at home, and the author said that many people think that Japanese people do not have creative ability, but this author said that Japanese people do have plenty of creative ability, but because Japan was a developing country, it has been trying to catch up after 100 years since the Meiji era, and it has been doing so by just imitating others. So, he said that developing countries don’t have time to use their creative abilities, so they just copy what other countries do, so they have the ability but don’t have time to use it. He said that all modern conveniences, such as steam engines and airplanes, were made in America. America is a mix of many different races, so if America has that kind of creative ability, then all races have it. This is his theory, but now, in terms of industry in Japan, there are a lot of companies that are on par with developed countries. So, from now on, it’s not that Japanese people don’t have creative abilities, so from now on, Japan will develop creative abilities to a great extent. Even in the automobiles we make, we have copied the production method developed in America. However, once the imitation stage is over, there will be no one to imitate, and so the next step will be to come up with ideas on your own. This means that the Japanese also have ample creative ability, so from now on, Japan will have to develop its own creative abilities.” (p. 42)

Comment: This is a very important passage! It says that when you are catching up, it is okay to copy or imitate others’ ideas and methods. This is exactly what Toyota did when it started in 1937. It copied Western automobile designs and batch-and-queue mass production methods. But after they caught up, they came up with their own ideas and methods (flow production; JIT). Likewise, once your company has caught up, you need to come up with your own ideas and methods. Take American manufacturing as an example, which specializes in overproduction. Relative to Toyota, it is way behind — still to this day, 50 years after learning about TPS — and trying to catch up (using Lean 😭). I have said for years, it is okay to copy Toyota. Do it! Learn from the best! Catch up quickly! But what is not okay is to copy without understanding TPS principles and practices (and in this context, forget about Lean). And once you have caught up, come up with your own ideas and methods. Copy, then improve.

• “It’s not like we made the changeover faster because we had to. If you’re working on something for Toyota, you’ll be praised if you make the changeover faster. If you make the changeover faster because you want to be praised, rather than doing it for the company, then this is a way of thinking that puts the cart before the horse. In that respect, you have to clearly separate the means, the purpose, and the method. We’ll try it now… and you’ll see how much the work-in-progress has decreased. If the work-in-progress doesn’t decrease, it’s no good if you can make the changeover in 30 seconds. But if you can do it in 30 seconds, you can do the changeover even after the order comes in. What used to take an hour can now be done in one minute. Then wouldn’t it be strange not to make something else that takes 59 minutes?” (p. 45)

Comment: This interesting passage questions what good is an innovation if it does not have a practical impact in improving something important to the business, such as reducing work-in-process and creating added productive capacity. In business, innovation for innovation’s sake can be pointless.

• “I’m getting confused and repetitive as I speak, so please listen. I know this has been a bit of a drag, but it’s almost time, so I’ll wrap it up here. Thank you for your time.” (pp. 48-49)

Comment: And that concludes Taiichi Ohno’s lecture titled: “Exploring New Directions in Production.” Ohno-san was 69 years old at the time of this lecture. I think his final words were meant as humor, as was his introductory comments.

Chapter 4 – My On-Site Management

This lecture, titled “My On-Site Management,” was given by Taiichi Ohno on 7 December 1982. “On-site management” means genba management. The lecture is devoted principally to production planning, meeting production targets, and related aspects.

• “…in times of great change and upheaval like today, I think that demand forecasts are often not accurate. Or, looking at the world at large, in an era where supply capacity exceeds demand, most products, or products, are often in a state of flux, and even if you do things normally, there are many things such as market share battles with other companies, and demand forecasts are often off, and you have to make changes. The significance of creating a production plan… in some companies, when they say “making a plan,” they interpret it as a very good thing to achieve 100% of the plan… but the people in the planning section of the production management department, who come to work every day and make a production plan for December, for example, are likely to leave it [unchanged] until December is over. With the world changing so much, production plans should be changed two or three times along the way, but they don’t do this… but even though they have systems… that can respond to various changes, the most important thing, the plans, haven’t changed at all. So how many days a month will the production planning section in the production management department go to work? It would be fine if they didn’t go to work after the plan was made, but even though they go to work every day, they don’t change the plans they made at all depending on the situation. I think there are a relatively large number of companies that feel that if they don’t make any changes… it won’t accomplish anything.” (pp. 50-51)

Comment: This is a funny passage because it reveals the absurdity of traditional production planning and the work of those who prepare production plans. Once they create a plan, they (and others) see it as fixed. Even though they come to work every day, they do not change the plan in response to changes in order and changes in market conditions. Then, people are held accountable to achieve 100 percent of the plan even though it cannot be achieved. It is true that such insanity “won’t accomplish anything.” Plans need to change often to reflect reality, not force an imagined reality on the people charged with carrying out the plan that will surely set them up to fail.

• “Even in small and medium-sized enterprises or companies that we are involved with, if something does not go according to plan, they say that someone is at fault… companies that think about achievement rates are outdated companies… but production plans should be changed at least three or four times a month in line with demand, but if a plan that was made once is left as it is until the end of a certain month, then… is useless. I think it’s a bit strange, but if there are companies that try to evaluate various things by talking about this plan and its achievement rate, I think that is outdated management.” (pp. 52-53)

Comment: This passage shows how the insanity of plans and the metric of plan achievement rate extends to even small- and medium-sized enterprises. Do these businesses learn outdated management by themselves, or do they learn it from the larger companies that they supply? Ohno-san’s message, always, is to see reality, think, and establish systems, policies, and methods that reflect reality as it is, not how you would like it to be.

• “However, as the first step on the ground, it is very important to achieve a 100% achievement rate. If you cannot do what you are told, it is obvious that the company cannot survive, but achieving 100% is for training purposes, and 100% achievement should never be the goal… If there are still companies out there where you are told to make 100 but you get scolded for making 90, and praised for making 110, then they are probably not suited to this era.” (p. 53, 54)

Comment: Here you see the relationship between plans that reflect reality and achievement of the plans, whose effect is to be profitable and survive in business. But setting a goal of 100 percent for plans that do not reflect reality trains people incorrectly and will result in higher costs and lower profits.

• “If you are told to make 100, you should think about how to make 100 cheaply, but we have this equipment and this many people. So saying you made 110 is the worst thing you can do. There is an old saying that goes, ‘Too much is as bad as too little,’ but I think it is important to think of things in this way, rather than thinking of too little as a bad thing. Having too little is a lesser sin.” (p. 54)

Comment: To meet a sales target of 100 means you have to think about the process you have and quickly determine if it can achieve the target. If not, the process must be improved to make 100 cheaply. There is no need to figure out how to make more than 100 because 100 reflects the current need. Underproduction is less of a sin than overproduction.

• “Achieving 105% feels better than 95%, but for those who are in the business, it’s no good if mood makes the company poor.” (p. 55)

Comment: The important thing is to achieve the daily requirement, based on reality. Doing more will increase costs without producing profit.

• “If you don’t understand why Kanban is used to reduce stock or shorten lead times, and just misuse it as a convenient way to say what you want, it won’t do any good. Kanban should be fine-tuned as much as possible, and to make fine adjustments, it’s no good changing plans all at once.” (p. 57)

Comment: Kanban is a method of production control, and changes to production quantities, up or down should be small, plus or minus 10 percent or less, to fine tune the required quantity in relation to the daily production plan. Changing quantities all at one is a large fluctuation that production cannot handle, which subverts kanban and causes stagnation of material at the company and its suppliers.

• “There are various ways to shorten the lead time, which is the minimum deadline. The most commonly mentioned method is to shorten the setup time as much as possible. If the setup time is shortened, the lot size will be much smaller. If the lot size is small, even if there are changes to the plan, it can be processed in a relatively short time…. It is important to educate factories on how to do this so that partner factories can adopt the same production system as our own.” (p. 58, 59)

Comment: This describes the connection between set-up reduction, production planning, and producing parts in quantities that reflect daily changes in the kanban, in response to actual customer demand. This connects the shop floor directly to the buyers’ market that the company exists to satisfy. Partner companies (suppliers) must be taught TPS so that the supply chain operates in a coordinated fashion and to avoid unnecessary and expensive overproduction.

•  “Therefore, each industry must consider the production system, such as if one right part is made, can one left part be made, or if one front part is made, can one rear part be made?” (p. 62)

Comment: This describes the need to make things in sets where sets are required, and connects to the necessity of quick changeover to avoid build-ups of material. For example, if an order is for 100 sets of right-hand and left-parts, make them in sets rather than produce 100 right-hand parts followed by 100 left-hand parts. This will improve the flow of downstream production. Making parts in batches (lots) lengthens the lead time to produce one set of parts, disrupts downstream production, creates quality problems, and reduces flexibility if production plans change.

• “I think there is a widespread idea that it is difficult for us to understand that we exist in the present.” (p. 65)

Comment: This connects to earlier comments about plans that people stick to despite changes that have occurred, and the practical need to be flexible and adaptable to changing conditions via fine-tuning. So while one can have forecasts and one or five year plans — all of which are future focused — humans live in the present and daily work must reflect present needs as they are determined by buyers’ markets. And production should be managed in the present such that it reduces lead time from order to delivery for the convenience of the customer.

• “Another problem is that we have gone back to basics [the old way of working] and have not done what was once called time study or motion study. The most important thing in the Toyota Production System is to clearly separate the time when the machine is working from the time when the person is working. [In the old way] When the machine is cutting with automatic feed, the person should not be doing any work. The person’s job is to remove the material after the processing is finished and attach the next material, and then start the feed again, which is the person’s job. Once that is done, the machine will cut properly, but it is a shameless story to get paid just for watching the machine and saying that you are monitoring it or something. The reason why time studies and motion studies are separated is that time studies are the tens of seconds it takes for a machine to operate, while motion studies are the seconds it takes to remove, attach, and press a button. If you do not clearly distinguish these, it will be difficult to understand the Toyota Production System. If there is no standard for this, it will be difficult to understand the process.” (p. 67)

Comment: This begins a short section on standard work, which is the basis for improvement. The standard is the quickest way to do the work, which people often misunderstand as the ideal way to do the work. Most Lean professionals have an understanding of standard work, but little to no understanding of time study or motion study. Without this knowledge and ability (which is not trivial), the work cannot be understood. That, in turn, means that coordination between processes and synchronization of supply with customers’ demand in buyers’ markets cannot be achieved, resulting in overproduction.

• “In Japan, layoffs are not possible, so as a national character, we cannot say goodbye to people who contributed to increased production just because production is reduced.” (p. 70)

Comment: National character or not, the production system that Ohno-san developed, along with his subordinates and others, results in greater employment stability because of closer synchronization between supply and demand. Aside from a CEOs’ simple desire to increase profits by laying people off, one of the biggest causes of job loss is due to overproduction (inventory build-ups) which helps initiate the business cycle. Overproduction is avoidable, as TPS proves, and so it is possible to reduce the number or severity of business cycles and associated job losses. Further, a principal cause of employees’ unwillingness to participate in process improvement is the ever-present threat of job loss. When you say “goodbye to people who contributed to increased production,” they say goodbye to improvement. And what is the outcome of that? Often, it is more layoffs, sooner or later. This is a vicious cycle that serves no one’s interests.

Chapter 5 – Obstacles Faced During the Development of the Toyota Production System and How They Were Overcome

This lecture, titled “Obstacles Faced During the Development of the Toyota Production System and How They Were Overcome,” was given by Taiichi Ohno on 22 April 1980.

• “If we want to increase productivity by 10 times, I thought that we would have to look at things with a completely different way of thinking than before, and tried various things.” (p. 73)

Comment: This was the initial big audacious target that became a centerpiece of Toyota’s kaizen method and way of thinking in future years (post-1947), along with management’s total acceptance of trial and error as a productive method for achieving seemingly unreachable targets. In most other businesses, leaders expect a detailed plan (Gantt chart; a prediction of the future) and strict adherence to the plan even though circumstances constantly change and the people executing the plan may have never done it before. Failure is foretold by leaders’ metaphysical belief that such a feat can be routinely achieved, and the people who executed the failed plan will most likely not have learned much from the experience other than it was bad. Most managers do not view trial and error as a plan and they see no value in it. They see it as an abstract scheme with low likelihood of success, in part because they do not believe employees possess creative abilities. Yet, that’s how Toyota went from nothing after World War II to being a global automotive maker in just 25 years. Management’s inability to accept trial and error as a productive method for achieving seemingly unreachable targets relegates them to meagre targets of ten percent improvement while their competitor may be like Toyota seeking 10 times (1000 percent) improvement. Company A seeking ten percent improvement per year thinking the old way is not competitive with Company B seeking 10 times improvement using a “a completely different way of thinking than before.” And they will likely remain ahead because of the unique learning that accrues over time by thinking differently. Such a situation should very much concern most senior leaders, but it likely will not be for reasons that I have previously identified.

• “Producing a defective product does not mean that the job has been done. It does not count as working in the conventional sense. Working only means that you have produced something good.” (p. 76)

Comment: It is common for businesses to allow defective products to go into the hands of customers. Both the processes and the staffing are inadequate to consistently produce something good in the belief that it lowers costs. This happens because managers fall under the illusion that it is easy to produce a product without defects. Because it is sold to a customer, the the business takes credit for the job being done. Yet, what is it really? It is the beginning of additional costs and waste of resources.

• “When they work hard, regardless of the results, the manager mistakenly thinks that they’ve done a good job and that their efficiency has increased, and the people working there mistakenly think that they’ve worked hard, and it’s a complete waste of time. They completely misunderstand what assembly line work is. They mistakenly think that a large number of items can be done by speeding up. This may also lead to the intensification of labor that I mentioned earlier.” (p. 79)

Comment: This passage is in relation to automation, specifically conveyor line assembly, and how motorized conveyors are often used to intensify work — when instead, the purpose of automation must be to make work easier and produce products with no defects. Work must be simplified so that workers can do the job at a normal pace in relation to the rate of customer demand (takt time). Another important point is how easily managers succumb to the mistaken view that working hard means efficiency has increased. Efficiency increases when work is made easier.

• ” So, stop the conveyor as much as possible. If it stops, the worker does not have to rush to fix it. They can do it at their own pace. It is not possible to increase productivity by expecting increased labor force. As I said at the beginning, it may be possible to increase productivity by 10% or 20%. If you want to increase it [productivity] several times, it is no good relying on that ability. Stop the conveyor, and if there is any inconvenience or trouble with the conveyor work, you must stop it. This is very difficult for foreigners… When the conveyor cannot be detected automatically, when installing an automatic stop device with a human bias [human touch], such as in assembly, it may not be possible to automatically detect the bad parts. In that case, the worker himself will have to press the stop button, which is automation with a human bias.” (p. 80)

Comment: This passage connects to the two prior passages about work intensification and producing defective products. If conveyors are used, they must be modified to stop automatically when a problem occurs, or stopped by a human. The problem is then rectified to ensure that only good products are produced. Stopping the line does not reduce productivity; it increases productivity by eliminating defects and thus results in profit.

• “In the Toyota method, instead of intensifying the labor of workers, the mental labor of managers and supervisors is intensified.” (p. 81)

Comment: This is the opposite of most companies where the mental labor of managers and supervisors is greatly reduced while the physical and mental labor or workers is intensified. Managers and supervisors are under the illusion that this will produce good work and good products, both free of defects. This happens because managers and supervisors believe they have the status, right, and privilege to reduce their mental labor. The result of that is bad work and bad products, and managers constantly whining about high costs and low profits.

• “When a cat plays with a ball of yarn, it may be doing it seriously. If it doesn’t train itself to do it all the time, it may not be able to catch the mouse. It’s called playing, but for cats, it’s doing it for a living, and from a human perspective, it just looks like they’re playing. In reality, it may be that the cat is being very serious about it.” (p. 87)

Comment: This passage has to do with supervisors’ ability to detect what workers are doing: working, moving, or playing around. Supervisors must provide immediate feedback (“scolding”) to workers when they are just moving and playing around — meaning, not adhering to the standard. If supervisors do not provide immediate feedback, the situation will get worse and possibly lead to ruin. In the cat analogy, it looks to humans like the cat is playing, but the cat is actually adhering to a standard of work that will help it survive. Companies must do the same for all processes, both manager and worker.

• “Even in the Toyota method, they are always saying that the worst thing you can do is to make too much, and that the most profitable thing is to make as much of what sells. But no one actually does such a simple thing. They think it’s okay because it will sell eventually, or that it’s cheaper to make a lot like this. They make their own excuses, like, ‘It’s a waste to stop at 1,005 units a day when the machine they have can make 1,200 units a day,’ and work hard to make things that won’t sell. If the person in question is completely serious and thinks that this will make the company profitable, the company will make less and less profit, and if the company is terrible, it will end up losing money.” (p. 89)

Comment: Can it be stated any more clearly? Make the required amount, not the just-in-case amount! Making the required amount of good products is working. Making more than that is playing around with the company’s resources in ways that will ensure losses.

• “The Toyota method is simple, and Toyota makes profits because people rarely do things that are obvious. I wonder why other companies can’t do such simple things. There must be some mistake or misunderstanding somewhere at the top.” (p. 89)

Comment: When there are misunderstandings at the top, there will be misunderstandings at the bottom. Here is an exercise for people at the top: Write a list of everything that you do that is obvious. It will be a very long list. Then, start doing the opposite for each item listed.

• “We need to think of making too much as doing more harm to the company than not making enough. I play golf. I was told that it is better to miss the green than to go over it. I think golf and work are the same. The other side of the green is not well maintained, so it is easier to get close to the green if you miss it, even if it is the same 3 meters, than if you go over it.” (p. 90)

Comment: Overproduction results in saturating the market, which in turn reduces profit. This leads to price wars, further reducing profit. It is better to have a deficit of product than a surplus. Don’t all CEOs know about the law of supply and demand? Why then do they authorize overproduction?

• “If each person works next to one machine, the labor hours and processing time will match. However, if the processing time is left to the machine and humans only do the work that humans need to do, and one person can handle five or ten machines, when you calculate the labor hours, the Toyota method will show a 10-fold increase in productivity and efficiency. This is not some kind of magic, but I think there are many people who don’t understand this clearly. It’s easy for accounting to make such a mistake.” (p. 94)

Comment: It is remarkable that simple solutions to productivity problems devised several decades ago remain unknown to many companies today. This is a testament to the inward focus that most companies have — the reluctance to import relevant information into the company, thoroughly understand it, and then use it correctly — and the lack of management interest in workers’ ideas to improve processes and productivity. This stems from two management preconceptions: 1. status confirms one’s thinking as correct, however wrong it may be, and 2. employees lack intelligence. These two preconceptions are guaranteed to cause major problems.

• “It is generally believed that the cost price will be cheaper if you make a lot, but I think everyone thinks so because it’s a legend. In reality, the cost price usually goes up if you make a lot… Try not to be fooled by formulas.” (p. 95, 96)

Comment: Formulas are metaphysical representations of a reality that may or may not be true. One has to carefully examine the context to know if the formula is fooling you. Most managers do not do this, so they are easily fooled. Of course, this situation is much worse than one realizes because generations of managers are fooled by the same formulas.

Final Thoughts

Taiichi Ohno’s lectures are a true masterclass in logic, questioning manufacturing traditions, questioning conventional thinking, and describing better ways of production that are aligned with the actual buyers’ markets that most companies face — all with a clear focus on costs and profit. I highly recommend the book — especially for business leaders and anyone who has an interest in operations or understanding work that is performed in any department.

Because business runs to a great extent on simple arithmetic, Ohno-san clearly spent a lot of time thinking about the preconceptions that inform the logic of arithmetic as it is applied to business. He did that because arithmetic interfered with his work to help Toyota survive.

For a long time, people highly skilled in arithmetic (accountants, CEOs, CFOs, engineers, scientists, and others) seem to never have thought about arithmetic and business in the way Ohno-san did — or not to the extent he did. It is incredible that arithmetic, which every manager is so confident that they understand perfectly ends up being a major barrier to the development of better systems of management that reflect the reality of the buyers’ markets that companies serve. This is a consequence of managers having the perspective of company-first instead of customer-first.

Further, it is remarkable is how younger generations learn wrong ways of thinking about business (markets and production in particular) from their elder managers (and professors), and how this continues unbroken for generation after generation. Because questioning how things are done typically results in being punished or ostracized, young people stay quiet and the same old system of classical management remains in force despite being long outdated.

Taiichi Ohno was intent on breaking the status quo, not once but over and over again for the purpose of creating production methods that better served customers. And he taught many others to do the same. Over time, these methods turned into a management system that was able to better serve the interests of the company, its employees, its business partners (suppliers), its shareholders, and the communities in which Toyota operates compared to archaic classical management.

The Toyota production system, the unique way of thinking that created it, and the trial and error efforts that produced it — rooted simply in the naked (fact-based) reality of the marketplace, free from pretense, deception, and illusion — is a remarkable and revolutionary achievement. Taiichi Ohno’s lectures make that abundantly clear.

Finally, let us all give our thanks to Professor Mitsumasa Kumazawa for publishing Ohno-san’s lectures. They give tremendous new insights into Taiichi Ohno’s thinking, TPS, and the Toyota Way.