The Evolution of Production Systems

Exploring the Sources of Toyota's Competitiveness

Abstract

This paper analyzes the formation process of production systems in order to identify the sources of Toyota's competitive strength (i.e., its long-term high-level performance). While previous studies have analyzed either the functions of the Toyota-style manufacturing system or the history of that system, there have been few research efforts that have integrated the two. The present paper explores both the functions and origins of the Toyota-style manufacturing system simultaneously. It also concludes that the source of Toyota's competitive strength can be explained in part by the “product architecture" perspective. The paper also shows that manufacturing contains three layers of organizational capability: manufacturing (monozukuri) capability, improvement (kaizen) capability, and evolutionary capability.