The purpose of this paper is to examine the origin of the adoption of the Toyota production system in China. In a large context of worldwide Japanization, the Chinese firms paid more attention to and introduced the Toyota production method earlier than American and European firms. First Automotive Works (FAW), the prototype of the Ford production system in China, began to introduce the philosophy of Toyota system under the direct technological instructions by Taiichi Ohno, one of the earliest proponents of the Just-in-Time method in Toyota in late 1970s. They also built a typical Toyota-style transmission plant which received technological assistance from Hino Motor Co. of Toyota Group in late 1980s. These efforts have been contributing to a great extent the evolution of the production system in FAW.
FAW invited Taiichi Ohno, who was born in China, to conduct seminars and on-the-spot technological instructions in 1977 and 1981, In FAW, Ohno not only harshly criticized the existing mass production system of FAW, but also taught FAW by showing the example of changing the lay-out of production line. Besides, FAW also sent an observation mission to learn Japanese management methods and visited ten Japanese auto companies for five months in 1978.
The FAW Transmission Plant, which introduced Just-in-Time method, is viewed as one of the best plants in China. This paper examines its system from the angles of production and quality control. It also analyzes the conflict between the old and new system during the adoption process of Toyota method as well as the modification of wage system and organization design. FAW is in the middle of learning the so-called “lean production”, and the transmission plant has become a typical model of this system. Every person above manager level has the book “The Machine that Changed the World” (MIT, IMVP). By 1995 thirteen seminars focused on lean production had been held at the FAW Academy of Communist Party.
Technology transfer between plants is one of the serious problems in FAW. There is a unique coexistence of different production systems including those of former Soviet Union, Japan, US and Germany because of the deferent adoption time. In general, the evolution process of production system of FAW shows an example of worldwide Japanization and a good direction for the reform of state-owned firms which are in the labor pains of building up competitiveness in an increasingly market-oriented economy in China.
