Toyota knows it competitive edge is its culture. Culture to change, to be retrospective, to improve. Lean, JIT, Kanban etc were derived from a culture of striving for perfection and to develop the optimal processes for a specific company is something that takes decades and is never ending, not something that can be read in a book, taught on a course in a short period of time.

There's also that story from back when Toyoda was making sewing machines or whatever it was, and a competitor stole copies of the engineering drawings for their latest model. Toyoda shrugged and said something to the effect of "So what? The really valuable knowledge are the mistakes we made coming up with those drawings, and that's not in the drawings. By the time our competitors have managed to get their copy of our machine to the market, we will have innovated away from that for our next model. And that innovation is informed not by what our current model looks like, but by the exploration we did to get there. None of that was stolen, so after this model, they will just keep repeating the mistakes we made."

I have no idea of whether this is true at all, but I really like the story anyway.

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What I do know is true is that modern day Toyota doesn't mind sharing the solutions they have come up with to various problems, because they think the real value is in the people and processes to (a) identify the problems in the first place, and (b) come up with solutions suited to those specific problems.

Blindly applying Toyota's solutions to Toyota's problems to your organisation, just hoping that you have the same problems as Toyota and that their solutions will work also for you is a recipe for confusion, and not what matters. (Yet virtually every "development methodology" is a specific solution to a specific problem blindly applied to an organisation.)

You see this a lot in IT companies if it works for google, Amazon and Microsoft, It will work for us while we have like a millionth their load or complexity.

> None of that was stolen, so after this model, they will just keep repeating the mistakes we made.

The competitor probably could have purchased a sewing machine and replicated the engineering drawings themselves. Teardowns of competitor products is common today, and I'm sure it was back then as well.

I think Toyota's "helpful" attitude comes from the Western paranoia in the 70-90s that Japan was going to completely dominate worldwide manufacturing. After all, their rise was fast: in the mid 60s, Japanese manufactures were practically begging to sell rudimentary formed metal components in the USA, but by the early 80s, they were a leader in the high-tech manufacturing. That rise caught many people off guard and I've heard it said that the "lost decade" in Japan was the result of American trade policy specifically designed to curtail Japan's growth in manufacturing.

Viewed in that light, it makes sense that Japanese companies would appear "helpful" to American ones. Why else would Toyota co-build a plant with GM in order to teach GM their Kaizen philosophy for manufacturing?

According to the book The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer by Jeffrey Liker, one of the motivations for Toyota was to repay the debt to American manufacturers who participated in the postwar rebuilding of Japan and taught American manufacturing techniques to Toyota and other Japanese manufacturers.

I’ve heard recently (in a video that I don’t know how to find again) that that’s exactly what happened with the automotive industry’s chip shortage: Toyota was the only one that built a stock of chips in advance, and now are the only ones that can keep producing cars without being limited by the shortage.

Edit: found the video: https://www.youtube.com/watch?v=b1JlYZQG3lI&t=804s

At 13 min. 24 seconds:

> Just in time is such a simple principle, but the pursuit of the elimination of waste is now the central mission of any major manufacturer.

> However, most did it wrong. Manufacturers globally saw the headline “elimination of inventory leads to massive efficiency gains” and jumped on that without actually determining what made it work for Toyota.

> They ignored that Japan's small physical size made for short domestic supply chains, less vulnerable to things going wrong.

> They ignored the company's production leveling: finding the average daily demand and producing that regardless of short-term changes and demands.

> They ignored the fact that eliminating excess inventory is different from eliminating all inventory.

> They ignored the principle of growing strong teams of cross-functional workers predicated on respecting people.

> They ignored the culture of stopping and fixing problems to get things right the first time.

> They ignored huge swaths of the Toyota Way and created a system that’s less effective and less resilient but can impress shareholders through short-term savings.

> How Toyota has effectively implemented this system fills books but many are just reading the covers.

> Even Toyota though is not perfect.

> In 2011 japan was rocked by a 9.0 magnitude earthquake the fourth strongest ever recorded anywhere. Not only did this cause immense destruction to life and property but it also led Toyota to recognize a flaw in its own system.

> As japan recovered some supply chains were quick to as well. For example, securing plastic resin for door panel production is not difficult: there are plenty of manufacturers globally creating easily substitutable alternatives.

> That’s not the case with, say, semiconductors: the hugely expensive facilities that create these chips require years to construct and after the 2011 earthquake it took many months to mend them back to operating status.

> This surfaced a truth that had never been fully considered: not all supply chains are made equal. Plastic resin can handle supply chain disruption, semiconductors cannot. Therefore Toyota made changes: all along, their mission was not to eliminate inventory full stop; it was to eliminate excess inventory.

> Supply chain disruption is inevitable. It's inevitable in the same way that Titanic's flawed design would eventually encounter an iceberg, or the structural economic vulnerabilities of 2008 would eventually collide with a market panic. Therefore semiconductor inventory is not excess because inevitably, due to the inevitability of disruption, excess semiconductor inventory will eventually become necessary.

> Recognizing this, Toyota in recent years has started to build up a stockpile of two to six months worth of chips and that's why the company is the only major vehicle manufacturer that is unfazed by the semiconductor shortage.

> Toyota followed its own principles. It did not stray from them, and it did not reinvent them. It’s no surprise that Toyota excels at implementing its own system, but it is a surprise that the entire manufacturing world has so wholeheartedly embraced flawed implementation of the system.

I thought I'd rather watch the video than read your long transcript, I clicked it, it's Wendover with his weird speech pattern (some syllables loud, some syllables he runs through, but some vowels he drawls on...).

> Just IN tiime, is such a SIMple principlee, but the purSUIT of the ELIMination of waste...

Tab closed, thanks for the transcript.

Did the speaker on wendover change like 1~2 years ago? I feel like the voice used to be more, uh, geeky sounding.

He probably got some sort of speech coaching because he didn't like the way he sounded. A bad one, I would say. I looked up a video from 2017, he sounded ok, I could hear some long syllables but they weren't as long as they are now. It also sounds like he got a different mic.

What is amazing about this is that it is a super simple game of "what if?". What if our current supply of chips are disrupted? It would mean production halts, there is a non negligible risk and we cannot source new chips in less than 6 months, so stockpile that to keep uninterrupted service. That conclusion probably take quite a while to get to, but the kick off question is really simple.

It's not that simple, though. "What if our supply chain of X is disrupted?" always leads to a problem where one of the most obvious solutions is "Stockpile huge inventories of X!"

That's what manufacturers had done ever since Ford tried to scale up his initial (very Toyota-esque) operation, and scaled it incorrectly but managed to inspire hordes of other manufacturers to repeat his mistakes.

The novelty of Toyota et al. was not that they asked the what if question, but that they answered it unconventionally: they worked on making the supply chains more reliable instead of adding buffers.

That's what makes this next move counter-intuitive to so many people: when Toyota encountered a supply chain that couldn't be made more reliable, they chose the previously-conventional response, apparently in defiance of their whole thing. Except it wasn't.

You're right in that it is simple, but in trying to show that you're making it too simple.

I think that is the easy way to answer that question. Obviously the first "What if .." should be try to source from somewhere else, or perhaps have multiple supply chains. For instance cloth is a commodity, and if they know they can get the quality they need from multiple vendors on all 7 continents - they don't need to do much except perhaps validate the supply chain of some selected to ensure they don't source from the same place. But if they are using a particular mineral that is only available from one location, something else must obviously be done.

Just stockpiling is not really an answer as much as it's trying to just do the least amount of problem solving and thinking.

Yes it's well know in manufacturing management that there is a trade off between utilisation, capacity and cycle time.

Naively it looks like it's cheapest to get close to 100% utilisation by removing all slack from the system.

If you do that though you can't deal with shocks to the system and it costs you much more in the medium term. In the long term your company dies.

This is very well illustrated by John Sterman's Beer game[1]. That's aimed at supply chains in general but works well in any system you can make brittle via cost over optimisation.

This happens a lot because initially over optimisation makes accountants and managers look good to share holders. By the time the chickens have come home to roost they've moved on to another job.

1. https://www.isixsigma.com/training/training-materials-aids/t...

> Just in time is obviously about not having undue spare capacity,

Also about making spare capacity undue. The lazy solution to unreliable delivery is inventory. The efficient solution is working with the supplier to make delivery more reliable.