The Two Houses of Toyota (part 1):


Toyota is famous for manufacturing automobiles. You may not know that Toyota also builds residential houses. You can learn more about it here. I will not be talking about the real livable Toyota houses today. I will be talking about the “conceptual” Toyota houses.

A lean enthusiast is familiar with the Toyota Production House. The house has two pillars – Jidoka and Just-in-Time. In 2001, Toyota revealed their organization’s guiding principles known as the Toyota Way. The Toyota Way also has two pillars – Continuous Improvement and Respect for People. There are literally thousands of depictions of the Toyota houses available online. The majority of these were created by non-Toyota people. I wanted to use only the depictions from a Toyota website.

The first house is the “Toyota Production House”. The picture below is taken from a Toyota Europe Forklift brochure. The reader can click on the picture to open the link to the brochure.


The second house is the “Toyota Way” house. The house below is taken from the Toyota Italy website. The reader can click on the picture to open the link.


First Descriptions of the Pillars:

From what I could find, the two pillars of TPS were first described officially in the “The first book of Toyota Production System”, an internal document released in 1973. The two pillars were later described in Taiichi Ohno’s 1978 book – “Toyota Production System”. Detailed descriptions of Respect for People and Continuous Improvement can also be found in the “The first book of Toyota Production System.” However, the Toyota Way house was not described in these earlier documents as it is currently.

It is interesting to note that starting in 1945, Taiichi Ohno began developing the Toyota Production System, but did not have the system documented until later. Norman Bodek, in his Foreword to Taiichi Ohno’s book “Toyota Production System” speculated that Ohno had feared Americans would discover his ideas and use them against the Japanese.

Fujio Cho, who was one of the people behind “The first book of Toyota Production System”, co-authored the 1977 paper “Toyota production system and Kanban system, Materialization of just-in-time and respect-for-human system”. This paper is available here. The roots of Toyota Way can be found in the paper. The section below is taken from the paper, and it is evident that Fujio Cho, the main architect of the Toyota Way 2001, had been thinking about the strategy for Toyota Production System:

Toyota is planning and running its production system on the following two basic concepts. First of all, the thing that corresponds to the first recognition of putting forth all efforts to attain low cost production is “reduction of cost through elimination of waste”. This involves making up a system that will thoroughly eliminate waste by assuming that anything other than the minimum amount of equipment, materials, parts, and workers (working time) which are absolutely essential to production are merely surplus that only raises the cost. The thing that corresponds to the second recognition of Japanese diligence, high degree of ability, and favoured labour environment is ” to make full use of the workers’ capabilities”. In short, treat the workers as human beings and with consideration. Build up a system that will allow the workers to display their full capabilities by themselves.

The Relationship Between the Two Houses:

Simon Dorrat, Manager of Toyota’s Business Intelligence function (2008 – 2013), has succinctly summed up the relationship between the two houses:

“The Toyota Production System is a practical expression of The Toyota Way – principles that guide everything we do in Toyota, based on Continuous Improvement and Respect for People.”

The Toyota Way 2001 represents the “What” and the “Why”, while the TPS House represents the “How”. In some ways this is akin to strategy and tactics.

Final Words – Even Ohno is fallible:

I will be exploring the pillars of the two Toyota houses in the future. I will finish this post with an Ohno story about Jidoka, one of the two pillars of the TPS house.

Even though Taiichi Ohno was a proponent of Genchi Genbutsu (Going to Gemba to learn actual facts), he was not infallible at this. Taiichi Ohno opened up in an interview with Michael Cusumano, author of the 1985 book – “The Japanese Automobile Industry – Technology and Management at Nissan and Toyota”. Ohno revealed that he had never tried to operate more than one machine at a time to see if it is easy or hard.

As part of implementing Jidoka at the Toyota automobile facility (Koroma plant), Ohno separated the operator’s work from the machine’s work. He treated the operator as being independent of the machine, and he had the operator work multiple machines simultaneously. The norm had been to have one operator dedicated to one machine only. The operator felt that he was creating value by simply watching the machine operate. Ohno understood that the operator is not adding value by watching over the machine. However, the operators hated operating several machines at once. Ohno admitted to Michael that he never felt the need to try operating several machines simultaneously to see how easy or hard it was. (Source: The Japanese Automobile Industry – Technology and Management at Nissan and Toyota, Michael Cusumano). Perhaps, it was because Ohno knew that the technique of one operator managing multiple machines was already successfully implemented at Toyoda Automatic Loom Works by Sakichi Toyoda, father of the founder of Toyota Motor Corporation. Ohno started at Toyota by working for the Loom Plant.

Ohno would later add in the interview that “Had I faced the Japan National Railways union or an American Union, I might have been murdered.” Ohno did have the support of the employee union at Toyota, as well as the upper management. Thus there was no immediate danger to Ohno’s life.

Always keep on learning…

In case you missed it, my last post was Wizard of Oz, Camel’s Nose and Being a Change Agent.