The Toyota Production System (TPS) is known worldwide and is used in numerous companies, especially in the industrial sector. Just -in-time production naturally impacts inventory management and thus warehousing .

Shortages of raw materials, materials, and labor posed enormous challenges to the Japanese economy after the end of World War II. At that time, engineers Eiji Toyoda and Taiichi Ohno were inspired by the innovative approaches of company founder Sakichi Toyoda and his son Kiichiro Toyoda to develop a revolutionary production system.

Step by step , a proprietary system, the Toyota Production System (TPS), was developed to make processes better, faster, more cost-effective, and more flexible. The key points (already familiar to some) were: eliminating the sources of waste: muri (overload), muda, and mura (imbalance). Other Japanese terms lurk in the details: jidoka, or "autonomation"—the automation of machines to achieve autonomy for people. And "just-in-time"—the tightly controlled production flow adapted to demand.

In addition, there is an approach that focuses on continuous improvement (Kaizen).

Photos: TMHE

Impressed by the effectiveness of this method, specialists and industrialists from all over the world began to study the Toyota Production System in depth in the 1980s and its basic principles. In 1991, three MIT scientists published the book "The Machine That Changed the World" (The Second Revolution in the Automotive Industry), thus introducing the term "Lean" – which, as we know, means "slim" and refers to the constant search for ways to reduce muda (waste). Today, "Lean" is widely used throughout the industrial sector and beyond. (...)

Just-in-time directly addresses one of the main sources of muda— inventory management—and is intended to eliminate overproduction, unnecessary waiting times, and inappropriate processes . It is intended to reduce the intermediate storage of raw materials, intermediate products, and finished products. The steps necessary to process raw materials into finished products should take place in a continuous flow, ideally without interruptions.

In the traditional process, the entire existing inventory of raw materials undergoes an initial processing step. The product is then stored before further processing. This process continues step by step until a final product is created.

The cycle time refers to the ideal production rhythm, which is determined based on customer needs rather than the maximum output of the equipment used. This allows the company to optimize and balance its resources to produce exactly the requested number of units without experiencing material shortages or excess inventory. (...)

To adapt the various stages of its logistics flows to demand, the factory must organize its production lines in Kanban loops. The demand for production materials and handling are represented on cards (called Kanban in Japanese) attached to the crates or pallets containing the goods destined for downstream stations. These cards contain the information related to the requested product/good. 

They are able to indicate to the supplier that, for example, a pallet of products/goods has been "used up" and it's time to replenish it. This means that the company only requests a delivery of, for example, raw materials when there is demand for it.

Matthias Bingel, Regional Manager & Senior TPS advisor Toyota Lean Academy

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