S2E5 - TPS Origins – The Thinking Production System

What if the Toyota Production System was never about efficiency?

In this episode, George Trachilis and Dr. Tom Lawless explore the true origins of TPS — and challenge one of the biggest misunderstandings in modern Lean thinking.

Taiichi Ohno didn’t begin with Kanban.
 He didn’t begin with standard work.
 He didn’t begin with tools.

He began with people.

Starting in a simple machine shop cell, Ohno experimented relentlessly. He learned that flexibility required multi-skilled people. That productivity required coaching. That improvement required leaders present at the gemba — asking questions, challenging assumptions, and developing thinkers.

Over decades, TPS evolved piece by piece.

And when it was finally written down as the famous “house,” Ohno feared something dangerous:

“If you write it down, you kill it.”

Why?

Because TPS was never meant to be a static diagram.
 It was a living, breathing system of thinking.

In this episode, we explore:

• Why Just-in-Time and Jidoka are visions of perfection — not implementation targets
• Why operational stability is the quiet foundation of continuous improvement
• How shareholder-first thinking distorts Lean
• The difference between extracting value and creating capability
• Why expert-led projects create fragility
• How leadership determines whether Kaizen thrives — or becomes theater
• And why TPS should have been called the “Thinking Production System”

Most organizations copy the tools.
 Very few develop the thinking.

If Lean is reduced to artifacts — Kanban boards, audits, ROI calculations — it becomes bureaucracy. But when leaders cultivate disciplined curiosity and structured “why” questions, TPS becomes what it was always intended to be:

A system for developing people.

🎯 Practical takeaway:
 Over the next two weeks, practice asking better “why” questions — not to blame, not to interrogate, but to stimulate thinking.

Because Lean leadership isn’t about installing systems.

It’s about developing people who can evolve the system.

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Transcript

SPEAKER_02 0:32

The next exceptional person in the To line who's not in the family was Taiichiyono. And he turned Kichiro Tota's vision of just in time into reality. He didn't do it in one step. Like Ichi Toyota took many experiments, trial and error, starting with a cell, or we know as the U-shaped cell, Tai Chiyono did it in a machine shop with many different kinds of machines. And he learned through that process that to really get productivity at any level and be able to adjust to customer demand, he needed people to be very flexible. He wanted to run this cell of lots of different machines with one person or two people or six people, depending on demand. So people had to learn multiple jobs to run a lathe, to run a drill, and they didn't want to do it. So this started Ono's learning about how to influence and motivate people. And he realized to do that, he had to be on the shop floor with the people, watching them struggle, asking them questions, challenging them, and learning to be a coach. And that's the beginnings of the tenant production system. As he expanded from a cell to getting parts to the line, he eventually came up with a Kanban system. He later learned that in order to have a reliable cell, you needed standardized work and you needed a way to teach people, which was the job instruction training method. And then to connect that cell to other processes that were not next to the cell, he needed to hold a small amount of inventory and replenish, replenish it using a Kanban. So again, over time, over decades, pieces of the Tota production system, pieces of the puzzle started to fall into place. Finally, it was written down. And it was written down over the objections of Tai Chiono. Why would he care? Why would he object to a simple diagram? The reason was that from Ono's point of view, the Tota production system was a living, breathing, evolving entity. It was the ideas of people as they were at the gamba and they're discovering weaknesses, they're overcoming those weaknesses and they were learning. And he was afraid that as soon as you write it down, it becomes a static picture that Kaizan will end. So he, in fact, was known to see somebody writing some sort of image of the production system, and he would tear it up. He would say, if you write it down, you kill it. Don't write it down. But later in life, he apparently got a little more laid back and allowed people to write it down, and it got represented as a house because a house is a system. So if you take away the structures that hold up the roof, the roof will collapse. If the roof is weak, the roof will leak. If there's a poor foundation, the whole house will collapse. So every part of it is necessary for the system to function. And at the center of the system are people continuously improving using Kaizen. The two pillars you might recognize now as the two contributions of Sakichi Toyota and Kichro Toyota. Sakichi Toyota's judoka, which is translated today as stop and fix problems or surface problems and solve them. And then we have Kichro Toyota's just in time, the right part, right time, right amount, and doing this without inventory, without waste. So one piece flow, give the customer what they want, when they want it, which is really an impossible dream if you think about it. If you can imagine any type of service that you get on demand that works 100% of the time, uh you've got something better than anything I've seen. But the goal was not to implement just in time. The goal was for just in time to be a vision, an ideal, and for judoka to also be a vision, which would be zero defects. Everything that you do, you do perfectly. So this vision is what drives Kaizen. The Kaizen is driving for perfection. And therefore it never ends because you never reach perfection. Now, at the base of the house, this the foundation is operational stability. It's very disciplined people who follow standardized work. It's having well-maintained equipment, which again requires very disciplined people who are doing their preventative maintenance, who are learning from machine downtime to solve the problem. Uh, and they're constantly trying to work to achieve the standard. Standard keeps on getting tougher and tougher. So you can see the val the value and the why people are at the center, right? People have the discipline to maintain every aspect of the system from preventative maintenance to solving quality problems to solving problems of running law parts. Trucks break down, that's a problem. People have to solve that. If people stop thinking, if they simply execute what some expert, say a black belt, were to come up with, then the system would fail because conditions change and people would be unadaptable. For example, imagine a pilot having a plan before the plane takes off, and the pilot's instructed, no matter what happens, don't adjust the plan. You run into a storm, follow the plan. The plane's gonna go down. So people are at the center, and who is it that drives these people to push themselves? Very few people have the self-discipline to constantly push themselves to get better and better. And the driving force is leadership. Lean today has become a global movement. There's lean, six sigma, and unfortunately, what we see is a shadow of the Toyota Way or the Toyota production system. For example, we can walk into a factory or an office or a hospital and see posters, charts, five, we can see Kanban systems for replenishment. And in cultural terms, those would all be artifacts. It would be like finding a vase from the first century, and then trying to interpret what this vase means. If we go down to try to understand the meaning behind these artifacts and behaviors, we get norms and values, and the norms and values often are translated into follow the rules, meet the targets, have experts who have black belts who lead lean projects. This represents what we would call a bureaucracy, a rigid bureaucracy. And in fact, it's what Frederick Taylor was creating in his scientific management. In fact, he was very clear the only thinkers should be the industrial engineers. And the workers should be doing what the management tells them to do, and the management should be telling them to follow the principles of the industrial engineers. So in that system, with people not thinking, there can be no adaptation unless the industrial engineers come up with the ideas. And they're spread very thin, often across multiple factories. The underlying assumption that leads to this misinterpretation of the to production system is that the most important part of respect for people is respecting shareholders. They're the owners of the business, and they should expect quarterly returns, which means you have to drive stock prices. And you should justify any investment you make, including in people development, including in lien, through a clear ROI. If you don't get the ROI, you shouldn't do it. Which means you're going to cherry pick and pick only those projects that have a clear, direct cause and effect. Spend the money, I get results, I report them to the shareholders. This is very different from building up a strong capability and striving toward a vision of perfection. And now, what Tito would say is that if you strive for perfection, if you're constantly improving your products and services, keeping your customers satisfied, then the profits will follow. I mean, it's one on the one hand, you're satisfying customers, so you would get revenue. On the other hand, you're using the same kaizen methods to reduce costs, so you're reducing the cost side of the equation. And that will lead to profits. But if you jump ahead and just say, we will not do anything unless we make a profit, you'll never make the investments, you won't have satisfied customers, and eventually you'll run out of steam and the organization will go out of business. What are we really talking about by the production system? We think of TPS, we may immediately think of manufacturing and Kanban and tools and machines, but really that was never what TPS was about. In fact, one of the students of THUNO THUNE said, we made a mistake. We should never have called it the joy of production system. We should have called it the thinking production system. Because the real point of everything is to make people think. Even a simple Kanban, we have a Kanban in every container. And if I see that there's a container without a Kanban, I have to think. Well, how did a container move without a Kanban? If I have 10 bins of inventory, I take out one Kanban, and now I have nine bins of inventory in circulation. Now my processes are going to shut down more quickly if I have a problem. Again, that forces people to think. So really the essence of TPS is on the one hand, identify problems, on the other hand, identify and test solutions so you can learn and continuously improve.

SPEAKER_01 11:04

Okay, Tom, this is awesome. I love that video with Jeff talking about the thinking production system. Now I got a question for you. How does writing down TPS risk leaders, shifting leaders' thinking from coaching to policy compliance?

SPEAKER_00 11:25

You know, George, that's a great question. Um felt that TPS was a living, breathing, evolving entity. He was known to tear up written instructions and say, if you write it down, you kill it. Don't write it down. When TPS became a house diagram, it became teachable, but also dangerously simplified. Leaders could point to the pillars and say, install J JIT, install Judoka. The risk is subtle, right? Instead of asking what problems are trying to surface, leaders would start asking, are you following the standard? The moment we equate documentation with understanding, coaching turns into auditing, the house become the house becomes a checklist, and when that happens, Kaizen slows down because people stop experimenting, they wait for instructions. Ono feared that freezing the system in a diagram would freeze thinking itself. His thought, because a lot of people thought that, well, he just, you know, he didn't want to share the Toyota production system, and it wasn't that. Like I said here a minute ago, he just knew that if he put it on in paper, it would freeze thinking. So, George, if just in time and judoka are visions of perfection rather than implementation targets, how should a lean coach respond when executives demand quick ROI?

SPEAKER_01 13:06

Wow, what a tough question. So the coach has to reframe the conversation from tools to capability. Instead of talking about just in time as a cost-cutting initiative, it becomes a vision delivering exactly what the customer needs without waste, it becomes a driver of learning. So, what are you learning? What are you gonna do next? And then when executives push ROI, the coach must ask, are we building short-term financial gains or long-term organizational muscle? It's really uh uh who's the coach in this case? It's gotta be the person that knows what TPS is about and helps the owners guide you know towards increased capability versus short-term results. So today's philosophy suggests that the customer satisfaction, cost reduction, follow capability building, not the other way around. Uh so the coach's role is to protect the vision while speaking the language of business, which is tough to do. That tension is leadership work. So, Tom, what is the danger of defining respect for people as primarily respect for the shareholders?

SPEAKER_00 14:24

That's a really good question. Uh that definition shifts the entire moral center of our of the system, right? If shareholders become the primary stakeholder, then quarterly results dominate the decisions. Investments in people become optional, development becomes justified only if the measurable short-term returns are in. Um where in contrast, TPS places people at the center, not symbolically, but operationally. People are the engine of problem solving. If you prioritize shareholders over capability, you cherry pick projects, you stop taking risk and developing thinking, and over time, adaptability erodes. It's the difference between extracting value and creating value. George, how does operational stability quietly determine whether Kaizen thrives or becomes a theater?

SPEAKER_01 15:31

Oh wow. Uh good one. Operational stability, as we know, it's the foundation of the house. When you look at it, if you don't have a good foundation, everything falls apart. The machines break down constantly, standards aren't followed, Kaizen becomes reactive firefighting. There is no such thing as Kaizen. The discipline to maintain equipment, follow standardized work, and learn from downtime creates a stable baseline. Stability exposes abnormality. So you're looking for what is out of standard or what is abnormal. Uh, if leaders ignore this foundation, they compensate with slogans, events, posters. There's all these other things that come up. I used to call it it's the Christmas tree effect. You know, somebody comes into the plant, the Christmas tree, the lights go on, but it's empty. So that's when lean becomes theater. Uh, real Kaizen requires a stable stage. And I know there's a lot of people out there that like chaos. I've heard it even two days ago. Uh I kind of like the chaos, right? So this is a problem. We got to be thinking like farmers. We like stability, we like to increase our capability, and so you want managers to develop themselves to be farmers and they're just increasing capability. Forget the chaos. So, Tom, in this case, yeah, TPS is a real thinking production system. I love it because when I heard that and when I heard uh Jeff talk about that, what happened for me was I thought about how I implemented way back. It was never about the thinking, it was about let's do this and let's do that, let's do 5S, and it wasn't about what problem do we have and how do we quickly test uh possible solutions. Not solutions, but possible solutions, like we call them countermeasures. So, what specific leader behavior stimulate or suppress this kind of thinking on the shop floor? Oh.

SPEAKER_00 17:51

Well, you know, from what I see, stimulating thinking requires presence. Ono learned he had to be on the shop floor watching, asking questions, and challenging assumptions. Leaders stimulate thinking when they ask why. Why, why, why. Allow they allow control struggle, control struggle. They remove fear from of surfacing problems, right? Because everybody's afraid to say something. Get that fear out, model curiosity, they suppress thinking when they provide answers too quickly, reward compliance over insight, delegate improvement to experts, and punish mistakes harshly. And I think that is huge. Do not punish mistakes, they are opportunities to learn. If people stop thinking and simply execute, the system collapses under change. Thinking's not optional, it's the core design principle. Why did Ono start with flexible people in a cell rather than Kanban or standard work as is as the first move, George?

SPEAKER_01 19:12

Yeah, wow. I you know, in this case, he started off with people resisting. That's what they did. And he had to be out on the shop floor with them, building that relationship. But flexibility exposes the reality of the situation. When one person must run multiple machines depending on demand, waste becomes visible. That's the key. So imbalances become obvious, skill gaps surface. These are problems, and problems are treasures. So starting with tools like Kanban, this is a tool that will expose a problem. Whether the Kanban card goes missing, whether the inventory is too much or too low, whether the quantity is not the right amount. So uh Kanban would have an odd an automated existing dysfunction. Instead, he began with people learning multiple jobs that forced adaptation. It also required motivation and coaching. Flexibility was not about efficiency first, it was about learning capacity. Once people could flex, then standardized work and Kanban could connect processes reliably. Now, uh, so the the first move was human, not technical. The second move was the technical move, and we when we started this, it was technical first. We were just trying to do stuff, so that's where the big mistake was and the big interpretation. We always copied the Toyota production system, but we never copied uh uh blindly, by the way. We never copied the thinking production system, what was behind the name, yeah. So we want to be thinkers. So, what happens, Tom, when an organization's long-term capability, when lean is reduced to projects led by experts instead of daily kaizen by everybody, everybody improving everywhere, every day, uh versus you know, lean.

SPEAKER_00 21:27

Well, it becomes dependent. Uh one thing I'll I'll bring up real quick is you know, this is Frederick Taylor came up with some with this kind type of a view well over a hundred years ago, and he said that um workers are to do what the what the boss says and nothing more. Well, that thought process, as experts think, workers execute. Improvement slows down when that happens, adaptation becomes uh episode instead of continuous. It takes people ten times longer to improve. If we if we shortcut people development, we create fragile gains. Daily Kaizen builds internal capability, expert led projects build isolation, and the long term organizations that invest in thinking outlast those that invest in tools. You know, George. By saying that all of the great thinkers have emphasized this over and over. Demmings said it, right? Uh Toyota said it. You could just go down the list and what what do we still today lack? We lack training. We lack self-development. We lack people that could that people are afraid to say something. Anyway, George, after walking through all this, I'm realizing something. TPS was never primarily about efficiency, was it?

SPEAKER_01 23:16

No, no. Efficiency was the is the byproduct. The real focus is cultivating disciplined people, thinking people, and people that are using the Gemba as their teacher.

SPEAKER_00 23:32

That's the shift, isn't it? Most organizations chase efficiency because it's measurable. But TPS is chasing something different, its capability.

SPEAKER_01 23:42

Yeah, exactly. It's about developing people who can see problems, think critically, and continually improve. The tools only matter when they stimulate thinking.

SPEAKER_00 23:56

And that's why just in time and judoka are visions of perfection, not cost reduction tactics. Right.

SPEAKER_01 24:05

They're ideals that stretch people. Not because they guarantee quarterly returns, but because striving toward them like an ideal state builds enduring excellence.

SPEAKER_00 24:19

So the real competitive advantage isn't Kanban. It isn't standard work. It isn't even the house diagram.

SPEAKER_01 24:27

Yeah, it's disciplined people who pursue perfection together.

SPEAKER_00 24:32

Which means lean leadership isn't about installing systems. No, it's about developing people. People first. People who can evolve the system.

SPEAKER_01 24:42

Yeah. And who keep evolving long after the original leaders are gone. So this is succession planning.

SPEAKER_00 24:51

Yeah, great. So maybe TPS was always less a production system.

SPEAKER_01 24:59

Yeah, and more people development, which brings me to this story, Tom. I went to Liverpool, talked at a company, and there was another high-powered consultant there. He's probably what way more well known than I am. And it was all about systems. And I was thinking, you know, at the center of all this has to be people development. I never, I shared that with them, but they never got it. So I think with the language, it's important. If you want to communicate to a CEO, yeah, tell them I'm going to implement a system that's going to get you results. But if you want long-term results, start educating them on capability.

SPEAKER_00 25:41

Yeah, that might be the most important takeaway of them all. So you may want to develop a skill from all this information. One skill to develop over the next two weeks. For everybody that's watching. Asking better why questions. If TPS is fundamentally about developing thinking people, then one practical skill the audience can take away and build on immediately is the discipline practice of asking thoughtful layered why questions. Not rapid-fire interrogation, not blame seeking, but structured curiosity.

SPEAKER_01 26:25

Yeah, thank you, Tom. That's really good. And if you want to know how to do this structured, layered why questions, look up the Socratic method. Figure out how to fold a question into itself and dig a little deeper on that topic, and you'll get it right. So develop that skill. We'll see you guys next time. Thank you. Thank you, Tom.