This procedure challenges the entire basis of mass production, which was (and in many parts of the world still is) the dominant manufacturing philosophy. Mass production depends on economics of scale and specialization. Workers, it is supposed, need to become more and more specialized in order to do their job more efficiently. And factories need to become bigger and bigger to achieve economics of scale. As the Japanese realized, however, this system also entails two serious costs.

Toyota—Quality and Innovation

Yet, in all this haste, each worker [in Toyota City] has the power to bring the assembly line to a halt, pulling a wire above his head if he (there are no women to be seen) spots a fault. And the news of the fault is immediately flashed on one of the many electronic boards suspended from the ceiling that also tell everybody how many cars have been made and how near the line is to hitting its target. The general air is that of competitive collaboration, with each team vying to be the most efficient. One young man displays a tool he invented a couple of years ago to make it easier to insert the steering column into its shaft. The tool is now used in Toyota’s factories around the world. A second worker shows off another invention (this time from another factory): a mobile chair, suspended from the ceiling, allows him to dart in and out of the passing cars without having to clamber all over them. The management puts an unusual amount of emphasis on the workers’ comfort. Robots do the back-breaking work of lifting rather than the skilled work of welding. The cars are suspended above the ground so that the workers can insert parts without bending down. Spare parts are stored at eye level for the same reason.

First, the classic mass-production system is unable to respond to rapid changes in demand. Mass producers tend to be much keener on keeping standardized designs in production than in experimenting with new products, partly because of the heavy costs of changing the production line and partly because their specialized workers are happiest with what they know. With a change in fashion, the factory may have to close down for months as machines are recalibrated and workers retrained. Producers may also have to throw away huge quantities of expensively stored but now obsolete inventory. By the time the factory is capable of mass-producing the new product, the demand may have changed once again.

Second, the system turns out an unacceptably high rate of faulty products. Large batches make it difficult to detect defects. A defective part may not reveal itself until the finished car finally breaks down. The Japanese argued that it is easier for the next person on the assembly line to check a small batch. And a worker making only a small batch is more likely to feel like a craftsman, whereas mass production usually achieves its economies of scale by reducing jobs to drudgery. By contrast, lean production continues to engage at least some of the intellectual gifts of the workers. They can see the impact of their workmanship—good or bad—on the company’s manufacturing process. Pats on the back from one’s colleagues are delivered for a job well done, scowls for a job skimped.

Lean producers ram home this concept of responsibility by making everybody aware not only of what they are doing but how well they are doing it. This information is communicated in “quality circles”—sessions at which people sit around discussing their performance and the quality of what they have produced. Workers are also fed continuous information on the job: hence the lighted electronic displays that are visible at every workstation in Toyota’s factories.

Lean production also means rethinking the boundaries of the firm-in particular its relationship with its suppliers. . . . The parent company treats the supply firms as partners rather than playing them off against each other. The suppliers provide the goods “just in time” in return for long-term relationships with the main manufacturers. . . . Even today Toyota can design and build a car twice as fast as an American-owned factory in Detroit.