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The Toyota Production System (TPS) was developed between 1945 and 1970

and it is still evolving today. The 1973 oil crisis hit Japan at least as hard as it hit

America and Europe. By 1974, Japan's economy had collapsed to a state of nought

growth. At Toyota Motor Company, although profits suffered, greater earnings were

sustained in 1975, 1976 and 1977 than at other Japanese companies. The widening

gaps between Toyota and other Japanese companies opened the eyes of others in

Japan to this phenomenon called the Toyota Production System and it began spreading

rapidly in Japan.

Toyota branched off of the Toyoda automatic loom company, founded by Sakichi

In the 1930s, when the Japanese military started fighting in Manchuria, they used

mainly foreign-made trucks. Unfortunately at that time worldwide depression made

money in short supply for the Japanese government, and mass production of autos

within Japan would both reduce costs and provide needed jobs, giving them control and

independence. In 1936, Japan established licensing for automakers in the country,

demanding that a majority of stockholders and half the ownership, as well as the

officers, had to be Japanese; in 1939, imports were practically halted. In this

atmosphere, the Toyoda Automatic Loom Works began to experiment, with a prototype

ready in 1935, and the sale of patent rights to a weaving machine providing much of the

necessary funding for experimentation and tooling. Toyoda's car operations were

placed in the hands of Kiichiro Toyoda, Sakichi Toyoda's son.

Many credit Toyota's success to aspects of the Toyota Production System,

established by Taichi Ohno and Shigeo Shingo from the late 1950s through 1970 (when

it gained the name). It includes aspects of autonomation, just-in-time production, and

continuous improvement, reducing both inventories and defects. The system is used

worldwide, but is only...