The Toyota Economic System : How Leaders Create True Prosperity Through Financial Congruency, Dignity of Work, and Environmental Stewardship book cover
1st Edition

The Toyota Economic System
How Leaders Create True Prosperity Through Financial Congruency, Dignity of Work, and Environmental Stewardship

  • Available for pre-order on June 2, 2023. Item will ship after June 23, 2023
ISBN 9781032391526
June 23, 2023 Forthcoming by Productivity Press
272 Pages 67 B/W Illustrations

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USD $44.95

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Book Description

This book analyzes the purpose and relationship between the different elements of the Toyota Production System (TPS) and how they add up to a system that brings engineering and managerial solutions to businesses and society. It argues how TPS can be viewed as a science as opposed to a tool-based technique. Our society faces unprecedented economic, social, and environmental challenges. Thankfully, TPS offers solutions. These solutions are born out of Toyota's dissatisfaction with simple cost-benefit analysis and trade-offs. It challenges the antiquated model of economies of scale and radical individual asset efficiency. The Toyota Production System offers technical and managerial innovations that eliminate pre-existing financial, socio-economical, and environmental contradictions. The result is congruency between several factors and agents of our society that have conflicted in the past. Specifically, TPS does the following: • Financially, TPS creates congruency between the Income Statement and the Statement of Cash Flow by pursuing total instead of individual efficiency. • Socio-managerially, TPS reconciles the creative nature of people with the mundane requirement of modern industrial work by re-introducing craftsmanship into industrial operation. • Economically, TPS lessens the conflicts between economic growth and environmental stewardship by eliminating overburden, unevenness, and waste. These innovations bring financial benefits to the corporation, social benefits to the workers, and economic and environmental benefits to society at large. The result is true instead of apparent efficiency. This is measurable, repeatable, and worth making into a scientific discipline, which can be taught and applied more widely—not just to business haphazardly, but systematically to the broader aspects of our economies.

Table of Contents


About the Author


Part 1: The Ideal: Its Philosophy, Principles, and Goals

Chapter I: Production Systems’ Contribution to Human Progress6

Initial condition: Craftsmanship6

Current condition: The great mass production system6

Target Condition: The Toyota Production System

Chapter 2: Toyota Production System (TPS) as a system

The three elements of TPS: What TPS does

The unity of the three elements displayed in the house of TPS

Part 2: Reconciling the Financials: Technical innovation by congruency Between Income and Cash Flow

Chapter 3: The traditional mass production system and its inherent contradiction as a system of economies of scale based on individual efficiency

Batch of conveyance to reduce cost conflicts with quality and lead-time

Batch of production to reduce cost conflicts with quality and lead-time

Batch processing means relying on a long-range forecast

Trade-offs factors instead of innovating

Chapter 4: The Toyota Production System and its inherent harmony: Approach to reconciling income and cash flow

Stop and notify, the first element of jidoka

Continuous flow as the first element of Just-in-Time

Takt time is a new datum with which to calculate and organize resources

Separate Man and Machine Work

Pull system, the second element of Just-in-time

Jidoka and Just‐in‐time conclusion

Heijunka: Leveling work by varieties

Standardized work

Conclusion on the technical element of TPS

Part 3: Industrial Craftsman. Managerial Innovation by reconciling the creative nature of people with the mundane requirements of industrial work

Chapter 5: Manage based on a vision of the Ideal—True North

The purpose of the ideal

Application of the Ideal

Images of the ideal

Chapter 6: Kaizen, a scientific problem-solving activity

Observation (plan)

Hypothesizing (do)

Testing (check)

Draw a conclusion (act)

Chapter 7: Institutionalization of problem-solving by developing experts: Learning problem-solving and solving learning-problems


Confirm by yourself

An intimate relationship between learning new tasks and scientific problem-solving


Demonstrate results by improving efficiencies

Chapter 8: Practical Principle-based performance indicators

Managing by Total and True efficiency

TPS metrics: Measuring and managing the 4M of the shop floor

Chapter 9: Managing human development with "A4 and A3"

Using Material and Information Flow A3 to manage total efficiency and achieve true efficiency through the elimination of unevenness, overburden, and waste

Part 4. The broader socio-economic benefits of the TPS method

Chapter 10: Reconciling economic prosperity with environmental stewardship.

The asset driven mass production system is push system

The customer driven Toyota Production System is a pull system

Economic innovation

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Olivier Larue is a senior executive consultant and president at Ydatum, Inc., which partners with public corporations and private equity clients in operation design and management. He has more than 30 years of hands-on experience with the Toyota Production System (TPS). He worked with the Toyota Supplier Support Center in North America (TSSC), Operations Management Consulting Division in Japan (OMCD), and New United Motor Manufacturing (NUMMI) before founding a consulting firm in the Bay Area focused on implementing TPS in a variety of industries.

Olivier has led organizations, from Fortune 500 to minority companies, in the design and implementation of industrial engineering and managerial business solutions for 25+ years with documented savings exceeding two billion dollars. He has the expertise and hands-on experience with TPS/Lean enterprising and has developed hundreds of leaders around the world. Olivier excels at working with everyone from executives to shop floor operators to deliverer higher quality products and services at a lower cost and with a shorter supply lead time based on the Toyota Production System.

He earned an MS from Saint Mary’s College of California, a BS in Business Administration, Management and Operation from the Faculte des Sciences Economiques of Rennes 1, France, and a Bio Resources Management Bac D’ from Theodore Monod Lycee, France