History of Toyota
Birth of the Toyota Way: Lessons from the Korean War and Ford

In the early 1950s, Toyota emerged from its financial difficulties as a leaner company, having downsized by closing factories and laying off workers. The outbreak of the Korean War in 1950 brought a lifeline to the struggling automaker when the U.S. Army ordered 1,000 trucks from Toyota to support military logistics near the battlefront. This order provided crucial revenue, stabilizing Toyota’s business operations and ensuring its survival during a precarious period.
Later that year, Eiji Toyoda, a close relative of Kiichiro Toyoda, led a team of executives on a fact-finding mission to the United States, where they trained at the Ford Motor Company and studied the production methods of numerous American manufacturers. During their visit to the Ford River Rouge Complex in Dearborn, Michigan, the Toyota team was struck by the sheer scale of Ford's operations but also noted significant inefficiencies, such as high levels of inventory and waste in the manufacturing process.
Eiji Toyoda and Taiichi Ohno, a seasoned loom machinist, used the insights gained from this trip, combined with their existing expertise in loom manufacturing, to develop what became the Toyota Production System (TPS). They sought to adapt the American model of mass production by incorporating principles that emphasized efficiency and quality. Key elements of TPS included:
- Kanban System: Inspired by grocery store restocking practices, Toyota implemented a "pull" system of production. The Kanban system used cards to signal when parts or materials were needed, reducing excess inventory and ensuring just-in-time production.
- Kaizen (Continuous Improvement): Toyota emphasized incremental improvements in every aspect of manufacturing, fostering a culture where all employees, from the factory floor to management, contributed ideas to improve efficiency, reduce waste, and enhance product quality.
- Jidoka (Autonomous Automation): Building on Sakichi Toyoda’s principles, machines and assembly lines were designed to stop automatically when defects were detected, ensuring that quality was maintained throughout the production process.
The Toyota Production System was not merely a set of manufacturing practices; it represented a broader management philosophy, later known as The Toyota Way, which focused on long-term thinking, respect for people, and a commitment to innovation and excellence. By refining and integrating these principles, Toyota set itself apart from its competitors, producing high-quality vehicles efficiently while minimizing costs.
By the end of the 1950s, Toyota had firmly established itself as a leader in manufacturing innovation, producing vehicles with unprecedented reliability and quality. These foundational developments paved the way for Toyota’s global expansion and lasting success.