According to Olivier Larue, subject matter expert and author of The Toyota Economic System: How Leaders Create True Prosperity Through Financial Congruency, Dignity of Work, and Environmental Stewardship, Toyota Production System (TPS) innovations are still inadequately understood and applied in certain instances. ASSEMBLY Audible met with Larue to investigate why and how the system needs to be better understood and used (not only in car production assembly) but can also be utilized in various governmental and entrepreneurial settings. This book analyzes the purpose and relationship between the different elements of the Toyota Production System (TPS) and how they add up to an economic system in addition to a production system that brings engineering and managerial solutions to businesses and society. Here's a snippet of the conversation.
Further, during the podcast episode, Larue explained that TPS has financial, socio-economic, and environmental benefits that we cannot afford to ignore. Notably, the TPS model eliminates problems in three broad categories: financial, social, and environmental.
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 requirements of modern industrial work by re-introducing craftsmanship into industrial operations.
- Economically, TPS lessens the conflicts between economic growth and environmental stewardship by eliminating unevenness, overburden, and waste instead of only chasing economies of scale through overproduction.
The three critical innovations bring financial benefits to the corporation, social benefits to the workers, and economic and environmental benefits to society. TPS is measurable, repeatable, and worth teaching and applying not just to businesses haphazardly but systematically to the broader aspects of our economies.
Listen to the entire conversation with Olivier Larue,
Why We Can't Afford to Ignore the Socio-Economic Benefits of the Toyota Production System.
Olivier Larue is President & Partner Consultant at Ydatum, Inc. His book The Toyota Economic System: How Leaders Create True Prosperity Through Financial Congruency, Dignity of Work, and Environmental Stewardship, will be published in the Summer of 2023. Additionally, Olivier will be ASSEMBLY's webinar guest speaker on October 3rd. Learn more and register for the webinar here.
