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Industry study 02 of 24 · Manufacturing Research Companion: Companies, Strategic Moves, and Technical Studies

Production Systems: Lean, TPS, Six Sigma and Business Systems

~9,000 words · 1 technical exhibit

A production system is the set of rules a factory uses to decide what to make, in what order, at what pace, with how much inventory, and what to do when something goes wrong. It is the least visible and most valuable asset a manufacturer has: it cannot be bought with the machines, and it is the part of process capability that competitors find hardest to copy. Ford's moving assembly line at Highland Park (1913, from memory, verify) made the car cheap by making one product the same way at enormous volume. General Motors under Alfred Sloan added variety and management by numbers. Toyota, too small and short of capital after the war to copy Ford, built a system under Taiichi Ohno from the late 1940s through the 1970s that made small batches of many models with little inventory and stopped the line at every defect: just-in-time, kanban, jidoka, levelled production and continuous improvement. The clearest proof that the system, not the workforce or the machines, made the difference came from Fremont, California. GM had closed its plant there in 1982; NUMMI, the GM–Toyota joint venture agreed in February 1983, reopened it with largely the same UAW workforce and began production in December 1984, and within a few years reached quality and productivity far above the old plant's (MIT research, reported; equal to Supply chain: Toyota). Others turned the methods into management systems: Motorola's and GE's Six Sigma, the Danaher Business System, Illinois Tool Works' 80/20 — whose "enterprise initiatives" the company credited with 130 basis points of its 26.3% operating margin in 2025 (company) — and GE Aerospace's "FLIGHT DECK". The lesson runs the other way too. Boeing's 2024 door-plug accident and the FAA's production cap showed what happens when a production system gives way to schedule pressure (03). This section explains the main production systems, what they are for, how they spread and failed to spread, what lean is not, and how to judge a company's claims about its "operating system". The companion worked example computes takt time, line balancing and work-in-process (Little's law) for one stylized assembly cell.

What the study covers

  1. 1Overview: the system is the product
  2. 2Mass production: Ford and Sloan
  3. 3The Toyota Production System
  4. 4NUMMI and the transfer problem
  5. 5Deming, Juran and the quality movement
  6. 6Six Sigma
  7. 7Lean outside Japan: business systems
  8. 8Flow arithmetic: takt, bottlenecks and Little's law
  9. 9What lean is not
  10. 10How to judge a company's "operating system"
  11. 11Key numbers
  12. 12Landmark companies and cases
  13. 13Pitfalls
  14. 14How an expert thinks about it
  15. 15Glossary

Technical exhibits

Worked examples, checklists and case studies included with this study.

Takt Time Line Balancing and Littles Law Worked Example

A stylized 13-task pump-assembly cell: takt time at four demand levels, the minimum and achievable number of stations, balance efficiency, labour cost per unit, work-in-process and lead time under one-piece flow and batches (Little's law), and how queues explode at the bottleneck as utilisation approaches 100% (computed in Python)

Companies in this study