Just-in-Time in practice at Toyota: Rules-in-Use for building self-diagnostic, adaptive work-systems

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INTRODUCTION
In reaction to a race to ‘best practice’ -- as reflected in initiatives such as TQM, JIT, re-engineering, and ‘lean manufacturing’ -- Hayes and Pisano (1994) encouraged managers to re-focus on achieving strategic fit by configuring production systems ‘through a series of interrelated and internally consistent choices [that reflect] the priorities and trade-offs in its competitive situation and strategy’. This had to be grounded in ‘a collection of evolving capabilities … which provide the flexibility needed to embark in new directions

THE LITERATURE’S EXPLANATIONS OF TOYOTA’S OPERATIONS BASED ADVANTAGE
To explain Toyota’s performance advantages, much focus has been on Toyota’s Just-in-Time tools such as kanban-card paced pull systems, frequent, small batch production and delivery, and reduced inventories. For instance, Hopp and Spearman (2000) have contrasted ConWIP and kanban control of production flows. Deleersnyder et al (1989) and Lee (1989) have compared the relative efficacy of push and pull approaches for production.


RULES-BASED, ADAPTIVE ROUTINES AS THE SOURCE OF TOYOTA’S ADVANTAGE
The field research reported in this paper leads to the conclusion that Toyota has developed a powerful ‘dynamic capability’ in the form of consistently practiced ‘Rules-in-Use’ for organizational design, improvement, and adaptation. I discovered that in TPS-managed organizations, [tending to] all work is executed as hypothesis testing experiments that contribute to accelerated generation and accumulation of individual and organizational learning about delegating, coordinating, and performing work done collaboratively. This includes work that is done repetitively and that which is done a few times only.