Despite their relative late entry to the race, Japanese automakers always looked far ahead. In the 1950s, they made large investments in infrastructure and technology during a time when American automakers were content to continue production in factories that hadn't had systemic upgrades in almost 30 years.
Japanese government entities played a large part in raising the bar for Japanese engineering, often setting goals that, even when impossible to reach, prompted competition and innovation among rival Japanese car manufacturers.
Following a worldwide economic slump in the mid-1970s caused in part by the 1974 oil crisis, Toyota emerged a stronger company, due to Toyota's managerial and production philosophy of kanban (in English, "just in time").
By planning the ordering of materials so that needed components arrived at production plants almost exactly when they were needed (and only in the precise quantity needed), Toyota hoped to eliminate waste and the need for any excess inventory on hand.
The "just in time" system (also known as the "pull system") has been likened to the filling of a car's gas tank. Just because you have the capacity to do so (access to a gas pump) doesn't mean you fill your gas tank every day. We generally wait until we're low on gas, then restock. While American car companies were enjoying the ability to metaphorically pump gas into tanks whether it was needed or not, Toyota (and eventually other Japanese companies) waited until the "empty" light turned on.
Toyota manufacturing focuses on quality and efficiency, but also on kaizen: self-improvement and continuous learning. Employees, vendors and members of the management team are taught to challenge their own assumptions and to learn more about problems or processes by putting eyes and hands on the situation.
In the 1980s, Japanese automakers began building massive plants in the United States while American automakers were moving their own overseas. This allowed Japanese automakers to produce and deliver a car quicker than ever before to American consumers. In fact, they became so proficient at this that Japanese car companies have even produced cars in the United States and exported them back to Japan.
In 1994, a two-year effort to design an environmentally friendly global car of the future resulted in Toyota's design of the Prius, the world's first hybrid fuel-electric vehicle, which hit the Japanese market in 1997.
Have American automakers adopted Japanese manufacturing techniques? Keep reading.