The Evolution of the Toyota Production System by Kazuo Wada

Author:Kazuo Wada
Language: eng
Format: epub
ISBN: 9789811549281
Publisher: Springer Singapore

Furthermore, in a book titled The Practices of Merit Pay Plans for practical persons published in 1966, a personnel division manager at Toyota contributed an article titled “The Production Allowance System at Toyota Motor Co., Ltd.” The merit pay plans or the efficiency pay system would generally use the standard time as the basis of measuring the efficiency. This article explained how Toyota set the standard time: after the company created the documentation section in the Engineering Department in 1947, Toyota began to analyze the past performance of machining processes, and calculated the standard time (Makino 1966, p. 156).

In 1947, Toyota began to accumulate data on production processes on the shop floors, precisely the data on each machining process. Based on such accumulated data, Toyota revived the efficiency pay system in 1948. Without the data on standard times, hours off-the-job, actual working hours, and so on, the production allowance rate could not have been calculated (see formula 4.5). The introduction of the production allowance system did not simply mean that Toyota revived the efficiency rate payment system, but rather that it actively acquired data on the actual working processes on the shop floors.

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