The Toyota Production System (TPS), developed by Toyota in the mid-1900s, is still a standard for companies worldwide and remains ingrained in Toyota’s culture globally.

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Innovative Applications for the Toyota Production System:
Forklifts are pivotal in Toyota’s own continuous
improvement journey
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2. INTRODUCTION
The Toyota Production System
(TPS), developed by Toyota in the
mid 1900s, is still a standard for
companies worldwide and remains
ingrained in Toyota’s culture glob-
ally. The system was founded on
pursuing the elimination of all
waste from production processes,
though other industries includ-
ing service organizations are also
benefiting from TPS.
Material handling equipment plays
a prominent role in supporting
TPS. At Toyota’s own manufactur-
ing facilities, integrating forklifts
into daily operations is proving
to deliver efficiencies and enable
quality, safety, productivity, and
profitability improvements.
A fleet of over 100 forklifts and
order pickers manufactured by
Toyota Material Handling North
America currently serve the Toyota
Industrial Equipment Manufactur-
ing (TIEM) plant in Columbus,
Indiana. The equipment and parts
manufacturing and distribution
campus includes more than one
million square feet of facilities.
The forklifts are instrumental in
streamlining the site’s operations,
maintenance, inventory, and field
service processes.
Learn how TPS and Toyota’s
forklifts are enabling continuous
improvements at Toyota, and how
the value is extended to aftermar-
ket services, fleet R&D, forklift
acquisitions, and dealership.
Toyota’s practices are a model for
achieving lean benefits enter-
prise-wide across many unique
operations.
WHAT IS TPS?
TPS is based on two concepts: Just-
In-Time (JIT) production (making
only what is needed, when it is
needed, and in the amount need-
ed), and Jidoka (“autonomation”
with a human touch), which in-
cludes the development and use of
intelligent machinery while allow-
ing any associate to stop a process if
they see a problem or opportunity
for improvement.
At the heart of TPS is Kaizen, or
continuous improvement, where
everyone in the organization
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Innovative Applications for the Toyota Production System:
Forklifts are pivotal in Toyota’s own continuous
improvement journey
The Toyota Industrial Equipment Manufacturing (TIEM) plant in Columbus, Indiana, operates 88
forklifts, 16 stand-up riders, and 45 tuggers made by Toyota Material Handling North America.

3. continuously looks for waste and
endeavors to remove it and improve
the standard. Waste in this context
is evidenced by product defects,
excessive inventory, unplanned
downtime, unnecessary tasks,
overproduction, idle time, clutter
in the work area, and any number
of other issues. Since waste can
never completely be eliminated, it
is instilled in the culture to apply
improvements on a daily basis.
The Japanese phrase “Monozukuri
wa hitozukuri” mean “making
things is about making people.”
This concept emphasizes a spirit of
excellence and a culture of respect
developed through the Toyota
Production System, where people
are the most important part of the
process. They share responsibility
for success, and each success boosts
morale.
“TPS allows us to constantly
evaluate our processes to identify
and remove waste. The byproduct
is more efficiency and productiv-
ity. This can offer a competitive
advantage and, in some cases, make
our work safer,” says Bruce Marti,
Aftermarket Delivery Manager for
Toyota Material Handling. “The
different principles that support
TPS all tell us to develop a culture
of continuous improvement and
allow us to quickly identify defects
in the process. The essence of TPS
is working for our customers and
getting them what they need as
soon as possible. This efficiency
is ingrained into our people. It’s
ingrained in TPS culture,” he adds.
WHY KAIZEN FOR CONTINUOUS
IMPROVEMENT?
No process is ever perfect; it can
always be improved. Performing
Kaizen in Toyota’s manufacturing
operations allows optimization of
everything from logistics to opera-
tor performance. Every individual
is committed to improving quality,
productivity, safety and on-time
delivery on a daily basis. Small
changes over time have a large,
positive impact on the business and
overall customer satisfaction.
“There is a natural tendency to have
degradation over time. If you’re not
getting better, then you’re getting
worse. We can’t just be satisfied
with the status quo,” explains Scott
Redelman, Senior Manager of
Production Control and Logistics
at Toyota Industrial Equipment
Manufacturing (TIEM). The TPS
culture allows everyone to constant-
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4. ly look for the next problem and
eliminate it. “It helps us to become a
better organization and make a bet-
ter product,” adds Redelman.
In daily management team meet-
ings, KPI results for the biggest
problems are compared against
targets set the prior day. The team
discusses what worked well, what
didn’t, and their commitments
for the next day. Their hope is to
learn which decisions and actions
definitively improved processes
and eliminated former problems.
If something “fixed” reoccurs, it
means the root cause has not been
found, and the team evaluates it
more deeply.
Opportunities are great for Kaizen
in forklift operations. Insufficient
training or improper behavior can
cause injuries or damage. Exces-
sive stops in a run or bottlenecks
in a process impact productivity
and profitability. Many companies
have dramatic gaps in operator ef-
ficiency, with operators sitting idle
or moving sporadically rather than
making fluid and efficient move-
ments. Even Toyota’s newer forklift
operators begin by running at 60-
80% efficiency. Example improve-
ment considerations include:
• Are the forklifts fit for purpose,
available, and in the right place
when needed?
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TPS stakeholder teams span Toyota’s
entire forklift manufacturing opera-
tion, each with their own measures of
success that are subject to continuous
improvement. Every associate is em-
powered to help evaluate and answer
questions like these in a TPS operation:
RD
• Will the forklift idea improve productivity,
safety, efficiency, reliability, or costs?
• Has the idea been patented?
• What is the average time to market?
• Are the daily KPI targets being met?
PROCUREMENT
• Are the forklift parts and material
suppliers delivering quality products
on time?
• Can they be purchased at a lower
cost elsewhere without sacrificing
quality?
• Can the procurement cycle time be
reduced?
• Is contact compliance as expected?
• Are the daily KPI targets being met?
OPERATIONS
• Are production schedules complete
and accessible?
• Is the inventory and equipment avail-
able when needed?
• Is the production floor layout logical
and efficient?
• Do the products conform to quality
standards?
• Are the daily KPI targets being met?
MAINTENANCE AND RELIABILITY
• Are parts and components available
when needed?
• Is the work planned and scheduled
efficiently
• Is the equipment maintenance up to
date?
• Did any accidents or injuries occur,
and were they handled properly?
• Are the daily KPI targets being met?
WAREHOUSE AND SHIPPING
• Where can inventory stocking levels
be reduced?
• Are production schedules and ship-
ping orders complete and accessible?
• Is the warehouse layout logical and
efficient?
• Are the daily KPI targets being met?
FIELD SERVICE
• Are the routes well defined and orga-
nized efficiently?
• Did the technician show up on time,
with the right parts, and able to com-
plete the repair?
• Are the daily KPI targets being met?
SUPPLIERS AND DEALERS
• Are we being as efficient as possible
in product and service delivery?
• Are we taking steps to continuously
improve?
WHO ARE THE KEY STAKEHOLDERS AFFECTED BY TPS?

5. • Are the forklift operators trained,
certified, and in the right place
when needed?
• Are the routes well defined, or-
ganized efficiently, and clear and
safe for passage?
• Are the loads secure, and the
assignments completed in a safe,
timely, and accurate manner?
• Did any impacts, accidents or
injuries occur, and were they
handled properly?
• Is there excessive idle time?
Kaizen processes allow TIEM to
optimize its processes by being
open about potential difficulties
and areas for improvement. In
addition, once the materials are
produced and shipped, Toyota’s
committment to TPS remains a
strong guide throughout the prod-
ucts’ lifespan in spaces like fork-
lift aftermarket services, forklift
operation management, and forklift
procurement.
AFTERMARKET PARTS AND
SERVICE OPTIMIZATION
When a customer’s forklift goes
down, Toyota’s goal is to fix it right
the first time, every time. Toyota’s
Aftermarket Delivery organiza-
tion continually strives for greater
process efficiency to reduce the lead
time for parts and services prom-
ised to the customer.
“Since we have done a good job
of managing our parts inventory,
planned an effective route to get
to a customer, and provided good
training for our technicians, then
that customer can feel assured
about their decision to partner
with Toyota. When our technician
shows up, they’re going to be able
to get the forklift fixed the first
time, in the shortest amount of
time,” says Marti.
This organization takes its lead
from TIEM. “We learn a lot from
our Toyota plants, since they’ve
been using TPS from the begin-
ning. They are our working labora-
tory; we can see the process in
action,” explains Marti.
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6. RD OPTIMIZATION
Modern telematics impact the
single largest cost of material
handling operation: operator
behavior. For years, data has been
collecting on the forklifts, but
there was no way to listen to it or
take meaningful actions. Toyota’s
T-Matics, a new cloud-based
forklift vehicle management sys-
tem, allows web-based monitor-
ing and reporting of fleet perfor-
mance and streamlined planned
maintenance.
Toyota has already rolled out T-
Matics to all of its forklifts in its
TIEM distribution center, and to
all three-wheel electric trucks run-
ning product to the line, improving
the flow of material around the
plant. It provides real-time insight
into GPS locations, utilization,
fault codes and behavior patterns,
revealing waste and bottlenecks
that might otherwise have been
missed and uncorrected.
The system identifies the physical
location of forklift operators, and
who might be idle but near another
job that needs to be done. This allows
for maximized efficiency and elimi-
nates idle time that can seriously slow
down manufacturing speed.
Remote measurement of the
time to get to each point allows
manufacturers to understand which
operators are most efficient and
possibly how to reorganize work-
spaces to maximize productivity.
Tracking of impacts and damage
also improve operator account-
ability. Ultimately, T-Matics can
reveal long-term operating trends
where low productivity is hurting
the bottom line and where further
efficiencies are possible.
“From a JIT standpoint, the big-
gest immediate benefit of telemat-
ics for Toyota is the reduction
in forklift downtime. Before an
operator even realizes their truck
is having a problem, the technician
is alerted to it by the truck itself,”
says Jeremy Sassatelli, Telematics
Sales and Operations Manager for
Toyota Material Handling.
T-Matics promotes continuous
improvement by automating the
identification of forklift patterns
in order to set new standards on a
continual basis – not necessarily in
speed, but in how operators travel
from one stop to another. With
Jidoka in mind, personnel holding
manual positions now automated
by telematics are moved to more
beneficial roles, such as process
analysis positions.
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In the spirit of continuous improve-
ment, Toyota envisions a future
where telematics will allow forklifts
to integrate and connect with other
areas in a manufacturing facility
or warehouse. This could include
anything from connected machines
and the entry levels of automation,
such as pedestrian alerts and light-
ing, to fleet deployment systems
where operators are messaged to
pick up and deliver items via the
optimal route. The integration of
T-matics into business systems such
as warehouse management and
control systems also is on the table
as Toyota pushes forward into the
new technological era of TPS.
FORKLIFT ACQUISITION
OPTIMIZATION
In addition to day-to-day manu-
facturing operation improvements,
effective fleet acquisition planning
and scheduling is crucial to op-
erational efficiency. It begins with
matching the lift to its purpose.
Considerations include its capac-
ity, mast type, tire type, electric or
internal combustion (IC) engine,
and the IC fuel type.
Properly timed acquisitions ensure
each forklift is used to its maxi-
mum capacity and not over-utilized
or under-utilized. “Companies
typically buy and lease units
sporadically throughout the year –
not a full fleet at once. As long as
a JIT schedule is established and
followed, they will avoid owning
or paying for forklifts they don’t
need,” says Jon Urbano, Product
Development Manager for Toyota
Industries Commercial Finance.
The decision to lease, buy, or rent
a forklift depends on what is good
for the business. With a purchase
or loan, the buyer pays the full
price to own the forklift. For
smaller shops, it may make sense to
own the unit for as long as 10-20
years.
Leases provide access to newer
units and fleets, for the payment
and duration required. Commer-
cial industries, particularly larger
companies, tend to acquire new
equipment and technology every
few years and don’t necessarily
want old equipment. Deciding
which of these options is correct for
a unique manufacturing opera-
tion is a foundational step in TPS
implementation.
Toyota Industries Commercial
Finance (TICF) offers a variety of
lease types, including operating
leases (lowest payment), capital
leases (lease-purchase), one-pay
leases (cash upfront), and flex leases
(tailored to the customer’s needs),
in addition to a retail installment
balloon loans. The choice depends
on the length, payment amounts
and payment spread wanted, and
the residual value of the forklift.
Competitive payments allow
Toyota customers to benefit from a
complete TPS-supported package
of equipment and financing. Both
Toyota dealerships and their cus-
tomers work with TICF to achieve
optimization in acquiring forklift
fleets.
DEALER OPTIMIZATION
Toyota works closely with its deal-
ers to help them implement lean
processes and instill a lean culture.
It strengthens their partnerships
with the dealers, who can then

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strengthen their relationships with
their customers.
Toyota Material Handling dealer-
ships are natural candidates for
the TPS philosophy. The North
American dealer network of-
fers forklift equipment, parts,
and service directly to end users
in localized markets. The After
Sales Service Evaluation and
Certification (ASEC) program
was designed by Toyota to ensure
consistency in dealer practices
globally.
ASEC is intended as a tool that
dealers can use to improve their
own business processes. It begins
with a survey of the dealership to
set a performance benchmark, and
follows with productivity, safety,
and sustainability process improve-
ments. The improvements are then
tracked and follow-up surveys are
performed, resulting in a cycle of
continuous improvement.
Respect for all people in the
process is encouraged, including
dealer, parts supplier, end user, and
Toyota personnel. “We practice
that with our dealers because they
drive the success of our company,
being our front line to the cus-
tomers. They are the ones taking
service calls from customers,”
explains Marti. Toyota Material
Handling’s close engagement with
its dealers leads to the implementa-
tion of Kaizen processes, meaning
customers get the full weight of
Toyota quality.
CONCLUSION
The TPS journey of continuous
learning and improvement is ap-
plied in every corner of Toyota’s
business, and reflected in its safety,
efficiency, quality, and profitability.
The Toyota Production System has
been proven to increase the produc-
tion and efficiency across many dif-
ferent plant operations. The model
can be deployed in any company
committed to instilling its culture
– not just its tools – and Toyota is
eager to show the way. For Toyota,
being a good global citizen means
encouraging others to become lean.