96-J-11. Fujimoto, Takahiro, "An Evolutionary Process of Toyota's Final Assembly Operations: The Role of Ex-Post Dynamic Capabilities", Apr. 1996.

The paper explores the evolutionary capability of Toyota Motor Corporation in reorganizing its manufacturing capabilities in response to the recent decline in domestic production due to post-bubble recession and yen appreciation.

It is well known that Toyota's assembly process designs have been significantly modified since the late 1980s, while maintaining much of its core manufacturing capabilities known as Toyota Production System. Some people call it post-Toyota system, new-Toyota system, post-lean system, and so on. The new system tries to improve its attractiveness to the new generation of workers in Japan, where the number of young work force is decreasing in the long run, while trying to save its cash flow by making the plant and equipment design slimmer and by avoiding excessive automation and capital investment. The authors call it `lean-on-balance' system, as the system tries to regain the balance between employee satisfaction and customer satisfaction, as well as the balance between lean production process and fat plant/equipment design (Fujimoto, Fuji-moto and Takeishi).

The main purpose of the present paper, however, is not to show how rational the new system is in relation to Japan's new environments in the 1990s, but to explore how the new system has evolved over time. The authors believe that the new system was not created simply by a rational (or analytical) strategy planning process, but a more complicated process of system evolution that may involve not only ex-ante-rational planning, but also trial and error, unintended changes, conflicts and coordination between different organizational units, complex organizational learning, and so on: a process of emergent strategies (Mintz-berg). As Toyota seems to be the first company to reach an apparently feasible manufacturing solutions, we may regard Toyota as having `evolutionary capabilities', by which a firm can handle a complex process of new system evolution.

In order to analyze this process, the paper compares two recent constructions of Toyota's domestic assembly plants: Tahara #4 and Kyushu-Miyata. By comparing their capabilities and performances, and by comparing the decision making process on the respective plant design and construction, the paper will try to reveal an evolutionary path of Toyota's manufacturing system, as well as Toyota's distinctive capabilities of handling the complex process of organizational adaptation and learning. Specifically, the paper will show, by using questionnaire and clinical data, that the experience of Tahara plant, which is known to be human friendly but over-equipped, affected the plant design of Kyushu Plant and subsequent plant designs at Toyota.