Eiji Toyoda

By the time Eiji received his mechanical engineering degree in 1936, Kiichiro was developing the system now known as lean manufacturing. He reasoned that the company could save money if parts and components could be delivered to the assembly line just in time to be installed on the car being built. He also changed the traditional physical layout of the plant so that machine tools were grouped along the flow of production. That made the supply line shorter and meant parts could get into the assembly process sooner. He then began convincing suppliers to cooperate in his just-in-time system. Eiji's first assignment was to run the company lab in Tokyo, and he set about lining up mechanical and scientific specialists to join Toyota. Then he worked on the shop floor in charge of machinery and production planning.

But on that day in 1938 when Kiichiro Toyoda, the founder of Toyota Motor Corp. (TM ), instructed his understudy, Eiji, to build a factory on land cleared from a red-pine forest in central Japan, neither realized they were about to make history. That plant, located in what is now called Toyota City, pioneered concepts such as just-in-time inventory control, kaizen continuous improvement, and kanban parts labeling -- all disciplines common today in factories from Detroit to Stuttgart, and essential to the Toyota Way.