The Toyota Production System (TPS)
It is the philosophy which organizes manufacturing and logistics at Toyota, including the interaction with suppliers and customers. The TPS is a major part of the more generic "Lean manufacturing". It was largely created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno; they drew heavily on the work of W. Edwards Deming and the writings of Henry Ford. When these men came to the United States to observe the assembly line and mass production that had made Ford rich, they were unimpressed. While shopping in a supermarket they observed the simple idea of an automatic drink resupplier; when the customer wants a drink, he takes one, and another replaces it. The main goals of the TPS are to design out overburden (muri), smooth production (mura) and eliminate waste (muda). There are 7 kinds of muda targeted in the TPS:
over-production
motion (of operator or machine)
waiting (of operator or machine)
conveyance
processing itself
inventory (raw material)
correction (rework and scrap)
Toyota was able to greatly reduce leadtime and cost using the TPS, while improving quality at the same time. This enabled it to become one of the ten largest companies in the world. It is currently as profitable as all the other car companies combined and became the largest car manufacturer in 2007. It has been proposed that the TPS is the most prominent example of the 'correlation', or middle, stage in a science, with material requirements planning and other data gathering systems representing the 'classification' or first stage. A science in this stage can see correlations between events and can propose some procedures that allow some predictions of the future. Due to this stellar success of the production philosophy's predictions many of these methods have been copied by other manufacturing companies, although mostly unsuccessfully.

Just In Time (JIT)

It is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated costs. The process is driven by a series of signals, or Kanban (看板, Kanban?), that tell production processes when to make the next part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf. When implemented correctly, JIT can lead to dramatic improvements in a manufacturing organization's return on investment, quality, and efficiency.
New stock is ordered when stock drops to the re-order level. This saves warehouse space and costs. However, one drawback of the JIT system is that the re-order level is determined by historical demand. If demand rises above the historical average demand, the firm will deplete inventory faster than usual and cause customer service issues. To meet a 95% service rate a firm must carry about 3 standard deviations of demand in safety stock. Forecasted shifts in demand should be planned for around the Kanban until trends can be established to reset the appropriate Kanban level. Others have suggested that recycling Kanban faster can also help flex the system by as much as 10-30%. In recent years manufacturers have touted a trailing 13 week average as a better predictor than most forecastors could provide