3. Lean production system

For the first time since the Second World War, the oil crisis of 1973 led to a reduction in demand and caused serious economic difficulties for manufacturers, particularly in Japan. Although the American mass-production approach had borne fruit during the period of rapid post-war growth, on the other hand, in a period of low overall consumption growth, the economies of scale associated with this approach reached their limit. The belief that production batches should be as large as possible in order to achieve these economies of scale, and that everything produced can be sold, implies considerable risks. In Japan, Toyota seems to be coping better than most, thanks to a new production management philosophy now known as the Toyota Production System.