Also interesting to mention. Amazon sounds a lot like this. When I heard Marc Onetto the SVP of Worldwide Operations from Amazon speak a few weeks ago he was mentioning how they use the Kaizen system. Also according to Marc, Amazon's version of the "Pull" method is allowing employees on the phone at customer service help desks to pull inventory that you can purchase online incase there is some-type of issue with how the item is being delivered, sold, etc. That's trusting your employees at all levels!

Question: Where does this system break down?

It feels like innovations at Toyota lag behind other firms such as Nissan or BMW, where they sometimes take a complete redesign of a car from year to year.

It also feels like Toyota had a bit of a scare a few years ago -- remember the recalls? -- that has made the company more conservative in embracing change.

How could continuous improvement shake Toyota out of its conservative turn?

Your Amazon point is a good one. They're regularly rolling out products that could disrupt existing product lines. I've never seen such scorched earth in a technology company.

Very interesting! I think that in 1940's, after the war these principals where really innovative. Especially the treating of employees. And I think even now, the best manufacturing companies in the world still use some sort of derivative of this method. Maybe there's a flaw in philosophy outside of these methods that hinder innovation. Although the Prius was and is one of the modern automotive phenomenons.

Amazon really is - for me at least - the ideal poster child for how a company can be run outside of the normal rules of "be the best at one thing". What makes them successful at breaking the rules? Or does breaking the rules make you successful? 

Breaking the rules does not always make you successful. There's survivor bias there.

I think what makes Amazon successful is that Jeff Bezos is bold and brave AND he has great vision.

His risks are calculated; when he breaks the rules, he has a good reason.

And you're right, a lot of Toyota's concepts are now commonplace in company cultures.

That shows just how great they truly are!

The Jidoka part is interesting to me.  Basically translates to "Automization".

Sounds like they try to separate tasks that machines are good at and tasks that humans are good at and then optimize them...

Eric Ries says automation is key to good engineering culture:

http://pandawhale.com/post/1601/what-makes-a-good-engineering-culture-answer-from-edmondlau-via-ericries

Eric Barker says one of the keys to productivity is to automate more:

http://pandawhale.com/post/984/10-things-you-need-to-know-about-productivity

And:

http://pandawhale.com/post/1665/10-ways-to-turn-yourself-into-a-productivity-dynamo

And especially:

http://pandawhale.com/post/6682/6-things-that-will-make-you-more-productive

Automation is also better for health habits:

http://pandawhale.com/post/1409/shortcut-to-better-health-20-minutes