Efficiency

Meeting the customer's needs precisely with minimal resources. 

Apparent efficiency versus real efficiency 

Taiichi Ohno illustrated the common confusion between apparent efficiency and real efficiency using an example in which 10 people produce 100 units every day. If output increases to 120 units per day thanks to process improvements, there is an apparent efficiency improvement of 20 percent. But that is only the case if demand also increases by 20 percent. If demand remains stable, then the only way to improve the efficiency of the process is to figure out how to produce the same number of units with less effort and capital.

Total efficiency versus local efficiency 

Toyota also often distinguishes between total efficiency, which looks at the performance of an entire production process or value stream, and local efficiency, which refers to the performance of one point or step within a production process or value stream. Toyota emphasizes that it is more important to achieve the first type of efficiency.