Last month we reviewed how Ford Motor Co.’s lean concepts were slowly phased out of the organization. The concepts, however, weren’t lost: Toyota realized their potential and improved upon them.

Toyota’s chief of production, Taiichi Ohno, embraced Ford’s concepts wholeheartedly. He applied them to machining operations and then to other areas of production. As a result, the Toyota Production System (TPS) was born in the 1960s and nurtured through the 1970s.

The real test of the TPS came in 1984, when Toyota and General Motors formed a joint venture called New United Manufacturing Inc. to build a car sharing designs, assembly processes, suppliers, and people. Although the venture’s performance didn’t meet expectations, the lean concept began there and spread to other U.S. and international organizations.

Meanwhile, IBM started focusing on process improvement. Since the late 1970s it had benchmarked its international internal operations and gathered best practices from Japan, Germany, and the United States. These best-practice approaches were called “process compatibility.” They focused on streamlining all support processes and used tools such as flowcharting, as-is process mapping, and value engineering.

The concept was documented and explained in my book, Excellence: The IBM Way (ASQ Quality Press, 1988). Over time, the approach evolved into two separate but similar methodologies:

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