Short answer
Cost advantage isn't built through cheaper purchasing alone. Lasting advantage comes from continuously eliminating waste, shortening processes, growing productivity and building an organization resilient to disruption — exactly what the conditions behind the Toyota Production System demanded.
Will cheap manufacturing in Asia "eat" the whole world?
There's no clean answer to that question — the topic is too broad, the variables too many. But the problem behind it is real: many organizations respond to cost pressure with a single move — shift sourcing to wherever it's cheaper. It's the simplest way to cut cost. It isn't a cure, though. It's a stopgap.
Where TPS actually came from
It's worth returning to the source. The Toyota Production System wasn't born out of abundance — it was born out of its absence. Postwar Toyota had none of the capital, scale or resource access that Western mass producers had. That absence forced something else: a relentless, systemic fight against everything that doesn't create value for the customer. Not as a slogan — as a condition for survival.
That's a distinction easy to miss today. TPS isn't a toolkit to bolt onto an existing system. It's an answer to a specific problem: how to compete without a cost advantage built on scale or cheap labor.
Why "buy where it's cheaper" isn't enough
Shifting sourcing to cheaper locations lowers unit cost — on paper. It doesn't remove dependency, doesn't shorten the supply chain, and builds no capability inside the organization. At some point, the question always arrives: "what if…?"
Not long ago, we all found out what can follow those three dots. We called that period a pandemic. Broken supply chains, weeks-long delays, production halted not by lack of demand but by the absence of a single component from the other side of the world. Organizations that had built their advantage on purchase price alone turned out to be the most fragile.
What builds lasting advantage
Lasting cost advantage is built from the inside, not negotiated with a supplier. In practice, that means four areas of work that reinforce each other:
Eliminating waste. Systematically removing what doesn't create value for the customer — not as a one-off campaign, but as a daily habit of the team.
Shortening processes. A shorter lead time isn't just a faster response to the customer — it's less work-in-process inventory, less capital frozen in the process, and less exposure to disruption.
Growing productivity. The same team and the same equipment, higher throughput — without investing in additional scale or additional resources.
Organizational resilience. The ability to keep functioning and responding when assumptions change — because sooner or later, they always do.
Develop not just yourself, but your suppliers too
This is where it's worth returning to TPS fundamentals again — and going one step further than your own organization. Toyota never built its advantage in isolation from its suppliers. It developed them alongside itself, because the stability of the whole value chain depends on its weakest link, not its strongest.
Working together to eliminate waste at a supplier — not price pressure, but real support in building their capability — pays back in more stable deliveries, better incoming quality and fewer crises to firefight after the fact. It's a slower path than switching to a cheaper supplier. But it's the only path that builds an advantage resilient to "what if…?"
Author
Andrzej Smoleński — production and operations transformation manager, Lean Six Sigma Master Black Belt. More than 20 years of experience developing processes, teams and management systems.