Meeting exact customer requirements with the minimum amount of resources.
Apparent Efficiency vs. True Efficiency
Taiichi Ohno illustrated the common confusion between apparent efficiency and true efficiency with an example of 10 people producing 100 units daily. If improvements to the process boost output to 120 units daily, there is an apparent 20 percent gain in efficiency. But this is true only if demand also increases by 20 percent. If demand remains stable at 100 the only way to increase the efficiency of the process is to figure out how to produce the same number of units with less effort and capital. (Ohno 1988, p. 61.)
Total Efficiency vs. Local Efficiency
Toyota also commonly distinguishes between total efficiency, involving the performance of an entire production process or value stream, and local efficiency, involving the performance of one point or step within a production process or value stream. It emphasizes achieving efficiency in the former over the latter.