Toyota has avoided layoffs or major labor disputes for more than half a century while maintaining an industry edge in cross-training line workers to build multiple cars on the same assembly lines. Inside Toyota's sprawling Tsutsumi plant here -- one of two in Japan that make the Prius -- workers produce seven models on two assembly lines, changing tasks every two hours.

The relentless push for efficiency often takes shape in small ways. Two years ago, the company came up with a new process in which parts for specific models were presorted into blue boxes that travel down the line as each car is assembled. Though low-tech and inexpensive to put into effect, it significantly sped up the product line and saved space by doing away with the need for workers to seek out different auto parts from storage bins. It was one of roughly 600,000 small improvements Toyota makes annually.

"Toyota is the Tiger Woods of flexibility and efficiency; they've got everybody a few strokes behind," said Ron Harbour, head of Harbour Consulting, publishers of an annual auto industry productivity report. "Often, it's nothing that makes you sit back and go 'wow.' They're little things, thousands of little things that add up to a huge advantage."

In this city, which was built on Toyota's success -- and remains its single largest production center in the world -- its five factories are located within 50 miles of most of the company's parts suppliers. That has reduced transportation costs and improved efficiency by allowing Toyota to place smaller orders for parts needed to fill existing orders. ... It helps the company keep inventories to an absolute minimum.

It helps the company keep inventories to an absolute minimum. That is particularly true in Japan, Toyota's single largest market. Car buyers here generally do not visit vast dealerships with hundreds of vehicles on the lot. Instead, Japanese consumers enter small, stylish showrooms and place custom orders -- allowing Toyota and other Japanese automakers to more accurately build what they know they can sell.