Toyota's Business Intelligence: Oh! What a Feeling

Toyota's business-intelligence system mirrors the company's corporate culture, or, kaizen—the Japanese business philosophy that demands obsessive cost control and relentless micromanagement. Read how it's paying off.
Just ten years ago, Toyota Motor Sales U.S.A. was suffering under the weight of a hopelessly backward IT infrastructure.

The U.S. distributor of cars and trucks built by Toyota Motor Corp., the Aichi, Japan-based pioneer of hybrid vehicles and cars that can run forever—the very model of efficiency and technological innovation—found itself awash in directionless data.

With little or no distributed computing in most departments, Toyota U.S.A. was generating sales and market data at a frightening rate, but it had no way to use the information strategically.

Stuck in a mainframe malaise, internal departments regularly failed to share information, and, by the time they did generate so-called "actionable" reports, it was often already too late.

In 1996, Toyota decided to do something about it.

The company hired Barbra Cooper, a serial CIO with two top tech posts already to her credit, to head up its IT department. What Cooper brought with her, besides her impressive resume, was a willingness to listen to her internal user community, and, in particular, to the company's business executives.

The painful evolution in Toyota's data-management strategy that followed was guided by Cooper but driven by the business side, and the results have been impressive.

Toyota U.S.A. has managed to increase the volume of cars it handles by 40 percent over the past eight years while increasing head count by just 3 percent.

That's helped parent Toyota Motor Corp. reach the highest profit margins in the automobile industry, and its stock is a perennial performer.

This article was originally published on 10-01-2004
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