WEBINAR: On-demand webcast
Next-Generation Applications Require the Power and Performance of Next-Generation Workstations REGISTER >
Before there were record profits for the parent company, before the U.S. subsidiary laid claim to a 506 percent ROI from its business-intelligence rollout, even before Barbra Cooper, there was Bob Daly.
A 19-year veteran of Toyota U.S.A., Daly speaks with the polite impatience of a man with better things to do with his time. He was brought to company headquarters in Torrance, Calif., in 1996, from Washington, D.C., where he ran Toyota U.S.A.'s government-relations division.
His new job: to head up Toyota Logistic Services, a wholly owned subsidiary that manages the transport of vehicles from the factories in Japan and North America to the dealerships in the U.S. What he found when he arrived was nothing short of chaos.
"I discovered quickly that I could not ask the systems we had in place for information," says Daly, who today is a group vice president in charge of Toyota Customer Services.
"There were overlapping reporting systems, we couldn't be certain that any of the data was accurate, and nothing was giving me a good picture of what was going on. I couldn't get information while we were doing business. I was using way too much Quicken."
Daly came to TLS with virtually no knowledge of technology. But he had a keen business sense and a mandate to refine the division's efficiency.
The task of TLS is one of the most crucial in all of Toyota's U.S.-based operations. The job requires precision tracking and supply-chain management in order to ensure that the right cars get to the right dealers in a predictable and timely fashion. Toyota U.S.A. takes ownership of the vehicles from the moment they leave the factories until the moment they reach the dealersessentially purchasing the vehicles from its corporate parent in Japan and then reselling them to dealers across the country.
That means Toyota U.S.A. must carry a finance charge of about $8 a day per car until they can unload them on the dealers. Multiply that by about 2 million cars a year and an average delivery time of nine days, and it's easy to see how manually compiled Quicken spreadsheets and a lack of data integration were costing Toyota millions.
"If just one individual made a data entry mistake when a ship docked, the mistake would endure throughout the entire supply chain," Daly says.
"We had data that told us that ships had been sailing out on the water forever, and never made it to port. There was no way to catch such mistakes."
"The Financial Impact of Business AnalyticsAn IDC ROI Study"
"Global Growth Gives Toyota 29 percent Rise in Profit"
By Todd Zaun, The New York Times, Aug. 4, 2004
Kaizen: The Key to Japan's Competitive Success
By Masaaki Imai
Daly didn't know how to fix the problem, but he knew what he needed, and he communicated that to Cooper, who at the time had been on the job only a few months and was still learning the Toyota corporate culture.
"I think it was somewhat of a case of the business community almost in rebellion," says Cooper of her first year on the job.
"The IT organization didn't really know how to respond to the growing needs of the business, and I think they were getting frustrated and needed a change agent."
Cooper had been busy trying to identify the problems on her own, so when Daly approached her with a clear idea of what TLS needed, she moved on it quickly.
"Most of the departments were struggling to describe their problems at that point, but we had a few self-starters in TLS who were stepping out and trying to make some things happen."
Cooper set up a data warehouse from Red Brick for TLS that used BRIO tools to mine the data, while Daly identified seven key areas in which he needed real-time, accurate data. The first data entry was made in January 1997.
Daly thought he had the problem licked.
"At first we had a field day," he says. But he soon discovered that with all the new data, the information that was coming back was hit or miss, much of it miss.
"We had a lot of false positives," he says.
It turned out that years of human error had gone unchecked, so duplicated data and data points that were never entered into the system returned illogical analyses. It didn't help that the Red Brick data warehouse was unwieldy, and there were severe problems transferring files from the old system into the new warehouse.
Over the next two years, it became clear that the data warehouse was not working the way Daly had envisioned. Meanwhile, continuing his upward career trajectory, Daly himself was promoted out of TLS and into a different division entirely.