Spreading the Wealth

Spreading the Wealth

Word of the success quickly spread throughout Toyota U.S.A., and it wasn't long before Bob Daly came back to Burkes wanting a demonstration of the new and improved technology.

Daly now heads up Toyota customer services, which includes call- center operations, accessory and part centers, and dealer relationships, and he wanted to see how the revolution he had initiated in TLS could help him in his new position, but with entirely different data.

Burkes came to Daly's office, set up some dashboards, and in two minutes had Daly up and running.

"I was sweating," recalls Burkes. "But when I was done, he stood up out of his chair and clapped. It would have taken me two weeks to get that information in the past, but now he can do it himself in six seconds."

As with any new project, there is still resistance in some quarters. Burkes is actively trying to get the CFO her own dashboard, but he admits that "not all of management is comfortable with the technology."

For one thing, the dashboard can be so detailed that it can send managers to the brink of obsession, distraction and micromanagement. The temptation to ruthlessly scrutinize every transaction is difficult to resist.

Cooper herself admits to taking the bait: She had a dashboard set up so that she could better manage expenses throughout the IT department. The first day it was set up, Cooper took a hard look at employee purchases of office supplies at Staples. She even reviewed the purchase of a coffee machine that she thought was a bit pricey.

"I thought it would drive me crazy, because I'm always going to find some margin of error."

The other problem is that it is resource intensive.

The amount of data the company is collecting on an hourly basis boggles the mind. Moving millions of cars on a yearly basis, adding on accessories and shipping parts to dealers is a logistical nightmare.

"It's a huge issue with a manufacturer the size of Toyota," says Mike Walls, an automobile industry analyst at research firm CSM Worldwide.

"Take the combination of overseas manufacturing and domestic manufacturing, compound that with port-installed accessories and dealer offers—it's a monumental task."

All of that data can eat up a lot of compute cycles. Daly, a staunch perfectionist, still complains that the dashboard doesn't load quickly enough on his laptop.

Eventually, says Cooper, the company hopes to push the technology out to the myriad managers who work throughout the company to help them manage more efficiently. And it is working—more than 2,500 employees, ranging from mid-level managers to C-level executives, are using the tools.

The belief in the IT department is that the more people who engage the data-analysis tools, the more money Toyota will earn.

"A good portion of Toyota's profitability comes from driving costs out of the business," says Walls. "They are adamant about it. And these guys are printing money."

Toyota's revenues for 2003 were $132 billion, as opposed to General Motors' $184 billion.

But Toyota's profits dwarfed their bigger competitor. The company earned $13.6 billion to GM's $2.8 billion. For the quarter ended June 30, Toyota earned more than Ford and GM combined.

After reporting the record quarterly earnings, Toyota's management didn't waste time congratulating themselves.

"The sense of crisis we feel, despite increasing sales and profits, stems from the fear that we have not kept up," said Toyota Motor Corp. President Fujio Cho.

It's all part of Toyota's corporate culture, says Cooper, who struggles at times with the company's obsession with kaizen—the Japanese business philosophy that demands obsessive cost control and relentless micromanagement.

"You cannot get headcount out of this company, you just can't," she laments.

"They limit headcount intentionally to grind the inefficiencies out of the business. So if we don't have that type of aggressiveness in using this technology, we're not going to get there."

Of course, technology will only get you so far. While the business performance software should be helping Toyota to better anticipate the needs of its customers, it's still not going to help you get a Prius any faster.

"There was a general underestimation of how fast hybrid cars would go out to the mainstream buyer," Cooper says of the interminable backlogs to buy the Prius.

"But we are getting production, and I'm telling you, it's worth the wait. Don't buy a Honda hybrid."

This article was originally published on 10-01-2004
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