Question for the Opening Vignette
1. In what ways did the old information systems create problems for Toyota?
Managers were unable to use such data and reports strategically. Furthermore, internal departments regularly failed to share information, or they did it too slowly. Actionable reports were often produced too late. In addition, overlapping reporting systems provided data that were not always accurate. Managers were unable to make timely decision because they were not certain what portion of the data was accurate.
2. What information needs of managers are satisfied by the new BI system? What decisions are satisfied by the BI support?
A system is therefore set up to provide real-time, accurate data. The new TLS system used Oracle’s data warehouse and Hyperion’s business intelligence platform. The system also included Hyperion’s dashboard feature, which allows executives to visually see hot spots in their business units and investigate further to identify problems and their causes.
With the new TLS system, which uses color meaningfully (e.g., red for danger), a business manager can see in real-time, for example, when delivery times are slowing and can immediately find the sources of the problems and even evaluate potential solutions by using “what-if” analysis.
3. Relate the TLS problem to the supply chain (from factories, to dealers, to consumers).
Toyota U.S.A. takes ownership of the vehicles from the moment they leave the factories until the moment they reach the dealers—essentially purchasing the vehicles from its corporate parent in Japan and then reselling them to dealers across the country.
TLS require precision tracking and supply-chain management to ensure that the right cars go to the right dealers in a timely manner. Manual scheduling and the other related business processes that were conducted with incorrect information caused additional problems. For example, if one individual made a data entry mistake when a ship docked, the mistake would endure throughout the entire supply chain. (For example, some data indicates to managers that ship never made it to a port week after the ships had safely docked).
4. List the decision support tools cited here.
1. Oracle’s data warehouse
2. Hyperion’s BI platform included Hyperion’s dashboard feature.
5. What strategic advantage can Toyota derive from this system?
- The system helps managers discover that Toyota was getting billed twice for a specific rail shipment (an $800,000 error).
- Managed to increase the volume of cars it handled by 40 percent between 2001 and 2005, increasing head count by just 3 percent. In addition, in-transit time was reduced by more that 5 percent.
- The parent company, Toyota Motor Corporation, reached the highest profit margin in the automotives industry in 2003. Also, Toyota’s market share has increased consistently.
- Toyota achieved a 506 percent return on its BI investment. The median return on investment [ROI] for the 43 other Fortune 500 companies that participated in the study was 112 percent.
6. Relate Toyota’s decision to make consumer-helping robots to the changing business environment.
In the midst of such major societal fluctuation as an aging society with a low birth rate and changes in population dynamics, the need for robot development is rising. With the philosophy of contributing to the world, and to its people by enriching society through manufacturing. Toyota marries cutting-edge technology from various disciplines including the automotive and IT industries in development of partner robots with the goal of practical use at an early stage in the decade after 2010.