An Evaluation of Toyota Motor Company

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An Evaluation of Toyota Motor Company (TMC) Information Systems May 23, 2007 by Ryan Norris   in AssociatedContent.com

The Toyota Motor Company is one of the largest automobile manufacturers in the world. To date, it has sold more than 8.8 million of its many makes and models of automobiles on five different continents around the globe. Founded in 1937 by Kiichiro Toyoda and headquartered in Toyota, Aichi, Japan, Toyota is a global leader in automotive technology and development. The company also makes trucks, buses, forklifts, and other industrial equipment.

Toyota also boasts a strong presence in North America. In the continental United States, there are five major assembly plants located in Huntsville, Alabama; Georgetown, Kentucky; Princeton, Indiana; San Antonio, Texas; and Buffalo, West Virginia. Early Japanese imports like Toyota's Toyopet were initially unpopular in the United States because of their smaller size, but with the energy crisis of the 1970s, Americans began to look to imported cars for their lower price and better fuel efficiency1. Today, rising gasoline prices coupled with concerns about global warming and the environment have prompted Toyota to design even more fuel-efficient vehicles. The company's marketing campaign, "Moving Forward," signals just that. Its current offerings include Camry and Highlander Hybrids and the Prius, which is also a popular gasoline-electric mid-size model2.

Toyota's global operations are also moving forward in information systems technologies as well. In April 2001, Toyota Material Handling USA (TMHU), which is responsible for all aspects of sales and marketing for Toyota's industrial equipment line, became a stand-alone company after many years as a division of Toyota Motor Sales USA. The company is a top seller of industrial lift trucks in the United States and 99 percent of its lift trucks sold in the country are also manufactured domestically in North America3. TMHU faced challenges of inefficiencies associated with the existing information system that was not specifically designed for the industrial equipment business. Many of the large corporate customers wanted to work with TMHU online and the present system was not web-enabled. The situation implored the company to build an individual site for each customer, a timely and expensive project.

Recognizing the need for change, Toyota executives chose to use a third-party consulting firm to evaluate software systems and implemented SAP software based on its recommendation in 2003. Thanks to the industry-specific software, TMHU can track each individual vehicle throughout its entire life using integrated vehicle, warranty, and financial information. The preconfigured software required little modification and has yielded significant results that include increased efficiency and better decision making. One of the biggest benefits has been its reduced operating costs. According to the SAP article online, by moving its dealers to an Internet-based network, the company has been able to save about $1 million a year in network costs alone. The SAP platform has also reduced turn around times from two days to two hours and strengthened the relationships between customers and dealers4.

Historically, the Toyota Company has been a leader in emerging technologies. As its business needs change, the SAP software will allow THMU in particular to evolve and adapt quickly. It can monitor changes made to product specifications that allow it to better understand customer demand and ensure that it has the right components and offering available (Toyota Material, 2004).

The information systems for the Toyota Motor Company (TMC) can clearly be evaluated by using SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). The biggest strength of Toyota's information systems is their ability to integrate their company goals globally by using their systems effectively. For example, Toyota reaches its customers in different...
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