Toyota's Vehicle Order Management System

Toyota Motor Corporation

Toyota is a multinational company known as the world’s largest and best auto maker and Toyota employs approximately 320,808 people worldwide. Toyota is headquartered in Tokyo city of Japan. In addition manufacturing automobiles to, Toyota provides financial services through its division Toyota Financial Services and also builds robots. Toyota Motor Corporation (including Toyota Financial Services) and Toyota Industries form the bulk of the Toyota Group. Toyota owns and operates Lexus and Scion brands and has a majority of shareholdings in of Daihatsu and Hino Motors, and minority shareholdings in Fuji Heavy Industries, Isuzu Motors, Yamaha Motors, and Mitsubishi Aircraft Corporation. The company has all around 522 subsidiaries.

Toyota has selling over 9 million vehicles in year 2006. The quality and reliability of Toyota vehicles are very good and Toyota holds the gold standard of vehicle quality and reliability in the industry. Hence Toyota has made a very good image about the company and Toyota holds very high rate of customer loyalty. Toyota has become the leader of the auto maker of the industry because it has been so skillful at combining quality of the product with efficiency. One main reason for Toyota’s success is its famous Toyota Production System, which based on lean production- eliminating waste while optimizing value. Toyota always mainly aims some principles like just-in-time-delivery, quality, and continuous improvement on their business processes in information systems.

Toyota Motor Europe and other Toyota divisions around the world use information systems to help their business processes. When they product vehicles they use actual customer orders, so the company only products cars that customer demands.

Toyota considers IT as an important and compulsive tool. As Ludo Vandervelden, vice president of Finance and Accounting, Information Systems, and Vehicle Logistics for Toyota Motor Europe says, “You cannot deal with the complexity or the number of product models that we have on the European market—with so many different spec codes and different pricing levels without having an appropriate IT system”.

Vehicle Order Management System

Toyota Motor Europe uses this vehicle order management system which based on Oracle E-Business Suite software. Toyota Motor Europe uses this vehicle order management system to reduce the time that it takes between placing a customer order for a vehicle and delivering the vehicle to the customer. This software integrates with Toyota company’s existing systems so easily. And they also sought to reduce errors resulting from inaccurate creation of data in the planning or ordering processes by using this system.

Toyota Motor Europe's Oracle-based vehicle order management system encompasses several business processes. It all starts with the customer selecting a car and various options, such as tinted windows, air conditioning, and a navigation system. The dealer uses the system to configure a car with all of the selected options by customer in front of the customer, prices the car and options, and locates the best available car and options in the Toyota supply chain, including vehicle scheduled for future production. Then the dealer uses the system to place the order through the national distributors. The national distributor is who consolidate the order with those of their other retailers and, in turn, place an order through Toyota Motor Europe. Toyota Motor Europe consolidates orders from the national distributors and places an order with Toyota factories. The national distributors can also manage their supply chain against the orders of different dealers. For example, "swap” cars with their various retailers.

Then each car is shipped and invoiced from the factory to headquarters, headquarters to national distributors, and national distributors to retailers. And all accounting processes are automatically triggered at each step. This system also tracks the car and its history, throughout the entire lifecycle. And, it supports the monthly planning and forecasting cycle.

Advantages of using Vehicle Order Management System

Main advantages of using vehicle order management system reduce the time it took between placing a customer order and delivering the vehicle to that customer and Toyota was able to reduce production time and cost of maintaining materials and finished cars in inventory by using the vehicle order system. Through vehicle order management system Toyota was able to provide the customer actual product of what he demands. This increased the customer service and satisfaction (helped to have a high rate of customer loyalty). So dealers do not have to pay for making and storing vehicles that customer did not want. Information provided by the system helps management monitor trends and forecast demand and production requirements more accurately. And finally it helped to reduce errors resulting from inaccurate creation of data in the planning or ordering processes and overcome a big risk of ending up with a yard full of vehicles for which you have no customers with having an inaccurate planning or ordering process.

References:

1. Toyota from http://en.wikipedia.org/wiki/Toyota
2. “Ready to Roll” by Katheryn Potterf from http://www.oracle.com/oramag/profit/06-may/p26vander.html
3. Kenneth C. Laudon, Jane P. Laudon (2007). Management Information Systems: Managing the Digital Firm.10th ed, India: Dorling Kidersley Pvt.Ltd.
4. Oracle is the Information Company from http://www.oracle.com.au/ocom/groups/public/@ocompublic/documents/webcontent/018916.pdf