Toyota's Recall: Leveraging IT

I was looking through news articles online for this blog entry, and I kept coming across news stories about Toyota’s massive recall. The one thing that I’ve really noticed in this developing story is the Toyota’s IT infrastructure seems to be incredibly strong. First I want to make two things clear: I’m not talking about this manufacturing/design defect specifically, but I am referring to Toyota’s ability to implement a change. Additionally, I think this is would be a much more massive problem for most automakers. In fact, I’ve worked in motorcycle dealerships in the past and noticed the general lack of IT support beyond the manufacturing stage of the supply chain.

I think the part of this story that really surprises me is Toyota’s responsiveness to the problem. After all, we are talking about a defect that affects eight of the most popular vehicle models sold my America’s second largest auto manufacturer by volume. I think most people look at Toyota’s move to halt sales and production of these models as a sign of weakness. From my past experience however, I think its complete remarkable that any manufacturer has the ability to cease its normal operations on such a massive scale and implement a change so abruptly. I recall several recalls on motorcycles in the past which were immensely more chaotic and far less organized. In fact, defects which had resulted in several deaths would take years to correct as manufacturers and dealers have minimal IT systems which could facilitate such recall. The usual recall routine involved the manufacturer sending each dealer a few of the replacement parts or “recall kits”. As customers would bring their vehicles in for repair, the dealership would literally have to fax paperwork to the manufacturer which showed that the dealership had performed the repairs, and the manufacturer would then send more kits.

In Toyota’s situation however, that is simply not the case. Toyota has in incredibly detailed and strong IT network with each of its dealers. This system allows Toyota to allocate recall kits to its dealers based on the geographic location of each of its customers. Toyota can then send each customer to the nearest dealer. Additionally, Toyota’s manufacturing facilities are also implementing advanced IT systems. In fact, Toyota’s new Texas assembly plant can stop production of any of its entire line of vehicles at any given time, and begin manufacturing any of its other vehicles in the same factory within twenty-four hours. Obviously, Toyota has a similar system for producing parts as this recall is being accomplished incredibly quickly given its scope and size.

In all, I really have to say that I’m astonished at the advancements Toyota has made in being able to utilize information technology to mitigate this problem so effectively. It really makes me realize how primitive the IT systems were which facilitate recalls in other industries (especially the motorcycle industry!).

Communication at Work

In my work at the MD Small Business Development Center, I recall that there were countless challenges I faced in helping entrepreneurs achieve their goals. When it comes to about issues regarding communication however, I always think about my team of undergraduate interns. At the MD SBDC, senior staff members always relied heavily on the help of undergraduates for the majority of day-to-day tasks. In fact, this is where I started; as an undergraduate intern responsible for various tasks in the office. After graduating from college, I decided to continue working for the MD SBDC as a Junior Counselor. One of my new responsibilities in this position would be to manage a team of three undergraduate interns.

What a nightmare! As soon as I started in my new position, I immediately realized why my supervisor wanted me to manage the undergrad interns. Communication was horrible! In the first two or three weeks, I would only communicate with my interns when they were in the office (usually two or three days per week). Other than that, they would never answer their phones or return voicemails, and they rarely returned emails.

I quickly realized what was going on. The first part of the problem was that the interns felt no obligation to communicate after office hours. This is because each intern was only required to work 150 hours for the entire semester as required by their classes. Basically, once each one reached 10 hours for the week, they would completely put the internship on the backburner. This was a major problem because the interns would inevitably delay others by being unreachable. Additionally, senior staff members didn’t have the time or resources to babysit the interns. As a result, the interns were usually given extremely menial tasks; far more simplistic than what they were capable of accomplishing.

At any rate, my first task as a Junior Counselor was really to ‘babysit’ the interns by making sure they were always doing what they were supposed to be doing. I decided to take a slightly different route by introducing a new communication system. I came up with a simple reporting form for the interns. It simply was a way for each intern to record what he or she had accomplished that day, which clients they helped and how, and what they needed to do next. The genius part of this form was that I made it part of the interns’ final reporting system on which their grades depended.

Once instituted, the change was immediately apparent. There was no longer the familiar question of “What are the interns doing… are they actually working today?”. This simple change really facilitated more effective communication throughout the office. We were able to avoid redundancy, work more efficiently, and actually put undergrad interns to work on more challenging and significant tasks.