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!).