Toyota: A Tough Tech Customer

By Mel Duvall  |  Posted 2006-09-05 Print this article Print

Vendors and suppliers agree: Toyota can be a difficult, challenging and uncompromising business partner.

Kelly Thomas will never forget his first face-to-face meeting with Toyota's senior officials.

It was 1999, and the head of the automotive division of i2 Technologies had been invited to Nagoya, Japan, to perform some consulting work around the area of production planning. He met privately with the project lead and spent two hours discussing lines of communication and responsibilities.

"I thought we were done," he recalls. But instead, the project lead took Thomas into a boardroom with other Toyota executives, where they spent another six hours discussing responsibilities and mapping out, on a whiteboard, lines of communication between i2 and Toyota officials. "I remember thinking at the time, 'This is going to be painful,'" Thomas says, referring to the fact that if Toyota was this thorough about setting out lines of communication, it was probably going to go over every other aspect of the project in minute detail.

Technology vendors and suppliers to Toyota all seem to agree on one point: The automotive company can be a difficult, challenging and uncompromising partner. Difficult in the sense that it is very meticulous in the way it implements new technology, spending much longer than most organizations evaluating systems before coming to a decision. And challenging in that it demands that the software or technology be flexible and adapt, often by customizing the code, to its business processes, and not the other way around.

But they also agree on two other points: The planning Toyota insists upon and its careful, well-thought-out implementation strategies are a big factor in its success; and the knowledge to be gained by working with Toyota and the prestige of having it as a customer are well worth the pain.

"In any large project, there are going to be peaks and valleys," Thomas says. "With other companies, when you enter the valleys, there tends to be a lot of finger-pointing. But that was never the case with Toyota. As it turned out, a lot of that initial planning—mapping out lines of communication and responsibilities—kept the project together and running smoothly."

The consulting project with i2, in fact, led to an even larger prize: Toyota implemented i2's Demand Planner software in its North American operations to predict demand and set inventory levels for more than 100,000 service parts and accessories.

Activplant, which supplied Toyota with software and systems to monitor its plant machinery, says getting into Toyota can be a long, challenging road. Activplant began negotiating with Toyota in late 2001 to test its software in a small pilot. It took 12 months to iron out the details and deploy the pilot; then Toyota spent another 12 months evaluating the results. Eventually, the automaker agreed to deploy in a single facility, and as it became further convinced of the software's merits, it expanded to other plants. Today, Activplant is deployed in five facilities, including the Georgetown, Ky., assembly plant where it monitors some 3,500 machines and robots.

"Toyota takes a very methodical approach to analysis and selection of software and technology," says Activplant chief executive Ted Williams. "They don't overreact . . . they have a philosophy of making decisions slowly, through consensus."

Toyota admits it can be a difficult company to work with, but it makes no apologies.

"We know that at times it can be a very frustrating experience for companies who aren't used to working with us," says Millie Marshall, vice president of information systems for Toyota Manufacturing North America. "But we like to think we give back a lot to our vendors. We try to grow with our vendors, and teach them our methods for problem solving and how Toyota does business."

Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.


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