Executive Perspectives Part 2 – Toyota Streamlines Business with Cisco
Check out this part 2 of our Executive Perspectives series. Here we follow on from Part One: Executive Perspectives and AkzoNobel – Manufacturing Industry CIO/CXO Special – Part 1, and look at how one of Cisco’s customers in the automotive industry has partnered to gain real business benefits.
Following the economic turbulence of the “Great Recession,” Toyota felt the need to improve its revenue structures. These earnings are directly linked to advanced work performed by knowledge workers in areas such as research and development on new cars, production, and sales. Toyota also wanted to shorten its product time-to-market to maintain its competitive market lead. The firm turned to the Cisco Internet Business Solutions Group (IBSG) to help Toyota determine where improvements could be made and how to implement them.
Internet Business Solutions Group (IBSG)
Cisco IBSG proposed analyzing knowledge-worker productivity based on which activities directly benefited customers, and reviewed operations from a zero-based perspective.
“I was searching for a way to stop our business from becoming too bloated . . . . I had tried a variety of measures to try to reduce operational waste, but I wasn’t really pleased with the results. Then we had the good luck to learn about Cisco IBSG’s advanced way of thinking and the practical solutions they champion. Their approach to decreasing operational waste was clearly understood by everyone.”
Kazuo Okamoto, Vice Chairman, Board Member, Toyota Motor Corporation
Toyota was founded in 1933, and is operated along traditional lines. It is renowned for its “A3” practice of using a single sheet of A3-size paper for proposals or reports—a practice that kept such documents concise and to the point. While Toyota is also respected for its dedication to the principles of Kaizen, or continuous improvement, a significant area of waste was discovered in knowledge-worker processes (non-factory-related processes that take place among workers with specialized knowledge).
The types of unproductive work varied widely, from preparation of internal reports, researching information, and moving from place to place for meetings—to simply waiting for responses from others. Eliminating all processes that did not directly add value to the end customer was clearly not possible, so each task had to be carefully analyzed and a decision made about how to eliminate, streamline, or digitize it.
So how did Cisco help overcome the challenges?
Well, you can read all about the solution to the challenges here. But let’s cut to the chase and tell you what was achieved (read the Executive Perspectives story at the Special Manufacturing Industry Executive Perspectives site by clicking here.)
The initial phase of the project yielded a 15 percent increase in knowledge-worker productivity, largely from business-process and cultural transformation that eliminated unnecessary tasks (such as document preparation, short trips for meetings, and redundant processes), and from improved communications and collaboration. The subsequent productivity improvement program (virtualizing meetings) boosted this gain to 18 percent.
Toyota and Cisco IBSG believe that an 18 percent gain in productivity is just the beginning, anticipating far greater productivity enhancements in the future as workers adjust to the cultural and technological transformations taking place. As the company’s culture has been integrated with advanced IT, including information-sharing and collaboration tools, it is anticipated that knowledge-worker processes will be enhanced still further as the company expands the productivity initiative across all technology fields and moves away from traditional, paper-based processes.
Do you have these challenges? How are you solving them? Let me know!