Toyota's Digital Transformation Journey: Enhancing the Customer Experience

Key Takeaways:

1. Toyota is enhancing the customer experience by addressing the challenges faced in configuring and purchasing their desired vehicle online.
2. Toyota is leveraging advanced technologies, including machine learning and AI, to improve supply chain visibility, inventory management, and customer-facing experiences.
3. The transformation involves modernizing Toyota's technology foundation, eliminating waste, and making data-driven decisions to drive continuous innovation and remain competitive.

Enhancing the Customer Experience

1. Challenges faced by customers:

   • Difficulty finding the exact vehicle configuration they want
   • Limited visibility into dealer inventory and availability
   • Compromises in what customers configure and what they can actually purchase

2. Toyota's Response:

   • Putting more focus on attainable inventory
   • Expanding the pipeline visibility of inventory beyond the dealer's physical lot
   • Enriching dealer tools and online customer tools with ML-based recommendations
   • Enhancing views with highly accurate ETA predictions

Behind the Scenes: Digital Backbone

1. Workforce and Employee Experience Transformation:

   • Moving away from complex Excel workbooks and tribal knowledge
   • Equipping product planning teams with ML-based forecasting tools
   • Strengthening the resilience of the value chain through scenario planning and AI-powered decision-making

2. Modernizing the Technology Foundation:

   • Methodically modernizing legacy systems
   • Eliminating waste (muda) through the adoption of new technologies
   • Leveraging technologies like GNI and graph databases to enable faster and more precise data-driven decisions

Digital Platform and Supply Chain Symphony

1. Integrating Demand Forecasting and Demand Fulfillment:

   • Demand forecasting products
   • Demand fulfillment and supply-demand matching engines

2. Intelligent Fulfillment Engine:

   • Matching customer configurations to available inventory and virtual pipeline
   • Providing information on percentage match, ETA, pricing, and leasing options

3. Order Recommendation Engine:

   • Generating unconstrained demand forecasts based on customer and dealer signals
   • Feeding into the Scheduling Optimization Engine

4. Scheduling Optimization Engine:

   • Incorporating supplier constraints and disruption information
   • Optimizing the production mix to deliver on-time and in-full for customers

5. Digital Data Thread:

   • Providing seamless connectivity across the supply chain
   • Enabling modernization of underlying legacy systems

Impact of the Transformation

1. Improved sales margins and increased R&D investments
2. Higher resilience to supply chain disruptions
3. Happier customers with the right car at the right time and price