Editor's note: Toyota Motor Sales U.S.A. CFO Tracey Doi will be a featured speaker at the CFO Rising West conference, September 21-23, 2009, in Las Vegas. For more information, click here.
The word "excess" isn't in CFO Tracey Doi's vocabulary. As the finance chief of Toyota Motor Sales U.S.A., she is tasked with keeping costs down for the sales, marketing, and distribution arm of the Japanese company.
But excess is what automakers had on their hands late last year as consumer demand severely declined and inventory levels rose — even at the world's number-one auto company. For the first time in decades, Toyota Motor Corp. reported an annual loss of 437 billion yen ($4.4 billion) for the fiscal year ended March 31, 2009, and it expects to also be in the red this fiscal year. The parent is expecting further reductions in fixed costs throughout the company in the months ahead.
Things are looking up a bit though, as dealers are still feeling rosy from the federal Cash for Clunkers program, which was especially helpful for Toyota sales. Nearly 20% of sales made under the project were Toyota vehicles — the largest share for any of the automakers. It helped give Doi's Toyota subsidiary a 10.5% bump in August sales compared with August of last year. Now Toyota is "ramping up production" again, says Doi, who joined the company nearly a decade ago. She previously held finance positions at AT&T Wireless, L.A. Cellular Telephone Co., and L.A. Gear.
At Toyota Motor Sales, Doi splits her duties between supporting her "internal customers" — the department heads — and the needs of her own department, the finance and administrative group. The group handles the corporate, finance, tax, and accounting for the U.S. sales and marketing operations for Toyota, Lexus, and Scion brands sold at 1,400 U.S. dealerships. She'll talk more about how Toyota has managed through challenging times at the CFO Rising West conference, which will be held September 21-23 in Las Vegas. An edited version of a recent interview with CFO.com follows.
Why has Toyota been able to avoid the same kind of fate as GM and Chrysler?
I'm not going to comment specifically about our competitors, but I can share what Toyota is focusing on. Obviously with the economic downturn, the auto industry overall has been hit very hard. If you were to compare 2007 to 2009, there's been about a 40% drop in the overall industry in just two years. Toyota wasn't immune to that.
We have taken advantage of the downturn to embrace our core values, one of which is continuous improvement. We've gotten everyone at Toyota involved in really cutting muda, or waste, and trying to look at everything that we're doing to become more efficient. It's not just us; our dealers are rightsizing their organizations under the umbrella of the global "emergency profit improvement" activities that Toyota has talked about publicly. We launched a companywide initiative here called GAME ON, which stands for gain advantage, maximize efficiencies, and overlook nothing. Our focus is staying true to our customers and developing the products they're looking for. I'm confident we're going to come out of this stronger. So we've got some work to do.
.gif)
- Tracey Doi, CFO, Toyota Motor Sales U.S.A.
How have you had to cut back in the finance department?
We've been on this journey for quite a while. I'm very much a student of the Toyota way and trying to evaluate how you take the practices that we have on the plant floor of identifying waste and moving that philosophy to finance and administrative functions. We do a lot of visualization of our processes end to end — a map if you will — and identify where there are opportunities to scrutinize and eliminate redundancies, and streamline our activities. That's been very helpful for us in increasing our efficiencies.
How is this process driven in the company? By each business leader, or does it start with the finance department?
It's not only a top-down effort. There are ideas that are coming from the top, and there are also ideas coming from the working floor. Some departments are doing it as a teambuilding activity with informal contests.
How does Toyota balance supply and demand, and what is your group's responsibility in communicating demand?
We have a production-planning process and distribution process that go hand-in-hand with the manufacturing arm, both in Japan and in the United States. One of our primary focuses is to provide the customers with the product that they're looking for and when they want it. It's not always easy, especially when there's such a significant downturn as the one in the last quarter of last year. Inventory built up all across the industry. We did a very good job of working together with the production-planning group to make quick adjustments in our production levels and get the inventory level back in line with customer demand.
Reader Comments» Post a comment