Overview of Management Information System

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

The business setting is characterized by intense competition. As a result, organizations have to provide clients with effective and dependable service. If they fail to do so, clients will transfer to more client efficient organizations. In addition, as organizations increase in size, it becomes more difficult to monitor the increasing level of client data. If an organization does a terrible job of managing and maintaining client accounts and information, it can lead to issues for both the organization and the client. This essay will concentrate on Toyota, and the way the company enhanced its customer service and minimized expenses by enhancing its management information system (MIS). References used involved business articles and websites with facts and discussion on Toyota.

Overview of Management Information System (MIS)

A management information system (MIS) pertains to a subcategory of the total inner controls of an organization encompassing the application of individuals, information, technologies, and processes by accountants to resolve business issues like putting a value on a commodity, service or a business plan. Management information systems are different from ordinary information systems in that they are utilized to study other information systems used in functional tasks in the company (Clarke, 2007). Academically, MIS is normally utilized to pertain to the cluster of information management processes connected to the automation or assistance of individual decision making.

At the beginning, in companies and other firms, internal documentation was done manually and only quarterly, as an output of the accounting system and with some extra figures, and provided limited and disrupted the data on management performance. In the past, information had to be isolated individually by the people as per the need and policy of the company (Laudon, 2007). Eventually, data and information was differentiated and rather than the gathering of mass of information, significant and accurate information that was needed by the company was the only one saved.

In their early years of existence, company computers were utilized for the logical business of calculating the payroll and monitoring the accounts payable and receivable. As programs were created that offered leaders with data regarding sales, stocks, and other information that would aid in controlling the company, the word "MIS" emerged to pertain to these types of companies (Cleland, 2006). At present, MIS is utilized widely in various subjects and involves: decision support systems, workforce control programs, project management and database storage programs.

The establishment and maintenance of information technology tools helps leaders and the employees in undertaking any activities connected to the analysis of data. MIS and business systems are particularly helpful in the gathering of business information and the generation of reports to be utilized as tools for making choices.

Company Overview

The Toyota Motor Company is one of the biggest car manufacturers in the globe. At present, it has sold approximately ten million of its vehicles on practically all countries all over the world. Established by Kiichiro Toyoda in 1937 and is based in Japan, Toyota is a force to reckon with in vehicle technology and innovation (Toyota Motor Corporation Global Site, 2010).

The Toyota Way is the organization's managerial perspective as suggested by experts. The primary thoughts are to establish managerial choices on an ideological objective, planning for the future, to have a procedure for addressing issues, to integrate value to the company by taking care of its employees, and to understand that consistently addressing the primary issues inspires corporate development (Liker, 2003).

Toyota's activities all over the world are also progressing in information systems also. In the first quarter of year 2001, Toyota Material Handling USA (TMHU), which is in charge for the whole sales and marketing activities for the company's industrial equipment products, turned into an independent organization after being a long time department of Toyota in America. The organization has become a marketable entity in offering lift trucks, and all of which are also produced within the country (Toyota Material Handling USA, 2010).

Toyota has a distinct business structure and the manner it pursues the vehicle manufacturing with its effective quality standards which developed the industry. Toyota's "just-in-time" supply-chain idea has turned into a standard for car companies all over the globe. The Toyota Production System (TPS) calls for the finished vehicle to be pulled through the production system (Ohno, 1988). This implies that the appropriate components arrive at the assembly line at the proper place and with no excess. This process symbolized a significant turning away from traditional production systems, which demand huge inventories in order to produce as many products as possible through assembly lines, and does not consider the true needs of clients. The concept of TPS, on the other hand, is to manufacture only the vehicles needed in the proper numbers targeted at a specific period. This establishes a 'pull' production process as compared to a 'push' process. By establishing manufacturing of cars on demand instead of just capability, Toyota is able to maintain stocks of both component and of assembled cars to a strict minimum. This is actually only one of the more evident benefits of Toyota's unique production process (Toyota Production System Global Site: TPS, 2010).

By concentrating on smaller manufacturing lots and generating only what clients need when they demand it, Toyota has established a versatility and responsiveness that keeps on becoming the guideline for the industry. Due to its concentration to consistent development, Toyota has obtained die-changeover and machine-set periods that are way ahead of its rivals. Therefore its capability for responding immediately to new market developments makes TPS an effective system in the present day\s quickly developing world business setting (Shingo, 1989). Toyota understands that it is necessary in guaranteeing quality management, and the provision of dependable products to clients.

The Dilemma of Toyota

TMHU confronted some problems concerning ineffectiveness connected with the current information system that was not particularly created for the industrial equipment industry. Majority of the important company clients desired to deal with TMHU through the Internet and the current system was not yet Internet ready. This circumstance forced the organization to create an individual website for every client, a logical and costly endeavor.

Acknowledging the necessity for necessary developments, Toyota leaders opted to utilize an external consulting company to assess management information systems and applied SAP based management information systems in 2003 (Lemke, 2009). Because of the effectiveness of these management information systems, TMHU was able to monitor every single car throughout its whole existence utilizing comprehensive automobile, warranty, and financial data. The management information system needed minor changes and produced beneficial outcomes that involved maximized effectiveness and improved decision making. One of the best advantages has been its minimized operating expenses. By transferring its clients to an online-based system, the organization has been able to save approximately $1 million annually in system expenses alone. The SAP based management information system has also minimized turn around periods from 48 hours to two hours and stabilized the linkages between clients and dealers.

The Toyota organization has always been a dominant force in developing car innovations. As its operations needed development, the SAP based management information system enabled THMU to cope up immediately. It was able to track changes done to vehicular specifications that enable it to better know client needs and guarantee that it had the proper attributes available.

Examples of MIS of Toyota

Hybrid Synergy Drive (HSD)

The Toyota HSD is an innovation to a traditional geared transmission with an electromechanical transmission. Since a car engine provides power effectively only over a limited range of speeds, the crankshaft of the engine is normally connected to a geared transmission by a clutch that enables the person driving to vary the speed that can be produced by the engine to the speed necessary to make the car move (Miller, 2004).

The mixture of excellent vehicle design, effective brake systems, electrical energy storage and effective engine design provide the HSD enabled vehicle with critical efficiency benefits. The intense rivalry in the automobile industry with huge penetration and exit expenses has resulted to Toyota in searching for a competitive advantage in their management information systems. As the car industry has been affected by huge fuel and crude oil expenses, Toyota has come up with a computerized engine system that tracks engine efficiency and makes power utilization in the car as productive as it can be.


If any issue emerges at any point of the manufacturing process, Toyota's error identification system, or "Jidoka", determines the problem and allows line workers to make the important measures to resolve it immediately even if that implies stopping the manufacturing process (Toyota Motor Corporation Global Site: Jidoka, 2010). By determining the equipment where the problem initially happened, this management information system makes it more comfortable to determine the cause of the issue and stops defects from developing to the succeeding phases of production (Dennis, 2007). Only a management information system as versatile and effective as Jidoka could undertake such activities economically possible. This management information system not only aids in removing waste, which makes it more friendly to the environment, it also implies that clients can be guaranteed that Toyota cars will adhere to the best standards of quality, dependability and innovation.

Jidoka can also utilize this raw information to make simulations - hypothetical situations that answer a variety of 'what if' inquiries concerning changes in strategy. It enables more effective decision making within the company than would be possible in the absence of MIS systems.

Toyota Comprehensive Warehouse Management System (Toyota WMS)

These management information systems offer effective management for warehouses of the whole procedure from the period products are obtained, to storage and location control, to shipment. Individuals, products, and data are addressed, wastes are removed, and everyday enhancements are advocated (Toyota Comprehensive Warehouse Management System, 2010). The Toyota WMS are tasked to offer an important function in generating comprehensive reports out of huge volumes of warehouse information that would otherwise be primarily considered as junk to decision makers. By analyzing these outputs warehouse management officers of Toyota can determine patterns and trends that would have stayed invisible if the raw information were consulted in manual terms.


This process makes use of management information systems for consistent development. Toyota consistently targets to improve its business procedures by discovering methods to remove out of the process (Hoseus, 2008). In the inclusion of management information systems, Toyota has entered into important partnerships to swap vehicle stocks utilizing online portals so their clients are not left in dead air for the car they wish to have.


Toyota utilizes management information systems that employ visual controls to immediately convey the status of production. On the production area, for instance, management information systems help inform a worker with a single glance whether the station is operating properly, whether there is something wrong being checked or whether the production has been halted. Management information systems also give critical data like which machine did not operate, the operator and the real time situations when it malfunctioned (Magee, 2007).


Toyota utilizes a variety of these affordable, highly dependable management information systems throughout its production process to stop defects. While computers of Toyota cannot establish business plans by themselves, they surely have helped the management in knowing the impacts of their plans, and aid in the process of effective decision-making (Morgan, 2006). The PokaYoke are tasked to convert information into data helpful for decision making.

MIS Strengths and Weaknesses of Toyota

The primary advantage of Toyota's management information systems is their capability to merge their corporate objectives all over the world by utilizing their systems properly. For instance, Toyota connects to its clients in various sectors by utilizing various Internet based web systems for various global regions (Hino, 2005). Even though there are numerous Internet sites and networks for each of the global continents, the management information systems all connect back to a global Internet site.

While the management information systems of Toyota are totally helpful in producing statistical documents and information analysis they are also utilized as a tool where the leaders and employees of the company agree upon a set of goals for the employees to try to accomplish within a specific time frame. Goals are established utilizing the SMART standard: that is, goals have to be Specific, Measurable, Attainable, Realistic and Time-Specific. The target of these goals is to offer a set of performance standards by which Toyota can compare the output of a worker or program. The effectiveness of any goal in Toyota relies upon the consistent monitoring of developments. In monitoring this performance it is tremendously helpful for Toyota to make use of its management information systems. Because all goals must be quantifiable they can be monitored through the establishment of management documents to be studied by the leaders of Toyota.

Not only do the MIS systems of Toyota enable the gathering of huge amounts of business information, but they also offer a significant time saving advantage to the employees (Fujimoto, 2001). Where in the past business data of Toyota had to be manually analyzed for documentation and analysis it can now be keyed in immediately and comfortably onto a computer by a data processor, enabling quicker decision making and more immediate reflexes for the company in its entirety.

Toyota has also established new areas for development through innovations made in their management information systems assigned for shipment. The company is functioning all over the world with clients and global leaders to enhance the process of shipment. To attain this, Toyota looked to analyze present shipment systems utilizing their clients as well as data from other organizations. Pursuing these enhancements to shipment systems was a tremendous development area for Toyota, since they were able to improve their client base and the needs of present clients. The usage of management information systems and networking were critical to aiding the company to attain success in enhancing its shipment systems.

A vulnerable area of Toyota's management information systems is the language obstacle that the Japanese based organization has with its global workers and clients. Sharing and utilizing data all over language barriers on the global setting poses a tremendous challenge to utilizing management information systems properly. Toyota primarily utilizes the English language globally but their organization is mainly situated in Japan and thus Japanese is still an important component of the usage of data.

One of the primary challenges of the establishment of Toyota's management information systems involves obstacles to data sharing among organizations. To further improve their management information systems, the company has to merge and share information with other organizations. In a competitive automobile industry, organizations are less likely to share knowledge and information with rivals. This represents a glaring weakness to Toyota since the development of management information system relies on the sharing of world data through the usage of systems and management information systems databases.


The MIS of Toyota has been proven to provide a great deal of advantages to its various business units. Toyota strives hard to keep discovering new methods to utilize their MIS to accomplish their business goals.

Each market dominant company will have a minimum of one major competency - that is, a task or operation they do better than their rivals. In the case of Toyota, by establishing a formidable management information system it became possible for the company to move ahead of its rival companies. The MIS systems of Toyota offer the tools essential to obtain a better knowledge of the market as well as an improved knowledge of the company itself.

The establishment of effective MIS in Toyota is the consequence of the implementation of an environment of system ownership. The owner is a system user who understands the present clients and their necessities and also has the capability to finance new programs. Establishing ownership builds confidence in corporate procedures and aids in guaranteeing responsibility. Even though the MIS of Toyota does not completely minimize costs, the establishment of important systems, and their effective usage, will reduce the chances that erratic choices will be done due to unreliable data. Erratic decisions practically waste precious assets. This may lead to a terrible effect on profit and/or capital. The MIS of Toyota satisfies the five factors of usability which are important factors to the company's immediate and future term preparation initiatives and objectives.

To attain effective MIS, Toyota's planning procedure involves taking into account the MIS needs at the strategic levels. For instance, at the strategic stage MIS systems and reports of Toyota helps the yearly operating scheme and budgetary procedures of the company. They are also utilized in support of the future strategic MIS and business preparation activities. Without the establishment of an efficient MIS, it will be difficult for Toyota to evaluate and check the effectiveness of new activities and the development of current programs. Two basic instances of this would be the handling of mergers and partnerships or the consistent progress and the integration of new products and services.