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12/15/2014

Application of MIS in HONDA

[Document subtitle]

Presented by – Pragnya Sahoo Course Name – BB7579 - Strategic Information Systems ManagementStudent ID – K1359395 Word count -2924Date of Submission -15th December 2014

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Table of Contents

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Management Information Systems

Executive Summary

This report evaluates the information system in Honda along with its various business processes. Honda being among the top companies in Automobile industries uses information technology to drive its business from internal and also external aspects. It has been using IT for various business processes .From innovation to research and developemet, It as played a vital role in the company. Even though IT systems have an impact on the improvement in the various hardware components for storing data, still the “fact gap” lies in the Honda to fetch the right information at the right time with the right cost for effective and efficient business process.

This report then explains the application of Management Information System(MIS) in various departments of Honda like manufacturing , production, information management , resources management and data collection. It discusses the different types of MIS that can be installed and which leads the company to achieve its prime objectives.

A ground research on Honda Motor Cycle and Scooter plant was carried out to understand the business process involved and also the over functioning of the company. Further information was added by the assistant manager (AM) of Honda plant, Manesar, Gurgaon, India who helped me understand the functioning of the various departments and the stakeholders. The Head of the departmemt, Mr sudhanshu Maharana provided me with the information about the IT department of the company . It also explained the various IS and IT systems that are currently operating in the company.

The paper discusses various frameworks to implement the idea of MIS .It reflects the benefits of using the technology with the present IT systems in the company .Its highlights the various types of information at various management level that are useful for smooth functionaing of the business process. An example of MIS implementation in the organization is also explained with the required diagrams.

It further analyses employees, vendors, shareholders and customers as the stakeholders of the company and details out its tangible and intangible benefits.

Finally the report delivers the potential recommendation for implementing MIS in Honda and summarizes its importance in the conclusion.

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Introduction

Information Technology (IT ) has become the backbone of every business plan. From huge multinational corporations to small business units, IT has made its presence everywhere.The increasing growth of Information technology has tremendous impact in automobile industries which has taken it to another level of innovation , automation and creativity. It has been more than a decade that the IT systems have been reflecting the cutting edge technology of products and services offered by automobile industries.According to D&M IS Success Model,’’ The semantic level is the success of the information in conveying the intended meaning. The effectiveness level is the effect of the information on the receiver. In the D&M IS Success Model, “systems quality” measures technical success; “information quality” measures semantic success; and “use, user satisfaction, individual impacts,” and “organizational impacts” measure effectiveness success.’’

Management Information System or MIS, is broadly defined as a computer-based information system that helps the management to plan, forecast and organize operations in an organization. It is also defined as an integrated system which provides information support for operations and efficient decision making. Accoridng to Bidgoli(2010),’’It acts as a subset of the entire internal control processes which consists of the documents, applications, technologies and processes that are used by management for collecting and analysing data’’ . ‘’Rationally, MIS is used for referring the group of information management techniques applied together for the support of decision making process in a business which is Expert Systems, Executive Information Systems and Decision Support systems (Lucey, 2005).’’ The figure 1.1 displays a brief understanding of MIS.

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Figure1.1 Definition of MIS

The characteristics of MIS are considered as essential factors for the efficient implementation of MIS which is to report with fixed and standard information; to have reports developed and implemented using information system. In addition, external data are used by the MIS while it is not captured by the organisation (Asemi, Safari & Zavareh, 2011)..

Honda - Joy of manufacturing:

Honda motor co.ltd is a Japanese public multinational corporation which belongs to the top listed companies in the automobile industry. Primarily known as a manufacturer of motorcycles, automobiles and power equipment. It is the largest manufacturers of motorcycles and produces more than 14 million internal combustion engine every year.

With its expansion in business, Honda also generated huge amount of data which had to be stored and processed. This data was very essential and informative which was used among various internal departments in the organization. For Honda, getting the right information at the right time is the need of the hour which helps in wise and quick decision making thereby enhancing the productivity, reducing cost and maximizing profits. Honda has an information system which enables the employees at various level to access the information. Honda’s hardware pattern is the basic element for driving employee’s connectivity and collaboration. (Bocji, 2005)

According to Tom Smith, co-founder of data research firm oxford consultants for Social Institution, ‘‘Part of the power of data lies in combining multiple sources-open data, internal data and data held by the customers, partner organizations and vendors to help target services.’’ A model of information management system is shown in figure 1.2.

Figure 1.2 Model of Information System in Honda

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MIS provides Honda with the right kind of information system to achieve its objectives and maintain proficient business. It will help the Honda management to administer the complexity and elaborateness of the supply chain, internal control and manufacturing along with meeting the market’s demands. MIS provides information in effective decision making which is a prime need of the hour for Honda.

Earl’s Multiple MethodologyAccording to Michael Earl (1989), IT provides many new business opportunities by improving the productivity and performance of the services and products, and developing new business and offering a competitive advantage to the companies; Management Information System has the capability of enhancing the information flow between various departments in an organization thereby delivering better business processes to achieve its objectives. Figure 1.3 illustrates the three approaches that the company needs to apply to this methodology to the Management Information System (MIS).

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Figure 1.3 Earl’s methodology

MIS Application in HONDA

The MIS application is across various processes and departments which generates better productivity and profit. The figure 1.4 shows an overall application of MIS in Honda.

Figure1.4 MIS Application

The following are the MIS application in Honda:

DATA COLLECTION: Honda follows a traditional methods of storing and managing data in hardcopies and files which are not only consumes space but also it’s a troublesome to manage them. MIS provides a data processor which not only stores data but also processes them into useful information which can be further used effectively.

INFORMATION MANAGEMENT: Every organization needs some kind of information on a regular day to day basis. MIS not only helps in gathering the required information related to business processes but also enables Honda to review the data and use it effectively for achieving the company’s objectives. The MIS will be very useful during the annual auditing of the company and generating reports. The following is a sample report of MIS .Management information system, however, are perfect for gathering and reporting information related to

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the company’s business process. MIS enables Honda to review the data and make use of the information for achieving the company’s objectives. (Clarke, 2007)

PRODUCTION MANAGEMENT: One of the major application of MIS is production management. It is carried out in various processes such as production planning , comtrolling , billing of raw materials , stoage of inventory etc. The following figure 1.5 demonstrates an overall application of MIS in production management.

Figure 1.5 Application of MIS Production Managment

Strategic Information: this is a type of information needed by the top level of management. A strategic decision by the production mangamenet is starting up a

new plant. Strategic information is essential to the marketing department to

understand the market and gain competitive advantage.

Tatical Information: This type of information is needed by the middle level management

which helps them in taking magerial level decisions This information is used to recognise the bottleneck analysis in the

production environment.

Opearational Information:

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This types of information is needed by the lower level of organization which helps them to take operational related decisions.

The information is essential in quality assurance and delivering products with minimum errors.

EFFICIENT COMMUNICATION: Proper communication between the departments enables the higher management to take decisions based on the data and information provided by MIS. It creates a upward and download flow of communication between the higher managers and front –line mangers for efficient decision making. ‘According to Sudhanshu Maharana , Head of the IT department , Honda Motorcycle and scooter plant, India ,‘Open communication flow allows Honda to obtain input or information from all the levels of the management to make informed decisions obtained from the MIS system.’

RESOURCE MANAGEMENT: MIS system enables Honda to make proper and efficient use of their resources. The assets and inventory of the organizations such as raw materials and labour are the management resources that needs supervision on a regular basis. The inefficient utilization of resources may lead to low productivity thereby may lose competitive edge. This also may affect the profit margins and lessening sales.

EFFICIENT DECISION MAKING PROCESS: Many of the companies use the information generated by MIS for making efficient decision making.’ Every single unit of data is reviewed and is used to make decisions regarding operational activities, market trends, profit margins etc. the process of decision making consists of all the levels of management, tends to generate most well-informed decisions (Wright, 2009).’

Benefit Level Matrix:

The Benefit level matrix (silk,1988) is developed to map the principle planned for the benefits of the systems. The Figure1.6 shows the matrix in a simple grid which explains the efficiency, effectiveness and the technology edge of the system .

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Figure 1.6 Benefit level matrix

The Various types of MIS:

There are various kinds of Management information system in an organization. MIS connects technology ,management and organization .Figure 1.7 shows different kinds of MIS.

Figure1.7 The different kinds of MIS

Financial Management Information System(FMIS)- The MIS generated reports on the past and present financial records of Honda.It details out the profit and losses of the company which helps in decisions regarding cost and funds.

Marketing Management Information System(MMIS)-To handle the various aspects of marketing such as advertisements, price, sales, innovation etc, MMIS is created. MMIS enables the oragnaztion to recognise the market trend and customer demands.It creates the look of the products of Honda.

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Manufacturing Management Information System-This MIS enables the organization to monitor the various manufacturing processes such as flow of goods , raw materials and components. The following figure 1.8 shows MIS implementation in manufacturing process.

Figure1. 8 MIS Implementaion in Manufacturing Process

Human resources Mangament Information System- This MIS helps in recruiting procedures and also allows tracking the performance of the employees.It views the requirements of the employees ,training processes and rules and policies of the organization.

Decision Support System- This MIS is used for various types of problem solving and decision making by gathering information from different sources. This information is complied by using computer programs.

Executive Information Systems(EIS)- This is a reporting tool which provides quick assess to the reports from all the levels of the company and departments.

Benefits Dependency Network:

A benefit dependency network is crafted out of the analysis done. The various parameters and componets used in the network diagrams is mapped with the relation between information systems , proposals and business benefits.Figure 1.9 shows the benefit dependency network diagram

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Figure 1.9 Benefits Dependency Network

Stakeholders and Benefits

It is very essential to recognise the stakeholder’s benefits from MIS technology. MIS implementation will have a major impact on the employees at various levels, the vendors and the shareholders, which in return will indirectly benefits the customers. The following discusses the different stakeholders and their tangible and intangible benefits.

Employees: The technology will have a huge impact on the employees at various level. MIS not only connects but also delivers efficient communication between the departments.

Tangible Benefits: MIS enables the employees to fetch the right information at the right

time which helps is quick decision making. Easily accessibility to data and information Increase the productivity of the employees resulting in efficient

working Enables effective and efficient use of resources which help in

managing cost and labour

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Intangible Benefits: Efficient communication between various departments helps in

establishing good communication and understanding among employees at various level.

Creates hassle free working environment as the various data and information is available easily.

Knowledge sharing becomes easier there by delivering a win-win situation among the employees.

Vendors: Vendors are the essential segment of any manufacturing company which helps in timely completion of the production. Honda works with the local vendors which provide the company with necessary parts at a wholesale rate. These parts are then assembled together at various departments in Honda.

Tangible Benefits: Enables to track the order and timely delivery of the components Helps in analysing the order pattern and forecast future orders. Track the defected components and replaces quickly. Internet helps in minimizing time and cost

Intangible Benefits: Better understanding with the client Improves service depending upon the feedback client On time delivery builds trust.

Shareholders: MIS in Honda will have a massive impact on the shareholders. The technology will provide a transparent communication between the company and its shareholders which not only enhances the relationship but also helps in forecasting the business.

Tangible Benefits: Reduces the expenses involved in risk and frauds there by delivering

the objectives Increases profit Helps in expanding market share MIS generates reports which help in understanding the market trend

and customers.

Intangible Benefits: Data Transparency helps in building trusts and better relationship Enhances reputation. Helps in creating better business portfolio.

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The above stated benefits of the employees and stakeholders will help in delivering better product and services. The technology will help the business to reach different types of customers and understand their requirements and taste. Therefore the technology also has an indirect impact on the customers.

Tangible Benefits: Track the order online Allows the customer to get the propoer product specifications and price Enables to provide feedback to the organization. Enable to view the future products

Intangible Benefits: Better customer services and satiafcation. Customer loyalty towards the brand.

Recommendations:

For Honda to achieve its prime objectives, it needs to understand and implement the MIS in its organization. The following are the few recommendations that Honda must implement :

Honda must implement MIS in various departments like finance, human reasources, manufacturing, production, etc.

There are various manuufacturers in the market who provide MIS. Honda must recognise the best manufacturer to get the system installed. Parameters like security , maintenance and price should be kept in mind while deciding the manufacturer.

The employees of any organization play a vital role in making a process and system effective. Honda will not succeed ina chiveing its objectives if the employees are neglected with technologies.So Honda must educate and train the employees about MIS and the new process.

The present scenario of Honda is , it has hardware systems from Cisco, Juniper and IBM. Before installting MIS, a compatibility check must be done with the hardware systems.

Conclusions:

Every organization have a competitive edge over their competitors. With the implementation of effective management information system, Honda has better opportunities to be ahead of their competitors.MIS enbales Honda to understand the market and external environments using the various tools and software.Management information system is an approach tahe helps Honda to increase its day to day opeartions and activities. It is just not any tool for collating the information but also helps the managers to of Honda in the decision making process and problem solving techniques.With the implementation of MIS in the organization, Honda will be benefiting from various departments both internal and external. MIS enables Honda in achieving its objectives and managing its resources. It even helps the managers of

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Honda for generating reports about the daily activities of the company regarding products and services, business partners, people, employees and inventories. It helps in organising the resources of Honda in an proper manner.

References:

Asemi, A., Safari, A. & Zavareh, A. A. (2011) The role of management information system (MIS) and Decision support system (DSS) for manager’s decision making process. International Journal of Business and Management.

Bocji, P. & Chaffey, D., (2005) Business Information Systems: Technology, Development and Management in the E-business: Prentice Hall.

Clarke Steve (2007): 'Information Systems Strategic Management: an integrated approach', Routledge Printing, USA & Canada.

DeLone, W. H., and McLean, E. R. (2003) The DeLone and McLean Model of Information Systems Success: A Ten-Year Update. Journal of MIS.

Grant.k.(2009).Strategic Information Systems Management.Andover:Andover:Cengage Learning.

Honda official website(2014).Reports.[Online].Available at

http://world.honda.com/environment/report/download/report_2014/.

Lucey, T., (2005), Management Information Systems (9th ed.), Croatia: Zrinski d.d

Wright, G., (2001), Strategic Decision Making, UK: John Wiley & Sons Inc.