Management Information System In Toyota Management Essay

Toyota has 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

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. 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.

. 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.


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.

Defining of Concept: 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. Academically, MIS is normally utilized to pertain to the cluster of information management processes connected to the automation or assistance of individual decision making (Clarke, 2007).

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. 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 (Laudon, 2007).

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.


1.1. Company Overview: Toyota Motor Corporation

The Toyota Motor Company is one of the biggest car manufacturers in the globe. Toyota has established a reputation as both an engine producer and the manufacturer of luxury vehicles. While the organization’s headquarters are still situated in Japan, it has several manufacturing facilities all over the globe and sales departments in various nations where the vehicles are transported (Toyota Motor Corporation Global Site, 2010).

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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 (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 days quickly developing world business setting. Toyota understands that it is necessary in guaranteeing quality management and the provision of dependable products to clients (Liker, 2005).

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.

1.2. MIS of Toyota

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. 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 (Toyota Comprehensive Warehouse Management System, 2010).


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.

1.2.3. 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 (Fujimoto, 2001). 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.

1.2.4. Andons

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).

1.2.5. PokaYoke

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.

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Application of MIS in Toyota

2.1. MIS across Departments

2.1.1. Operations

The operations of Toyota have been impacted by tremendous developments in technology. Because of this, manufacturing operations within the company have significantly improved. For instance, vehicles and car parts are transported ahead of time, and this prevents large amounts of money from being utilized for storing activities (Fujimoto, 2001).

The Toyota Comprehensive Warehouse Management System offers remedies for the organization concerning car and process structuring and planning for the smooth flow of operations. The Toyota Comprehensive Warehouse Management System aids the organization with regard to the enhancement of the operational procedures (Toyota Comprehensive Warehouse Management System, 2010).

The smooth flow of operations is accomplished within Toyota through the Toyota Comprehensive Warehouse Management System, where the structuring of each car model and warehousing processes from the prototyping level to the production phase is attained in one structure (Shingo, 1989). This limits unnecessary repetition of processes and the need for interfaces as data is secured in a centralized system. Excellent coordination with suppliers offers great opportunities for more efficient product development with suppliers via the Internet.

Productivity and efficiency in the operations within Toyota is accomplished through the Model-mix structuring and the excellent planning aspects of this MIS. Model-mix structuring allows Toyota to enhance the operational procedures that are important for the organization (Ineak, 2009). The excellent planning options enable effective processing of assembly and parts of make-to-order deals.

SAP gathers specialized production orders from Toyota’s planning system. The orders include the car parts essential to assemble each car; some Toyota cars, for example, have plenty of components detailed in the list. SAP generates the shipment schedules for each part to match Toyota’s assembly-line procedures (SAP, 2007).

Toyota delivers these detailed information and precise shipment schedules to its suppliers. The significant suppliers obtain the information through electronic data interchange. Other providers log on to the Toyota online portal, where the company details the provisions to provide the updates on its shipment activities (Hino, 2005). By going to the website of Toyota, suppliers can monitor this information in real time, including release schedules, receipts, and other important information.

When they deliver car parts, the suppliers send Toyota shipment details to give them with the latest information in this matter. Car parts going inside the Toyota storage facilities are then obtained and delivered quickly to the line. There, Toyota uses its Jidoka to monitor the assembly process in real time. Jidoka tracks the production verification and consumption information consistently. Parts utilized in the production are removed from the stock list, and costs are presented to detail the value of work in process (Toyota Motor Corporation Global Site, Jidoka, 2010).

Customer desires for various Toyota cars warranted a solution that would properly improve and help organize production. These MIS help the organization to reduce order-to shipment period, enhances its supply chain activities with regard to demand analysis and tracking of deliveries, and improves inventory activities all over its establishments— enabling Toyota to significantly reduce time to customer for its excellent vehicles.

2.1.2. Finance

In 2003, Toyota started to implement SAP software system which also provides financial information to the finance department of the company and its concerned personnel. The people of the finance department of Toyota analyzes previous and current financial figures, anticipates future financial outputs, and checks and handles the utilization of capital over time by making use of the information generated by SAP (SAP, 2005).

The SAP provides options that enable sales and pricing of cars through configuration and monitoring of available parts. Vehicle customization and pricing via the Internet enhanced car sales of Toyota by offering customers with the choice of designing their vehicles. Once the vehicle is designed, the SAP will determine the worth of the vehicles based on the design. Vehicle search enables Toyota to locate vehicles that address the specific designs, accomplishing faster delivery to customers (Hoseus, 2008).

2.1.3. Marketing

The SAP helps the marketing operations of the organization with regard to product development, pricing activities, marketing, and sales forecasts. Just like other important company operations, Toyota relies on external sources of data. These sources entail the opinion or feedback of customers. (SAP, 2007)

2.2. Decision Making at the Three Tiers of Management

2.2.1. Operational Level Systems

To transform the operational level decision making within Toyota very fundamental and productive, the MIS of Toyota aids in providing and sending reliable information to all executors. The Toyota Comprehensive Warehouse Management System is established to enhance the reporting of information that will be important in the proper decision making within the operational level of Toyota. Furthermore, the SAP is able to effectively collect and process data, process results, and able to adjust, cope and address inaccuracies right away. (SAP, 2007)

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2.2.2. Management Level Systems

The Toyota Comprehensive Warehouse Management System has effective internal controls that aid in the management level decision making tasks in Toyota. Information is collected through efficient processing and inner control tracking. An effective internal and outer audit process is utilized within Toyota through the MIS (Magee, 2007).

2.2.3. Strategic Level Systems

To have a productive and efficient strategic level decision making, important data within Toyota is processed and handled properly through its Material Handling System. Differences in the way information is collected and documented can change information and trend studies. Also, because data collection and documentation activities will eventually change through time, Toyota management has established flexible methods to allow systems developments through the MIS. These procedures are always well structured, properly informed to employees and has a tracking system that helps in the strategic level decision making of Toyota (Toyota Material Handling USA, 2010).

2.3. Managing Business Processes

The integration of various MIS within Toyota is the effect of the integration of system management. The employees and leaders of the company are the users of the MIS who know the present customer demands and also have the capacity to plan the funds for new initiatives. In order to control its business procedures properly, Toyota has persevered in managing ownership that promotes effectiveness in its business processes and helps ensure being responsible. Even though the MIS does not reduce expense altogether, the integration of this essential system, and its properly utilization reduces the periods that wrong decisions in company procedures are accomplished because of inaccurate information (Morgan, 2006). Terrible company decisions simply misuse precious assets. This may result in a negative effect on revenues and/or budget.


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.

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 (Magee 2007).

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.

Only a management information system that is versatile and effective 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.

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