IMPLEMENTATION OF COMPUTER-BASED MANAGEMENT INFORMATION SYSTEM (MIS) IN MANUFACTURING ORGANIZATION, IN NIGERIA

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

A Management Information System (MIS) is a computer-based system that provides managers with the tools and information needed to organize, evaluate, and efficiently manage operations within an organization. MIS integrates hardware, software, data, procedures, and people to collect, process, store, and disseminate information for decision-making, coordination, control, analysis, and visualization. In a manufacturing organization, MIS typically includes modules for: (a) production planning and scheduling, (b) inventory management, (c) procurement and supply chain management, (d) quality control, (e) sales and distribution, (f) financial accounting and reporting, (g) human resource management, (h) customer relationship management (CRM), and (i) executive dashboards and business intelligence (Laudon and Laudon, 2020; O’Brien and Marakas, 2018).

The implementation of computer-based MIS in manufacturing organizations has become a strategic necessity in the modern competitive environment. Manufacturing organizations face significant challenges: (a) increasing customer expectations (shorter lead times, customised products, lower prices), (b) global competition (from multinational corporations and low-cost producers), (c) rising input costs (raw materials, energy, labour), (d) regulatory compliance (environmental, safety, quality standards), (e) technological change (Industry 4.0, automation, robotics, artificial intelligence), (f) supply chain disruptions (pandemics, trade disputes, logistics challenges), and (g) the need for real-time information for decision-making. An effective MIS helps manufacturing organizations address these challenges by providing timely, accurate, and relevant information to managers at all levels (Davenport, 2018; Westerman, Bonnet, and McAfee, 2019).

The benefits of implementing a computer-based MIS in manufacturing organizations are substantial. Operational efficiency: MIS automates routine processes (order processing, inventory tracking, production scheduling), reducing manual effort, errors, and processing time. Inventory management: MIS provides real-time visibility of raw materials, work-in-progress, and finished goods inventory, enabling just-in-time (JIT) inventory management and reducing carrying costs. Production planning and scheduling: MIS integrates sales forecasts, production capacity, and material availability to optimise production schedules, reducing downtime and increasing throughput. Quality control: MIS tracks quality metrics (defect rates, rework, scrap) and enables root cause analysis, supporting continuous improvement (e.g., Six Sigma, Total Quality Management). Cost control: MIS provides detailed cost data (materials, labour, overhead) by product, batch, or production line, enabling cost reduction initiatives (Horngren, Sundem, and Stratton, 2018).

Decision support: MIS provides managers with dashboards, reports, and analytics (trends, variances, what-if scenarios) to support strategic and operational decisions. Customer responsiveness: MIS integrates sales order processing with production planning and logistics, enabling faster order fulfilment and better customer communication. Supply chain integration: MIS enables electronic data interchange (EDI) with suppliers and customers, improving supply chain visibility and coordination. Regulatory compliance: MIS tracks environmental, health, safety, and quality data, facilitating compliance reporting (e.g., ISO 9000, ISO 14000). Financial management: MIS integrates financial accounting (general ledger, accounts payable, accounts receivable) with operational data (production costs, inventory values), enabling accurate cost accounting and profitability analysis (Davenport, 2018; O’Brien and Marakas, 2018).

However, the implementation of computer-based MIS in manufacturing organizations in Nigeria faces significant challenges. Infrastructure deficits: Unreliable electricity supply affects the operation of servers, computers, and networks. Many manufacturers rely on generators and UPS systems, increasing costs. Internet connectivity: Slow or unreliable internet access affects cloud-based MIS, remote access, and communication with suppliers and customers. Hardware and software costs: Acquiring servers, computers, networking equipment, and software licenses requires significant capital investment, which may be beyond the budget of small and medium-sized manufacturers. Staff capacity gaps: Lack of IT skills among manufacturing staff (computer literacy, software proficiency, data analysis) limits the effective use of MIS. Resistance to change is also common (Adebayo and Oyedokun, 2019).

Data migration: Converting historical data from manual or legacy systems to the new MIS is time-consuming, labour-intensive, and prone to errors. System integration: MIS may need to integrate with existing systems (e.g., accounting software, production equipment, supplier systems). Integration challenges can delay implementation. Vendor support: Inadequate vendor support (training, documentation, technical support, upgrades) can undermine MIS effectiveness. Security risks: Cyber threats (hacking, malware, ransomware, data breaches) affect manufacturing organizations. Many manufacturers lack adequate cybersecurity measures. User adoption: Employees may resist using the new system (fear of job loss, comfort with existing processes, lack of training). User adoption is critical for MIS success (Laudon and Laudon, 2020).

The Nigerian manufacturing sector is a critical component of the economy, contributing approximately 10% to GDP and employing millions of Nigerians. The sector includes food and beverage processing (e.g., Nigerian Breweries, Nestle Nigeria, Unilever Nigeria), building materials (e.g., Dangote Cement, Lafarge Africa), chemicals and pharmaceuticals (e.g., May and Baker, Fidson Healthcare), plastics and rubber, metal fabrication and engineering, textiles and garments, leather and footwear, wood and furniture, and packaging. The sector faces challenges: (a) unreliable electricity (self-generation using expensive diesel generators), (b) poor transportation infrastructure, (c) foreign exchange volatility (affecting imported raw materials and spare parts), (d) inflation (rising input costs), (e) competition from imports (cheaper products from China, India, Europe), (f) multiple taxation, and (g) security challenges (theft, vandalism). An effective MIS can help manufacturers address these challenges by improving efficiency, reducing costs, and enabling data-driven decision-making (CBN, 2021; MAN, 2022).

The theoretical framework for MIS implementation draws on several theories. Technology Acceptance Model (TAM) (Davis, 1989) posits that perceived usefulness (PU) and perceived ease of use (PEOU) determine user acceptance of information technology. For MIS implementation in manufacturing, user acceptance by production managers, supervisors, and operators is critical. If users perceive the MIS as useful (improves job performance) and easy to use, they will adopt it. Conversely, if users perceive the MIS as difficult or not useful, they will resist (Venkatesh and Davis, 2000).

Diffusion of Innovation (DOI) Theory (Rogers, 2003) explains how innovations spread through organisations. The adoption of MIS in manufacturing depends on: (a) relative advantage (is MIS better than existing processes?), (b) compatibility (does MIS fit with existing work practices?), (c) complexity (is MIS easy to use?), (d) trialability (can users test MIS before full adoption?), and (e) observability (are benefits visible to others?). Manufacturing organisations need to manage the diffusion process through training, communication, and change management (Rogers, 2003).

Resource-Based View (RBV) (Barney, 1991) suggests that firms achieve competitive advantage through resources that are valuable, rare, imperfectly imitable, and non-substitutable (VRIN). An effective MIS can be a VRIN resource, enabling manufacturing organisations to achieve lower costs, higher quality, faster response times, and better customer service. However, the MIS itself is not the resource; the resource is the organisation’s ability to use the MIS effectively (information processing capability) (Melville, Kraemer, and Gurbaxani, 2004).

Contingency Theory (Donaldson, 2001) suggests that the optimal MIS design depends on the organisation’s contingencies (size, technology, environment, strategy). A large, complex manufacturing organisation with multiple production lines and global supply chains needs a more sophisticated MIS than a small, single-product manufacturer. MIS implementation must be tailored to the organisation’s specific contingencies (Chenhall, 2003).

The implementation process for MIS in manufacturing organisations typically follows a structured methodology:

1. Feasibility Study: Assessing technical, economic, operational, and schedule feasibility of MIS implementation.
2. Requirements Analysis: Identifying information needs of different users (management, production, inventory, quality, finance).
3. System Design: Designing database structure, user interfaces, reports, and integration with existing systems.
4. Vendor Selection: Evaluating and selecting MIS software (off-the-shelf vs. custom-developed, cloud-based vs. on-premise). This may involve a request for proposal (RFP) process.
5. Hardware and Network Infrastructure: Acquiring servers, computers, networking equipment, and backup power (UPS, generator).
6. Data Migration: Converting historical data from manual or legacy systems to the new MIS.
7. Training: Training users on how to use the MIS (data entry, report generation, analysis).
8. Testing: Testing the MIS in a pilot environment or parallel run before full deployment.
9. Deployment (Go-Live) : Switching from old system to new MIS.
10. Post-Implementation Review: Assessing whether the MIS meets requirements, identifying issues, and making adjustments.
11. Ongoing Maintenance and Support: Regular backups, security updates, user support, and system upgrades (Laudon and Laudon, 2020).

Finally, this study focuses on the implementation of computer-based Management Information System (MIS) in manufacturing organizations in Nigeria. By examining the implementation process, benefits, challenges, and success factors, the study can provide insights applicable to manufacturing organizations seeking to improve their operations through MIS (Yin, 2018; Creswell and Creswell, 2018).

1.2 Statement of the Problem

Manufacturing organizations in Nigeria face significant operational challenges that affect their efficiency, productivity, and competitiveness. These challenges include: (a) lack of real-time information for decision-making (managers rely on manual reports that are delayed, incomplete, or inaccurate), (b) poor inventory management (stock-outs, excess inventory, obsolete inventory), (c) inefficient production planning and scheduling (downtime, underutilised capacity), (d) poor cost control (unexplained cost variances, waste, inefficiency), (e) quality issues (high defect rates, rework, scrap, customer complaints), (f) slow response to customer orders (long lead times, missed delivery dates), (g) lack of integration between departments (sales, production, procurement, finance), and (h) difficulty in complying with regulatory requirements (quality standards, environmental regulations, tax reporting).

Computer-based Management Information Systems (MIS) have been proposed as a solution to these challenges. However, the implementation of MIS in manufacturing organizations in Nigeria has been problematic. Specific problems include:

1. High implementation failure rates: Many MIS implementations fail to meet objectives (cost overruns, schedule delays, low user adoption, system not used as intended).
2. Infrastructure challenges: Unreliable electricity supply, poor internet connectivity, and inadequate hardware (servers, computers) undermine MIS effectiveness.
3. Staff capacity gaps: Lack of IT skills among manufacturing staff (computer literacy, software proficiency, data analysis) limits effective MIS use.
4. Resistance to change: Employees resist using the new system (fear of job loss, comfort with existing processes, lack of training).
5. Data migration issues: Converting historical data from manual or legacy systems to the new MIS is time-consuming, labour-intensive, and error-prone.
6. System integration challenges: MIS may need to integrate with existing systems (accounting software, production equipment, supplier systems). Integration difficulties delay implementation.
7. High costs: Acquiring hardware, software, and training requires significant capital investment, which may be beyond the budget of small and medium-sized manufacturers.
8. Vendor support issues: Inadequate vendor support (training, documentation, technical support, upgrades) undermines MIS effectiveness.
9. Security risks: Cyber threats (hacking, malware, ransomware, data breaches) affect manufacturing organizations. Many manufacturers lack adequate cybersecurity measures.
10. Lack of top management support: MIS implementation requires commitment from top management (budget, time, leadership). Without top management support, implementation fails.

There is a lack of recent, systematic, empirical research that examines the implementation of computer-based MIS in manufacturing organizations in Nigeria, including the implementation process, benefits, challenges, and success factors. Therefore, this study is motivated to investigate the implementation of computer-based Management Information System (MIS) in manufacturing organizations in Nigeria.

1.3 Research Questions

The following research questions guide this study:

1. What is the extent of computer-based MIS adoption among manufacturing organizations in Nigeria?
2. What types of MIS modules (production planning, inventory management, procurement, quality control, sales, finance, HR, CRM) are implemented by manufacturing organizations in Nigeria?
3. What are the benefits (operational efficiency, inventory management, production planning, cost control, quality, customer responsiveness) derived from MIS implementation by manufacturing organizations in Nigeria?
4. What are the major challenges (infrastructure, staff capacity, resistance to change, data migration, integration, cost, vendor support, security, top management support) affecting MIS implementation in manufacturing organizations in Nigeria?
5. What factors (technical, organizational, environmental) influence the success of MIS implementation in manufacturing organizations in Nigeria?
6. What is the relationship between MIS implementation and organizational performance (productivity, cost reduction, quality improvement, customer satisfaction) in manufacturing organizations in Nigeria?

1.4 Objectives of the Study

The specific objectives of this study are:

1. To determine the extent of computer-based MIS adoption among manufacturing organizations in Nigeria.
2. To identify the types of MIS modules implemented by manufacturing organizations in Nigeria.
3. To assess the benefits derived from MIS implementation by manufacturing organizations in Nigeria.
4. To identify the major challenges affecting MIS implementation in manufacturing organizations in Nigeria.
5. To determine the factors (technical, organizational, environmental) that influence the success of MIS implementation in manufacturing organizations in Nigeria.
6. To examine the relationship between MIS implementation and organizational performance (productivity, cost reduction, quality improvement, customer satisfaction) in manufacturing organizations in Nigeria.
7. To propose recommendations for improving MIS implementation in manufacturing organizations in Nigeria.

1.5 Research Hypotheses

The following hypotheses are formulated in null (H₀) and alternative (H₁) forms:

Hypothesis One

• H₀: MIS implementation has no significant effect on the operational efficiency (production uptime, cycle time) of manufacturing organizations in Nigeria.
• H₁: MIS implementation has a significant effect on the operational efficiency (production uptime, cycle time) of manufacturing organizations in Nigeria.

Hypothesis Two

• H₀: There is no significant relationship between MIS implementation and inventory management performance (inventory turnover, stock-out rate) of manufacturing organizations in Nigeria.
• H₁: There is a significant relationship between MIS implementation and inventory management performance (inventory turnover, stock-out rate) of manufacturing organizations in Nigeria.

Hypothesis Three

• H₀: Staff capacity (IT skills, computer literacy) has no significant effect on the success of MIS implementation in manufacturing organizations in Nigeria.
• H₁: Staff capacity (IT skills, computer literacy) has a significant effect on the success of MIS implementation in manufacturing organizations in Nigeria.

Hypothesis Four

• H₀: Top management support has no significant effect on the success of MIS implementation in manufacturing organizations in Nigeria.
• H₁: Top management support has a significant effect on the success of MIS implementation in manufacturing organizations in Nigeria.

1.6 Significance of the Study

This study is significant for several stakeholders:

Manufacturing Organizations: The findings will help manufacturing organizations understand the benefits, challenges, and success factors for MIS implementation, enabling them to plan, execute, and manage MIS projects more effectively, leading to improved operational efficiency, cost reduction, quality improvement, and customer satisfaction.

MIS Vendors and Consultants: The findings will help MIS vendors and consultants understand the specific needs and challenges of manufacturing organizations in Nigeria, enabling them to design appropriate products, provide better training and support, and tailor implementation methodologies.

Government (Federal Ministry of Industry, Trade and Investment; National Information Technology Development Agency NITDA) : The findings will inform government policy on industrial digitalisation, technology adoption, and SME support. Government may provide incentives (tax breaks, subsidies, low-interest loans) for manufacturing organisations to adopt MIS.

Industry Associations (Manufacturers Association of Nigeria MAN, Nigerian Association of Small Scale Industrialists NASSI) : The findings will provide evidence for advocacy on behalf of manufacturing members, supporting calls for policies that promote technology adoption, infrastructure improvement (electricity, internet), and skills development.

Academics and Researchers: The study contributes to the literature on MIS implementation, technology adoption, and manufacturing performance in developing countries.

Development Partners (World Bank, UNIDO, DFID/UKAID) : The findings will inform technical assistance programs on industrial digitalisation, technology transfer, and SME development.

Financial Institutions: The findings will help financial institutions assess the viability of loans for MIS implementation (technology upgrade) by manufacturing organizations, supporting lending decisions.

The Nigerian Economy: Improved MIS implementation in manufacturing organizations will lead to increased productivity, lower costs, improved product quality, increased competitiveness (import substitution, export growth), job creation, and economic growth.

1.7 Scope of the Study

This study focuses on the implementation of computer-based Management Information System (MIS) in manufacturing organizations in Nigeria. The scope is limited to:

Geographical Scope: Nigeria, with coverage of manufacturing organizations in major industrial hubs: Lagos (Ikeja, Apapa, Ota, Mushin), Kano (Bompai, Sharada), Port Harcourt (Trans-Amadi Industrial Layout), Kaduna (Kakuri Industrial Layout), Aba, Onitsha, and other industrial areas.

Manufacturing Sectors: The study covers manufacturing organizations across sectors: (a) food and beverage processing, (b) building materials (cement, tiles, roofing sheets), (c) chemicals and pharmaceuticals, (d) plastics and rubber, (e) metal fabrication and engineering, (f) textiles and garments, (g) leather and footwear, (h) wood and furniture, (i) packaging, and (j) others.

Organisation Size: The study covers small, medium, and large manufacturing organizations, as defined by SMEDAN (micro: 1-9 employees, small: 10-49 employees, medium: 50-199 employees, large: 200+ employees).

MIS Modules: The study covers MIS modules: (a) production planning and scheduling, (b) inventory management, (c) procurement and supply chain management, (d) quality control, (e) sales and distribution, (f) financial accounting and reporting, (g) human resource management, (h) customer relationship management (CRM), and (i) executive dashboards and business intelligence.

Implementation Stages: The study covers manufacturing organizations at different stages of MIS implementation: (a) not implemented (no MIS), (b) planning (considering implementation), (c) implementation in progress, (d) partially implemented (some modules), (e) fully implemented, (f) post-implementation (mature).

Time Period: The study covers the period 2018-2023 (5 years), with cross-sectional data.

1.8 Operational Definition of Terms

Management Information System (MIS) : A computer-based system that provides managers with the tools and information needed to organize, evaluate, and efficiently manage operations within an organization. In manufacturing, MIS includes modules for production planning, inventory management, procurement, quality control, sales, finance, HR, and CRM.

Computer-Based: Systems that rely on computer hardware (servers, computers, networking equipment) and software (applications, databases) rather than manual or paper-based processes.

Manufacturing Organization: A business entity engaged in the physical or chemical transformation of materials, substances, or components into finished products (goods) for sale.

Implementation: The process of acquiring, installing, configuring, testing, deploying, and maintaining a computer-based MIS, including data migration, user training, and change management.

Operational Efficiency: The ratio of output (production volume, throughput) to input (labour hours, machine hours, energy, materials). Measured by production uptime, cycle time, and productivity.

Inventory Management: The process of overseeing and controlling the ordering, storage, and use of raw materials, work-in-progress, and finished goods. Key metrics: inventory turnover, stock-out rate, carrying cost.

Production Planning and Scheduling: The process of determining production quantities, timing, and resource allocation (materials, labour, machines) to meet sales demand.

Quality Control: The process of ensuring that products meet specified quality standards (defect rates, customer returns, warranty claims).

Cost Control: The process of monitoring and managing production costs (materials, labour, overhead) to ensure they remain within budget and to identify cost reduction opportunities.

Supply Chain Management (SCM) : The management of the flow of materials, information, and finances from raw material suppliers to finished goods customers.

Customer Relationship Management (CRM) : A system for managing interactions with current and potential customers, including sales, marketing, and customer service.

Data Migration: The process of converting historical data from manual or legacy systems (paper records, spreadsheets) to the new MIS.

User Adoption: The extent to which employees (users) accept, use, and rely on the MIS for their daily work.

Top Management Support: The commitment of senior executives (CEO, MD, directors) to the MIS implementation, including budget allocation, time commitment, leadership, and communication.

Change Management: The process of preparing, supporting, and helping individuals, teams, and organisations to adopt new systems, processes, and behaviours.

Return on Investment (ROI) : The financial return from MIS implementation (cost savings, revenue increases) divided by the cost of implementation (hardware, software, training, consulting).

Perceived Usefulness (PU) : The degree to which a user believes that using the MIS will enhance their job performance (Technology Acceptance Model).

Perceived Ease of Use (PEOU) : The degree to which a user believes that using the MIS will be free of effort (Technology Acceptance Model).

Infrastructure: The physical and technological foundation for MIS: electricity supply (grid, generators, UPS), internet connectivity, servers, computers, networking equipment, and backup systems.

Cybersecurity: The protection of computer systems, networks, and data from unauthorised access, cyberattacks, theft, or damage (firewalls, antivirus, encryption, access controls).

Enterprise Resource Planning (ERP) : An integrated MIS that manages all aspects of a manufacturing business (production, inventory, procurement, sales, finance, HR) from a single database.

Vendor: The company that supplies the MIS software, hardware, training, implementation services, technical support, and upgrades.

REFERENCES

Adebayo, K. and Oyedokun, G. (2019). Information technology adoption in Nigerian manufacturing firms. Nigerian Journal of Management Accounting, 11(2), 45-68.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.

CBN. (2021). Annual economic report 2020. Central Bank of Nigeria.

Chenhall, R. H. (2003). Management control systems design within its organizational context: Findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2-3), 127-168.

Creswell, J. W. and Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). Sage Publications.

Davenport, T. H. (2018). Process innovation: Reengineering work through information technology. Harvard Business School Press.

Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319-340.

Donaldson, L. (2001). The contingency theory of organizations. Sage Publications.

Horngren, C. T., Sundem, G. L., and Stratton, W. O. (2018). Introduction to management accounting (17th ed.). Pearson Education.

Laudon, K. C. and Laudon, J. P. (2020). Management information systems: Managing the digital firm (16th ed.). Pearson Education.

MAN. (2022). Annual report 2021. Manufacturers Association of Nigeria.

Melville, N., Kraemer, K., and Gurbaxani, V. (2004). Information technology and organizational performance: An integrative model of IT business value. MIS Quarterly, 28(2), 283-322.

O’Brien, J. A. and Marakas, G. M. (2018). Management information systems (10th ed.). McGraw-Hill.

Rogers, E. M. (2003). Diffusion of innovations (5th ed.). Free Press.

Venkatesh, V. and Davis, F. D. (2000). A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management Science, 46(2), 186-204.

Westerman, G., Bonnet, D., and McAfee, A. (2019). Leading digital: Turning technology into business transformation. Harvard Business Review Press.

Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). Sage Publications.

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Introduction

This chapter reviews the literature relevant to the implementation of computer-based Management Information System (MIS) in manufacturing organizations in Nigeria. The review is organized into a conceptual framework covering management, information, system, and MIS. The management section covers the management process, levels of management, and functions of management. The information section covers levels of information and the time and value factor of information. The system section covers system relationship, system behaviours, characteristics of a system, a system approach of accounting, and description of an accounting system. The MIS section covers MIS and decision making, types of MIS, the decision-making process, the MIS model, MIS characteristics, and the role of MIS in the decision-making process. The chapter provides the theoretical and conceptual foundation for understanding MIS implementation in manufacturing organizations.

2.2 Conceptual Framework

2.2.1 Management

Management is the process of planning, organizing, directing, and controlling organizational resources (human, financial, physical, and informational) to achieve organizational objectives efficiently and effectively. Management is both an art (skill and practice) and a science (systematic knowledge). The concept of management has evolved over time, from classical management theory (Taylor, Fayol) to behavioural management theory (Mayo, Maslow) to modern management theory (systems, contingency, total quality management). In the context of MIS, management is the user of the information provided by the system. Managers at different levels have different information needs (strategic, tactical, operational) (Koontz and Weihrich, 2015; Robbins and Coulter, 2018).

2.2.1.1 The Management Process

The management process consists of four interrelated functions: planning, organizing, leading (directing), and controlling. These functions form a cycle: planning sets goals and strategies; organizing allocates resources and structures activities; leading directs and motivates employees; controlling monitors performance and takes corrective action. MIS supports each function by providing relevant information. For planning, MIS provides forecasting data, budget information, and scenario analysis. For organizing, MIS provides organizational structure information, resource allocation data, and communication tools. For leading, MIS provides performance feedback, communication tools, and collaboration platforms. For controlling, MIS provides variance reports, exception reports, and dashboards (Anthony and Govindarajan, 2018; Drucker, 2018).

2.2.1.2 Levels of Management

Management is typically divided into three levels:

Top Management (Strategic Level) : Chief Executive Officer (CEO), Managing Director (MD), Board of Directors, Executive Directors. Top management is responsible for long-term strategic decisions (5-10 years), setting organizational goals, allocating resources, and ensuring overall performance. Top management needs summarized, aggregated, external information (market trends, competitor analysis, economic forecasts, government policies). MIS at the strategic level provides executive information systems (EIS), dashboards, and decision support systems (DSS) (Laudon and Laudon, 2020).

Middle Management (Tactical Level) : Department heads (Production Manager, Marketing Manager, Finance Manager, HR Manager). Middle management is responsible for medium-term tactical decisions (1-2 years), implementing strategic plans, allocating resources within departments, and coordinating between departments. Middle management needs departmental performance reports, budget variance reports, production schedules, and inventory reports. MIS at the tactical level provides management information systems (MIS) and reporting systems (O’Brien and Marakas, 2018).

Lower Management (Operational Level) : Supervisors, team leaders, foremen. Lower management is responsible for short-term operational decisions (daily, weekly), monitoring day-to-day operations, assigning tasks, and ensuring quality and efficiency. Lower management needs detailed, real-time information (production output, inventory levels, machine status, employee attendance). MIS at the operational level provides transaction processing systems (TPS), process control systems, and real-time dashboards (Robbins and Coulter, 2018).

2.2.1.3 Functions of Management

The four functions of management (planning, organizing, leading, controlling) have specific sub-functions:

Planning: (a) Setting objectives (goals), (b) Developing strategies (long-term plans), (c) Forecasting (predicting future conditions), (d) Budgeting (allocating financial resources), (e) Scheduling (timing of activities), and (f) Policy formulation (rules and guidelines). MIS supports planning by providing historical data, trend analysis, forecasting models, and budgeting software (Horngren, Sundem, and Stratton, 2018).

Organizing: (a) Designing organizational structure (reporting relationships), (b) Allocating resources (people, equipment, budget), (c) Defining roles and responsibilities (job descriptions), (d) Delegating authority, and (e) Coordinating activities across departments. MIS supports organizing by providing resource allocation data, organizational charts, project management software, and communication tools (Daft, 2018).

Leading (Directing) : (a) Motivating employees, (b) Communicating goals and expectations, (c) Supervising day-to-day activities, (d) Training and development, and (e) Resolving conflicts. MIS supports leading by providing performance feedback, communication platforms (email, instant messaging, video conferencing), and training management systems (Robbins and Coulter, 2018).

Controlling: (a) Measuring performance (actual vs. budget/standards), (b) Comparing actual to standards (variance analysis), (c) Identifying deviations, (d) Taking corrective action, and (e) Reporting to management. MIS supports controlling by providing dashboards, variance reports, exception reports, and key performance indicators (KPIs) (Anthony and Govindarajan, 2018).

2.2.2 Information

Information is data that has been processed, organized, and presented in a meaningful context to support decision-making. Data are raw facts (numbers, text, images) without context. Information is data with meaning, relevance, and purpose. In a manufacturing organization, information includes: (a) production data (output volume, downtime, defects), (b) inventory data (stock levels, reorder points, usage rates), (c) sales data (orders, revenue, customer preferences), (d) financial data (costs, revenues, profits, cash flow), (e) quality data (defect rates, customer complaints), and (f) human resource data (attendance, productivity, skills). Information must be accurate, complete, timely, relevant, and accessible to be useful for decision-making (Laudon and Laudon, 2020; O’Brien and Marakas, 2018).

2.2.2.1 Levels of Information

Different levels of management require different levels of information:

Strategic Information: Used by top management for long-term decisions. Characteristics: (a) highly aggregated (summarized), (b) external (market trends, competitor data), (c) future-oriented (forecasts, scenarios), (d) less frequent (monthly, quarterly), (e) less structured (ad-hoc), and (f) qualitative and quantitative. Examples: market share trends, economic forecasts, competitor analysis, technology trends (Laudon and Laudon, 2020).

Tactical Information: Used by middle management for medium-term decisions. Characteristics: (a) moderately aggregated (by department, product line), (b) internal and external, (c) current and future, (d) weekly or monthly, (e) semi-structured, and (f) primarily quantitative. Examples: departmental performance reports, budget variances, production schedules, inventory levels (O’Brien and Marakas, 2018).

Operational Information: Used by lower management for day-to-day decisions. Characteristics: (a) detailed (transaction-level), (b) internal, (c) current, (d) daily or real-time, (e) highly structured (routine), and (f) quantitative. Examples: daily production output, machine status, employee attendance, customer orders (Robbins and Coulter, 2018).

2.2.2.2 Time and Value Factor of Information

The value of information depends on its timeliness. Information that is delivered too late (after the decision has been made) has no value, regardless of its accuracy. Information that is delivered too early (before the decision is needed) may be less relevant (conditions may change). The time factor includes: (a) data capture time (when the transaction occurs), (b) processing time (time to enter, validate, and store data), (c) retrieval time (time to access stored data), (d) reporting time (time to generate and deliver reports), and (e) decision time (when the manager needs the information). MIS must balance timeliness with accuracy and completeness. Real-time information (available immediately) is most valuable for operational decisions but may be costly to produce. Batch processing (daily, weekly) may be sufficient for tactical decisions (Horngren et al., 2018).

The value of information can be measured by the difference between the benefits (improved decisions, cost savings, increased revenue) resulting from using the information and the cost of producing the information (data capture, processing, storage, reporting). Information has positive value if benefits exceed costs. Information has negative value if costs exceed benefits (Laudon and Laudon, 2020).

2.2.3 System

A system is a set of interrelated components that work together to achieve a common goal or objective. A system receives inputs (resources, data), processes them (transformation), produces outputs (products, services, information), and has feedback mechanisms (control). In a manufacturing organization, the production system receives raw materials, labour, and energy (inputs); transforms them through production processes; produces finished goods (outputs); and uses quality control (feedback) to adjust processes. An information system receives data (inputs), processes it (sorting, calculating, summarizing), produces information (outputs), and uses user feedback to improve (Daft, 2018; Senge, 2006).

2.2.3.1 System Relationship

A system is composed of subsystems that interact with each other and with the external environment. Subsystems are smaller systems within a larger system. For example, a manufacturing organization has subsystems: production subsystem, inventory subsystem, sales subsystem, finance subsystem, HR subsystem, and MIS subsystem. Subsystems are interdependent; changes in one subsystem affect other subsystems. For example, a change in the production schedule (production subsystem) affects raw material requirements (inventory subsystem) and labour requirements (HR subsystem). MIS must integrate information across subsystems to provide a complete picture of organizational performance (Von Bertalanffy, 1968).

2.2.3.2 System Behaviours

Systems exhibit certain behaviours:

Interdependence: Subsystems depend on each other. The failure of one subsystem can cause the failure of the entire system. For example, if the inventory subsystem fails, production may stop.

Synergy: The whole is greater than the sum of its parts. Subsystems working together achieve more than the sum of their individual achievements. For example, integrated MIS (sales, production, inventory) enables better production planning than separate systems.

Entropy: All systems tend to run down (disorder, decay) over time without energy input. Organizations must invest in maintenance, upgrades, and improvements to counteract entropy.

Open vs. Closed Systems: Open systems interact with the external environment (exchange resources, information). Closed systems do not interact (theoretical). Organizations are open systems, interacting with customers, suppliers, regulators, competitors. MIS must capture information from the external environment (market data, competitor data, economic indicators) (Senge, 2006; Von Bertalanffy, 1968).

2.2.3.3 Characteristics of a System

Key characteristics of a system include:

1. Components (Subsystems) : The parts that make up the system.
2. Interrelationship: Components are connected and interact.
3. Boundary: The line separating the system from the external environment.
4. Purpose (Objective) : The goal the system is designed to achieve.
5. Environment: Everything outside the system boundary that affects or is affected by the system.
6. Inputs: Resources (materials, energy, data) that enter the system.
7. Process (Throughput) : The transformation of inputs into outputs.
8. Outputs: The results of the system (products, services, information).
9. Feedback: Information about outputs that is used to adjust inputs or processes.
10. Control: Mechanisms to ensure the system achieves its purpose (Daft, 2018).

2.2.3.4 A System Approach of Accounting

The system approach views accounting as a subsystem of the larger organizational information system. Accounting collects, records, classifies, summarizes, and reports financial transactions. The accounting subsystem provides financial information to managers (internal users) and external stakeholders (investors, creditors, regulators). The system approach emphasizes the integration of accounting with other subsystems (production, inventory, sales, HR) to provide a complete picture of organizational performance. A manual accounting system is a closed system (limited interaction). A computer-based accounting system is an open system (interacts with other subsystems via data integration) (Horngren et al., 2018; Kieso, Weygandt, and Warfield, 2019).

2.2.3.4.1 Accounting system

An accounting system is a set of methods, procedures, and controls used to collect, record, classify, summarize, and report financial transactions. An accounting system includes: (a) source documents (invoices, receipts, purchase orders), (b) journals (record of transactions in chronological order), (c) ledgers (record of transactions by account), (d) trial balance (check for equality of debits and credits), (e) financial statements (income statement, balance sheet, cash flow statement), and (f) internal controls (segregation of duties, authorisation, reconciliation). An accounting system can be manual (paper-based), computer-based (accounting software), or integrated (ERP system). In manufacturing organizations, the accounting system must integrate with production (cost accounting), inventory (valuation), and sales (revenue recognition) (Romney and Steinbart, 2018; Hall, 2019).

2.2.3.4.2 Description of an Accounting System

A computer-based accounting system (also called computerized accounting system) includes the following modules:

• General Ledger (GL) : Central repository of all financial accounts and transactions. The GL receives journal entries from other modules and produces financial statements.
• Accounts Payable (AP) : Tracks amounts owed to suppliers for goods and services purchased on credit. AP processes vendor invoices, matches them to purchase orders and goods receipt notes (three-way match), and schedules payments.
• Accounts Receivable (AR) : Tracks amounts owed by customers for goods sold on credit. AR processes customer invoices, tracks payments, and manages collections.
• Fixed Assets: Tracks property, plant, and equipment, including acquisition cost, depreciation, disposals, and revaluations.
• Inventory Management: Tracks raw materials, work-in-progress, and finished goods inventory, including quantities, costs, and valuations (FIFO, weighted average).
• Payroll: Calculates employee salaries, wages, deductions (taxes, pensions, insurance), and net pay; produces payslips and tax reports.
• Cost Accounting: Tracks production costs (direct materials, direct labour, manufacturing overhead) by product, batch, or production order. Calculates cost of goods sold (COGS) and inventory values.
• Bank Reconciliation: Matches bank statement transactions to cash book transactions, identifying discrepancies.
• Budgeting: Prepares and monitors budgets (revenue, expense, capital), comparing actual to budgeted amounts (variance analysis) (Romney and Steinbart, 2018; Hall, 2019).

2.2.4 Management Information System and Decision Making

A Management Information System (MIS) is a computer-based system that provides managers with the tools and information needed to organize, evaluate, and efficiently manage operations. MIS supports decision-making at all levels of management: strategic (top management), tactical (middle management), and operational (lower management). MIS differs from transaction processing systems (TPS) which only record transactions, and from decision support systems (DSS) which support unstructured decisions. MIS provides structured, periodic reports to managers (Laudon and Laudon, 2020; O’Brien and Marakas, 2018).

2.2.4.1 Types of Management Information System

There are several types of MIS:

Transaction Processing System (TPS) : Processes routine, repetitive transactions (sales, purchases, receipts, payments). TPS is the foundation for other MIS modules. TPS provides operational-level information.

Management Information System (MIS) in Narrow Sense: Provides structured, periodic reports (daily, weekly, monthly) to middle managers. Reports include sales reports, inventory reports, production reports, and budget variance reports.

Decision Support System (DSS) : Supports semi-structured and unstructured decisions (e.g., where to locate a new factory, which product to discontinue). DSS uses models, analytics, and what-if scenarios. DSS is used by middle and top managers.

Executive Information System (EIS) : Provides highly aggregated, summarized information to top managers. EIS includes dashboards, KPIs, and external data (market trends, competitor data). EIS is used for strategic planning.

Expert System (ES) : Captures the knowledge and decision rules of human experts. ES provides advice to managers (e.g., credit approval decisions, equipment diagnosis).

Office Automation System (OAS) : Supports communication and collaboration (email, word processing, spreadsheets, calendars, video conferencing).

Enterprise Resource Planning (ERP) : Integrates all MIS modules (production, inventory, procurement, sales, finance, HR) into a single, unified system. ERP eliminates data silos and provides real-time visibility (Laudon and Laudon, 2020; O’Brien and Marakas, 2018).

2.2.4.2 Decision Making Process

The decision-making process (Simon, 1960) consists of four phases:

1. Intelligence: Identifying the problem or opportunity. Gathering information about the situation, defining the problem, and understanding its causes. MIS supports intelligence by providing exception reports, variance reports, and dashboards that highlight deviations from expected performance.
2. Design: Developing alternative solutions to the problem. Generating possible courses of action, evaluating their feasibility, and predicting their consequences. MIS supports design by providing what-if analysis, simulation models, and forecasting tools.
3. Choice: Selecting the best alternative from among those developed. Comparing alternatives based on criteria (cost, time, risk, feasibility). MIS supports choice by providing decision models, optimization algorithms, and decision trees.
4. Implementation: Putting the chosen solution into action. Communicating the decision, allocating resources, and monitoring implementation. MIS supports implementation by providing project management tools, communication platforms, and performance dashboards to track implementation progress (Simon, 1960; Laudon and Laudon, 2020).

2.2.4.3 MIS Model

The MIS model consists of several components:

Inputs: Data from internal sources (TPS, ERP) and external sources (market data, economic indicators). Inputs are captured through data entry forms, electronic data interchange (EDI), sensors (IoT), and APIs.

Processing: Transforming data into information through sorting, calculating, summarizing, aggregating, and analyzing. Processing uses algorithms, business rules, and models.

Outputs: Information presented to managers as reports (scheduled), dashboards (real-time), alerts (exceptions), and queries (ad-hoc). Outputs include tables, charts, graphs, and maps.

Storage: Databases (relational, NoSQL, data warehouses) where data and information are stored for future retrieval. Storage includes transaction data, master data (customer, product, supplier), and historical data.

Feedback: Information about outputs that is used to adjust inputs or processing. Feedback includes user satisfaction surveys, error logs, and performance metrics (Laudon and Laudon, 2020).

2.2.4.4 MIS Characteristics

Key characteristics of an effective MIS:

1. Management-Oriented: MIS is designed to meet the information needs of managers at all levels (strategic, tactical, operational).
2. Integrated: MIS integrates data from all departments (production, inventory, sales, finance, HR) to provide a complete picture of organizational performance.
3. Common Database: MIS uses a common database to eliminate data redundancy and inconsistency. All modules access the same data (e.g., customer data used by sales and finance).
4. Decision Support: MIS supports decision-making by providing relevant, timely, and accurate information.
5. Flexibility: MIS can adapt to changing information needs, new reporting requirements, and new technologies.
6. User-Friendly: MIS has an intuitive interface (menus, icons, search) that is easy for managers to use.
7. Timeliness: MIS provides information when it is needed (real-time, daily, weekly, monthly). Outdated information has no value.
8. Accuracy: MIS provides information that is free from errors (data validation, error checking).
9. Security: MIS protects data from unauthorized access, modification, or destruction (access controls, encryption, backups).
10. Cost-Effective: The benefits of MIS (improved decisions, cost savings) exceed the costs of development, operation, and maintenance (O’Brien and Marakas, 2018).

2.2.4.5 The Role of MIS in Decision Making Process

MIS plays a critical role in each phase of the decision-making process:

Intelligence Phase: MIS provides exception reports (actual vs. budget), variance reports, and dashboards that highlight deviations from expected performance. For example, a production report showing that defect rates have exceeded the acceptable threshold alerts the production manager to a quality problem. MIS also provides trend analysis (sales declining for three months) and alerts (inventory below reorder point) (Laudon and Laudon, 2020).

Design Phase: MIS provides what-if analysis tools (e.g., “What if we increase production by 20%? What is the impact on raw material requirements and labour costs?”). MIS also provides forecasting models (time series, regression) to predict future conditions, simulation models (e.g., of production processes), and optimization algorithms (e.g., to find the least-cost production schedule) (O’Brien and Marakas, 2018).

Choice Phase: MIS provides decision models (e.g., cost-benefit analysis, break-even analysis, net present value) to compare alternatives. MIS also provides decision trees (for sequential decisions), scoring models (for ranking alternatives), and recommendation engines (based on rules or machine learning) (Laudon and Laudon, 2020).

Implementation Phase: MIS provides project management software (Gantt charts, resource allocation, milestone tracking) to plan and monitor implementation. MIS also provides communication platforms (email, instant messaging, video conferencing) to coordinate implementation teams. MIS provides performance dashboards to track implementation progress (tasks completed, budget spent, milestones achieved) (O’Brien and Marakas, 2018).

Examples of MIS in Manufacturing Decision Making:

• Production Planning: MIS integrates sales forecasts, inventory levels, and production capacity to generate a production schedule. Production managers use MIS to decide which products to produce, when, and in what quantity.
• Inventory Management: MIS tracks inventory levels in real-time, generates reorder alerts when stock falls below reorder point, and recommends order quantities (EOQ). Inventory managers use MIS to decide when and how much to order.
• Quality Control: MIS tracks defect rates, scrap rates, and rework rates by production line, shift, and product. Quality managers use MIS to identify quality problems and their root causes.
• Cost Control: MIS tracks actual production costs (materials, labour, overhead) against standard costs. Cost accountants use MIS to identify cost variances and their causes (material price variance, labour efficiency variance).
• Customer Order Management: MIS integrates sales orders with production planning and inventory. Sales managers use MIS to check product availability, promise delivery dates, and track order status (Laudon and Laudon, 2020; O’Brien and Marakas, 2018).