Organizational context

Tokai Bane

Is a spring manufacturing firm established in 1934 in Osaka. Its annual turn over is 1.3 billion yens
and employs 70 workers.

Due the fact of being a long-stablished firm, Tokai Bane has a large database of 6,000 production
data which allows her to readily produce even old products of 70 years ago in very small lots. Though
no negative earnings were registered in 62 years, the company faces difficulties in attracting new
customers and generate profits.

Tokai Bane adopts a full order-made production system which makes it difficult to predict quantities
and types of material that is going to be needed in to fulfil the orders from customers. This leads to
high stock levels as a measure to be always ready to produce.

In Tokai Bane all the process from customer order until the order fulfilment is manual. Suppliers
don’t have access to firm inventory data, so it has to make an order every time that material is
needed to maintain the stock. Customers’ orders are made through the phone so there are risks of
misunderstanding and wrong order fulfilment.

For Tokai is old firm, it has accumulated through time manufacturing experience that is considered
secret and not to be shared with outsiders for therein is its competitive advantage as well.

The difficult to generate profits was the trigger to modernize its information system. Without this
problem, the probability of changing would be minimal as the experience shows that long-
established firms are satisfied to the status quo and would not bother to changing.

This case provides a good example of how information system can improve firms operations by
reducing paperwork, misunderstanding with customers and suppliers and spreading knowledge
through the organization. It also shows that the firm might be required to reveal certain information
that she considered secreted or a source of advantage and abandon her old paradigm such as
disposing of some regarded-valuable assets (reducing inventory stock for example) if she has to
implement effectivelly the systems.