Variance tracking MIS in interdependent manufacturing contexts: An initial examination

Abstract

There are many conflicting signals concerning the effectiveness of variance-tracking management information systems (MIS) in manufacturing contexts. Though there are anecdotal references to dissatisfaction with the systems and conceptual arguments concerning inaccuracy, no empirical evaluation of the effects of such system deficiencies could be found. This, combined with the widespread use of such MISs makes it of interest to further investigate them in manufacturing context. This paper provides an exploratory empirical examination of variance tracking MIS deficiencies. Via a simulation experiment, we find that, in an interdependent manufacturing context, variance-tracking MISs may severely misrepresent whether production departments are in or out of control. We thus agree with those who suggest that variance-tracking MISs may not be appropriate in interdependent manufacturing contexts. Contributions include an empirical demonstration of the kind and extent of MIS deficiencies that can occur in these contexts. However, the exploratory nature of this study imposes significant problems of external validity.