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Contribution of Information Technology for Product's Quality | Correlation And Dependence | Sampling (Statistics)

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INFORMATION TECHNOLOGY’S CONTRIBUTION TO THE IMPROVEMENT OF PRODUCT QUALITY IN MANUFACTURING FIRMS OF ETHIOPIA: THE CASE OF ADDIS ABABA Tsegaye Mulugeta1 Abstract: This study was conducted to assess the contribution that information technology (IT) has for product quality. For this purpose, stratified random sampling was used to select manufacturing firms from each sub city of Addis Ababa, and their areas of expertise selected as per their convenience. Top-level managers were contacted from each
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  INFORMATION TECHNOLOGY’S CONTRIBUTION TO THEIMPROVEMENT OF PRODUCT QUALITY IN MANUFACTURING FIRMS OFETHIOPIA: THE CASE OF ADDIS ABABA Tsegaye Mulugeta 1 Abstract: This study was conducted to assess the contribution that information technology (IT) has for product quality. For this purpose, stratified random sampling was used to select manufacturing firms from each sub city of Addis Ababa, and their areas of expertise selected as per their convenience. Top-level managers were contacted  from each organization. Both close and open-ended questionnairewere employed to collect the data. The data collected by the closeended questionnaire were analyzed through the Spearman’s Rank order correlation analysis method of 0.05 level of significance at twotailed test. The open-ended questions were used for further discussionof the level of IT usage and awareness in manufacturing firms. Finally,the result shows that the use of IT is significantly contributed to thequality of product’s improvement through its involvement inmanufacturing process. 1.INTRODUCTION As business managers search for strategies to improve the competitive position of their firms, information technology is playing an increasingly crucial role. Though what isconsidered an Information Technology varies widely in the literature, for this study wewill use the general definition provided by Davis & Olson(1995): ‘an integrated, user machine system for providing information to support operations, management, analysisand decision making functions in an organization’. 1 B.Sc., MBA, Department of Management, P.O.Box 80732, Addis Ababa, Ethiopia. Tel 251-911-473929,Email:cozet1996@yahoo.com    The term product embraces more than physical goods, for a product maybe intangible(service) or ideas. The product offered maybe in any of these three categories: goods,services, and ideas or indeed may be an amalgam of all three (J.Luck & et a, 1982, p.163-4). The product that is to be referred in this study however refers only the physical goodsthat can be exchanged in the market.As O’Brain (2003), manufacturing information systems support the production functionthat includes all activities concerned with the planning and control of the processes for  producing goods. Among the systems, computer integrated manufacturing system plays avital role in automating manufacturing process that support them with machines,computers and robotics. Manufacturing firms can also use the material requirement planning and the manufacturing execution systems to monitor, report, and adjust thestatus and performance of manufacturing components to help a company achieve aflexible, high quality manufacturing process.The relation-ship between the use of Information Technology (IT) and product qualityhas been indicated in numerous literatures. ‘A manufacturing business is devoted to the production of tangible objects that are high in quality and competitive in cost, meetcustomers’ expectations for performance, and are delivered in a timely manner. Findingand achieving the appropriate balance among these attributes-quality, cost, performance,and time to market- challenge all manufacturing businesses. Those companies that aresuccessful in meeting that challenge remains in business: those that are not usuallydisappear’ (CSITMNRC, 1995). The study finally confirms that manufacturing industriesneed wise use of Information Technology to sustain in the market.Lutchen, emphasizes that to be successful companies should develop a formal business plan that fully integrates IT with strategic business objectives of the entire organization(Lutchen, 2004, p.38). Besides the direct contribution of firms’ effectiveness, IT will alsohave a considerable contribution for customer satisfaction, which is a base for businesstransformation. This can be possible through: improving the understanding of requirements, tailoring product to individual needs, providing a higher level of service,enabling a coherent customer relationship, providing informed and timely assistance andimproving communication (Moreton & et al, 1997, p.79-86).2  Again, IT’s contribution towards financial performance has been studied by Anandhis &et al (2000), and their study in different organizations for five years shows that theinclusion of IT expenditure variable in the model increased the variance significantly.This indicates that the presence of IT variable in the system provides a better  performance in the financial activities of the organization.There has been also a controversial idea as cited on Dan Remenyi & et al (1995) that‘There is in fact no correlation between the amount invested on IT and the return earnedon the investment. Hence 70% of users declared that their system was not returning their company’s investment; however the authors also stated ‘it is estimated that as many as90% of organizations didn’t have a systematic approach to evaluate their IT investment’.Finally, as we can see from the above literature, there is a direct relationship between theuse of IT and organization’s performance, with the exception of Anandhi’s study, thatshows the direct relationship of IT with financial performance of firms. Hence, this studyaims at specifying the general view of the studies by narrowing the scope towardsrelationship between the use of IT and product’s quality of manufacturing firms.With the above idea as a base, this study was initiated with a major researchable question:“Is there any relationship between Information Technology utilization and quality of  product's improvement in manufacturing firms?” and an objective of “ identifying therelationship of Information technology and quality of product's improvement inmanufacturing firms of Ethiopia .” 2.METHODOLOGY The study was conducted at the organizational level of manufacturing firms of Ethiopia toassess their systems’ flexibility to incorporate IT’s components. Stratified randomsampling was used to select manufacturing firms from each sub city of Addis Ababa, andtheir area of expertise selected as per their convenience. In the sampling process, efforthas been made not to contact two firms with in similar field of expertise (Industries).From each selected firm, a non-random sampling, mainly based on the position in theorganization, was used to select the individuals to be contacted. An open-endedquestionnaire was used to collect the intended information, including some technicalquestions that demand the manager’s concern to be responded. Therefore, individuals at a3  middle or top-level management position were contacted to collect information, whichreflects the situation of the firm and the effort towards product quality. No prior assessment was made in selecting firms about their usage of IT components for their manufacturing process. Among the structured questions, proper questions (Ordinallyassigned) were selected to be analyzed by the Sperman’s Rank Order correlation analysismethod to see the relationship of the variables and the other non structured questionswere used for discussion. 3.DISCUSSION The study was supposed to study the relationship of incorporating informationtechnology, beyond the physical equipment availability, with that of expected product’squality. The quality of products was assessed mainly focusing on the customerssatisfaction because of expectations met. Points like cost and technical effectiveness,timeliness and others shown in the graph below are also indicators of product qualityunder production (www.ams.mod.uk). Fig. 1- Quality measurement Variables  4
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