Track: IE/OM in Asia

Abstract

The introduction of information technologies (ITs) into small and medium-sized enterprises in Japan is very slow in spite of the various promotional measures such as financial support, education programs, and awards for best practices. We conduct a field study of IT utilization in small and medium-sized food manufacturers in Miyagi prefecture, Japan. In order to show the importance of the strategic utilization of ITs, we carry out a gross profit analysis of their product range. The results of our analysis show that some products have a gross margin below zero (i.e., the more of the product they sell, the lower their profits become). Before the analysis, the managers of the manufacturers thought they did not need to use ITs because their sales were growing (even though their profits were low). However, the results of the analysis suggest that managers could detect this gross margin problem if they utilized IT tools. In order for regional small and medium-sized manufacturers to utilize ITs in a strategic way, their managers must recognize the importance of ITs.