Today's information systems are both technical and social in nature. Management must understand the importance of information within the organization. It is management's job to understand how information is collected, processed, and distributed. We are all extremely affected by information systems and must be willing to understand and work with them. Our global economy does not allow us to depend on face to face transactions like in the 1980's. Today, few managers can ignore the importance and impact of how information is handled by their organization. Information systems play a critical role in today's business organization and society (Laudon 5).

Since the emergence of the global economy, the success of firms today and in the future depends on their ability to operate globally. The American economy depends on imports and exports. Foreign trade, both imports and exports accounts for a little over 25 percent of goods and services produced in the United States, and even more in countries like Japan and Germany. This percentage is currently and will continue to grow in the future (5).

Globalization of the world's industrial economies greatly enhances the value of information

For example, UPS competes globally with information technology. UPS delivers over three billion packages a day to more than 185 countries. All this would not be possible without an accurate information system. UPS has invested 1 to 1.8 billion dollars on information technology alone from 1992 to 1996. This technology has helped UPS boost customer service while keeping costs low and streamlining its overall operations. UPS does this by using a hand-held computer called a Delivery Information Acquisition Device (DIAD). UPS drivers automatically capture customers' signatures along with pickup, delivery, and timecard information on these computers. These computers are then placed into an adapter attached to each UPS truck. The adapters then transmit to the main UPS computer network through cellular access. From the main computer network any information can be accessed (Wilson).

The system used by Baxter is similar to the just-in-time delivery systems developed in Japan and now being used in the American automobile industry. Baxter has even gone one step further by eliminating the need for delivery personnel to drop off their carts at the loading dock, which is then placed in a hospital storeroom. Instead, they deliver orders directly to the hospital corridors, dropping them at nursing stations, operating rooms, and stock closets. This essentially has created a stockless inventory since Baxter serves as the hospitals' warehouse. A stockless inventory greatly reduces the hospitals' need for storage space and personnel. It also lowers holding and handling costs significantly. This is a better system than the just-in-time inventory method because under the other systems, storage is required, but under the stockless inventory system, it eliminates inventories entirely. The most important part of the stockless inventory is the information system that allows all transactions to happen at the touch of a key ("Removing the Warehouse").

New Jersey: Prentice-Hall Inc., 1996

Another example on the critical role of information systems is Baxter International's "stockless inventory" and ordering system. This is an information system that locks in customers and satisfaction. Participating hospitals become unwilling to switch to another supplier because of the system's convenience and low cost. Baxter Healthcare International Inc. supplies nearly two-thirds of all products used by United States hospitals. It uses an information system originally developed by American Hospital Supply Corporation. Buying this system has made Baxter a full line supplier for all hospital needs ("Removing the Warehouse").

As you can see information systems are far more than just input, process, and output machin

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