Application of MIS in Manufacturing Sector

Applications of MISManufacturing Sector:

Introduction, Personal Management, Marketing Management, Accounting and Finance Management, Production Management, Materials Management and Marketing Management,

Service Sector: Introduction, MIS applications in service industry ,

MIS Applications in Banking and Insurance Sector

Cross-Functional Enterprise Systems: Introduction, Collaboration systems in

Manufacturing, Enterprise application Integration, Transaction Processing systems

MANUFACTURING SECTORMajor business functions can be distinctly

identified as Sales, Marketing, Manufacturing, Finance, Accounting, and Human resources.

These are nothing but the managerial task with in business organization.

Managers basically perform the functions of decision making, planning and controlling

As a result MIS for each of these functional areas are developed.

Management Information Systems that support the goals of the organisationFinancial managementHuman resources managementMaterials managementProduction managementMarketing management

Financial management Primary objective is to meet the financial needs of the business. To meet the statutory compliance by way of declaring the financial results and

submitting reports to the Government and Tax authorities. Financial management uses a variety of tools and techniques as under:Cash management Cost analysisCapital budgeting and ROI analysisRatio analysisFinancial planning

Following are the list of documents, which are served as input for the financial management system

1. Payments to suppliers, employees, other institutions2. Receipt from customers, employees, financial institutions

and others. 3. Shares information from stock exchange

Applications To produce financial results of the company by creating

balance sheets To guide finance managers, cost controllers, auditors and all

other managers who are interested to view the financial statements

Accounting The system accounts for all monetary transactions which have

taken place, directly or indirectly, and which affect the company

The financial management system accounts for the following:Salaries of the employeesSales and purchases InventoryOther expensesDepositsMoveable and non-moveable assets of the organizationSales tax, Income tax and other local taxes.Shareholder’s funds

Reports Statutory reports Sales tax, excise and tax returns or any other tax details. Providing reports to other financial institutions. Giving reports to the shareholders annually.   Knowledge updates Stock valuation Monthly trial balance, balance sheet and profit and loss account Accounts receivables and aging Accounts payable and aging Overall business achievements in major lines of business Cash position  Operations updates Filing of statutory returns and reports Statutory payments such as advance tax, sales tax, octroi and excise

duty, etc. Reports on finished goods, despatched and invoicing Reports on material receipts and payments to the suppliers

Decisional reports: •Break even analysis for cost and price decision.•ROI for choice of investment.•Sources and usage of funds. •Analysis of current liabilities and decision on liquidation on priority basis

Action reports:Though decision analysis indicates the areas of decisions, action is taken in exceptional cases. Exceptional reports on implementations of the decision and its impact on the business are listed as follows:1. Overdue receivables• Legal actions can be taken• Some times termination of business association.2. Advance is paid but supply of goods is not done•Legal actions can be taken after giving warnings and notices•Term revision•Termination of business association3. Poor usage of fixed assets and disposal4. Payment to creditors, when penalties are involved  

Personal management Organizational structure of most firms includes a unit that is responsible for

many of the activities related to the personnel resource. The term personnel- management was originally given to these units, but

the practice today is to use the name human resource (HR). Personal Management looks after :Flow of information about people working in organization.Planning the personnel needs of the business by providing

suitable manpower.Development and training of the employees Promotion and rewards through performance appraisalEmployees grievances

Applications

The viewers of the database are personnel managers, heads of the human resource development department and top management

Accounting: Following are the list of documents, which are very necessary for the PM system• Attendance of the employees (May be weekly or monthly)• Number of employees working for particular department.• Leave record of the employees• Salary, wages, increments, deductions and incentives.• Skills and preferences.• Personal Resumes containing family information also

Materials management The objective of Materials Management (MM) :To provide material for production , maintenance and services To provide materials at economical pricesTo provide appropriate quantity and quality of materials with least stock outsTo reduce the extra cost of carrying the inventoryDisposal of non-moving and slow moving inventory

APPLICATIONS

 The materials management function is conducted through several

administrative and management systems, each having different purpose and focus. It has the following systems

Forecasting and planningProcurementPurchase orderingGoods receiptInspectionIssuing the material

AccountingThe materials management function account for a number of things , as shown below :• Purchase quantity• Issue Quantity• Stocks• Good returns• Rejections• Performance• Value Of purchase• Average or standard rate of accounting

Query Queries in the materials management largely centre around price , supplier, stock and pending aspects of purchase, returns and payments.

ReportsStatutory Report Stock ledgerOctroi registerMODVAT registerExcise duty returns registersReturns on Tax Deducted at source

Knowledge Update Price fluctuation and trendInformation on alternative materials with specification and test results.New suppliers and source of suppliesCurrent incidence of taxes and dutiesPerformance of suppliersValue of non-moving inventoryMaterials required for the next planning period

Operations update• Daily goods received register• Statement showing items in short supply or stock outs.• Reports on purchase requisitions received but not converted into purchase orders.• Statements on supplies due but not yet received• Statement on payment due to suppliers but not yet paid• Statement on supplies received or registered.

Decision Analysis• Cost of purchase and overrun• Value of inventory and analysis• Excessive delay in inspection• Reliability of suppliers• Vendor performance• Material performance• Floor rejections

Action Update• Indicates whether the decision is implemented or not• To know the impact of the action

Production managementThe objective of production management function : To provide manufacturing services to the organisationTo manufacture products of a certain specified qualityTo produce in a stipulated timeFuller utilisation of the manufacturing capacityMaximum uptime of plant and equipmentMinimal rejectionsFulfilling the promises given to the customer

Applications : The production management is performed through : production , planning and control bill of material processing,drawings and process planning,scheduling and monitoring systems as support systems

Accounting Quantity of production with respect to a time periodMaterial requirement and its usageRejection quantity at each intermediate stage and at final stageBreakdown incidenceUsage of power, fuel and consumablesMachine and facilities utilisationLabour hours

QueryStatus of job or order in terms of stage and level completionLoad status on machine or group of machinesStatus on availability of materialsStandard information on machines, tools, specifications etcStandard information on skills and capacities of each worker

Decision analysisMake or buyMake or subcontractUse of alternative materialUse of alternative processEvolving optimum product mix / job mixPlanning and scheduling of jobsSelection of production facilitiesSelection of alternative maintenance policies

Marketing management Basic goal of marketing is to satisfy the needs and wants of the customers.

The business functions of marketing is concerned with the promotions,

planning and sale of existing product and service in existing market.

It also deals with development of new product and services for new

market to potential customers

Thus MIS plays important role by providing managers with many

functional information systems. Actually marketing was the first

functional area to exhibit an interest in MIS.

For example, for interactive marketing- MIS can provide information

about prospectus customers who can become partners for making and

improving the product and services.

AccountingProduct SalesSales ValueSales TaxDealerDistributerCustomerExcise DutyZoneAreaMarket SegmentsExport MarketReturnsComplaints

ReportsStatutory ComplianceTaxes and duties Filing the returns to appropriate government authorities

Knowledge UpdateProduct sales ledgerSales summariesAccount receivablesOrders received and acceptedSales analysisAging of receivablesContribution analysisMarket analysisCompetition analysis

Operations UpdateOrder bookDespatch Report Inventory InvoiceCustomer complaintsComplaints disposed

Decision AnalysisPrice increase or decreaseLaunch of new productPackaging of existing productsDistribution channelsProduct positioning

Action Update : The action update reports will lead to such decisions asprice reductionwithdrawal of product from the market changing the product position allocating more budget for expenses

Some of the action update reports are:Sales v/s BudgetExpenses v/s SalesSales Growth v/s Sales ObjectiveSales v/s Market Segment v/s BudgetStock v/s Budgeted Stock LevelsComplaints v/s Number of Complaints Serviced

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