MANAGEMENT INFORMATION SYSTEM

Third Year Information Technology

Part 15Applications of MIS(Manufacturing Sector)

Tushar B Kute,Sandip Institute of Technology & Research Centre, Nashiktbkute@gmail.com

MODEL OF INFORMATION PROCESSING SYSTEM

APPLICATIONS IN MANUFACTURING SECTOR

Personnel management Production management Financial management Material management Marketing management

PERSONNEL MANAGEMENT

It has a primary function of providing suitable manpower in number and certain ability, skill and knowledge, as the business organizations demands from time to time.

Its goal is to control personnel cost through continuous increase in manpower productivity by resorting the following techniques: HRD through training and upgrading the skills. Motivation through leadership and job

enrichment. Promotion and rewards through performance

appraisal. Structuring the organization.

INPUT TRANSACTION DOCUMENTS

Personal application form Appointment letter Attendance and leave records Biodata Appraisal form Productivity data on jobs Wages / salary agreement Record of complaints, grievance, accidents Industry data of wage, salary structure Industry data on manpower, skill, qualifications

APPLICATIONS

Accounting Query Analysis Control

ACCOUNTING

Attendance Manpower Leave Salary/wages deductions Loans and deductions Accidents Production data Skills Biodata Family data

QUERY

Who is who? Strength of section, department, division Number of person with particular skills. Attendance, leave, absenteeism records of all

employees. Salary/wages of employees. Designations and number persons holding

these designations. Personal records of employees..

ANALYSIS

Analysis of attendance by class of employees.

Leave analysis by a group of employees.

Trend in the leave record. Analysis of accident and type thereof. Analysis of salary/wages structure. Analysis of overtime.

CONTROL

Probable absence vs. workload. Projection of personnel cost against

manpower increase. Assessment of accident records against

safety measures taken. Personnel cost vs. industry cost and its

projection. Projection of manpower needs and evolving

recruitment and training programs.

REPORTS

Statutory reports Information updates Operation updates Decision analysis Action reports

STATUTORY REPORTS

Attendance record (Muster). Strength of employees by category-

permanent, trainees, apprentices. Provident funds, ESI reports, ledgers,

returns. Accident reports. Income tax forms 16, 24A. Strength of employees to Director

General of Technical Development (DGTD)

INFORMATION UPDATES

Daily attendance report Employee strength Joining and transfer of employees Personnel cost by department, job,

product. Periodical statements showing cost by

salary/wages, overtime.

OPERATION UPDATES

Daily attendance to plan the workload. Overtime vs. work completed. Projected absenteeism and distribution

of workload. Cost of personnel job or work

completed.

DECISION ANALYSIS

Analysis of attendance for season, festival, and by skills, scheduling of the jobs accordingly.

Overtime analysis by department, employees and job to decide the strength of personnel.

Analysis of accidents and deciding on safety measures and training.

Cost analysis by personnel vs. jobs skills and planning for new recruitment.

ACTION REPORTS

Recruitment and additional manpower or subcontracting of jobs.

Acceptance of orders on the basis of workload.

Reduction, transfer and reorganization of employees to control costs.

Preparation of training and development programs with specific needs.

HR MANAGEMENT SYSTEM

FINANCIAL MANAGEMENT

Its function has a primary objective of meeting the financial needs of the business, from time to time, by the way of providing working capital and long-term capital to run the business with the goal of containing the cost of the capital at minimum.

Declaration of audit financial results, submit all reports and returns to the Government and Tax authorities.

FM TOOLS

Break-even analysis Cost analysis Cash flow projections Ratio analysis Capital budgeting and ROI analysis Financial modeling Management accounting Expense analysis, auditing and control

INPUT TRANSACTION DOCUMENTS

Payments- to suppliers, authorities, employees, shareholders, financial institutions and others.

Receipts- from customers, authorities, employees, shareholders, financial institutions and others.

Data from stock exchange of the share prices, consolidated financial results of the other companies.

APPLICATIONS

Accounting Query Decision analysis Control

ACCOUNTING

Sales Purchase Salary / wages Inventory Expenses Capital purchase Fixed deposits Shareholder’s

funds

Income tax Sales tax Excise duty Custom duty Octroi Consumption Budgets Fixed assets

QUERY

The query is processed for the following with respective codes as keys- Main document Subsidiary account Location (Factory, Branch) etc. Document (Bills, Credit note, Delhi note,

Receipt etc.)

DECISION ANALYSIS

Cash flow analysis Sources and uses of funds Debtors analysis and aging Creditors analysis and aging Budget analysis Ratio analysis and management norms Capital budgeting and ranking of investment

alternatives. Cost analysis of various production inputs

and alternatives.

CONTROL

The control is exercised, based on the exceptions found in the business organization- Accounts receivables, outstanding beyond the

acceptable norms. Advances to creditors and non realization of

obligations. Valuation of non-moving inventory for disposal. Analysis of non-moving accounts and legal

actions. Shortage of funds in excess of planned and

rescheduling of activities, priorities. Cost overruns beyond the norms and action on

alternatives.

REPORTS

Statutory reports Information updates Operation updates Decision analysis Action reports

STATUTORY COMPLIANCE

Tax returns Registers: sale tax, excise tax, tax deducted

at source. Declaration of certain results to the financial

institutions. Declaration of financial results to the public

every six months. Declaration of annual results to the board,

shareholders, and public within a stipulated time.

INFORMATION UPDATES

Monthly trial balance, balance sheet and profit and loss account

Stock valuation Accounts receivables and aging Accounts payables and aging Expenses on major accounts. Cash position Payments and receipts which are statutory

obligations. Sales and purchase of assets by certain

classification. Overall business achievements in major lines of

business.

OPERATION UPDATES

Filling statutory returns and reports. Statutory payments such as advance tax,

sales tax, octroi, excise duty etc. Transactions executed and accounted in the

system. Reports on finished goods, dispatches and

invoicing. Reports on material receipts and payment to

the suppliers. Obligatory payments- rents, insurance

premium, membership fees, interest and dividend.

DECISION ANALYSIS

Break even analysis for cost price detection. Returns of investment analysis for choice of

investment. Trends analysis on price of selected

commodities. Cash flow, sources and uses of funds. Analysis of current and fixed assets in terms

of use and decision on alternate use or disposal.

Analysis of current liabilities and decision on liquidation on priorities basis.

ACTION UPDATE

Overdue receivables Legal action Termination of business association.

Non supply of goods and services but advance paid. Legal action Revision of terms Termination of business association

Payments to creditors, where penalties are involved. Poor usage of fixed assets and disposal. Non-moving inventory of more than two years and

its disposal. Evolving new systems and procedures to control

expenses and implementation.

PRODUCTION MANAGEMENT (PM) The Objective of PM function is, to

provide manufacturing services to the organisation.

This involves the manufacture of products of a certain specified quality and within certain costs in a stipulated time fulfilling the promises given to the customer.

The PM function is supported by other functions, viz. Production Planning and Control, Industrial Engineering, Maintenance and Quality Control.

INPUT TRANSACTION DOCUMENTS Production Programme Production Schedule Process Planning Sheet Job Card Job status advice Quality Assurance rating form Finished goods advice Breakdown advice Material Requirement Material Requisition Customer order

APPLICATIONS

Performed through Production Planning and Control

Bill of material processing Drawing and Process Planning Scheduling and Monitoring systems as

support systems

ACCOUNTING Quantity of Production with respect to a

time period Material requirement and its usage Rejection quantity at each intermediate

stage and the final stage Breakdown incidence Labour complement with respect to a

period Use of Power, fuel and Consumables. Machine and facilities utilisation Labour hours

QUERY The queries in the PM relate to seeking of

status of job or information on fixed entities..+ Status of the job or order in terms of stage

and level of completion+ Production Programme and jobs

schedules.+ Load status on Machine, group of

machines.+ Status on availability of material.+ Standard information on machines, tools,

specifications.+ Standard information on skills and

capacities of each worker.+ Standard information on products and

processes.

DECISION ANALYSIS Long term and Short term Period

Make or buy Make or subcontract User of alternative material Use of alternative process Evolving optimum product mix/job mix Rescheduling and loading of jobs Planning and scheduling of jobs Selection of production facilities Selection of alternative maintenance

policies

CONTROL The exceptions which need to be highlighted are:

Excessive product rejection on account of material and/or process.

Hold up of key jobs beyond a certain limit. Excessive work in process inventory. Continued breakdown of the manufacturing

facility beyond a certain period. Utilisation of key facilities below a limit. Continuous significant deviation from standards or

norms of production rate. Backlog of a large number of orders and failure to

meet promised delivery date.

REPORTS AND SCREEN DISPLAY

Statutory Compliance Information Update Operations Updates Decision Analysis Action Update

MATERIALS MANAGEMENT

To provide material for production, maintenance and services at economical prices, in an appropriate quantity and quality with east stockouts and with no extra cost of carrying the inventory.

The scope of materials management function is procurement, stocking control of inventory.

INPUT TRANSACTION DOCUMENTS

Purchase acquisition Purchase order Receipt of goods Return of goods to supplier Issue for production Return from production Certification of bill for payment

APPLICATIONS

Forecasting and planning Procurement Purchase ordering Goods receipt Issuing the material Processing of returns Bill passing and control

ACCOUNTING

Purchase quantity Issue quantity Stocks Good returns Rejections Performance Value of purchase Average or standard rate of accounting

QUERY

Query in material management largely centered around price, supplier, stock and pending aspect of purchase, returns and payments.

It may be on item seeking the latest purchase price or it may be on an item seeking price in a particular purchase order placed on a particular supplier.

DECISION ANALYSIS

Price of the item. Multidimensional analysis of the price.

Stocking of items System for controlling items

Fixed Order Quantity Reorder Level System Periodic Review System

Inventory analysis A-B-C Analysis Production Analysis

CONTROL

Capital blocked in the inventory Number of stock outs affecting the

production activity Reliability and dependability of

suppliers Cost of purchase

REPORTS AND DISPLAY

Statutory Compliance Information Update Operations Updates Decision Analysis Action Update

STATUTORY COMPLIANCE

Stock ledger Valued stock statement Octroi register MODVAT register Excise duty returns and registers Customs bond register Returns on tax deducted at source

INFORMATION UPDATE

Price fluctuations and trend Information of alternative material with

specifications and test results New suppliers and sources of suppliers Current incidence of taxes and duties Value of inventory computed at standard

price Performance of suppliers Stockouts Value of non-moving inventory Material required for next planning period.

OPERATIONS UPDATE

Daily goods received register Statement showing items in short supply or

stockouts Reports on purchase acquisitions received

but not converted into purchase orders Statement on suppliers due but not yet

received Statement on payment due to suppliers but

not yet paid Statement of suppliers received and rejected

DECISION ANALYSIS

Emergency procurement Revision of price Terms of supplies Disposal of inventory Cutting down the procedure of

purchase Switching over to new supplier

ACTION UPDATES

All the actions are centered around the parameters mentioned in decision analysis.

MARKETING MANAGEMENT

It deals with satisfying the consumer. The scope of function starts from identifying the need of customer, evolving product concept, designing the product, positioning the product in market and selling in the appropriate price.

Activities- Market research Consumer survey Advertising Sales promotion campaign Stocking of products

INPUT TRANSACTION DOCUMENTS

Customer order Order acceptance Delivery note Invoice, credit note, debit note

APPLICATIONS

Accounting Query Decision analysis Control

ACCOUNTING

Product sale Product family Sales value Sales tax Dealer Distributor Customer Excise duty

Zone Area Inventory Receivables Market segment Exports market Returns Complaints

QUERY

Handling customer complaints Pending position followed by stock

exists for allocation or not Whether manufacturing order is

issued / status Single or multidimensional comparisons

between two product groups.

DECISION ANALYSIS

Decision taken on Pricing Allocation of stocks to orders Discounts and commissions Deciding sale terms

Decision building models Break even analysis model Risk analysis model Distribution model Network model Product launch model

CONTROL

Correct ongoing operational performance

Reset the direction trend in the development towards desired goals and objectives

Product positioning and pricing Choice of market segment

REPORTS

Statutory reports Information updates Operation updates Decision analysis Action reports

STATUTORY COMPLIANCE

Sales tax register Returns Excise duty returns

INFORMATION UPDATE

Product sales register Sales summaries Accounts receivables Orders received and accepted Sales analysis Aging of receivables Contribution analysis Market analysis Competition analysis

OPERATION UPDATE

Reports generated on various marketing operations, daily transactions– Order book Dispatch report Inventory Invoice Customer complaints Complaints disposal

Guidance for operating personnel as how they are performing.

DECISION ANALYSIS

It convey whether the desired/expected results are realized or not.

Pre and post-sales campaign Choice for alternative to customers New product launch

ACTION UPDATES

Action reports Sales vs. budget Expenses vs. sales Sales growth vs. sales objectives Sales vs. market segment vs. budget Stock vs. budgeted stock levels

REFERENCES

Waman Jawadekar, "Management Information Systems” , 4th Edition, Tata McGraw-Hill Publishing Company Limited.

Tushar B Kute,Sandip Institute of Technology & Research Centre, Nashiktbkute@gmail.com