Part 15

Applications of MIS
(Manufacturing
Sector)

Third Year Information Technology

MANAGEMENT INFORMATION
Tushar B Kute,
SYSTEM

Sandip Institute of
Technology &

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

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 categorypermanent, 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 longterm 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
Shareholders
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

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

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

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

Non supply of goods and services but advance paid.

Legal action
Termination of business association.
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,

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

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

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.

Stocking of items
System for controlling items

Multidimensional analysis of the price.

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 &