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Application in

Manufacturing Sector

Application in Manufacturing
Sector
A typical information system primarily serves the
needs of Functional levels such as
Personnel, Finance, Production, Materials,
Marketing and Corporate Business
Management.
Integrated systems provides data and information
for:
Business Planning: at the Middle Management
Level
Strategic Planning: at the Top Management
Level

Personnel
Managemen
t
Corporate
Business
Managem
ent

Financial
Managem
ent
Manufacturin
g sector

Marketing
Manageme
nt

Production
Managemen
t
Material
Managem
ent

Personnel Management
Objective: Providing suitable manpower in number and with certain ability,
skills and knowledge as per the demand of the business.
Its goal is to control personnel cost through continuous increase in manpower
productivity (use techniques, training, motivation, promotion, rewards).
Viewers of the Database:
1Personnel Managers
2.Heads of HRD Departments
3.Top Management
Application of MIS in Personnel Database
1. Analysis of attendance by a class ofemployees
2. Leave mgmt:by agroup ofemployees
3. Trend in the leave records
4. Analysis of accidents
5. Analysis of Salary \Wage structure
6. Analysis of Overtime
7. Analysis of manpower needs and evolving recruitment and training program.

FinancialManagement
Objective:
Meeting the financial needs of the business from time to time, by way of
providingWorking capitaland Long term loans to run the business with the goal of
containing the cost of capital at minimum.
Viewers of the Database:
1.Financialmanagers
2.CostControllers
3.Auditors
4.Material Managers
5.CompanySecretary
6.TopManagement
Application of MIS in Financial Database
1.CashFlow Analysis
2.Sourcesand Uses of Funds
3.Debtors analysis and Aging pattern
4.Creditorsanalysis and Aging pattern
5.Budget Analysis
6.Ratio Analysis
7.CapitalBudgeting
8.CostAnalysis

Production Management
Objective: To provide manufacturing service to the
organisation which includes Production planning and
control, Industrial Engineering, Maintenance and Quality
Control.
Maximum utilization of the manufacturing capacity with
minimum rejections
Meeting delivery promises
Application of MIS in Production Database
1. Make or buymaterialdecisions
2. Usesofalternative materialdecisions
3. Rescheduling andloading ofjobs
4. Planning and Scheduling of jobs
5. Selection of production facilities
6. Selection of alternative maintenance facilities

Materials Management
Objective: To provide material for production, maintenance
and service at economical prices in an appropriate quantity
and quality with no extra cost of carrying the inventory.
Its scope is Material procurement, stocking and inventory
management
Searching new substitutes to reduce the cost ofmaterials,
Reduction of inventory.
Application of MIS in Material Database
1. Forecasting and planningdecisions
2. Price decisions
3. Stocking of the items
4. Controlling the item
5. Production /Inventory holding
6. Inspection and supervising

Marketing Management
Objective: Identifying the needs of the consumers
Evolving in product concept
Designing of the product
Satisfying the consumer
Positioning of the product
Selling at appropriate price
Developing dealer distribution network
Application of MIS in Marketing Database
1. Pricing decisions
2. Acceptance of orders
3. Allocation of stock to orders
4. Discount and commission
5. Deciding the sales terms
6. Introduction of new product
7. Product positioning

Application in service
sector

Introduction to service
sector:
Service sector is an organization
which provides services to

customers. The main aim of service industry is to provide most


satisfying service to their customers.
Since service industry deals directly with human being, it is very
difficult to provide the expected services because of the following
reasons.
1. The service demands of customer are more dynamic.
2. Socio-economic status of customers changes the expectations and
understanding about the services and its outcome.

. Difference between
Manufacturing
industry
Service industry
manufacturing
industry
and
The goals changes with
Goal is not changing. It is to give
service
industry:
industry
to industry.
services to customers
Product demands are not so
dynamic

Service demands are so dynamic

No need to change its operation It needs changes in services


oftenly
oftenly.

1.
2.
3.
4.
5.
.
.

MIS in service industry consists of all the basic applications such


as personal, payroll, inventory etc., plus the important application
calledmission critical application.This helps to offer the
distinctive service to the customers.
The different types of service industries are,
Airlines
Hotels
Hospitals
Banks
Insurances
Principles of special service
Tom Peter stated five principles of distinctive service
Listen, Understand and Respond to the customers
Define a Superior Service and establish a Service Strategy
Set standards and measure the performance
Select, Train and Empower the employees to work forthe
customers
Recognize and reward the accomplishments.

Applications of MIS in airline industry:

The main function of airline industry is to move people and goods


from one location to other safely on time. The following are the
different expectations and perceptions (understanding)about
distinctive services from the industry by the consumers.
Flight schedule convenience
Ticket prices
Seat comfort
Meal quality
Treatment by the new crew members and ground staff
Facilities in the airport

Assistance in travel arrangements

Arranging hotel accommodation

Transport facility available in the airport

Solving their problems immediately in the airport front office

Passenger information(type, class, purpose of travel, language etc.)

Information on the aviation industry(mis is necessary where the


safety, security and availability of planes is doubtful.)

Applications of MIS in hotels:


Hotel is a place where people look for a
distinctive service. It is a place of stay and
transition from convenience to comfort,
comfort to enjoyment, enjoyment to total
service.
Applications:
Keep track of the customer profile
Monitoring occupancy level
Project future needs
Monitor the level of expectations
Monitor the communication needs
Customer database

Applications of MIS in Hospital:

The hospital are required to run as business institution with the mission of
the best health care for the people.
Patients database :
To handle the queries onexisting patients and their treatment.
Planning and control :
At any time hospital staff needs to find out availability of certain facility and
resourcesin the hospital. It is needed to have a online query system tofind out such
information.
Hospital staff database :All medical staff of the hospital including Doctors, Nurses,
andTechnicians, Visiting doctors requires togive their personal and professional
experience details to hospital management. There work times and shits, important
telephone numbers. Information about other emergency and important service
center like laboratories, blood banks andspecial clinical and facility centers
History database :Guidance and research doctors and students needs patients
history database to maintain. How patient is responding to a particular drug can be
monitored. To make planning for health service this serves is a important information.
Payroll and financial accounting
Critical control Management of the hospital need reports for forward planning and
control. Most ofthe management efforts are related to manpowerand human
resource planning.

Application of MIS in banks


Information systems are important to design MIS for banking systems
1. Customers Database
2. Service
. To the customer: Some times bank personals needs information
about the customers and their account, which will help and warn
them for their service.
. For business promotions: For building a business with
customer,bank officials needs to find out prospectus customers
Therefore they require to study the trendsin the industry. MIS should
collect data from various sources and analyses it.
3. Skill and Knowledge Up-gradation: To offer proper service to
the customerbank personnel must update theirknowledge about
financial policies and new developments.
. There are many banks in the market now and this industry is growing
very fast.Good service is the only solution toimprove business.

MIS Application in Insurance


Insurance is a widely accepted method
ofsafeguarding people against various hazards of
life.
MIS handles three major areas of insurance
company :
The development of new policies.
The settlement of claims(claim pending, their
disputes, not settled and rejected claims due to
certain reasons).
Administrations and Management of policies(forgot
to pay the premium in time, renew a policy): MIS
must help in generating automaticreminderservice
and generating letters to that respect.

Decision support system

DSS
DSS:

A decision support system (DDS) is a computer based information system that


supports the process of managerial decision making when these decisions are semi
structured or unstructured, unique, rapidly changing, and not specified easily in advance.
The characteristics of DSS include:
Comprehensive Data Access:They attempt to combine the use of models or analytic
techniques with traditional data access and retrieval functions;
Easy to use: They specifically focus on features which make them easy to use by non
computer people in an interactive mode.
Flexibility: Support for decision makers in semi structured and unstructured problems.
Interaction. DSS are computer-based systems designed for interactive use by decision
makers or staff users who control the sequence of interaction and the operations performed.
Repeated Use. DSS are intended for repeated use. A specific DSS may be used routinely or
used as needed for ad hoc decision support tasks.
Ancillary. DSS can support decision makers at any level in an organization. Support for
managers at various managerial levels, ranging from top executive to line managers.
Task-oriented. DSS provide specific capabilities that support one or more tasks related to
decision-making, including: intelligence and data analysis; identification and design of
alternatives; choice among alternatives; and decision implementation.
Identifiable. DSS may be independent systems that collect or replicate data from other
information systems OR subsystems of a larger, more integrated information system.

Difference between MIS and DSS


S.n
o.

MIS

The main focus is on the structured tasks


and the routine decisions.

Delivers system depending on the frozen


requirements.
Data storage is of great importance

3
4

MIS manager may not completely


understand the nature of the decision.

Access to the data possibly requiring a


wait for the managers turn.
Info about performance

DSS
Focus is mainly on the semi / un-structured
tasks, which demand the managerial
judgment.
Current data can be used in the Decision
Support System.
The main emphasis is on the data
manipulation.
Manager possesses the knowledge about the
nature of the decision and the decision
making environment.
Waiting is not at all required.
Info and modeling to analyze problems

Pre-specified Fixed format

Flexible and Adaptable

Periodic reports or On Demand

Interactive Inquiries

MIS focuses more on the information


gathered and the information that has
poured from different quarters.

DSS focuses more on leadership.

10

on planning the report of various topics


concerned with the organization that
would assist the managers to take vital
decisions pertaining to the functioning of
the organization.

focuses more on decision making.

Types of DSS
1. Status Inquiry System:It helps in taking operational,
management level, or middle level management decisions. It does
not require any computation, analysis, choice for decision. If the
status is known, the decision is automatic.
2. Data Analysis System:It needs comparative analysis and makes
use of formula or an algorithm, for example cash flow analysis,
inventory analysis etc.
3. Information Analysis System:In this system data is analyzed
and the information report is generated. For example, sales
analysis, accounts receivable systems, market analysis etc.
4. Accounting System:It keeps track of accounting and finance
related information, for example, final account, accounts
receivables, accounts payables, etc. that keep track of the major
aspects of the business.
5. Model Based System:Simulation models or optimization models
used for decision-making are used one time and infrequently and
creates general guidelines for operation or management.

Types of tools/models
DSS

Behavioura
l model

Management
science model

OR model

1. Behavioural model:

These models are useful in understanding the


behaviour amongst the business variables.
It includes trend analysis, forecasting(regression, time series and correlation) and the
statistical analysis models. These models shows the relationship between one or more
variable and identifying the influence of one variable on the other. They are used in
process control, manufacturing, marketing, agricultural science etc.

2. Management science model:

They are developed on the principle of


business management, accounting and economics. There are several management
systems which are used for management decisions.
Example: bugetary system, cost accounting, ROI and MRP system in material mngt.
Production planning and control, scheduling and loading system in production mngt.
Manpower planning and forecasting in personnel management.

3. Operations research models:

It includes
mathematical model and linear programming model and
inventory control model.

They represent a real life problem situation in terms of


variables, constant and parameters expressed in algebraic
equations. For these models, set theory, algebra, calculus
and probability are used.
These models are used to find the optimal solutions.

Enterprise management
system

ERP

ERP is an integrated, real-time, cross-functional enterprise


application, an enterprise-wide transaction framework that
supports all the internal business processes of a company.
It supports all core business processes such as sales order
processing, inventory management and control, production and
distribution planning, and finance.

ERP is an combination of three most important components: Business


Management Practices, Information Technology(database and
applications), and Specific Business Objectives.
Business solutions that addresses all the needs of an enterprise with the
process view of an org to meet the organizational goals and integrate all
the functions of the enterprise.
It integrate all data and processes of an organization into an unified
system.
An ERP systems key objective is to integrate information and processes
from all functional divisions of an organization and merge it for effortless
access and structured work flow.
Why of ERP?
1. ERP is very helpful in the following areas:
2. Business integration and automated data update
3. Linkage between all core business processes and easy flow of integration
4. Flexibility in business operations and more agility to the company
5. Better analysis and planning capabilities
6. Critical decision-making
7. Only solution for better project management.
8. Automatic introduction of latest technologies
9. Better customer service

Scope of ERP
Finance:Financial accounting, Managerial accounting,
treasury management, asset management, budget
control, costing, and enterprise control.
Logistics:Production planning, material management,
plant maintenance, project management, events
management, etc.
Human resource:Personnel management, training
and development, etc.
Supply Chain:Inventory control, purchase and order
control, supplier scheduling, planning, etc.
Work flow:Integrate the entire organization with the
flexible assignment of tasks and responsibility to
locations, position, jobs, etc.

ADVANTAGES AND DISADVANTAGES OF ERP:


Advantages:
Integration
ERP is used for reducing data redundancy and redundant data entry.
Efficiency
Cost reduction
It reduces cost only if the company took accounting and reporting
seriously even before implementation and had put a lot of manual effort
in it.
Accuracy
ERP does is makes the lives of inaccurate people or organization a
complete hell and maybe forces them to be accurate (which means hiring
more people or distributing work better),
Disadvantages:
Expensive
This entails software, hardware, implementation, consultants, training,
etc. Or you can hire a programmer or two as an employee and only buy
business consulting from an outside source, do all customization and enduser training inside. That can be cost-effective.
Not very flexible
Risk of implementation failure

Components of ERP
FRM: This component is the core of the
ERP system.
This gathers financial data from various
functional departments and generates
valuable financial reports such as balance
sheet, general ledger; trial balance and
quarterly financial statements.
MRP: This component provides the
information needed for the manufacturing
process to take place.
It contains number of manufacturing
methods, so that the organization can
choose the best which fits for them.
HRM: This component maintains a employee database containing
information about employees contact information, salary details, attendance,
performance evaluation and promotion details.
This component helps the management to make use of the employees best
talent.
SCM: SCM as the "design, planning, execution, control, and monitoring of
supply chain activities with the objective of creating net value, building a
competitive infrastructure, leveraging worldwide logistics, synchronizing
supply with demand and measuring performance globally.
CRM: managing a companys interactions with customers and sales
prospects.