Management Information System of PEPSICO.

What is Information System?

System:
System is a set of interrelated components, with a clearly defined
boundary, working together to achieve a common set of objectives.

Information System:
Information system is an organized combination of:
People.
Hardware and software.
Communication networks.
Data resources.
Policies and procedures.
This
system
stores,
retrieves,
transforms,
disseminates information in an organization

and

The following diagram clarifies the concept of Information

System & its dimensions:

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Management Information System of PEPSICO.

Types of Information System

Types of Information System:
Information Systems are classified into two main categories &
than further divided into sub-categories as follows:

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Management Information System of PEPSICO.

Information Systems from

Constituency Perspective
Information Systems from constituency perspective:
Information Systems from constituency perspective are as follows:

Transaction Processing System.

Management Information System.
Decision Support System.
Executive Support System.

Transaction processing systems (TPS):

The functions performed by TPS are as follows:
It serves operational managers.
Its principal purpose is to answer routine questions & to track
the flow of transactions through the organization. For e.g.
inventory status, granting credit to customers etc.
It monitors status of internal operations & firms relationship
with external environment.
Major producer of information for other systems.
It is highly central to business operations & functioning.

Management Information Systems (MIS):

The functions performed by MIS are as follows:
It provide middle level managers with reports on firms
performance which helps them to monitor firms operations &
helps in predicting future performance.
It summarizes & gives reports on basic operations using data
from TPS.
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Management Information System of PEPSICO.

It provides weekly, monthly, annual results but may enable
drilling down into daily & hourly data.
It is typically not very flexible system with little analytical
capability.

Decision Support Systems (DSS):

The functions performed by DSS are as follows:
It supports non-routine decision making for middle level
management. For e.g. what would impact on production
schedules be if the sales doubled in any previous month?
It uses information from TPS, MIS & external sources.
The system uses various modules to analyze the data.
It focuses on extracting, analyzing information from large
amounts of data.

Executive Support Systems (ESS):

The functions performed by ESS are as follows:
This type of information serves senior managers.
It addresses strategic issues & long term trends. For e.g. what
types of products should we make in next 5 years?
The system addresses non-routine decision making.
It provides generalized computing capacity that can be applied
to changing set of problems.
The system draw summarized information from MIS, DSS &
data from external events.
It typically uses web portal interface to present the content.

The functions performed by ESS are discussed in following diagram:

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Management Information System of PEPSICO.

How MIS obtain data from Organizations TPS:

The criteria through which MIS obtain data from TPS are as follows:

Relationship of Systems to one-another:

These systems are interlinked with each other as:
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Management Information System of PEPSICO.

TPS is the major source of data for other systems.
ESS is primarily a recipient of data from lower level systems.
Exchange of data between functional areas for e.g. sales order
transmitted to manufacturing system.
The following diagram shows that the systems are interlinked:

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Management Information System of PEPSICO.

Information Systems in Pepsi

Computer Based Information Systems are used in Pepsi Co.
which includes:
Electronic Data Interchange (EDI) -- To exchange
information between companies.
Direct Exchange (DEX) For information exchange
between hand-held computers & stores delivery system.

Benefits of Computer Based Information Systems to

Co.:
The microcomputers are linked up to PepsiCos central computer
system daily to update inventory information system. Management
estimates that over Rs. 1,250,000 per year maybe saved because of
the system. In Pepsi Co. it performs following functions:

It helps to recognize market trends- MIS helps PepsiCos

managers to recognize market trends, in respect of price,
designs of products, fashions etc. Timely information of the
market trend enables the firm to follow the right course of
action.
It facilitates marketing planning & control- Effective
marketing planning is required in terms of product planning,
pricing, promotion & distribution. Such planning will be
possible only if the company is possessing adequate &
relevant information & also possible through MIS.
Quick supply of information- In todays era, every firm
has to take quick decisions, for this purpose it requires fast
flow of information which is facilitated by a properly
designed MIS.
Improves quality of decision making- Properly designed
MIS supplies reliable & relevant information. With the help of
computers & other data processing equipment, the
marketing managers over there can make effective decisions
at the right time.
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Management Information System of PEPSICO.

Information Systems in Pepsi Co.

Information systems in PepsiCo. are:
In responding to market demands for efficient 24 hour order-todelivery process for customer orders, PepsiCo has installed a
computer system that links an effective wide area network that
allows immediate transmission of customer orders.
The outcome has been:
To integrate with a wide area network.
Transmit accurate & complete customer data.
Allowing the company to more efficiently loads trucks, schedule
deliveries & save labor hours.
Information systems link the vendor partners, who share relevant
work, personal, & health related information about employees.
Following Information Systems are used in Pepsi Co.:
Logistics.
Electronic commerce in PepsiCo.
Logistics:
In order to manage its distribution systems effectively, PepsiCo
had put in place advanced logistics systems.
PepsiCo sold beverage concentrate to bottlers, who added
carbon dioxide, sweetener & water to make beverages &
beverage syrup.
Syrup was sold either directly to the fountain accounts or was
combined with carbonated water for bottling.
Bottling companies were owned & operated by local companies
in the countries where PepsiCo operates.
The transportation network has been designed with a view to
ensure responsiveness & boost the availability of the product.
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Management Information System of PEPSICO.

For the unit we visited, using fast mode of transport increases
responsiveness as well as the transportation cost but lowers
the inventory holding cost.
The unit decides different mode of transportations having
different characteristics with respect to speed & size of
shipment.

Electronic commerce in PepsiCo.:

Pepsi takes the plunge with an online campaignPepsiCos recent announcement that it would conduct a joint
promotion of its products with Yahoo, one of the most popular
sites on the internet, is promising news for website operators
that have struggled to persuade the richest advertisers to
spend their money online.

SAP announced global brand leader PepsiCo has

selected My SAP Business Suite- SAP has announced that
global brand leader PepsiCo has selected My SAP Business
Suite as the primary business platform for unifying its
operations, standardizing business processes & increasing
efficiency across its divisions.

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