Management Information System

CHENAB ENGINEERIG AND FOUNDRIES Faisalabad

Executive Summary:

FIRM NAME: CHENAB ENGINEERIG WORKS AND FOUNDRIES (Pvt) Ltd.

ADDRESS: Jhumra Road Nishatabad , Faisalabad, Pakistan.
INTRODUCTION:
The firm was established in 1950, since then is involved in wide range of its manufacturing
capabilities, to flexibility match customers needs starting right from designing, raw materials and finished
goods. Apart from raw casting, the company is supplying fully machined casting. The company has kept its
pace with the latest technology and development in the field of iron and steel casting. The company is a
precision engineering firm and is equipped with the latest sophisticated equipments. The company is
member of AFS, USA and IBF, UK.
CEO: CEO of Chenab Engineering is Ahmed Hassan and he is also the CEO of chamber of commerce
Faisalabad.
DEPARTMENTS:
Administration Department
Account Department
Machine shop Department
Induction Furnace Department
Sale Department
Purchase Department
Security Department
Store Department
Crank Shaft Department
Finance Department
Quality Department
Maintenance Department
Monitoring Department
Audit Department
Power Department
VENDER:
Chenab Engineering is the vender of following three industries;
1. Millet Tractor Lahore
2. Al-Ghazi Tractor
3. Defense
Defense relates with HIT (Heavy Industry Taxla). Mostly tanks are made for defense industry.
Products:
Chenab Engineering is a manufacturing firm. It produces many products relating to tractor and
army tanks. Some products are following;
Axle 480 and 385
Adopter plate
Diff plate
Diff case
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Cylinder
Hydraulic lift cover
Hydraulic ram
Oil sump
Hub piston
Paddle
Pivot
Sport Splitter
Connection
Front Support
Boogie wheel
Crank shaft
Sprocket
End connector
Track block
Center connector
Track pin
Major Items For Production:
Machining Tools mostly imported form China
C.I Boora from Millet Tractor
C.I Scrape
Pig Iron
Sodium Silicate
Silica Sand
Short Blast
Co2 gas
Ferro Magnees
Silicon Magnees
Carburizer from India
Black Led from Sri Lanka
Coal Dust from South Africa
Information System:
The firm uses the Customize Oracle information system. This system contains some subsystems these are as
under.
1. Purchase system is used for purchase department. This system contains restrictions and controls over
purchase matters.
2. Account system is used in account and finance department.
3. Store system is used for store transactions. This system covers all the assets in stock and all the required
material stock detail.
4. Payroll system is used for calculating the salaries and wages of the firm's employees and workers.
5. Production system contains the records of production on daily bases and also on monthly and annual
bases.
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6. Sale system is used for sales records.
Information System Link wise:
Chenab Engineering has a customize system. In which there are some sub systems and every system has
link with other sub systems. Some details of these systems are as under.
Store System:
Store is a major department of the firm. It keeps all the stock of the firm. Store maintain a
specific level of stock according to the material requirement planning of the firm. Store system has some
following forms and reports;
1. Department wise demand (it comes from required production)
2. Store demand (it comes from department consumption)
3. Post purchase demand (it comes from urgent requirement)
4. Issuance department wise (it comes from department wise demand)
5. Part wise detail (it comes from part wise production)
6. Item wise detail (it comes from item wise demand)
7. Consumption on daily bases (it comes from issuance on daily bases)
8. Monthly consumption (it comes from monthly issuance)
9. Daily production report (it comes from production department)
10. GRN report (it comes from purchase system)
11. Issuance employee wise (it comes from employee wise demand)
12. Stock category wise (it comes from total items of store)
13. Item codes (it comes from required item)
14. Party codes (it comes from creditor and debtor)
15. Brand and model (it comes from purchased item)
16. Quantity wise stock
17. Amount wise stock (it comes from purchase rate of item)
18. Auto generated demand number (it comes from system)
19. Party wise detail (it comes from party wise purchase)
20. Item wise demand (it comes from total demand)
21. Demand date (auto generate)
22. Purchase return

Purchase System:
In purchase system the purchase manager controls the purchase procedure. This system starts from
store demand. Purchase system is a part of expenditure cycle and expenditure cycle comes from TPS and
TPS is a subsystem of information system.

1. Party wise purchase (it comes from purchase)

2. Item wise purchase (it comes from item wise demand)
3. Purchase order number (it comes from demand)
4. Credit or Cash.
5. Local purchase or import purchase (local purchase comes domestic purchase and import purchase from
foreign.
6. Purchase order date
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7. Comparative statement (it comes from competitors)
8.Approval of CS( it comes from competitors)
9. Approval of purchase order
10. Gate inward (it comes from purchase order number)
11. Inward quantity (it comes from purchase order quantity and physical quantity)
12. Inspection (it comes from inward number)
13. GRN (it comes from inspection number)
14. Inspection Return report
15. Daily purchase report
16. Monthly purchase report
17. Yearly purchase report

SALE SYSTEM:
Sale system relates with sale of the firms products it is major part of revenue cycle and revenue cycle is a
subsystem of TPS. Revenue cycle has link with conversion cycle and conversion cycle relates with cost
accounting.

1. Sale order
2. Delivery note
3. Total finished goods stock
4. Item wise sale
5. Party wise sale
6. Cash sale
7. Credit sale
8. Gate outward
9. Sales return record
10. Party wise sales return
11. Item wise sales return
12. Daily sale
13. Cost on finished goods
14. Monthly sale

Account System:
1. Ledger system
2. Party wise ledger
3. Creditors accounts
4. Debtors accounts
5. Trial balance
6. Voucher( it comes from GRN numbers)
7. Account balance report
8. Banks accounts report
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All the above points of systems are the reports in oracle which is being used in Chenab and now we
describe the procedures under major information system.
FRS:
Financial Reporting System is another subsystem of information system. Chenab engineering
is a registered firm so there is much role of finance department. The responsibility for providing
information to external parties is to a great extent, prescribed by law and professional standards
.Much of this information is in the form of traditional financial statements, tax returns, and
documents required by regulatory agencies.
The finance department following procedure for making solid financial reports;
a) Collect the transactions.
b) Record the transactions in special journal.
c) Posting from special journal to subsidiary ledger.
d) Post to general ledger.
e) Prepare the unadjusted trail balance.
f) Make adjusting entries.
g) Journalize and post adjusting entries.
h) Prepare the financial statement.
i) Journalize and post the closing entries.
j) Prepare the post closing trail balance.

Management Information System (MIS):

Management information system is a sub system of information system. In Chenab
Engineering this system is weak. This system is not working properly .Normally MIS include
following;
a) Production Management
b) Marketing Management
c) Finance Management
d) Human Resource Management
But in Chenab there is no specific marketing management. Only crank department market
there product because its sale is very low as compare to other parts.
Human resource management is a major department of industries but unfortunately Chenab
Engineering has no HRM department. Chenab is getting help for HRM from NUST.
Decision Support System:
Normally in Chenab the directors make decisions about firm progress. In some cases
directors call the department’s head for meeting. A new system of making decision for firm is being
implemented and following members are include in this new system;
a) Head of machine department.
b) Manager of production department.
c) Monitoring head.
d) Director Operations.
e) Admin manager.
f) Head of power department.
g) Head of store department.
All the members gather in one room for meeting of one hour on daily basis. After meeting
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CEO call the DO. If CEO wants to meet with other members then he call all the members in his
office after the routine meeting.

Objectives of Information System:

Objectives may differ from firm to firm. However, fundamental objectives are common to all
systems. Some objectives of Chenab are following which we observed;
1.The information system provides information about resource utilization to external users via
traditional financial statements and other mandated reports. Internally, management receives
stewardship information from various responsibility reports.
2. To support management decision making. The information system supplies managers with the
information they need to carry out their decision making responsibilities.
3. To support the firm's day to day operations. The information system provides information to
operations personnel to assist them in the efficient an effective discharge of their daily tasks.
4. Self esteem is another objective of Chenab owners.
5. Economic development

Advantages of Information System:

There are many advantages of information system in the firm. These are as under:
1. Cost reduction.
2. Improved and controlled responsibility.
3. Improved user satisfaction.
4. Data backup.
5. Check on controls of firms.
6. Day to day performance of employees.
7. Satisfaction of workers.
8. Enhancement in confidence of employees.
9. Reliable reports with verified controls.
10. Link wise verification on system.
11. Proper procedures for all transactions in the firm.
12. Well informed organization.
13. Proper time utilization.
14. Reliable financial statements.
15. Solid controls on inventories and account balance.
16. Satisfaction of owners on firm's staff.

Competitive Advantages:
1) This firm links with army because of this employees confidence is very high and firm get heavy
earning.
2) Millat Tractor industry is very famous and Chenab Engineering is only the vender of Millat.
3) Chenab Engineering is only one of the industry in Pakistan which produces axle for tractors.
4) For employees satisfaction NUST is much interested in Chenab Engineering.
5) CEO has good relation with China industry and China is investing new projects with Chenab
Engineering industry.
6) Chenab Engineering market their product in foreign countries.
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7) They can higher only experienced employees.
Challenges of information system:
Information system also have some challenges in the firm. These challenges are
following;
1. Uneducated employees.
2. Unauthorized documents.
3. Employee turnover problem.
4. Week control on inventory.
5. Daley in clearing accounts.
6. Emergency transaction.
7. Employee package problem.
8. Trust problem on employees.
9. Lack of controls implementation.
10. Lack of market information.
11. Narrow minded owners.
12. Coding problem.
13. No friendly atmosphere.
14. Duplication of demand
15. Issuance not on daily bases.
16. Negligence in recording according to physical existence.
Remedies:
1) Hiring most be qualified.
2) Proper use of designation and authority.
3) Provide facilities to employees control turnover.
4) Controls must be cross checked.
5) Strict rules for liabilities payable and must be full filled as an agreement.
6) Material required for planning must be for a month and store must keep it for emergency
use.
7) Pay according to the work abilities and efficiency of the employees.
8) Create trust worthy relationship among firm employees and also from owner side.
9) Controls implementation strictly obeyed by the firm's employees.
10) Market department must be a part of firm and marketing department should observe
market conditions on daily bases.
11) Coding must be proper and segregation of items must be proper.
12) Atmosphere must be friendly and it is necessary for all employees and owners they can
corporate with each other.

CONCLUSION:
In CHENAB ENGINEERING information system is very weak because the director
operations has old minded person he is not adopting the new technologies. Now the next generation of
that family has advance mind and they are trying to adopt new technologies. Moreover, now ERP is in
process. The son of CEO is working on HRM and also on Chenab system. Before the entry of son of CEO, the
workers of Chenab were not satisfy from system but now they have hope for the best future of Chenab.