Management Information system

Submitted to: Mr. Aman Kumar

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Submitted by: Sabhyata Marwah Nitin Katoch Anshul Khanna

MANAGEMENT INFORMATION SYSTEM

The MIS is a computerized business processing system generating information for the people in the organization to meet the information needs for decision-making to achieve the corporate objectives of the organization. An 'MIS' is a planned system of the collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management. In a way it is a documented report of the activities that were planned and executed. MIS is mainly designed to take care of the needs of the managers in the organization. MIS aids in integrating the information generated by various departments of the organization. MIS helps in identifying a proper mechanism of storage of data. MIS also helps in establishing mechanism to eliminate redundancies in data

Characteristics of MIS

Applications used In the Manufacturing sector

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Introduction
The approach to the application development is on the basis of data base and non conventional file system. The MIS model of an application, considers transaction processing as a basis. The online transaction processing system develops data for DBMS and the application development is basis on such database. A typical information system primarily serves the needs at function levels such as Personnel, Finance, Production, Materials and Corporate Business Management. These systems when integrated provide cross functional information to management high-lighting the business implications of the decisions taken in one area of the business or the other. Integrated systems provide data and information for business planning at the middle management level and for strategic planning at the top management level.

The system designer develops the applications with the objective of accounting the transaction based results and provide reports on the same. The second objective is to provide a query system for assessment of the status on record, result or document. The system provides on the spot screen display showing a status, such as stock of an item, balance of an account, position of purchase order an d so on. Third objective is to provide system analysis of processed data revealing certain business trends or results. It is also supposed to provide certain guidelines and norms for strategic and tactical planning. The analysis system provides fund of information at all level for planning and execution of business operations. The fourth objective is to provide control information to ensure that the business runs as per the plan. Wherever possible the information provided on the basis of feed forward control, i.e., providing early signal of probable adverse conditions or results.

The report generation is decided on the basis of certain business information needs. These needs are statutory compliance, knowledge update, operation management, decision analysis, control and action. The contents of the reports are decided as per users of the information. The frequency, duration and coverage of the report is decided as per the user requirements.

OLTP SYSTEM

RDBMS

DATABASE

APPLICATION DEVELOPMENT SYSTEMS

ACCOUNTING APPLICATION S

QUERY APPLICATION S

ANALYSIS APPLICATION S

CONTROL APPLICATION S

PRINT REPORTS

SCREEN DISPLAY

STATUTORY COMPLIANCE

KNOWLEDGE UPDATE

OPERATION UPDATE

DECISION ANALYSIS

ACTION UPDATE

Various applications used in Manufacturing Sector

PERSONNEL MANAGEMENT Personnel management function has the objective of providing suitable manpower in number and with certain ability, skill, and knowledge, as the business organization demands from time to time. Its goal is to control personnel cost through continuous increase in manpower productivity by resorting to following technique. 1.Human Resource Development through training and upgrading the skills. 2.Motivation through leadership and job enrichment. 3.Promotion and rewards through performance appraisal. 4.Grievance handling. 5. Structuring the organization. FINANCIAL MANAGEMENT Financial management has primary objective of meeting the financial needs of the Business from time to time, by way of providing working capital and longterm capital to run the business with the goal of containing the cost of capital at the minimum.

Objectives 1. To meet the financial needs of the Business from time to time. 2. To provide Working capital and long-term capital to run business. 3. To meet the statutory compliance by way of declaring the audited financial result, submit all reports and return to the government and Tax Authorities . 4. To fulfill the obligations to the shareholders.

PRODUCTION MANAGEMENT The Production Management Function is to provide manufacturing services to the organization. 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. Objectives 1. Fuller utilization of the manufacturing capacity. 2. To provide manufacturing services 3. Minimal rejections 4. Maximum uptime of plant and equipments 5. Meeting the delivery promise.

 RAW MATERIALS MANAGEMENT The function of material management is the single largest function which takes away large capital as working capital. This is important from the point of view of controlling the material cost and cost of carrying inventory. Objectives 1. To provide material for production 2. Maintenance and service at economical prices 3. Maintenance and service in appropriate quantity and quality with easy stock-outs and with no extra cost of carrying the inventory. MARKETING MANAGEMENT The marketing management function deals with satisfying the customer. In the process of performing the marketing function, activities such as market research, consumer survey, advertising, sales promotion campaign, stocking of products, developing dealers distributor network from major tasks.

Objectives 1. Identifying the need of consumer 2. Evolving product concept 3. Designing the product 4. Positioning the product in the market 5. Selling at appropriate price.

Business system integration

Order booking Enquirie s Orders

Customers
Acceptanc e

Marketing Invoicing Management Receivabl es System

HR accounting Expenses Payroll

Expenses Payable

Personnel and HR Management

Expenses Material And Capacity Plan and Schedule

Finance And Accounts

Bills booking and payment Purchase Accounting Inventory Purchase order Material Delivery Payment

MRP- I

MRP-II

Production Materials management Work Order Generation management System System

Vendors

Business Accounting

Management Accounting

Business Forecasting and Long term Planning

Business Analysis Report

Raw materials management

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Introduction
The objective of materials management(RM) is to provide material for production, maintenance and services at economical prices, in an appropriate quantity and quality with easy stockouts and with no extra cost of carrying the inventory. The function of materials management is important, as it is a single largest function, which takes away large capital as working capital. Secondly, it is important from the point of view of controlling the material cost and the cost of carrying inventory. Apart from providing material to production, maintenance and services, it has responsibility of searching new substitutes to reduce the cost of material, reduction of inventory and disposal of non-moving and slow inventory. The function is also controlled by corporate management, through audits and checks, to ensure the procurement of materials is done at an economic price.

Input Transaction Documents

The material management has the following transactions, which need to be covered in the system. Purchase requisition Purchase order Receipt of goods Return of goods to supplier Issue for Production Return from production Certification of bill for payment Apart from these basic transactions, the material management draws data from quotations, tenders and from documents in Excise, Sales Tax and Octroi. It also depends on the data from external sources such as Industrial Associations, Trade Journals, Research Laboratories and so on. The materials management function has to interface with finance and production while executing the functional responsibility.

APPLICATIONS
The Material Management Function is conducted through several administrative and management systems , each having different purpose and focus. It has the following system. Forecasting and planning Procurement Purchase ordering Goods receipt Inspection Issuing the material Processing the returns Bill passing and control Through these systems, different functional needs of accounting, query, analysis, decision making and control are fulfilled.

Accounting
Accounting is a major basic function of the materials management, which provides a lot of valuable data to other systems within materials management and also to other functional systems like finance and production. The materials management function account for a number of things, as shown below. 1. Purchase quantity 2. Issue quantity 3. Stocks 4. Goods returns 5. Rejections 6. Performance 7. Value of purchase 8. Average of standard of accounting The systems are Purchase ordering and accounting. Accounting of stocks and purchase, consumption, stocks and performance of supplier.

Query
Queries in the materials management largely centered around price, supplier, stock and pending aspect of purchase, returns and payments. The query may be on an item seeking latest purchase price or it may be on an item seeking a price in a particular purchase order placed on a particular supplier. The query could be a processed one seeking information on, say the number of stockouts in the last six months of a particular item. Or it could be on the items in case of which the stock is zero and supply is not due in the current month. The query applications are designed as processing routines which are often put in the system. The others are handled through SQL by the users of the system.

Decision Analysis
A majority of the decisions centre around the cost of purchase and the cost of materials consumed. The first major decision in the function is price of an item. The price is a commercial decision influenced by reliability of supply, quality of material and dependability. The second major decision the materials management has to take, is stocking of items. the i.e., whether to stock or not to stock, what are the inventory levels, like minimum stock, maximum stock, reorder level, economic order quantity level and so on. The third major decision is relating to system of controlling the item. There are three system of control namely Fixed Order Quantity(FOQ) and Reorder Level (ROL) system, Periodic Review System, with varying order quantity and fixed period ordering with quantity not more than a fixed quantity. To make these decisions, inventory is analyzed in a number of ways like A-B-C Analysis, production holding and other, imports and indigenous and so on. The analysis of inventory indicates the importance and criticality of an item to decide on Inventory Control Policy. The decision analysis applications are developed to aid planning and control decisions in the Materials Management

Control
The control applications help in making and implementing decisions. The performance of the materials management function is evaluated on four accounts, like capital blocked in the inventory, number of stockouts affecting the production activity, reliability and dependability of suppliers, and cost of purchase. The management stipulates certain norms on these accounts which become reference for control. Inventory is valued every month to indicate whether capital blocked is above budget. The stockouts are counted and compared with the norm. The delivery promise and quality of material supplies is rated to arrive at performance index of the supplier and compared with the norm. Lastly, the purchase cost is computed with purchase price plus taxes and duties and compared with the purchase budget. In all these comparisons, whenever adverse results are seen, the system selects items and suppliers based on criteria, for specific action or decision. The decisions may be to find a substitute item or supplier. It could be that the system of inventory control is changed for the item

Reports and Display

There are many reports and screen displays in the Materials Management system. They are largely based on accounting applications and decision analysis system. They are produced at regular intervals, say monthly or quarterly. The report screen are developed to answer ad hoc queries on various aspects of the materials management function like price, stock specifications, supplier, pending positions and valuations. The report generation is decided on the basis of certain business information needs. These needs are

o statutory compliance Reporting the value of inventory in balance sheet of the company is a statutory compliance. Maintenance of registers, and filing returns in the areas of Sales Tax, Octroi, Excise Duty and Customs Duty is a statutory obligation. The essential reports are: Stock ledger, Valued stock statement, Octroi register, MODVAT register, Excise duty returns and registers, Customs bond register, Returns on tax deduced at source The data source for these outputs is accounting applications developed to account receipts, issues, consumptions, returns and payment to suppliers.

o Information Update A materials manager needs to build up knowledge on a couple of aspects of the function. These aspects are: Price fluctuations and trend, Information on alternative materials with specification and test results, Current incidence of taxes and duties, Value of inventory computes at standard price, Performance of suppliers, Stockouts, Value of non-moving inventory, Materials required for the next planning period The reports on the knowledge base are as under: Reports on price of high value and high purchaser rate items, Complied reports from trade journals on new material and sources., Stock ledger with value, Value of stockouts versus total inventory, Value of non-moving inventory versus total inventory, Report on material requirement for the next planning period in quantity and value o Operations Update Operation updates are useful for day to day functioning of operating departments like Purchase Stores and Workshop.

It is necessary to know the arrival of material, whether inspected and taken in stock.The second update is on the issue of material for consumption. The third update is on the purchase action against a purchase requisition. These reports are: Daily Goods Received Register, Statement showing items in short supply or stockouts, Reports on purchase requisitions received but not converted into purchase orders, Statement on supplies due but not yet received, Statement on payment due to suppliers but not yet paid, Statement of supplies received and rejected The operations updates help to perform day to day routine operations at the junior management level in purchase, stores and workshops. o Decision Analysis The reports of decision analysis applications are primarily exceptional in nature. For example, exception report on stockout or short supply will call for the decision of advance procurement, the information on purchase orders placed but delivery is not due. It will show the effect on the production programme and probable change in the programme or alternative choice of material to overcome the short supply.

The decision analysis report identifies the problem and provided logical relational linkage into other systems where solution can be found. The exception reports will centre around the following parameters: Stockouts, Cost of purchase and overrun, Value of inventory and Analysis, Excessive delay in purchase action, Excessive delay in inspection, Reliability of suppliers, Vendor performance, Material performance, Floor rejections These reports will lead to such decisions as emergency procurement, revision of price and terms of supplies, disposal of inventory, cutting down procedures of purchase and the inspection by streamlining the activities, and switching over to a new supplier. o Action update The action update comes through a control system which indicates whether the decision is implemented or not. Many a times a decision is taken and delegated for action at a lower level. It is necessary to know whether action is taken and what is the impact. This will be selective reporting.

For example, if stockout is noticed, action is taken to purchase by raising a new purchase order. The update is necessary to know whether the material order has arrived or not. The action updates, therefore, will centre around the parameters which are mentioned in decision analysis applications.

Marketing management
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introduction
The marketing management function deals with satisfying the customer. The scope of function starts from identifying the need of consumer, evolving product concept, designing the product, positioning the product in the market and selling at appropriate price. Activities such as market research, consumer survey, advertising, sales promotion campaign, stocking of products, developing dealers distributor network form major tasks. The function has a very strong interface with the production and finance department. The control of sales from the point of view of sales income is the major task of marketing management. Forecasting of sales, evolving marketing strategies, pricing, product designing and launching are some of the key responsibilities of marketing management. Retaining a market share, penetrating into new markets, assessing consumer responses to a new market, launch are the challenging tasks of marketing management. The major responsibility of the function remains to evolve competitive strategies in all the branches of marketing management.

Input Transaction Documents

The most important Input Transaction Documents used in the marketing management function includes 1. Customer order 2. Order acceptance 3. Delivery note 4. Invoice, credit note, debit note As a support to these transaction, data is borrowed from company literature such as price lists, product literature, etc. It further relies on external sources such as product journals, industry association publications, etc. for industry data. The number and nature of transactions would vary depending upon the product, industry, marketing organization, and infrastructure of production and warehouses.

Accounting
There are several highly process-oriented accounting applications of the marketing management. The main accounting entity is sales in terms of quantity and value. The detailed entities are as follows:

1. 2. 3. 4. 5. 6. 7.

Product sale Product family Sales value Sales Tax Dealer Distributor Customer

8. 9. 10. 11. 12. 13. 14. 15.

Excise duty Zone Area Inventory Receivables Market Segment Export Market Returns Complaints

Accounting applications build a lot of basic data for the organisation, which meets the needs of statutory compliance and operations update.

Query
The queries in the marketing management are on customer, product, price, stock, sale and certain cumulative statistics pertaining to sale. The query may be on Order pending position followed by whether stock exists for allocation to the order. If the customer order is to be fulfilled by manufacturing, then whether manufacturing order is issued and if so, what is its status. The query could be on assessment of sales performance on single dimension or multi-dimensions by comparison between the two product groups, Customer Groups, Zones, and Areas. The query could be on the performance of overall sales in relations to the budget. In marketing management , a lot of importance is given to handling of customer complaints. The queries are raised on its satisfactory disposal. Many a times, queries are on basic data such as product specifications, price and discounts, quality, names and address of customer, dealers, and distributors.

Decision Analysis
In day to day functioning, the decisions required to take on pricing, allocation of stocks to orders, acceptance of order, discounts and commission, deciding sales terms and so on. In most of these decision areas, decisions are rule-based and can be supported by decision support systems. The complex decisions are price increase or decrease, deciding on a new product, packaging, distribution channels, product positioning. These decisions have far reaching effects on the marketing performance. They fall in the category of strategic and tactical decisions. Applications are developed to support theses decision building models such as the break even model, risk analysis model, distribution model, network model, product launch model tec. They form the basis for analysing the decision alternatives and their impact on marketing performance, prospects and growth. The organizations in consumer industry have applications which are designed to collect consumer information on preference, behaviour, response to advertising campaigns etc. This data is collected on a routine basis to build up independent

Control
In marketing management, there are a number of factors, which need to be controlled for achieving business goals. These factors are Sales versus Budget, Marketing Cost versus Budgeted Cost, Product Sales versus Target Fixed for Market Segments- Distributor, Dealer, Branch and Marketing persons, planned sales programme versus actual sales versus competitors sales. The applications are developed to report on these comparisons. However , a selection routine is added in each applications to bring out abnormal variation between actual versus expected. This helps to take specific decision and action in area of shortcoming or failure.

Reports and display

o Statutory Compliance In marketing management, statutory compliance is mainly related to taxes and duties and filing the returns to appropriate government authorities. The main reports are sales tax register and returns and excise duty returns. In some industries like alcohol, tobacco, gold etc., the organization is required to keep the information in a format by the government and file returns in a prescribed format. These documents are to kept up-to-date and are subject to surprise checks by government auditors and inspectors.

o Information Update These reports are based on summaries of various entities such as orders, value, sales, stock, budgets with reference to the past, current and future projections. They are produced regularly at equal intervals. The information update reports are as under: Production sales ledger, Sales summaries, Account receivables, Orders received and accepted, Sales analysis, Aging of receivables, Contribution analysis, Market analysis, Competition analysis

Most of the reports generated as functional information and they are not related to an individuals needs, it is expected that these reports will be used by all concerned by picking up relevant information suited to them. There are eleven factors like Customer, Class of Customer, Market Segment, Product , Product Family, Sales Representative, Branch Area and Zone, Dealer and Distributor, which are used for classification and builds marketing knowledge helping to evolve the strategies in marketing. o Operations Update These reports inform the details of the marketing operations ranging from orders received, processed, accepted, executed, dispatched, billed and money recovered. These reports are processed by way of daily transaction processing and making statistical summaries for quick update. They are not analysis reports but reports informing facts on day to day operations. These are made for junior management personnel in marketing and related functional areas such as store and accounts. A typical report will indicate daily order received and orders invoiced. Some more typical reports are as follows: Order book, Despatch report, Inventory, Invoice, Customer complaints, Complaints disposed

These reports are produced with reference to a date and cumulative since beginning of the year. No high order data processing is involved. Transactions during a day are processed in document sequence and grand summaries are taken on a daily basis, such as daily sales, dispatches, inventory and invoice. These reports provide guidance to the operating personnel as to how they are performing. No external information is connected and processed along with this statistical data o Decision Analysis Decision analysis reports convey whether the desired/expected results are realised or not. These reports tie up the specific decision to its results In marketing function, a number of such decision situations are present, where analysis of sales is necessary, to confirm whether the choice of the alternative is correct or not. The analysis may be with reference to price, choice of market, packaging, design and so on. Market research analysis reports fall in this category. These reports are unstructured and are decision specific.

There is another class or reports, which are generated using models. For example, risk analysis model throws light on the market share, given the probable conditions of the company and its competitor in price, market, design and so on. New product introduction, Break Even Analysis, Product Market Mix, Marketing expense and market Mix are the examples of decision analysis models helping the marketing management to take a correct decision

Action Update The action update reports will lead to such decisions as price reduction, withdrawal of product from the market, changing the product position, allocating more budget for expenses, inventory and personnel resources. Some of the action update reports are: Sales versus Budget, Expenses versus sales, Sales Growth versus Sales Objective, Sales versus Market Segment versus Budget, Stock versus Budgeted Stock Levels, Complaints versus Number of Complaints Serviced

Case study- zara fast fashion

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zara fast fashion

Zara, the most profitable brand of Inditex SA Zara has remained focused on its core fashion philosophy that creativity and quality design together with a rapid response to market demands will yield profitable results Information System (IS) plays a key role in the value chain of Zara to support its preferences for speed and decentralized decision making. Zara has uses information technology to successfully speed up the entire value chain process. In other words, while it takes the typical retailer 9 to 12 months to develop a fashion concept and see it through to the point where the goods arrive in the store, Zara has streamlined the process so much that it takes about a quarter of that time Store associates frequently see new fashion or fabric ideas and send them over the Internet to Zara's headquarters. All of this information heads into a database at the head office. The constant monitoring and updating that occurs gives designers a heads up over the competition in developing new styles.

Zaras distribution system is so high-tech that there is little human involvement required. For example, instead of relying on workers to sort through articles of clothing, Zara uses optical reading devices to accomplish this task, which leads to a tremendous cost savings in the form of labour. Use of Information system can be used to map the optimum routes and keep the track so as the merchandize reaches the desired place at minimum cost and time. As Zara orders twice a week so as to update the stock in their stores with latest stock, MIS comes handy in such situations so as to determine optimum order quantity and is also used to chart out the route to be taken so as to fulfil demand of all their stores in the most optimum manner. MIS also helps better order management as Zara typically doesn't keep an inventory in their warehouse for more than three days. Since Zara ships items to far flung areas like USA they use a good MIS to support this process as all the inventory initially comes to the central warehouse before being shipped to elsewhere. MIS systems like Queue Management Systems help maintaining the turnaround and waiting period of the

Through the use of computerized systems, they help the management by producing statistical reports on information such as arrival rates and patterns, waiting and service times, and default and reneging cases. Based on these statistics, the optimal use of resources can be achieved, helping the trade-off between service quality and service cost. The latest Internet-enabled systems allow remote system monitoring, report generation and system configuration across an Internet link. As a high percentage of transporting costs incurred by Zara are due to the use of air travel, MIS is used to optimize routes across multiple countries and also DSS is used here to choose the best carriers so that goods reach their destination at the fastest possible time and at the cheapest time. As Zara has only one central warehouse to serve its multiple locations it would be necessary to implement MIS so as to service all its outlets efficiently. Previously this was not an issue as the outlets were between 1000 to 2000 kms from the central warehouse, but their rapid expansion has necessitated the implementation of MIS.

ZARA uses PDAs (personal digital assistant) to gather customer input PDAs are also linked to stores POS system, showing how garments ranked by Sales Managers at Zara stores use handheld devices(PDA) to send standardized information regarding customer feedback and ordering needs directly to in-house designers. This not only keeps Zara's designers informed of fast-changing customer trends and demand, but also provides the company with insight on less-desirable merchandise. Unlike Zaras hybrid model (which incorporates human intelligence and IT applications), competitors rely almost completely on information technology MIS and TPS are used to provide real time sales information as well as sales information of current year v/s previous year for the same period in store managers dashboard so that they can compare current sales with that of previous year and at the same time compare themselves vis--vis other Zara stores in the region.

Associates use PDAs to gather customer input like feedback, demands etc.

CUSTOMER

Order management

STORE/OUTLE T
Updates stock twice a week. The MIS determines order quantity, charts out routine for optimum supply Associates sends information about new fashion, demands through internet

CENTRAL WAREHOUSE

ZARAS Management Information System

Transaction Processing System

Arrival rates and patterns Waiting and service time

Queue Management system

SHIPS
Maintains turnaround and waiting period of ships at dock for shippment of goods

Thank you
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