FUNCTIONAL ASPECTS OF THE MIS

MIS is an integrated collection of functional

information systems, each supporting particular functional areas.

Some traditional functional areas include finance,

manufacturing, marketing, human resources, and other specialized information systems.

Internet

An Organizations MIS Financial MIS

Business transactions

Transaction processing systems

Databases of valid transactions

Accounting MIS

Drill down reports

Exception reports Demand reports

Marketing MIS

Key-indicator reports Scheduled reports

Business transactions

Databases of external data

Human Resources MIS Etc.

Etc.

Extranet

Financial Management Information Systems

A financial MIS provides financial information not

only for executives but also for a broader set of people who need to make better decisions on a daily basis.

Financial Management Information Systems (Cont)

Most financial MISs perform the following

functions:
Integrate financial and operational information from

multiple sources, including the Internet, into a single system Provide easy access to data for both financial and nonfinancial users, often through the use of a corporate intranet to access corporate Web pages of financial data and information Make financial data immediately available to shorten analysis turnaround time Enable analysis of financial data along multiple dimensionstime, geography, product, plant, and customer

Financial Management Information Systems(Cont)

Figure shows typical inputs, function-specific

subsystems, and outputs of a financial MIS, including profit and loss, auditing, and uses and management of funds.

Databases of internal data

Databases of external data

Financial DSS

Business transactions Transaction processing systems

Databases of valid transactions for each TPS

Financial MIS

Financial applications databases

Business transactions Operational databases

Financial statements Uses and management of funds Financial statistics for control

Financial ES

Internet or Extranet Business transactions

Customers, Suppliers

Financial Management Information Systems(Cont)

Financial subsystems
Profit/loss and cost systems Auditing Internal auditing External auditing Uses and management of funds

Financial Management Information Systems(Cont)

Profit/loss and cost systems
Many departments within an organization are profit

centers , which means that they focus on generating profits. An investment division of a large insurance or credit card company is an example of a profit center. Other departments can be revenue centers , which are divisions within the company that focus primarily on sales or revenues, such as a marketing or sales department. Still other departments can be cost centers , which are divisions within a company that do not directly generate revenue, such as manufacturing or research and development.

Financial Management Information Systems(Cont)

Auditing
Auditing involves analyzing the financial condition

of an organization and determining whether financial statements and reports produced by the financial MIS are accurate. Internal auditing is performed by individuals within the organization. External auditing is performed by an outside group, usually an accounting or consulting firm

Financial Management Information Systems(Cont)

Uses and management of funds.
Internal uses of funds include purchasing additional

inventory, updating plants and equipment, hiring new employees, acquiring other companies, buying new computer systems, increasing marketing and advertising, purchasing raw materials or land, investing in new products, and increasing research and development. External uses of funds are typically investment related. Companies often invest excess funds in such external revenue generators as bank accounts, stocks, bonds, bills, notes, futures, options, and foreign currency using financial MISs.

Manufacturing Management Information Systems

More than any other functional area, advances in

information systems have revolutionized manufacturing. As a result, many manufacturing operations have been dramatically improved over the last decade. The manufacturing MIS subsystems and outputs are used to monitor and control the flow of materials, products, and services through the organization. As raw materials are converted to finished goods, the manufacturing MIS monitors the process at almost every stage. The success of an organization can depend on the manufacturing function.

Databases of internal data

Databases of external data

Manufacturing DSS

Business transactions Transaction processing systems

Databases of valid transactions for each TPS

Manufacturing MIS

Manufacturing applications databases

Business transactions Operational databases

Quality control reports Process control reports

Internet or Extranet Business transactions

JIT reports MRP reports Production schedule CAD output

Manufacturing ES

Customers, Suppliers

Figure 9.6

Inputs to the Manufacturing MIS

Strategic plan or corporate policies. The TPS:

Order processing Inventory data Receiving and inspecting data Personnel data Production process

External sources

Manufacturing MIS Subsystems and Outputs

Design and engineering

Master production scheduling Inventory

control

Manufacturing resource planning Just-in-time inventory and manufacturing

Process control Computer-integrated manufacturing (CIM) Quality control and testing

Manufacturing Management Information Systems (Cont)

Design and engineering

Manufacturing companies often use computer-aided design (CAD) with new or existing products. The data from design and engineering can also be used to identify problems with existing products and help develop new products.

Manufacturing Management Information Systems (Cont)

Master production scheduling and inventory

control.
Scheduling production and controlling inventory are critical

for any manufacturing company. The overall objective of master production scheduling is to provide detailed plans for both short-term and long-range scheduling of manufacturing facilities. Some companies hire outside companies to help them with inventory control. Most techniques are used to minimize inventory costs. They determine when and how much inventory to order. One method of determining the amount of inventory to order is called the economic order quantity (EOQ). This quantity is calculated to minimize the total inventory costs.

Manufacturing Management Information Systems (Cont)

Reorder point (ROP) : Which is a critical inventory quantity

level. When the inventory level for a particular item falls to the reorder point, or critical level, the system generates a report so that an order is immediately placed for the EOQ of the product. Material requirements planning (MRP): . The basic goal of MRP is to determine when finished products, such as automobiles or airplanes, are needed and then to work backward to determine deadlines and resources needed, such as engines and tires, to complete the final product on schedule. Just-in-time (JIT) inventory and manufacturing is an approach that maintains inventory at the lowest levels without sacrificing the availability of finished products. With this approach, inventory and materials are delivered just before they are used in a product.

Manufacturing Management Information Systems (Cont)

Process control.

Managers can use a number of technologies to control and streamline the manufacturing process. For example, computers can directly control manufacturing equipment, using systems called computer-assisted manufacturing (CAM) CAM systems can control drilling machines, assembly lines, and more. Computer-integrated manufacturing (CIM) uses computers to link the components of the production process into an effective system. CIMs goal is to tie together all aspects of production, including order processing, product design, manufacturing, inspection and quality control, and shipping. A flexible manufacturing system (FMS) is an approach that allows manufacturing facilities to rapidly and efficiently

Manufacturing Management Information Systems (Cont)

Quality control and testing.
Todays manufacturing organizations are placing

more emphasis on quality control , a process that ensures that the finished product meets the customers needs. Information systems are used to monitor quality and take corrective steps to eliminate possible quality problems.