Application of MIS in Manufacturing Sector

Applications of MIS
 Manufacturing Sector:
 Introduction, Personal Management, Marketing Management,
Accounting and Finance Management, Production
Management, Materials Management and Marketing
Management,
 Service Sector:
 Introduction, MIS applications in service industry , MIS
Applications in Banking and Insurance Sector
 Cross-Functional Enterprise Systems:
 Introduction, Collaboration systems in Manufacturing,
Enterprise application Integration, Transaction Processing
systems
MANUFACTURING SECTOR
Major business functions can be distinctly identified
as Sales, Marketing, Manufacturing, Finance,
Accounting, and Human resources.
These are nothing but the managerial task with in
business organization.
Managers basically perform the functions of
decision making, planning and controlling
As a result MIS for each of these functional areas
are developed.
Management Information Systems that
support the goals of the organisation
Financial management
Human resources management
Materials management
Production management
Marketing management
 Financial management
 Primary objective is to meet the financial needs of the business.
 To meet the statutory compliance by way of declaring the financial results
and submitting reports to the Government and Tax authorities.
 Financial management uses a variety of tools and techniques as under:
 Cash management
 Cost analysis
 Capital budgeting and ROI analysis
 Ratio analysis
 Financial planning

 Following are the list of documents, which are served as input for the
financial management system
1. Payments to suppliers, employees, other institutions
2. Receipt from customers, employees, financial institutions and others.
3. Shares information from stock exchange
 Applications
 To produce financial results of the company by creating balance sheets
 To guide finance managers, cost controllers, auditors and all other
managers who are interested to view the financial statements

Accounting
 The system accounts for all monetary transactions which have taken
place, directly or indirectly, and which affect the company
 The financial management system accounts for the following:
 Salaries of the employees
 Sales and purchases
 Inventory
 Other expenses
 Deposits
 Moveable and non-moveable assets of the organization
 Sales tax, Income tax and other local taxes.
 Shareholder’s funds
Reports
 Statutory reports
Sales tax, excise and tax returns or any other tax details.
Providing reports to other financial institutions.
Giving reports to the shareholders annually.
 
 Knowledge updates
Stock valuation
Monthly trial balance, balance sheet and profit and loss account
Accounts receivables and aging
Accounts payable and aging
Overall business achievements in major lines of business
Cash position
 
 Operations updates
Filing of statutory returns and reports
Statutory payments such as advance tax, sales tax, octroi and excise duty, etc.
Reports on finished goods, despatched and invoicing
Reports on material receipts and payments to the suppliers
Decisional reports:
•Break even analysis for cost and price decision.
•ROI for choice of investment.
•Sources and usage of funds.
•Analysis of current liabilities and decision on liquidation on priority
basis

Action reports:
Though decision analysis indicates the areas of decisions, action is
taken in exceptional cases. Exceptional reports on implementations of
the decision and its impact on the business are listed as follows:
1. Overdue receivables
• Legal actions can be taken
• Some times termination of business association.
2. Advance is paid but supply of goods is not done
•Legal actions can be taken after giving warnings and notices
•Term revision
•Termination of business association
3. Poor usage of fixed assets and disposal
4. Payment to creditors, when penalties are involved
 
Personal management
 Organizational structure of most firms includes a unit that is responsible for
many of the activities related to the personnel resource.
 The term personnel- management was originally given to these units, but
the practice today is to use the name human resource (HR).
 Personal Management looks after :
 Flow of information about people working in organization.
 Planning the personnel needs of the business by providing suitable
manpower.
 Development and training of the employees
 Promotion and rewards through performance appraisal
 Employees grievances
Applications
 The viewers of the database are personnel managers, heads of the human
resource development department and top management

Accounting: Following are the list of documents, which are very necessary
for the PM system
• Attendance of the employees (May be weekly or monthly)
• Number of employees working for particular department.
• Leave record of the employees
• Salary, wages, increments, deductions and incentives.
• Skills and preferences.
• Personal Resumes containing family information also
Materials management
 The objective of Materials Management (MM) :
To provide material for production , maintenance and services
To provide materials at economical prices
To provide appropriate quantity and quality of materials with least stock outs
To reduce the extra cost of carrying the inventory
Disposal of non-moving and slow moving inventory

 APPLICATIONS
 
The materials management function is conducted through several administrative
and management systems, each having different purpose and focus. It has the
following systems
Forecasting and planning
Procurement
Purchase ordering
Goods receipt
Inspection
Issuing the material
 Accounting
The materials management function account for a number of things , as
shown below :
• Purchase quantity
• Issue Quantity
• Stocks
• Good returns
• Rejections
• Performance
• Value Of purchase
• Average or standard rate of accounting

Query
Queries in the materials management largely centre around price ,
supplier, stock and pending aspects of purchase, returns and payments.
Reports
 Statutory Report
 Stock ledger
 Octroi register
 MODVAT register
 Excise duty returns registers
 Returns on Tax Deducted at source

 Knowledge Update
Price fluctuation and trend
Information on alternative materials with specification and test results.
New suppliers and source of supplies
Current incidence of taxes and duties
Performance of suppliers
Value of non-moving inventory
Materials required for the next planning period
Operations update
• Daily goods received register
• Statement showing items in short supply or stock outs.
• Reports on purchase requisitions received but not converted into purchase
orders.
• Statements on supplies due but not yet received
• Statement on payment due to suppliers but not yet paid
• Statement on supplies received or registered.

Decision Analysis
• Cost of purchase and overrun
• Value of inventory and analysis
• Excessive delay in inspection
• Reliability of suppliers
• Vendor performance
• Material performance
• Floor rejections

Action Update
• Indicates whether the decision is implemented or not
•
Production management
 The objective of production management function :
To provide manufacturing services to the organisation
To manufacture products of a certain specified quality
To produce in a stipulated time
Fuller utilisation of the manufacturing capacity
Maximum uptime of plant and equipment
Minimal rejections
Fulfilling the promises given to the customer
 Applications : The production management is performed through :
 production , planning and control
 bill of material processing,
 drawings and process planning,
 scheduling and monitoring systems as support systems

Accounting
 Quantity of production with respect to a time period
 Material requirement and its usage
 Rejection quantity at each intermediate stage and at final stage
 Breakdown incidence
 Usage of power, fuel and consumables
 Machine and facilities utilisation
 Labour hours
 Query
 Status of job or order in terms of stage and level completion
 Load status on machine or group of machines
 Status on availability of materials
 Standard information on machines, tools, specifications etc
 Standard information on skills and capacities of each worker

 Decision analysis
 Make or buy
 Make or subcontract
 Use of alternative material
 Use of alternative process
 Evolving optimum product mix / job mix
 Planning and scheduling of jobs
 Selection of production facilities
 Selection of alternative maintenance policies
Marketing management
Basic goal of marketing is to satisfy the needs and wants of the customers.
The business functions of marketing is concerned with the promotions,
planning and sale of existing product and service in existing market.
It also deals with development of new product and services for new market
to potential customers
Thus MIS plays important role by providing managers with many functional
information systems. Actually marketing was the first functional area to
exhibit an interest in MIS.
For example, for interactive marketing- MIS can provide information about
prospectus customers who can become partners for making and improving
the product and services.
Accounting
Product Sales
Sales Value
Sales Tax
Dealer
Distributer
Customer
Excise Duty
Zone
Area
Market Segments
Export Market
Returns
Complaints
Reports
 Statutory Compliance
Taxes and duties
Filing the returns to appropriate government authorities

 Knowledge Update
Product sales ledger
Sales summaries
Account receivables
Orders received and accepted
Sales analysis
Aging of receivables
Contribution analysis
Market analysis
Competition analysis
 Operations Update
 Order book
 Despatch Report
 Inventory
 Invoice
 Customer complaints
 Complaints disposed

 Decision Analysis
 Price increase or decrease
 Launch of new product
 Packaging of existing products
 Distribution channels
 Product positioning
 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

 Some of the action update reports are: