module 5 mis

Management Information System

Manufacturing and Service systems

INTRODUCTION

This chapter is an introduction to the business applications of management

information system. It gives an overview of the application does not gives small

details which may be specific to a typical organisation. The approach to the

application development is on the basis of database and not conventional file

system.

For each application inputs which process by online transaction processing (oltp)

system, are determined. The system designer develops the applications with the objective of

accounting the transactions based results and providing the reports on the same. The second

objective is to provide a query system for assessment of the status on record, results or

documents. 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 and so on. The third objective is to

provide a system of analyses of proceed data revealing certain business trends or results. It is

supposed to give certain analytical assessment of the event which will through light on the

validity of decisions, policy & rules. It is also supposed to provide certain guidelines &

norms for strategic & tactical planning.

Page | 72MIT- Maharaja Institute of Technology



The analytical information provides support for decision making in the decision support

system (DSS) the analysis system provides fund of information at all level for planning &

execution of business operation. The forth objective is to provide control information to

ensure that the business runs as per the plan progresses in a set direction & achieves the

goals.

The control information is generated by using the standards, norms targets & budgets.

The actual results are compared with this entities & exceptions are highlighted whenever

possible the information is provided on the basis of feed forward control that is providing

early signal of probable adverse conditions or results. The designer of business application

focuses the development on the aspect of accounting querying, analysis & control.

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 & action. The reports are designed for screen display or for print. The content of the

reports are decided as per users of the information. The frequency, duration & coverage of

the report is decided as per the user requirement.

A typical information system begins with OLTP system, uses RDBMS for creation of

database, DGL for application development and SQL forquerying and report generation. It

uses programme or complex data processing and report generation. It uses business models,

accounting and commercial principles for processing the information leading to business

results. The information system is designed on the principle of open system deign, providing

flexibility and friendliness of the users of the system.

A typical information system primarily serves the needs at function levels such as

personl, finance, production, materials, marketing and corporate business management. These

systems when integrated provide cross functional information to management high-lighting

the business implications of the decision 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 orstrtegic planning at the top management level.




INFORMATION SYSTEM FOR ACCOUNTIG

Accounting information systems are oldest and most widely used information systems in

business. They record and report business transaction and other economic events.

As record and report the flow of funds through on organization on a historic basis and

produce financial statements such as balance sheets and income statements.

6 essential accounting information systems used in business

1. ORDER PROCESSING:- capture and process customers orders and produce data

and for inventory and accounts receivable.

2. INVENTORY CONTROLE:- process data reflecting changes in inventory and

provides shipping and reorder information

3. ACCOUNTS RECIVABLE:- records amounts owed by customers and produce

invoices, statements

4. ACCOUNTS PAYABLE:- records purchases from amounts owed to, payments

supply

5. PAYROLL:- records employee work and compensation data and produce pay

checks and other reports

6. GENERAL LEDGER:- consolidates data from other accounting system and

produce the periodic statements and reports

FINANCIAL MANAGEMENT SYSTEMS

Computer based FMS supports business manager and proper proforma in decision

regarding .

1. The financing of a business

2. Allocation and control of financial resources with in a business




MAJOR FMS CATEGORIES INCLUDE

Cash and investment management (fore cash and manage cash)

Capital budgeting (evaluate risk and return of capital expenditure)

Financial planning and forecasting (forecast financial performance and financial needs)

PRODUCTION AND MANUFACTURING SYSTEM

Manufacturing information systems support the production operations function that

include all activities concerned with the planning and control of the processes producing

goods and services. Information system used for operation management and transaction

processing supports all firms than must plan, monitor and control inventories, purchases and

flow of goods and services firms such as transportation companies, wholesalers, retailers,

financial institution, service companies must use production operation information systems to

plan and control this operations

COMPUTER INTEGRATED MANUFACTURING

The over all goal of CIM and such manufacturing system as is to create manufacturing

process that efficient produce products of highest quality.

Computer based manufacturing information systems help a company achieve CIM and thus

1.SIMPLIFY- production process, product designs

2.AUTOMATE- production process and business functions using computers, machines.

3.INTEGRATE- all production and support processes using computer network, cross

functional business systems and other information technologies

Manufacturing information systems help companies simplify automate and integrate many of

the activities needed to produce products of all kinds

Eg- computers are used to help engineer design better products using both computers aided

engineering and computer aided design systems and better production




Computers are also used to help plan the types of material needed in the production process

which is called material requirement planning and to integrate MRP with production

scheduling and shop floor operations which in known as manufacturing resource planning

5 ESSENTIAL COMPONENTS INVOLVED IN PRODUCTION PROCESS

Materials

Equipment

Personnel

Instruction and specification

Production facilities

MES includes- shop floor scheduling and control, machine control and process control

Machine control-in the case of computers to control actions of machines

Process control-is the use of computers to control organization.

Physical process- eg: petroleum refineries, physical measurements are taken and process

COMPUTER INTEGRATED MANUFACTURING


Production forecasting

Shop tool scheduling

CAP

Production Scheduling

Shop floor control

CAE

Material requirement planning

Machine control Computer Aided process planning

Capacity planning

Robostic control

Product simulation & Proto typing

Manufacturing Resource Planning systems

Manufacturing execution systems

Engineering systems

ERP

C I M



MARKETING SYSTEMS

Marketing performs a vital role in the operations of business. The business functions

of marketing is concerned with the planning, promotion and sale of products in market and

development of new products attract new customers.

Marketing information systems provide info technology to support major components

of the marketing

Websites make interactive marketing process possible sales force, automation use

computing and internet to automate processing activities for sales support and management.

The marketing information systems assists marketing manager in CRM, products

planning, marketing advertising etc.

MARKETING APPLICATION

1. Interactive marketing- The goal of interactive marketing is to enable a company to

profitably use those networks to attract and keep customers who will become partners with

the business in creating, purchasing and improving products and service.


MARKETING INFORMATION

INTER ACTIVE MARKETING

SALES FORCE AUTOMATION

CRM SALES MANAGEMENT

MARKET RESEARCH AND FORECASTING

ADVERTISING AND PROMOTION

PRODUCTION MANAGEMENT



IM is customer focused marketing process that is based on internet, intranet and extra nets to

establish two way transaction between a business and its customers

IM encourages customers to become involved in product development, delivery and service

issues using various internet technologies like chat discussion form, questionnaires, email

correspondence

2. Targeted marketing- is an advertising and promotion of management concept that

includes 5 targeting concepts

a. Community – advertising and promotion to specific communities they can be communities

of interest such as virtual community of online enthusiasts 0f arts and crafts etc.

b. Content- the banners can be placed on a variety of selective websites. The content of this

messages is aimed at the targeted audience.

c. context:- advertising that is relevant to the content of a product or service. Advertises is

targeted only to people who are already about a subject matter that is relative to the company

products.

d. demographic or psychographics advertising aimed only at specified type or classes of

people.

e. online behavior:- advertise considering the online browsing behavior. This can be done

using techniques like wet cook, files which records visitor web browsing behavior from

previous visits this enable a company to track a persons online behavior at website so

marketing can be targeted to that individual at each visit to their website

SALES FORCE AUTOMATION

Computers and internets are providing the basis for SFA. Companies viewing SFA as a way

to gain a strategic advantage in sales productivity and marketing responsibilities

Eg : sales people use PC to related sales data as they make their calls on customers and

prospects of during the day then each night sales represents in the field can connected this

computers to internets. Then they can upload information on sales order, sales call, statistics,




mails etc. as well they can down load product availability data, list of information related to

sales etc.

HUMAN RESOURCE MANAGEMENT (HRM)

HRM functions involves

Recruiting

Placement

Evaluation of employment

Compensation

Development of employment and organization.

Goal of HRM is the efficient and effective use of human resource of a company

Thus HRI systems are designed to support

1.Planning to meet the personnel need of business

2. Development of employees to their full potential

3. control of personnel policies and program

4.Recruitment , selection and hiring.

HRIS support human resource management in organization. HRM websites on the internet or

corporate intranets have become important tools for providing HR services to present and

prospective employee.

BENEFITS OF USING HRM

1. Round the clock services




2. Can collect information online from employees

3. Allow employees to view benefits enter travel and expense supports

4. Verify salary information update personal information

5. Can serve as superior training tool.

Fig: HRIM supports strategic, tactical and operational use of the human resource of an

organization

Staffing Training &

development

Compensation &

administration

Strategic

systems

-HR planning

-Labour force tracking

-Succession planning

-Performance appraisal

planning

-Contract costing

-salary forecasting

Tactical

systems

-labour cost analysis &

budgeting

- training effectiveness

- carrier matching

-Compensation

effectiveness

-benefitspreface

analysis

Operational

systems

-Recruiting

-Workforce scheduling/

planning

-Skill assessment

-Performance

evaluation

-Payroll control

-Benefits

administration

APPLICATIONS IN SERVICE SECTOR

INTRODUCTION

Unlike the manufacturing sector, the service sector does not have physical goods to be

manufactured for the customer. Hence, the MIS normally found in a manufacturing and

selling organization will not be suitable in the suitable in the service sector. The data

processing applications like payroll, accounting and inventory are required in the service

industry too, but they may not be all critical to the service industry. The mission in a service

industry, it could differ from industry to industry and from organization.




There are certain mission critical applications in the service industry which need to be

managed best. These applications make a organization efficient and effective in providing the

best service to the customer. In a competitive situation, this industry requires distinction to

create an identity, a position and a growth, to remain ahead of the completion. In a service

industry, therefore, a sensitive market and consumer research is necessary to identify the

segment to be served and to study its service requirements, expectations & perceptions.

Since, the service demands are more dynamic than that of a product, a continuous research on

a requirements, expectations and perceptions, is to be conducted to upgrade and enhance the

service facilities.

The socio economic status of a customer has changed leading to changes in expectation

& perceptions about the service and its outcome. The service, may remain the same but the

process are the a managing f offering the service needs a change. Depending on the service

industry the mission critical applications would change from time to time, but the focus in all

the cases and at all the time is to offer a service which satisfies the customer. Since the

service essentially a process of human interaction of the systems, here the human interaction

is predominant, needs attention for improvement.

Most of the service industries have front-end facilities to serve the customer to clear his

immediate needs and make him comfortable the rest of service demand. Any human

interaction is knowledge based, hence information based. All the systems which make human

interaction comfortable are mission critical applications and a service industry a to provide

these to offer the most satisfying service. The mission critical applications are built around

the business strategy. The strategy formulation and implementation depends a lot on the

information on the socio economic changes, the new demands arising out f these changes,

and the technology to meet the changing needs effectively.

The service organizations undergo changes more rapidly see manufacturing sector the

returns in the service industry are immediate compared to the manufacturing sector. The

entire managerial effort in the service industry is to create a distinctive service to remain

competitive.

TOM PETERS in ‘The Service Edge’ states 5 principles of a distinctive service:

1. Listen, understand, and respond to the customers.




2. Define a superior service and establish a service strategy.

3. Set standards and measure the performance.

4. Select, train and empower the employees to work for the customers.

5. Recognize and reward the accomplishments.

Before going in the details of these, one should understand the meaning of the

distinctive service in the service industry and how it differs from the manufacturing sector.

This would help us to evolve and understand the specific mission critical application in the

service and hospitality industry.

CREATING A DISTINGTIVE SERVIC

Creating a distinctive service is a willful management act. The management of a service

business calls for such a willful act to create a distinctive service and hence, to remain in the

business . to manage a service effectively, it is necessary to understand the distinctive

characters between the product and the service , the customer expectation and the perception.

SERVICE vs PRODUCT

A product is tangible, but a service is not. A product consumes a shelf space, has a

shelf life and has a physical unit of measure such as kgs, sq. meter, volume, etc. The product

can be offered on payment ,while services are offered on demand. The quality control of the

product is possible with reference to the determined standards, while the quality control of a

service is difficult due to its reference to the customer’s expectations which are difficult to

judge and control.

The product can be demonstrated before the actual sale, while the service cannot be

demonstrated. The product can be produced , sold and consumed in stages while the service

has to be produced , sold and consumed simultaneously. The receiver and provider of the

service are very close to each other.

The quality of service results in the satisfaction or dissatisfaction of the customer. The

satisfaction is related to the customer’s expectations and perceptions of the service and its out




come which are integral to his needs, could be specific or vague. The customer is dissatisfied

if the service received is below his expectations and not as perceived by him.

The satisfaction is also based on the manner in which the service is begin offered or

perceived . if the service process is not enjoyable though it gives what is asked for ,then

dissatisfaction results. The service expectation are the the outcome, and a satisfaction relates

to both. The hence, to create a distinctive service ,the management of a service business must

understand the customer expectations, and if the customer expectations and perceptions are

not rational and generated out of knowledge, then customer awareness and education is

absolutely necessary.

The customer education would create realistic expectations and a meaningful perception

reducing the gap b/n the actual and the expected service experience. While achieving this, it

is necessary to ctrl this diversity through mgt. action by concentrating on the customer/mkt.

segment where customer diversity is not significant.

To summaries , the service conscious mgt. would create service focused org. , where

The org. listens , understands and responds swiftly to the changing character of the

customer wants , needs and expectations.

The org. develops and maintains a customer friendly service delivery system.

Organization employs, inspires and develops a customer oriented front line personnel.

The service function essentially in a human interaction b/n the service receiver and the

provider. The service focused org. manages this human interaction at its best through a well

defined customer-oriented service strategy designed for an excellent distinctive service

HOTELS

Hotel is a place where look for a distinctive service. Traditionally hotels are meant for

those who do not have home or place to stay, when they are away from home. The concept of

hotel as a place of stay, when you are out station has undergone a change due to number of

reasons.

The hotels were designed for individual’s stay, then came the business executives

followed the family, and followed by the tourist groups. Every time the hotel designs




undergo change to meet the changed need of the occupants. The concept of the star hotels

emerged to service these needs of the different customer segments according to their budgets.

A higher customer turnover with a higher occupancy is better for the business performance.

The MIS, therefore, has the following responsibilities to provide the best information support

1-KEEP TRACK OF THE CUSTOMER PROFILE

The following information is to be kept in the

Types of the customer

The nature of purpose of visit

The duration of stay

The service demanded

The socio-economic class of the customer

The religion, the language, and the culture of the religion.

This information will help to anticipate the expectations and perceptions about the

service and process of offering the service and its outcome.

2-MONITORING OCCUPANCY LEV

It is necessary to ctrl the occupancy at a high level. The MIS should provide the

information on a higher or low, and the reasons thereof.

3- PROJECT FUTURE SHOULD PROVID




The MIS should provide information on new needs which are emerging in the

foreseeable future.

4-MONITOR THE LEVEL OF EXPECTAT

The customer expectations on the service level norms differs from class to class and

service to service. Besides perceptions about fast and slow service, the customers have

expectations about the manner or process of offering the service.

5-MONITORE THE COMMUNICATION N

The communication makes interaction with the customer a comfortable exercise. It is

necessary to upgrade the knowledge and skills of all employees to fulfill the changing needs

of the customer.

6-CUSTOMER DATABASE

Most of the good hotels create a customer database for handling a variety of applications.

It keeps the data about their room choice, food habits, special linking, record of contracts and

so on.

Most of the MIS system in a hotel are mgt. as front end and back office. The system are

support system to the main MIS of the hotel .

HOSPITAL

The role of a hospital in today’s world has changed from the medical and clinical

assistances to health care with a concern for the people who need it. It is a missionary

organization established to provide health care services to the needy with the motto-don’t

make them sick while they are trying to get well.

The management of the hospital is to provide distinctive service to a wide range of

customers whose service expectations and perceptions are varied .




Todays hospitals use a lot of medical hardware and software in health care activity.

Health care decisions are based on diagnostic aids and assistance through an X-ray,

scanning ,pathological test, and knowledge base of case history etc.

In hospitals there are critical resources such an operation theater , and X-ray lab, hospital

beds, etc. the resources to be used effectively by planning and control by the other associate

resources such as the surgeon, anesthetist, physician, and nursing staff .

The resource planning must consider the emergency requirement of the customers which

are difficult to predict and control. With this backdrop, we can discuss the mission critical

applications in the hospital industry.

FRONT END APPLICATIONS

1.Patient data base:-

To handle the queries on the existing patients and the patients treated and discharged the

queries may come from a visitor, a doctor or any other staff of the hospital.

2.Medical server data base :-

Name, addresses, telephones etc. of all medical staff including doctors,

nurses ,technicians .

Important service centers the town were support services can be obtained in emergency.

these are the laboratories, the blood banks the special clinics and the special facility centers.

3.Resource planning and control:-

An online query facility to answer the number of queries on the availability,

scheduling and re-scheduling of the resources and the facilities.

For judging the usage of the facilities and to put them in proper use.

4. Medical case history data base :-

Knowledge data base on the case history for the guidance and research .




Monitoring the effect of drugs to judge the efficacy in term of the patient response.

Analyse the health care demand and make a planning for the health service strategy.

Back Office Applications

1. Core Applications

• Manpower and personnel planning.

• Payroll and the employee related applications.

• Hospital billing and recovery.

• An inventory control-procurement, planning and control. The expiry data

management.

• Financial accounting. Capital budgeting and expense control.

• Maintenance of the service facilities.

• Resource utilisation and analysis.

2. Critical Control Applications

Evolve the basic standards for control and provide exception reports to the management for

forwarij planning and control.

• Patients waiting time and service cycle.

• Non use of critical resources.

• Stockouts of the critical drugs, and the time taken to restore supply.

• The number of patients admitted, treated and cured. Length of the stay,

cost and revenue to the hospital.

• New trends in the service demands and the service performance in such

cases.




• Analysis of the delays in terms of duration and causes.

• The number of patients turned down or sent to the other hospitals for want

of facilities—analysis and causes.

Unlike a manufacturing industry, it is not possible to have a mechanisation and an

automation in the hospital services. They could be, at the most, aids. The service quality

depends on the people who provide it. Most of the management issues are related to the

manpower and human resource planning. The MIS largely revolves around this aspect in the

industry. If this aspect is not taken care of, the service, would suffer badly in spite of the best

physical resources available.

The hospital management is a high risk business, both for the server and the customer

and the risk spreads from business risk to the survival of the patient. It is a business of non

standard activity where every customer needs a unique approach. The steps of service may be

common but the process may differ putting strain on the facilities. The MIS in hospital

management plays more of a support role in forward planning than the present control needs.

The MIS plays a support role for a strategic decision making for expansion, upgradation and

training of human resource. The MIS plays a role of crisis management through information

support.

Banking

Banking is generally understood as a place where the financial services are offered,

viz., checking, savings and providing credit to the customers. The scope of this service in

today's world is expanded where the banks have become an instrument in providing financial

assistance to a number of activities as a policy or by regulation or for meeting socio-

economic obligations. In banking also the concept of financial product has come in.

The customers choose the bank mainly on the following three factors.

• The ease of doing business.

• The quality of personnel and service.




• The range of the financial services.

These factors outrank the factors such as the location, the interest rates, the lay-out,

the banking hours, etc.

The bank has a wide range of customers like individuals, institutions, trusts, business

organisations, Government and local bodies.

The banks deal with a number of transactions which also vary widely in terms of

length and complexity. The bank customer, like any other service industry, is interested in

getting terminal results quickly. The distinctive service in banking mostly means solving the

customer's problems in the financial matters, and the single, most widely used measure of

quick service is the elapsed time of transaction execution. For example, the time taken for

crediting the amount, withdrawal of cash, the sanction of a loan or credit facility, etc. are the

norms of deciding a good service. The MIS in banking industry revolves around this aspect.

The customer of the bank would like to know the states of the account very fast to make

decisions on withdrawals or payments. He is interested in obtaining the loan assistance for his

specific need with a reasonable rate of interest. Some customers would be interested in tax

consulting and tax planning. Another group of customers would be interested in investment

guidance for investing in stocks and securities.

To avoid the inconvenience of going to a number of places for payment of small

amounts, customers need service at the counter to pay electricity bills, telephone bills, taxes

and duties to the local bodies and the Government. Hence, the MIS is to be designed to

identify, decide and design a service strategy for offering a distinctive service to the wide

range of customers seeking a variety of service demands. The following points should be

taken care of while designing an MIS for a bank.

1. Customer Database

The service expectations and perceptions revolve around the following factors:

1. Customer — individuals, company, institutions, etc.




2. Operator — housewife, employee, officer of the organisation.

3. Range of service — savings, credit checking and payment, the other

financial services.

4. Class of customers — income group, corporate bodies, etc.

5. Working hours — morning, afternoon, evening, etc.

The management of the bank create a customer database and analyse the needs of the

customers from time to time to create suitable service packages.

2. Service to the Account Holders

The customers (Accounts holders) need constant advising on the status and its

operations. Most of the customers use their account for routine payments affecting the

balances. Many a times the account holds a large amount and it is not transacted for any

purpose. The MIS should give following reports to the management.

1. The non-moving account.

2. The account having balance more than say Rs. 50,000.

3. The account going down below minimum balance.

4. The routine payments not made.

5. The routine credits not arrived.

6. The defaults on loan repayment.

7. The delays on crediting cheques amounts.

8. A sudden rise and fall in the account movement.

9. The account holders giving 80 per cent business to take personal care of

their service expectations and perceptions.

Based on these reports, the management of the bank should alert or warn the customer

to act on his account to correct the situation. The personal and individual account holders




need such a service badly as they have to manage their domestic or business activities in a

tight money situation. The MIS built around such demands would help not only the bank

manager but also the account holder.

3. Service for Business Promotions

The bank finances can be utilised in a number of ways to increase the banking

operations by offering credit to the right kind of customers. It is, therefore, necessary to study

the trend in the business industry and solicit the customers from the upcoming and growing

business sector.

The MIS should concentrate on data collection from the various sources to analyse

and conclude the future business strategy. Such information will help the banker to move out

to talk to the customer to obtain business for the bank. Such support will also reduce the risk

of account going into the red and the bad debt.

4. The Index Monitoring System

One more feature of the MIS is to monitor the variety of indices and ratios related to

banking operations which are internal to the banking business. Some of these ratios fulfill the

statutory needs, some meet the policy needs and so on. It is necessary to build the MIS

applications to support the bank manager in making decisions to keep a different index,

norms and ratios within the acceptable limits. He should also get support through DSS to

handle the problem of not meeting these statutory standards.

5. Human Resource Upgrade

There is a lot of human aspect in the banking operations. Any amount of

mechanisation and computerisation is not a substitute to a service with a smile. The service

may become faster or quicker but still it requires a human touch and skill. It is, therefore,

necessary to upgrade the skills and knowledge of the bank employees to offer a proper

service to the customers.

The financial world changes so fast that retaining a customer base is a challenge. He

financial service business is becoming competitive and offering a good distinctive service is

the only solution to improve the business prospects. The service has to be more aggressive for




specific problem solving of the customers. The MIS should identify such needs and offer help

to the management in designing training courses for the employees to improve their

knowledge about banking and the financial world.

In the banking industry, the traditional methods of good performance are at odds, with

good service. A good financial performance may not necessarily mean a good service quality.

The customer of the bank expect the service to be delivered in a smooth, problem-

free, efficient and timely manner. The managers in the bank have the service as well as the

financial goals to achieve. It is, therefore, necessary to set the internal standards on the art,

the accuracy, the responsiveness and the timeliness. The systems and the resources provided

to achieve these standards need monitoring and the MIS will provide a feedback on these

standards so they can be regulated and controlled.

For example, a multinational bank has set standards on satisfying the queries in the first

phone call, cheque clearance time, waiting time, etc. It has set eighty-one separate 'Quality

Indicators' for the Bank Card Business and so on. The MIS measures these standards and

gives a feedback on achievement or non-achievement
