Part 15

Applications of MIS
(Manufacturing Sector)

Third Year Information Technology

MANAGEMENT INFORMATION SYSTEM

Tushar B Kute,
Sandip Institute of Technology &
Research Centre, Nashik
tbkute@gmail.com
MODEL OF INFORMATION PROCESSING SYSTEM
APPLICATIONS IN MANUFACTURING SECTOR

 Personnel management
 Production management

 Financial management

 Material management

 Marketing management
PERSONNEL MANAGEMENT
 It has a primary function of providing suitable
manpower in number and certain ability, skill and
knowledge, as the business organizations
demands from time to time.
 Its goal is to control personnel cost through
continuous increase in manpower productivity by
resorting the following techniques:
 HRD through training and upgrading the skills.
 Motivation through leadership and job enrichment.
 Promotion and rewards through performance appraisal.
 Structuring the organization.
INPUT TRANSACTION DOCUMENTS
 Personal application form
 Appointment letter
 Attendance and leave records
 Biodata
 Appraisal form
 Productivity data on jobs
 Wages / salary agreement
 Record of complaints, grievance, accidents
 Industry data of wage, salary structure
 Industry data on manpower, skill, qualifications
APPLICATIONS

 Accounting
 Query

 Analysis

 Control
ACCOUNTING
 Attendance
 Manpower
 Leave
 Salary/wages deductions
 Loans and deductions
 Accidents
 Production data
 Skills
 Biodata
 Family data
QUERY
 Who is who?
 Strength of section, department, division
 Number of person with particular skills.
 Attendance, leave, absenteeism records of all
employees.
 Salary/wages of employees.
 Designations and number persons holding these
designations.
 Personal records of employees..
ANALYSIS

 Analysis of attendance by class of

employees.
 Leave analysis by a group of employees.

 Trend in the leave record.

 Analysis of accident and type thereof.

 Analysis of salary/wages structure.

 Analysis of overtime.
CONTROL
 Probable absence vs. workload.
 Projection of personnel cost against manpower
increase.
 Assessment of accident records against safety
measures taken.
 Personnel cost vs. industry cost and its projection.
 Projection of manpower needs and evolving
recruitment and training programs.
REPORTS

 Statutory reports
 Information updates

 Operation updates

 Decision analysis

 Action reports
STATUTORY REPORTS

 Attendance record (Muster).

 Strength of employees by category-
permanent, trainees, apprentices.
 Provident funds, ESI reports, ledgers,
returns.
 Accident reports.

 Income tax forms 16, 24A.

 Strength of employees to Director General of

Technical Development (DGTD)
INFORMATION UPDATES

 Daily attendance report

 Employee strength

 Joining and transfer of employees

 Personnel cost by department, job, product.

 Periodical statements showing cost by

salary/wages, overtime.
OPERATION UPDATES

 Daily attendance to plan the workload.

 Overtime vs. work completed.

 Projected absenteeism and distribution of

workload.
 Cost of personnel job or work completed.
DECISION ANALYSIS
 Analysis of attendance for season, festival, and by
skills, scheduling of the jobs accordingly.
 Overtime analysis by department, employees and
job to decide the strength of personnel.
 Analysis of accidents and deciding on safety
measures and training.
 Cost analysis by personnel vs. jobs skills and
planning for new recruitment.
ACTION REPORTS

 Recruitment and additional manpower or

subcontracting of jobs.
 Acceptance of orders on the basis of
workload.
 Reduction, transfer and reorganization of
employees to control costs.
 Preparation of training and development
programs with specific needs.
HR MANAGEMENT SYSTEM
FINANCIAL MANAGEMENT

 Its function has a primary objective of

meeting the financial needs of the business,
from time to time, by the way of providing
working capital and long-term capital to run
the business with the goal of containing the
cost of the capital at minimum.
 Declaration of audit financial results, submit
all reports and returns to the Government
and Tax authorities.
FM TOOLS

 Break-even analysis
 Cost analysis

 Cash flow projections

 Ratio analysis

 Capital budgeting and ROI analysis

 Financial modeling

 Management accounting

 Expense analysis, auditing and control

INPUT TRANSACTION DOCUMENTS

 Payments- to suppliers, authorities,

employees, shareholders, financial
institutions and others.
 Receipts- from customers, authorities,
employees, shareholders, financial
institutions and others.
 Data from stock exchange of the share
prices, consolidated financial results of the
other companies.
APPLICATIONS

 Accounting
 Query

 Decision analysis

 Control
ACCOUNTING

 Sales  Income tax

 Purchase  Sales tax
 Salary / wages  Excise duty
 Inventory  Custom duty
 Expenses  Octroi
 Capital purchase  Consumption
 Fixed deposits  Budgets
 Shareholder’s  Fixed assets
funds
QUERY

 The query is processed for the following with

respective codes as keys-
 Main document
 Subsidiary account

 Location (Factory, Branch) etc.

 Document (Bills, Credit note, Delhi note, Receipt

etc.)
DECISION ANALYSIS
 Cash flow analysis
 Sources and uses of funds
 Debtors analysis and aging
 Creditors analysis and aging
 Budget analysis
 Ratio analysis and management norms
 Capital budgeting and ranking of investment
alternatives.
 Cost analysis of various production inputs and
alternatives.
CONTROL
 The control is exercised, based on the exceptions
found in the business organization-
 Accounts receivables, outstanding beyond the
acceptable norms.
 Advances to creditors and non realization of obligations.
 Valuation of non-moving inventory for disposal.
 Analysis of non-moving accounts and legal actions.
 Shortage of funds in excess of planned and rescheduling
of activities, priorities.
 Cost overruns beyond the norms and action on
alternatives.
REPORTS

 Statutory reports
 Information updates

 Operation updates

 Decision analysis

 Action reports
STATUTORY COMPLIANCE
 Tax returns
 Registers: sale tax, excise tax, tax deducted at
source.
 Declaration of certain results to the financial
institutions.
 Declaration of financial results to the public every
six months.
 Declaration of annual results to the board,
shareholders, and public within a stipulated time.
INFORMATION UPDATES
 Monthly trial balance, balance sheet and profit and loss
account
 Stock valuation
 Accounts receivables and aging
 Accounts payables and aging
 Expenses on major accounts.
 Cash position
 Payments and receipts which are statutory obligations.
 Sales and purchase of assets by certain classification.
 Overall business achievements in major lines of
business.
OPERATION UPDATES
 Filling statutory returns and reports.
 Statutory payments such as advance tax, sales tax,
octroi, excise duty etc.
 Transactions executed and accounted in the
system.
 Reports on finished goods, dispatches and
invoicing.
 Reports on material receipts and payment to the
suppliers.
 Obligatory payments- rents, insurance premium,
membership fees, interest and dividend.
DECISION ANALYSIS
 Break even analysis for cost price detection.
 Returns of investment analysis for choice of
investment.
 Trends analysis on price of selected commodities.
 Cash flow, sources and uses of funds.
 Analysis of current and fixed assets in terms of use
and decision on alternate use or disposal.
 Analysis of current liabilities and decision on
liquidation on priorities basis.
ACTION UPDATE
 Overdue receivables
 Legal action
 Termination of business association.
 Non supply of goods and services but advance paid.
 Legal action
 Revision of terms
 Termination of business association
 Payments to creditors, where penalties are involved.
 Poor usage of fixed assets and disposal.
 Non-moving inventory of more than two years and its
disposal.
 Evolving new systems and procedures to control expenses
and implementation.
PRODUCTION MANAGEMENT (PM)
 The Objective of PM function is, to provide
manufacturing services to the organisation.
 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.
 The PM function is supported by other
functions, viz. Production Planning and
Control, Industrial Engineering, Maintenance
and Quality Control.
INPUT TRANSACTION DOCUMENTS
 Production Programme
 Production Schedule
 Process Planning Sheet
 Job Card
 Job status advice
 Quality Assurance rating form
 Finished goods advice
 Breakdown advice
 Material Requirement
 Material Requisition
 Customer order
APPLICATIONS

 Performed through Production Planning and

Control
 Bill of material processing

 Drawing 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 the final stage
 Breakdown incidence

 Labour complement with respect to a period

 Use of Power, fuel and Consumables.

 Machine and facilities utilisation

 Labour hours
QUERY
 The queries in the PM relate to seeking of status of
job or information on fixed entities..
+ Status of the job or order in terms of stage and
level of completion
+ Production Programme and jobs schedules.
+ Load status on Machine, group of machines.
+ Status on availability of material.
+ Standard information on machines, tools,
specifications.
+ Standard information on skills and capacities of
each worker.
+ Standard information on products and
DECISION ANALYSIS
 Long term and Short term Period
 Make or buy
 Make or subcontract

 User of alternative material

 Use of alternative process

 Evolving optimum product mix/job mix

 Rescheduling and loading of jobs

 Planning and scheduling of jobs

 Selection of production facilities

 Selection of alternative maintenance policies

CONTROL
 The exceptions which need to be highlighted are:
 Excessive product rejection on account of material and/or
process.
 Hold up of key jobs beyond a certain limit.

 Excessive work in process inventory.

 Continued breakdown of the manufacturing facility

beyond a certain period.
 Utilisation of key facilities below a limit.

 Continuous significant deviation from standards or norms

of production rate.
 Backlog of a large number of orders and failure to meet
promised delivery date.
REPORTS AND SCREEN DISPLAY

 Statutory Compliance
 Information Update

 Operations Updates

 Decision Analysis

 Action Update
MATERIALS MANAGEMENT
 To provide material for production,
maintenance and services at economical
prices, in an appropriate quantity and quality
with east stockouts and with no extra cost of
carrying the inventory.
 The scope of materials management function
is procurement, stocking control of inventory.
INPUT TRANSACTION DOCUMENTS

 Purchase acquisition
 Purchase order

 Receipt of goods

 Return of goods to supplier

 Issue for production

 Return from production

 Certification of bill for payment

APPLICATIONS

 Forecasting and planning

 Procurement

 Purchase ordering

 Goods receipt

 Issuing the material

 Processing of returns

 Bill passing and control

ACCOUNTING

 Purchase quantity
 Issue quantity

 Stocks

 Good returns

 Rejections

 Performance

 Value of purchase

 Average or standard rate of accounting

QUERY
 Query in material management largely centered
around price, supplier, stock and pending aspect of
purchase, returns and payments.
 It may be on item seeking the latest purchase price
or it may be on an item seeking price in a particular
purchase order placed on a particular supplier.
DECISION ANALYSIS
 Price of the item.
 Multidimensional analysis of the price.
 Stocking of items
 System for controlling items
 Fixed Order Quantity
 Reorder Level System
 Periodic Review System
 Inventory analysis
 A-B-C Analysis
 Production Analysis
CONTROL

 Capital blocked in the inventory

 Number of stock outs affecting the production
activity
 Reliability and dependability of suppliers

 Cost of purchase
REPORTS AND DISPLAY

 Statutory Compliance
 Information Update

 Operations Updates

 Decision Analysis

 Action Update
STATUTORY COMPLIANCE

 Stock ledger
 Valued stock statement

 Octroi register

 MODVAT register

 Excise duty returns and registers

 Customs bond register

 Returns on tax deducted at source

INFORMATION UPDATE
 Price fluctuations and trend
 Information of alternative material with
specifications and test results
 New suppliers and sources of suppliers
 Current incidence of taxes and duties
 Value of inventory computed at standard price
 Performance of suppliers
 Stockouts
 Value of non-moving inventory
 Material required for next planning period.
OPERATIONS UPDATE
 Daily goods received register
 Statement showing items in short supply or
stockouts
 Reports on purchase acquisitions received but not
converted into purchase orders
 Statement on suppliers due but not yet received
 Statement on payment due to suppliers but not yet
paid
 Statement of suppliers received and rejected
DECISION ANALYSIS

 Emergency procurement
 Revision of price

 Terms of supplies

 Disposal of inventory

 Cutting down the procedure of purchase

 Switching over to new supplier

ACTION UPDATES

 All the actions are centered around the

parameters mentioned in decision analysis.
MARKETING MANAGEMENT
 It deals with satisfying the consumer. The scope of
function starts from identifying the need of
customer, evolving product concept, designing the
product, positioning the product in market and
selling in the appropriate price.
 Activities-
 Market research
 Consumer survey
 Advertising
 Sales promotion campaign
 Stocking of products
INPUT TRANSACTION DOCUMENTS

 Customer order
 Order acceptance

 Delivery note

 Invoice, credit note, debit note

APPLICATIONS

 Accounting
 Query

 Decision analysis

 Control
ACCOUNTING

 Product sale  Zone

 Product family  Area
 Sales value  Inventory
 Sales tax  Receivables
 Dealer  Market segment
 Distributor  Exports market
 Customer  Returns
 Excise duty  Complaints
QUERY

 Handling customer complaints

 Pending position followed by stock exists for
allocation or not
 Whether manufacturing order is issued /
status
 Single or multidimensional comparisons
between two product groups.
DECISION ANALYSIS
 Decision taken on
 Pricing
 Allocation of stocks to orders
 Discounts and commissions
 Deciding sale terms
 Decision building models
 Break even analysis model
 Risk analysis model
 Distribution model
 Network model
 Product launch model
CONTROL

 Correct ongoing operational performance

 Reset the direction trend in the development
towards desired goals and objectives
 Product positioning and pricing

 Choice of market segment

REPORTS

 Statutory reports
 Information updates

 Operation updates

 Decision analysis

 Action reports
STATUTORY COMPLIANCE

 Sales tax register

 Returns

 Excise duty returns

INFORMATION UPDATE
 Product sales register
 Sales summaries
 Accounts receivables
 Orders received and accepted
 Sales analysis
 Aging of receivables
 Contribution analysis
 Market analysis
 Competition analysis
OPERATION UPDATE
 Reports generated on various marketing
operations, daily transactions–
 Order book
 Dispatch report
 Inventory
 Invoice
 Customer complaints
 Complaints disposal
 Guidance for operating personnel as how they are
performing.
DECISION ANALYSIS

 It convey whether the desired/expected

results are realized or not.
 Pre and post-sales campaign

 Choice for alternative to customers

 New product launch

ACTION UPDATES

 Action reports
 Sales vs. budget
 Expenses vs. sales

 Sales growth vs. sales objectives

 Sales vs. market segment vs. budget

 Stock vs. budgeted stock levels

REFERENCES

 Waman Jawadekar, "Management Information

Systems” , 4th Edition, Tata McGraw-Hill
Publishing Company Limited.

Tushar B Kute,
Sandip Institute of Technology &
Research Centre, Nashik
tbkute@gmail.com