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.

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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.

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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

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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

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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

Manufacturin Manufacturin Engineering

g Resource g execution systems
Planning systems
systems
Production Shop tool CAP
forecasting scheduling
Production Shop floor CAE
ERP

Scheduling control
Material Machine Computer
requirement control Aided
planning process
Robostic
planning
Capacity control Product
planning simulation &
Proto typing

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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

MARKETING
INFORMATION

INTER ACTIVE SALES FORCE CRM SALES

MARKETING AUTOMATION MANAGEMENT

MARKET ADVERTISING PRODUCTION

RESEARCH AND AND PROMOTION MANAGEMENT
FORECASTING

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.

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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,

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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

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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 & Compensation &

development administration
Strategic -HR planning -Succession planning -Contract costing
systems -Labour force tracking -Performance appraisal -salary forecasting
planning
Tactical -labour cost analysis & - training effectiveness -Compensation
systems budgeting - carrier matching effectiveness
-benefitspreface
analysis
Operational -Recruiting -Skill assessment -Payroll control
systems -Workforce scheduling/ -Performance -Benefits
planning evaluation 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

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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.

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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

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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.

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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

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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 .

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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 .

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• 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.

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• 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.

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• 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.

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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

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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

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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

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