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Chapter 12:
APPLICATION IN MANUFACTURING SECTOR
Page 2
Applications of management functions of the industry
Model of information processing system
Integration of manufacturing applications
LEARNING OBJECTIVES
Page 3
Introduction
Mis model of application in manufacturing sector is devided into number of different processes which are as under given
- OLTP
- RDBMS
- DATABASE
- INPUT
- PROCESS
- OUTPUT
- UPDATION
Page 4
Model of Information Processing System
OLTP RDBMS
DATABASE
APPLICATIONDEVELOPMENTSYSTEM
ACCOUNTING QUERY ANALYSIS CONTROL
PRINTPROCESS
SCREEN
STATUTORYCOMPLIANCE
KNOWLEDGEUPDATE
OPERATIONUPDATE
DECISIONANALYSIS
ACTIONUPDATE
Page 5
Model of Information Processing System
The online transaction processing system helps to process input into database
The system designer develops an application with the objective of accounting, transaction based results and providing the reports on the same.
The second objective is to provide query system for assessment of the status of record, result or document.
Threw analysis and control application development and maintained process take place.
After this input process next is report generation and screen display have been done.
At last the updating process take place.
Page 6
Different management effected on mis
There are various kinds of management and its application which are as given beloved.
- Personal management
- Financial management
- Production management
- Raw material management
- Marketing management
- Corporate overview.
Page 7
Personal management
Pm functions has the primary objectives is providing suitable manpower in number with certain ability, skills and knowledge as organizations demands from time to time.
Main goal is increase in manpower productivity by resorting following techniques.
1)HR development threw training and upgrade skills
2)Motivation threw leadership and job enrichment
3)Promotion and rewards threw performance appraisal
4)Grievance handling
5)Structuring the organization
Page 8
Personal management
Input transaction documents
- Personnel application form
- Appointment letter
- Attendance and leave record
- Biodata,self and family
- Production/productivity data on jobs
- Wage/salary agreements
- Record of complaints, accidents etc
- Industry data
- Records of sources of manpower
Page 9
Personal management
Applications:
Accounting
- Attendance
- Manpower
- Leave
- Salary/wages
- Loans and deductions
- Accidents
- Production data
- Skills
- Bio data
- Family data
Page 10
Personal management Query:
- Who is who?
- Strength of section,department,division
- Number of persons with a particular skills
- Attendance, leave record of employees
- Salary/wages of employees
- Designation and number of personnel detail in organizations
- Personnel records of employees
• Analysis:
- Analysis of attendance by a class of employees
- Leave analysis by a group of employees
- Trend in leave record
- Analysis of attendance
- Analysis of salary
- Analysis of overtime
-
Page 11
Personal management
Control:
- Probable absence versus workload
- Projection of personnel cost against manpower increase
- Assessment of accident records
- Personnel cost versus industry cost
- Projection of manpower needs and evolving recruitment and training programmers.
Page 12
Personal management
Reports:
Statutory reports:
- Attendance records
- Strength of employees by category-permrent,trainee and apprentices
- PF,Ledgers and returns
- IT form
• Information updates:
- Daily attendence reports
- Employee strenth
- Joining and transfer of employees
- Personnel cost of department,job,product.
- Periodic statement
Page 13
Personal management
Operation update:
- Daily attendance report
- Overtime versus work completed
- Projected absenteeism and distribution of workload
- Cost of personnel by work completed
• Decision analysis:
- Analysis of attendance for season, festival and by skills.
- Overtime analysis by department, employees and jobs
- Analysis of accidents and deciding on safety measures and training
- Cost analysis by personnel versus jobs vs skills and planning for new recruitment
Page 14
Personal management
Action reports:
- Recruitment and additional manpower or subcontracting of jobs
- Acceptance of orders on the basis of workload.
- Reduction, transfer of employees
- Preparations of training and development programmers with specific needs
* Most of this reports is useful with top level management
Page 15
Financial management
Main objective is fulfill financial needs of business from time to time by providing working capital and organization to achieve goal.
Other objectives are help organizations with audited financial reports time to time.
Financial management uses variety of tools and techniques which are as under:
- Break even analysis
- Cost analysis
- Cash flow projections
- Ratio analysis
- Roi analysis
- Management accounting
- Expense analysis, Auditing and control
Page 16
Financial management
Input transaction documents:
- payments: to suppliers,authorities,employees,shareholders,financial institutions etc
- Receipts : from customers,authorities,employees,financial institutions and others.
- Data from stock exchange of the share prices,consolideted financial results of the other companies etc.
Page 17
Financial management
Applications:
Accounting:
- Sales
- Purchase
- salary/wages
- Inventory
- Expenses
- Capital purchase
- Fixed deposits
- Shareholder’s funds
- Income tax, sales tax,exise duty, customs duty
- Budgets
- Fixed assets
Page 18
Financial management Query :
- The query is processed for the following with respective codes as keys:
- Main account
- Subsidiary account
- Locations(factory,branch etc)
- Documents
• Decision analysis:
- Cash flow analysis
- Source and users funds
- Debtors analysis
- Creditors analysis
- Budgeted analysis
- Ratio analysis
- Cost analysis
Page 19
Financial management
Controls:
- Account receivable, outstanding beyond acceptance norms
- Advances to creditors
- Valuation of non moving inventories
- Analysis of nonmoving accounts and legal actions
- Cost overruns beyond norms and action on alternatives
- Performance analysis
• Reports:
• Statutory compliance:
- Tax returns
- Registers
- Declarations of creations results to the financial institutions
- Declarations of financial results
- Declarations of annual results
Page 20
Financial management Information updates:
- Monthly trial balance, balance sheet and profit and loss account
- Stock valuation
- Account receivable
- Account payable
- Expanses
- Cash positions
- Sales, purchase of assets by certain classifications
- Overall business achievements
• Operations updates:
- Statutory returns and reports
- Tax details
- Reports on finished goods, dispatches and invoicing
- Reports on materials receipts and paynments
Page 21
Financial management
Decision analysis:
- Break even analysis
- Roi for choice of investment
- Trend analysis
- Cash flow analysis
- Analysis current, fixed and nonmoving assets
• Action update:
- Overdue receivables
- Non supply of goods and services but advance paid
- Payments to creditors, where penalties are involved
- Poor usage of fixed assets and disposals
Page 22
Production Management Main objective is to provide manufacturing services to the organizations
The other functions like planning,control,industial engineering,maintaince and quality control.
The organizations of the production management is differ from type of production
The functions goals of the production management are fuller utilization of the manufacturing,capicity etc.
Input transaction documents.
- Production program
- Production schedule
- Process planning sheet
- Job cart
- Job status advice
- Quality assurance rating form
- Finished goods advice
- Material requirement
Page 23
Production Management Applications
Accounting
- Quantity of production with respect to a time period
- Material requirement
- Rejection quantity
- Breakdown incidence
- Labor detail
- Machine and facility utilization
- Labor hours
• Query:
- Status of job
- Production program and job schedules
- Status or availability of material
- Standard information on machines
- Standard on skills
Page 24
Production Management Decision analysis:
- Make or buy
- make or subcontract
- Use of alternate material
- Rescheduling and loading of jobs
- Planning and scheduling of jobs
- Selection of production facilities
• control:
• The exceptions which need to highlighted are:
- Hold up a key jobs beyond certain limits
- Utilization of key facilities
- Standards
- Backlog of large number of order and failure to meet promised delivery date.
Page 25
Production Management
Statutory compliance
- PM should be significant towards legal documents which are related with other managements
- The production hours, general workloads are effected as statutory side in pm,.
• Information update:
- Follow standard
- Information should kept up to date
- Data of job hours, production hours etc.
• Operation updates:
- The reports highlighted –planned verses actual
- Job hours, job schedule etc
Page 26
Production Management
The decision analysis
- Focuses on specific functions which is helpful in decision making
- Focused on information,knoledge and bi
- Analysis take place with help[ of DSS
• Action update:
- These reports provide information update on the post implementation scenario of decisions
- Measurement of decisions count in this report
- Help to decision maker with providing a proper infrastructure which is helpful in future,
Page 27
Raw Material Management(RMM)
The objective of RMM is to provide material for production,maintainance and services at economical prices, in an appropriate quantity and quality with extra inventory.
Mainly focused on cost of material
Deals with supplies of goods
Managerial task focused on cost of production, the price with the quantity, performance of production department etc.
It is controlled by corporate management and regular checking ,audit take place to ensure the procurement of material is done at an economic price.
Page 28
Raw Material Management(RMM) Input transaction documents:
- Purchase requisition
- Purchase order
- Receipt of goods
- Return of goods to supplier
- Issue for production
- Return from production
- Certification of bill for payment
• Application:
- Forecasting and planning
- Purchase ordering
- Goods receipt
- Inspection
- Issuing the material
- Bill passing and control
Page 29
Raw Material Management(RMM) Accounting:
- Purchase quantity
- Issue quantity
- Stocks
- Goods returns
- Rejections
- Performance
- Value of purchase
• Query:
- Query is centre around price,supplier,stock and pending aspects of purchase, returns and payments
- Query may be on item purchased, purchased price, supplier and other purchase related detail.
Page 30
Raw Material Management(RMM) Decision analysis:
- Decision is based on cost, material quality and quantity of raw material
- The first major decision is related with price of an item
- A DSS is major aspects which proves as helpful to decision maker to take decisions
- Material management performs supporting role to production management in decision analysis.
• Control :
- Performance is evaluated with 4 accounts viz,capital blocksed in inventory, number of stock outs affecting production activity, reliability of suppliers, cost and purchase.
- Periodic evaluation required with stocks,rawmaretials etc.
- The evaluation of non moving and non selling inventory is necessary while control process take place in raw material management.
Page 31
Raw Material Management(RMM)
Reports and Displays:
Statutory Compliance:
- Stock ledger
- Value stock statement
- Octroi register
- Excise duty returns and registers
- Custom bonds register
- Returns on tax
Page 32
Raw Material Management(RMM)
Information Update:
- There are various information which required regular updating in register which are:
- Price and trend
- Information about material
- New supplies and sources of supplies
- Tax duties
- Value of inventory
- Value of non moving inventory
- Material information for future usage
Page 33
Raw Material Management(RMM) Operations update:
- Daily goods received register
- Statements of stocks
- Reports on purchase
- Statements of supplies
- Statements of payments
- Statements of supplies received and rejected
• Decision analysis:
- Stock outs
- Cost of purchase and overview
- Value of inventory and analysis
- Reliability of suppliers
- Vendor performance
- Material performance
Page 34
Raw Material Management(RMM)
Action Update:
Action update take place on decision wise that whether a decision is implemented or not.
Review of action take place and impact can be measures
Actions is related with vendors,purchase,quality measurement etc.
Page 35
Marketing Management
It is deal with satisfying the consumer
Scope is identify need of consumer,envolving product concept, designing the product
The activities involves are market research, consumer surveys,advertising,sales,promotions,campaign,stocking of products, developing ,etc
Control take place at sales department wise
It is directly interacted with sales management.
Page 36
Marketing Management
Input transaction documents:
- customer order
- Order acceptance
- Delivery note
- invoice note, credit note, debit note
• Applications:
• There are several highly process oriented accounting applications of marketing management.
• The main accounting activity is sales everything is focused on sales
• The other accounting activities are as given
Page 37
Marketing Management Accounting:
- Product sale
- Product family
- Sales value
- Sales tax
- Dealer
- Distributor
- Customer
- Excise duty
- Inventory
- Area
- Market segments
- Returns
- Receivables
Page 38
Marketing Management
Query
- The queries in the MM are on customer,product,price,stock,sales.
- It mainly focused on orders, transaction process after order has been received
- It has also on assessment of sales performance and comparison with various competitors also.
• Decision analysis:
- Decision is focusing on prices,orders,discounts,commisions,deciding sales terms etc
- The complexity comes in price decisions
- Dss is helpful to MM to decide a perfect decision on critical issues on MM
- There are various application developed to support MM to take right decisions
Page 39
Marketing Management
Control:
- Control is focused on business goals
- Control comes with comparisons of sales vs budget, marketing cost vs budget cost, product sale vs target fixed
- Control applies on distributor,dealer,branch and marketing persons, planned sales, competitors review etc.
- The control applications designed with focusing on decision and action of MM.
Page 40
Marketing Management Reports
Statutory reports:
- taxes and duties
- Excise duties
- Sales tax
- Audit record and review
• Information update:
- product sales ledger
- Sales summary
- Account receivables
- Sales analysis
- Market analysis
- Competition analysis
- Contribution analysis
Page 41
Marketing Management Operation update:
- Order book
- Dispatch reports
- Inventory
- Invoice
- Customer complaints
- Complaints disposed
• Action update:
- Sales vs. budget
- Expenses vs. sales
- Sales growth vs. sales objectives
- Stock vs. budget growth
- Complaint vs. number of complaint solved
Page 42
Corporate overview
It is combination of all management
The top management is informed by each manager threw reports and performance evaluation take place according to this reports
The reports contains note, inner-office memos etc documents
The basic communication is necessary between various department before submitting report to top management
Periodic evolution is necessary
The main example of corporate overview according to management wise is like this
Page 43
Corporate overview
Marketing Production Finance Expenses
Orders Planned productions
Current assets Revenue expenses
Sales Actual production Current liabilities Capital expenditure
Cost of goods sold Cost of production Current ratio Payment to employees
Finished goods inventory
Raw material inventory
Account receivable to turn over
Marketing expense
Receivables Payables Inventory turnover Other expenses
Page 44
Corporate overview: Business System Integration
MM PM
FM
ProductionMGMT
RMM
BusinessAccounting
MGMTAccounting
planningBusiness accounting
