Making decisions is an integral part in the functioning of any organization. To facilitate Decision making in this ever-competitive world it is imperative that managers have the right information at the right time to bridge the gap between need and expectation. For better flow of information an adequate Management Information Systems (MIS) is the need of this age. Thus it is important to have an understanding of the MIS followed in an organization by all levels of management in order to take effective and appropriate decisions.
A management information system collects and processes data (information) and provides it to managers at all levels who use it for decision making, planning, program implementation, and control. The MIS has many roles to perform like the decision support role, the performance monitoring role and the functional support role.
To get a realistic view of the MIS, I've gone through the MIS of AC Limited. For the purpose of getting in depth understanding of particular functions of the company, I focused the needs, uses and benefits of MIS with respect to the Material Department of the company. For the preparation of this report, Inventory Management has primarily been focused.
AC Limited is one of the first Pakistani companies to realize the potential and importance of information technology and to adopt automation and IT infrastructure. The preliminary computerization took place in 1986.
The organization has traveled a long way from the days in 1986 when it was using simple keypunching machines. Significant improvements were made in the application systems and infrastructure. From Batch processing to on-line systems, from IBM1401 to the latest UNIX and Windows XP and 2003 based machines organization has made timely transitions determined by the available technologies. Throughout this evolution the MIS remained synchronized to the information flow in the organization and the management felt that it has played a role in the overall growth and increased performance of the organization.
INTRODUCTION - DEFINITION OF MIS
Management Information Systems (MIS) is a system consisting of people, machines, procedures, data bases and data models, as its components. The system gathers data from Internal and External sources of an organization; processes it and supplies Management Information to assist managers in the process in decision making. Thus it is safe to conclude that an information system is "a system consisting of the network of all communication channels used within an organization".
There are many potential benefits of MIS investments
Investing in information systems can pay off for a company in many ways.
It can support a core competency.
Enhance distribution channel management.
Builds brand equity.
IT investment can boost production processes
Information systems allow company flexibility in its output level.
An information system comprises of all the components that collect, manipulate, and deliver data or information. It usually includes hardware, software, people, communications systems such as telephone lines, and the data itself. The activities involved include inputting data, processing of data into information, storage of data and information, and the production of outputs such as management reports.
COMPANY PROFILE - THE AC LIMITED
AC (AC Limited) is Pakistan's foremost manufacturer of cement, concrete and other relevant products. AC's products and operations are spread throughout the country over different projetcs with 9 modern cement production facilities, 12 Mixture Concrete Plants, 26 sales offices, and several zonal offices (sub agencies). It has a workforce of about 9000 persons and a countrywide distribution network of over 9,000 dealers. AC's research and development facility keeps a unique record of innovative researchers since its development, products and specialized consultancy services. Since its start in 1938, the company remained a trendsetter and important legend benchmark for the cement industry due to its unique and standard of quality, in every respect like marketing, production and processes of personnel management. AC remained committed to environment-friendliness, high ethics in business dealings and for its on-going efforts for the welfare of the community. AC always made a significant contribution to the process of nation building by the quality products, services and its shared expertise.
In the 71 years of its existence, AC remained on the top of the list and holds a popular rating in the market. AC's brand name is synonymous with cement and enjoys a high level of equity in not only the Pakistani market but also been exported to other nearby countries. It is the only cement company that can be listed as Consumer Super Brands of Pakistan.
The company's various businesses are supported by a powerful, in-house research and technology backup facility - the only one of its kind in the Indian cement industry. This ensures not just consistency in product quality but also continuous improvements in products, processes, and application areas.
AC has vast experience in the industry of mining because of being the largest user of limestone, and also biggest user of coal. As the largest and quality cement producer in Pakistan, Pakistan Railway is the biggest customer of AC Limited. Of course mentioning highways and roads through out the country with the help of such industry can not be ignored.
AC has also extended services to international market like Middle East, Africa, and South America. AC elaborates the practices like a good corporate citizen developing a wide range of activities and products to improve the living conditions of the common people living near by the production facilities.
OBJECTIVE OF THE STUDY
The objective of this report is to study the MIS implementation at AC Ltd. and with the help of this domain, to get an insight into the needs of MIS in business setups on a big scale, various functions performed by the MIS, benefits derived out of such a system and the risks involved.
I intend to aim my study at analyzing the business needs of the organization, key challenges or desired functional requirements of the MIS, the IT solution that is currently implemented and the outcome of such a system.
AC Ltd. requires MIS to map internal processes and interaction with the external environment to the technology and ensure the solution delivers real benefits to the business.
SCOPE OF THE STUDY
The scope of this study is to understand the reasons behind the need of MIS in AC Ltd. This study leads to the MIS support to the Company as a whole with special emphasis on Inventory Management practiced in the Material Stores Department of the company. Through the interaction with the executives of AC Limited, we get an insight about the effectiveness of the MIS in place at the organization.
TYPES OF MIS AND USES
MIS CLASSIFICATION
MIS is a concept, which is a matter of degree rather than an absolute one. In management there are perhaps few other areas other than MIS which gas created so much controversy. We would make an attempt to try to look into different types of MIS as they have evolved during the course of time.
Transaction Processing System
Management Information System
Decision Support System
Executive Support System
Office Automation System
Business Expert System
SIGNIFICANT ROLES AND FUNCTIONAL USES OF MIS
PERFORMANCE MONITORING
MIS is not just data analysis and statistics. It is also used to be the Management of Objectives Tool. It helps:
Establishing measureable and relevant objectives
Results and performance monitoring.
Sending alerts to managers within the organization, on all deviations for the pre-defined objectives and their results.
FUNCTIONAL SUPPORT
Operations support function and Business processes are the most primary roles. These involve collection, storage and an initial processing of data. Information system plays its role in operations as following:
Taking input, storing into data base and processing the data, from both sales and purchase sections, from payroll section and other relevant data from accounts section.
All the above stated activities for inventory records, works (which are in progress), quantitative records of maintenance and repair of machinery and equipment, supply chain records , and few other operations records
It also handles the relevant data of market surveys, customer ratings and profiles, customer past purchases, advertisement and marketing, etc.
Finally MIS also records, stores an processes data for competitors, industry supply demand/ production surveys, corporate objectives, and strategic management decisions and records
DECISION SUPPORT
Another advance step is the business decision making support functions. This support function is an important part of decision making. It also allows end users to ask the questions like "What if…?" For example, what if the price is been increased by 5%? What if the price is been increased by 10%? What would be the affect if price is decreased by 5%? What would happen if we increase 10% now and suggest a decrease by 5% after six months? It also allows users to deal with peripherals: If inflation increases from current to minimum 3% in six months and by 5% at the maximum. (instead of 2% as we are assuming), then what could be the strategy? What measures can be taken if new competitors are their in the market or if we temporarily loose our work force etc.
ORGANIZATIONAL STRUCTURE OF THE ACC LTD.
Description and Nature of Information System
INVENTORY MANAGEMENT
The products which are highly demanding in the market are very difficult to manage. An accurate and realistic demand survey can help managing the demand-supply gap, hence is essential. This holds the impact on the entire supply chain to facilitate consumer's response based on consumer's demands. That's why it becomes necessary that such companies should consider inventory management at priority. Predicting accurate demand and supply needs is the most ideal situation for anyone within the supply chain management people could think.
Providing timely and accurate information relating to inventory location, its transport, receipt of product, its sales and returns, overall profits make inventory visible throughout the network.
With inventory management tools, the catalogues can be changed from time to time hiding the non-available products within the stocks, or changes in prices can be based on the market and business. Sub agencies are automatically notified about low stocks.
Information Technology plays a key role in transforming purchase of goods into a strategic business function. The actual challenge is to look for a way where these technologies can be put and can be used to create value and competitive advantage.
The Main Objectives in Inventory Management are:
Improved customer services
Reduced investment on inventory
Increased and controlled production.
Complete information on the value of the stocked goods
Enhanced visibility on Quantities in stock, committed quantities and quantities which have been sold.
Reduced response time to demand changes, either high or low
Increased and targeted sales
Exact volume of the business become known
Taxes and other finances like insurance etc. are paid only on real time merchandizing.
DESCRIPTION AND ANALYSIS OF INFORMATION SYSTEMS
The implementation of ERP solution for process control is shown in the figure below.
Fig.1 The ERP implementation for process control at AC Ltd.
IT department is still continuously working on improving the functionality and removing the errors of the system. As a result system is becoming better day-by-day, thus improving the productivity of the company.
NEED FOR AN INTEGRATED MIS
The benefits associated with an integrated MIS are
Better processing of the large volume of data in an organization.
Reducing the Redundancy of Data that occurs in case of separate packages.
Availability of all the required information about any department through a common system.
Making the system capable of supporting the managers in making decisions.
Facilitate the communication between the various regional offices of the company and the corporate office along with the main plant.
Use of online data to speed up the information flow of the organization and facilitate decision-making
FUNCTIONS PROVIDED BY CURRENT MIS
Plant (Manufacturing & Maintenance)
Production
Break down and Plant performance Module
MIS Reports and stoppage Module, Stock position
Raw Materials Management System
Integration with Weigh Bridge and Security Gate
Daily stock, issue position and bill passing
Transport Freight Payment Systems
Weigh Bridge
Integrated with Security Gate
Stopped one mechanical weigh bridge
500 trucks can weigh for gross and tare in single day
500x2 = 1000
Time Management Reports, Truck Movement reports
Weighment is integrated with invoice cum challan freight
Payment
Truck position inside and outside the plant.
Computerized Preventive Maintenance Software
Both plant are using this module
Preventive Maintenance and Break down Module
Shutdown module and integrated with inventory
Forecasting of spares and skills usage module
Inward & Outward Materials Security
Control on returnable goods
Work Order and analysis
Work Order will be prepared by authorized person
Provided to all departments. Integrated with Rate Master
And budget.
Labour Deployment and accounting System
Daily supply of Contractor Labour deployment
Against regular, adhoc and shutdown requirements
Daily/monthly/yearly analysis reports
Contractor labour Bill passing system
Commercial Applications
Marketing Accounting and analysis System
Excise module and Sales Tax Module
Transport Bill passing module
Order Confirmations and Dispatch Instruction
Free Market Requirements, Railway Receipt
Commercial Invoice, Debit Note, Credit Notes.
Stores Inventory & Non Inventory
On Line indent, Issue and Receipt Materials
Delivery Schedule
Controlling the inventory
Controlling the increased inventory
Stores Ledger, consumption Summary
MIS reports, Budget V/s Actual Consumption.
Integrated with financial Package
Repair & maintenance inventory, Department Wise Expenses.
Purchase Management System
Purchase Order integration with indent
On line enquiry, Party wise information
Pending list of purchase order
MIS reports, Purchase / Indent Register
Payment Advice System (Advance, regular)
Financial Accounting System
All types of voucher feeding
Purchase and freight bill passing
Other Expenses bill passing and TDS Module
General Ledger, Sub Ledger and Trial balance of two
Financial years
Auto payment advice, Bank forwarding letters, payment
System, Overhead Analysis reports.
Integrated with inventory and Payroll module MIS Reports
Cash Budget,
Vehicle Movement
Controlling on Taxi, Car etc
On line General information System
Information provided to Users about
On line Leave status I.e. opening, availed and closing status
Electricity Deduction Employee wise, Quarter wise
Over time Status department wise
Welfare rules and Regulations, Telephone list, accidental etc
Actual Consumption against budget, Welfare information
Human Resource Development
Topic Courses, General Awareness Programme,
TNA of Workmen, TNA of LCW, Individual record of ext/int
Training, Pending Training etc.
Payroll & PIS Module
Payslips of Staff, Worker, School, Badli & Casual Worker
PF, VPF, Bonus, Gratuity Module
LIC, CTD, Thrift Society, Co-operative advances Module.
Recovery & Deduction, PIS and Income Tax Employee wise
Integrated with Financial Package
Over Time, C-off Module
Payroll of Marketing Department (Transferred from HO)
Sales Accounting Systems
Sales Accounting Systems, Rent Payment System
Data loading, Expenses Payment System,
Freight Payment, MIS, Transferring in FAS
Gate Pass System (Returnable &Non-returnable goods)
All goods send through Computerized Gate Pass
Integrated with Gate System.
Pending repair items information
Architecture of MIS at AC Limited
CMMS
(Computerized Mines Management System)
Costing Package
Production Package
Co-operative Management System
Payroll & Leave Management System
Inventory System
Weigh Bridge & Gate System
MAAS
(Marketing & Analysis System)
Financial System
Inventory Management Module of Current MIS
Current MIS of the company is basically a In-house developed system, also comprising of few specialized readymade software packages bought from outside developers. It comprises of 11 main modules covering all the main functions of the company.
Inventory Management Module is one of the most important parts of the system. It is highly integrated with the other modules and capable of functionalities like Auto Alarming when inventory is low. It is capable of generating more than 200 different types of reports to help managers in different required ways. Its main parts include Inventory issue, purchase, bill passing, other OER passing, freight passing, stock updation etc.
DFDs and Data processing diagrams:
Inventory Package Context Level Diagram (CFD):
Inventory Package Issue DFD:
Inventory Purchase DFD:
Data Processing (Full Inventory Module)
Application used for Work order Preparation at The ACC Ltd.
1. ITEM CODE CREATION
There are 9 types of item group in Non Catalogue Item
Medicines 806
Stationary 807
Repair Order 808
Transportation Order 809
Raw materials 810
Capital Orders 811
Job Orders 812
Laboratory Items 813
Direct book orders 814
2. Indent Posting
3. Indent Sanctioning
4. Indent Type Updation
5. Order Preparation
6. Order Printing
ASSESSMENT OF CURRENT USE OF INFORMATION SYSTEMS
IDENTIFICATION OF PROBLEMS
After analyzing the system properly, we came to a basic conclusion that system is working fine at an overall level and consisting of very minimal problems. These problems can't be stated as such problems and instead can be stated as future path. Still we tried to jot down the few of them, which are as follows: -
Still lack of system integration after a level. Though inventory management module is integrated well with all the other modules like financial system, thus reducing the redundancy. But still there is need of paper work and manual intervention when reordering is required. System cannot be configured to reorder automatically, even for the fast moving raw material.
Lack of Web Integration. AC hasn't still employed the concept of taking orders or ordering through web and have no integration of its system to its website.
Legacy Network Support. Backbone network used by AC is still the same, which they used in 1993. They haven't upgraded the network support from then, which has started creating problems for them already. As MIS of the company is improving day-by-day including more and more functionalities, the network has already become very slow.
Lack of training to managers to effectively use the decision support functionalities of system. This is another problem that we felt at the company. IT department is basically making the improvements in the system continuously with new added functionalities, but there is lack of training to managers to effectively use these functions in way that can support them to make better decisions. For example, on an average, a manager uses only 10-15 types of reports out of more than 200 types of reports available.
RECOMMENDATIONS FOR FUTURE DEVELOPMENT
Considering the given problems, their analysis and research on comparative MIS systems used in the similar kind of industries, our group is presenting following recommendations for the company.
IT department of the company should now work towards integrating the system on a higher level and making the company Paper-Less Office. This should be done by integrating the system in a way that the manual intervention be minimized in the day-to-day process.
The company should also start Web-Based ordering and selling, so that to be able to catch up with the growing industry.
As more improvements in MIS would be done, and Web-support to be also incorporated, it is more than sure that current Network available is going to crash. To cop this, company needs to upgrade its network. For this purpose, we suggest the tie-up of company with some outside contractors like IBM or CISCO to continuously upgrade and maintain their network.
With each up gradation, we suggest training to the managers of the company about effectively using the added functionalities and use of them in a better way. This can be also done by providing a handbook along with each up gradation.
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