qwertyuiopasdfghjklzxcvbnmqw ertyuiopasdfghjklzxcvbnmqwert yuiopasdfghjklzxcvbnmqwertyui opasdfghjklzxcvbnmqwertyuiopa MANAGEMENT INFORMATION SYSTEM sdfghjklzxcvbnmqwertyuiopasdf MIS in a Manufacturing Industry ghjklzxcvbnmqwertyuiopasdfghj klzxcvbnmqwertyuiopasdfghjklz xcvbnmqwertyuiopasdfghjklzxcv bnmqwertyuiopasdfghjklzxcvbn mqwertyuiopasdfghjklzxcvbnmq wertyuiopasdfghjklzxcvbnmqwer tyuiopasdfghjklzxcvbnmqwertyu iopasdfghjklzxcvbnmqwertyuiop asdfghjklzxcvbnmqwertyuiopasd fghjklzxcvbnmqwertyuiopasdfgh jklzxcvbnmqwertyuiopasdfghjklz xcvbnmrtyuiopasdfghjklzxcvbn Case study Of Madura Garments
Dayal KantMunda(05) Praveen
Prabhakar(15)
Date: 09-05-2011
1. Introduction Management Information Systems (MIS) is the study of people, technology, and organizations and the relationships among them. MIS professionals help firms realize maximum benefit from investment in personnel, equipment, and business processes. It’s a people-oriented field with an emphasis on service through technology. In a way MIS is a documented report of the activities that were planned and executed.MIS consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to automate or support decision making. All businesses use information systems at all levels of operation to collect, process, and store data. This data is aggregated and disseminated in the form of information needed to carry out the functions of business. Everyone who works in business, from someone who pays the bills to the person who makes employment decisions, uses information systems. A car dealership could use a computer database to keep track of which products sell best, and a retail store could use a computer-based information system to sell products over the Internet. In fact, all businesses are concentrating on the alignment of MIS with Business to achieve competitive advantage over other businesses. Management Information System (MIS) is a subset of the overall internal controls of a business covering the application of people, documents, technologies, and procedures by management accountants to solving business problems such as costing a product, service or a business-wide strategy. Management Information Systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization
2. Characteristics of a Management Information System •
Provides reports with fixed and standard formats o
Hard-copy and soft-copy reports
•
Uses internal data stored in the computer system
•
End users can develop custom reports
•
Requires formal requests from users
2.1. Management Information Systems for Competitive Advantage •
Provides support to managers as they work to achieve corporate goals
•
Enables managers to compare results to established company goals and identify problem areas and opportunities for improvement
2.2. MIS and Web Technology •
Data may be made available from management information systems on a company’s intranet
•
Employees can use browsers and their PC to gain access to the data
2.3. Functional Aspects •
MIS is an integrated collection of functional information systems, each supporting particular functional areas.
2.4. Application of MIS at different levels Different levels of decision-making need different amounts and types of data and information. Strategic management level (Senior people like Chief Executives, MDs, Marketing Directors, etc.) needs information that is highly summarised, sorted and categorised to define current status and measure how well business is doing and which deals with the big picture of the business. This is long-term stuff usually relating to a rolling corporate plan which can be reviewed annually. On the other hand, Tactical management (Middle management e.g. Area Sales Director, Factory Manager) needs more detail than strategic level. Tactical management level initiates to achieve and implement measures to secure those strategic objectives. This means setting up allocating staff, devising reporting structures, authorising resources (budget) and emphasising certain approaches over others. They use MIS to know in the medium term if the “tacticals” are working so that fine adjustments, on the basis of variances over plan, can be made between strategic reviews.
However the operational level users (Grass Roots e.g. Foreman, shift leaders, the workforce, front desk executives, back office team) need lots of detailed information with drill down to the last of the MIS layer transactions and the masters. For example the line-manager will use MIS for operational information on a day-to-day basis to support operational running. MIS helps operational decisions which are often made in ‘real time’ and are the result of needing to make quick adjustments or change to achieve the desired outcome. This concludes that the more senior the manager, the less detailed the information needed. The senior management would apply MIS for strategic business directions like: •
information for strategically positioning the organization
•
competitive analysis and performance evaluation,
•
strategic planning and policy,
•
external factors that influence the direction
The mid-level management would apply MIS for organizational and operational functions like: •
information for coordination of work units
•
information for delivery programmes
•
evaluation of resources usage
•
budget control
•
problem solving
•
operational planning
At a tactical level MIS systems and report output are applied to support the annual operating plan and budgetary processes. Tactical management applies MIS for decision making in HOW a particular goal has to be achieved. MIS helps them focus on one or a series of tasks and activities involved in executing an overall strategy.
The Strategic management however applies MIS to decide WHAT has to be the goal. MIS helps them focus on defining the overall strategy while establishing the end goal in mind. The strategic management level applies MIS to take decisions about: It includes decisions about: •
nature of the business
•
vision for the business
•
person’s business identity
•
direction in which the business is headed
•
how will the business compete?
•
What business are you in?
3.1. MIS for Garment manufacturing sector Change being a constant factor in the apparel and fashion industry, a proper MIS in place helps organisations take timely decisions, leading to increase in productivity and profitability The automation in manufacturing companies has significantly improved in all areas of processing, but at the same time it has also created a staggering amount of data. Though IT departments have taken advantage of hardware improvements to economically store the increased data, there never seems to be enough time or resources to meet the needs of factory managers who face the “fact gap” that exists between the data and the usable information required to make real business decisions. For manufacturing/operations companies, getting the right information to the right people in a timely manner has never been more important than it is today – to reduce hidden costs, to increase production, and to maximize profits. Manufacturers have to manage the complexity of their supply chain, internal manufacturing, and operations along with meeting their distribution and customer
requirements. Manufacturers today are faced with making extremely complicated decisions in real-time, on a daily basis, with limited information. Manufacturers face increasing globalization, more competition than ever, and customers whose demands reflect their own knowledge and expectations of a global market. Every manufacturing company is different like different processes, different tracking systems and different challenges. All of these variations add up to the fact that you need a management information system (MIS) that caters to the specific needs as well. While looking for a MIS solution you may define your needs and formulate a list of requirements that simplify the adoption of information technology for improving performance. In the manufacturing industry, information quality issues exist throughout the supply chain. One reason for this is that manufacturers depend on data from suppliers, contract manufacturers, distributors, retailers, and consumers in order to effectively and efficiently source raw materials, forecast demand, make and market their products. Very seldom will manufacturers have control over the quality and format of this external data. Through incremental improvements in data quality throughout the supply
chain, however, manufacturers can
realize
significant performance
improvements, including improved speed and efficiency of product manufacture, improved ability to perform demand analysis, improved channel partner effectiveness through timely and accurate product and pricing information, and improved customer satisfaction through timely and accurate customer information. Measurement and verification are needed to ensure the information quality program is reaching its objective
3.2. Garment industry –department roles 3.2.1. Marketing department Marketing plan and all the things which are related to marketing are under this department. The main purpose of marketing department is to introduce the products worldwide and make good will of their products in the local and international market and make interest of the consumer and buyer towards their products of garments and to get the feedback from customers around the work and recommend changes to the production department according to customer need and wants.
3.2.2. Customer Relationship Management: This is also managed under marketing department. All the customers’ complaints and all the data mining process are taken in marketing department. They work on 4 P’s of •
Product
•
Price
•
Place
•
Promotion
The product is garment and they get the rates of all fabrics and other stuffs and the make costing on ms excel sheets after price decision they select place to sell the product place is very important in this sector because there are different sipping rates for different countries and promote their product on that place and create buyers interest in their products this is the main function and introduction of marketing department. 3.2.3. HR department All the companies social problem are solved by HR department in case of any dispute the employees contact with HR department for help and solution of problems. 3.2.4. R & D Department The main purpose of this department is to research on new varieties or make changes in production as per latest trends prevailing in the market. 3.2.5. Export / Import department
Import and export department ensure and make all necessary documents and all legal agreement which are compulsory for the export purpose. All the product documentation is made by this department for export and import. This department manages all shipment dates schedules and tracking of the shipments, B/L, E-forms, and packing list. 3.2.6. Quality management department This department is responsible of maintaining quality of the product which is produced in the industry. This department use latest gadgets to check product quality. These departments solve the quality related problems and maintain the quality according to the need of international standards. 3.2.7. MIS department It is one the highest important departments because it’s connected with all departments and cause of sales are on export base. The duty is to backup all the data of employees and check regular maintains in the systems provide database servers, provide trouble shooting and networking. This department is also divided in many small united like support, software development, web developers, networking engineers. 3.2.8. Finance department This department comprises units like sales tax, internal auditors, accountants, cashiers which are responsible for managing all cash and transactions making account’s and salaries of the employees opening letter of credit or demand draft for trading and bank accounts of company. 3.2.9. Admin department The duty of managing small staff like security guards, office boys, control time check on office staff and assign small task to the staffs on daily and routine basis. The stores are also under Admin dept control when anything needed from stores from stock the proper approval and reacquisition s required otherwise admin refuse to give anything form stores.
4. Role of MIS in garment industry 4.1. Major responsibilities and functions of the MIS department •
Providing E-Mail Services to organization:
MIS department provide E-Mail service to all organizations required employees with the help of email servers and support team they provide access to employees to their email inbox in their computers and mobiles as well as software based servers called MS Exchange and Mdaemon email server which use network and use protocols of POP, SMTP and IMAP. •
Network Services
MIS department provide Network connectivity for all necessary users to share their file and folders to work combine on same projects and files. •
Printing Services:-
All of the office staff are not allowed to use printer only specific persons are allowed to print their documents and for this purpose MIS department attached network printers to provide service for printing like installation of printers and tuner filling. •
Web Site Administration:-
MIS department team manages the website and add or remove any content from website and online database. •
Database Administration:-
Database are handles by MIS department all the database of the organization are stored in proper format in MS SQL server and this is MIS department responsibility to maintain the database keep proper backups and give the access of the database to authorized persons only. •
Audio & Video Services:-
It’s MIS department duty to provide service of audio and video conference and provide easily access for video and audio conference with customers around the world.
•
Terminal Services:-
MIS department help provide terminal services like remote access and telnet service, help and support purposes. •
Software Development:-
Team of developers under the head of MIS department provides software development services of accounts and all other related software for marketing data mining and small utilities for checking product quality and computing the costing as per raw materials used. •
Providing Internet access:-
MIS department provide access to outside networks like on VPN and internet to the authorized persons Internet access is controlled by software called Microsoft Internet Security and Acceleration Server (ISA). •
Domain controller service, Network software installation, configuration, and upgrades:-
This include TCP/IP and upgrading of IP version from 4 to 6 and all other protocols and installation of software’s which work on LAN like LAN talk for the helping purpose of employees which really safe time and energy of employees.
•
Backup and recovery tasks:-
MIS department is responsible for taking backups and recovery of damage and loosed and damaged data of employees. •
Installation and maintenance of LAN related active equipments:-
Installation of LAN and WAN based equipments like IP cameras and IP based printers and all other LAN related active equipments. •
Configuration of LAN/WAN routers and switches:-
Configuration of LAN and WAN routers and switches giving them IPS, DNS and setting firewalls in routers for security is responsibility of the MIS department. •
Continuous performance monitoring:-
•
MIS department continuously monitor all the equipments servers routers pc performance and monitor them so they will be in fully working condition anytime then they are needed.
•
Installation of new servers
It is responsibility of MIS department of installation of new server if it is required for any purpose. •
Operating system level trouble-shooting
Installation of windows and Ms Office and trouble shoot the windows XP, 2000 and apple OS is done by the MIS department. •
System and software upgrades:-
MIS department upgrade the systems which are faulty and old and slow with the latest and best alternative available for the better performance of the system.
4.2. MIS departments Support to other departments:MIS support to Accounts Department MIS department support account department in managing all the records of transactions MIS department provide the software according to the need of accounts department and provide them access to the database server in which all the data is safe accounts department really depend on the support of MIS department now a days because all the transaction payroll system and all the statements are dependent on software and all these statements are build on soft based and after competition they printout for hard copy and record purpose. Both departments work together for making accounts department work smooth efficient and by the help of MIS department ,now accounts department find it really easy to enter all record quickly and retrieve any specific record at very fast speed and accurately. Without the support of MIS accounts depart may find very difficulties to fulfil their jobs and requirements. Industry managers and CEO can retrieve any records from any accounts at anytime.
MIS support to Marketing Department MIS department support marketing department on their work of data mining and getting trends from the huge database MIS department provide them internet to be in touch with international market and support marketing department in all aspects provide them E-Mail facility so they always keep in touch with buyers and consumers. MIS department provide marketing software which is very helpful in getting feedback across the word and check the all the cotton and fabric news are directly electronically shifted to marketing departments mobiles and emails. It helps to make marketing plan on the run and be aware of the all markets conditions all the time and antiseptic all the effect of market and make policies and plans.MIS also help marketing in targeted based marketing plans to provide them all the data of targeted market and propels of the markets in proper format. MIS support to Quality Management Department All the qualities of fabrics and quality standards are stored in database of the industry and provided to the quality management Team when required. MIS support to HR Department All the qualities of fabrics and quality standards are stored in database of the industry and provided to the quality management Team when required. MIS support to Admin Department All the timetables and tasks are saved in the database and MIS department make software for Admin department which is really easy to operate this help the Admin department to safe all their to-do list and recommendations and reports and retrieve them when needed.
4. MIS application in Madura Garments- an example Leading apparel and textile manufacturers and retailer, Madura Garments has implemented an inventory-specific Enterprise Resource Planning (ERP) product called Apparel and Footwear Solution (AFS). What is ERP? An Enterprise Resource Planning (ERP) system is a package of corporate wide
software application that drives manufacturing, planning, costing, finance, marketing, human resources and other business functions in real time. Most textile companies today have separate application software to carry out each activity. The significant advantage of an ERP system is that it integrates all the functions to create a single unified system rather than a group of independent application, thus creating a synergy between the vital resources of an organization namely men, material, money and machine. ERP is an integrated system that allows information to enter at a single point in process & updates a single shared database for all functions that directly or indirectly depend on this information. ERP is basically a software suit that integrates the whole enterprise, covering the entire internal supply chain from vendors & suppliers to customers Eight factories, a warehouse, over 120 exclusive franchisee showrooms, 15 agents, 22 distributors and 3,500 retail outlets spread across the country — and that's only one side of the equation that N P Singh, Vice president, Information Technology, Madura Garments, had to solve. Keeping the level of unsold stocks (returns) down to between five and 10 per cent is the challenge that every garmentmaker must deal with. Returns up to this level are acceptable since it is impossible to get the forecasts completely right — but anything higher, and it begins to hurt. This was the case with the Bangalore-based Madura Garments that sold brands such as Louis Philippe, Van Heusen and Allen Solly. The returns in Madura's case were as high as 30 per cent, high enough to hurt the bottom line. The problem was apparent. "Users across functions identified operational problems and absence of timely MIS as two major issues," says Singh. The drawbacks of the legacy system included lack of updated information due to non-integrated systems, difficulty in modifying current systems for new information requirements related to product development and impending technology obsolescence (INGRES, COBOL, and FOXPRO were the platforms).
The presence of multiple technologies was making integration and modification complex and cumbersome. Moreover, the company was incurring high costs in maintaining the IT infrastructure. As a matter of fact, there were times when the warehousing system would show one figure that would be totally different from the consolidated figure at the corporate level. It was critical that Madura had complete visibility into the supply chain. It also needed more accurate forecasting, better matching of demand and production, smoother interfaces with distributors and retailers. It needed to wire up everything — production, forecasting, and distribution — smartly. In other words, Madura needed ERP, and also add other applications on top of it to reduce lead times and have better response mechanisms. Having analyzed various implementation needs at the organisation, Singh knew that SAP, which already had over 200 installations of SAP R/3 in India alone, was the right partner for triggering re-engineering initiatives at Madura. So the company started with ERP from SAP. It decided to go for an industry and inventory-specific solution called Apparel and Footwear Solution (AFS) comprising SAP R/3 and AF3. Now, a traditional ERP attempts to integrate all functions onto a single platform to serve the specific needs of all the departments. So it takes care of the 'enterprise' part (in its acronym) reasonably well. The trouble is with the 'planning' part. There, it doesn't quite live up to its promise. SAP had two great aces up its sleeves: APO or Advance planning and Optimization module (a forecasting application); and BIW or Business Intelligence and Warehousing module (a data warehousing and decision support application) that took care of planning and top management decision-making concerns. Since both the applications were from SAP, it meant that integration was going to be easier. It also added a web-based customer interface on top of the ERP system. This would make sure that it captured data from external sources (distributors, retailers, suppliers) in addition to what ERP gathered from within the organization. 4.1. How did it implement?
Madura formed a project team comprising a consultant from PwC (which is now IBM Business Consulting Services.) Besides, a joint team was formed with SAP India also. "It's because of the industry expertise SAP had," says Singh. A 30-member core team comprising 15 consultants and an equal number of specialists from Madura was formed to oversee the operations. Madura also hired 4-5 programmers and trained them in ABAP (the SAP language). They were to do the customization during implementation. Since Madura wanted all the processes to be automated, the customization team came in handy. For example, entry of SKUs into the ERP system is manual. "But that would have been very cumbersome," says Singh. So the team developed a bar-code scanning module-essentially, software that would collect and load data automatically into the ERP system from a barcode scanner. The team then integrated its existing Web-based ordering process with the ERP system. Today, Madura does not entertain any orders offline. Distributors and agents can place orders, check status of their orders and even check the accounts with the company, just by logging in. With this, the team had integrated a large chunk of the supply chain with ERP at its core. Simultaneously, it went about integrating the top management MIS so that it could cull out data from the back-end and present it to the bosses faster and more accurately than ever before. This included information like profitability across brands and channels, sales off takes and working capital status. While implementing, Madura set certain milestones. When a module such as Materials Management was implemented it insisted that SAP AG fly an expert from its headquarters in Germany for auditing that milestone. Only after the audit did they move to the next stage. As a result, Madura was able to stabilize the system within 12 months. "SAP implementation has changed the way we conduct our business by bringing in transparency and doing away with islands with tenuous connections to each other," says Singh. In the process, Madura has also reduced its response time to internal and external customers. "We are now able to sense, act and respond efficiently to ever-changing markets."
Now, senior executives at Madura can monitor variations between annual budget plan and monthly plans, which ensures coordinated monitoring of top-line and bottom-line growth resulting in improved profitability. The implementation has also brought an integrated order management, revenue recognition and account receivables functionality; and at the same time has eliminated non-value adding functions like reconciliation and consolidation. "Profitability assessment for each showroom, brand and customer can be done in the system, " says Singh. The new system can also suggest replenishment based on these parameters and also generate weekly control reports on sales and inventory for each showroom. Moreover, sales returns can be linked to original sales orders. The numbers at Madura tell the entire story. Order fulfilment is up from 70 to 90 per cent; order release-to-dispatch time is down from 22 to 18 days; inventory is down from 13 per cent of sales to 11.7 per cent; showroom receivables have reduced from 55 to 45 days. 4.2. Measurable benefits The SAP implementation has changed the way work is undertaken at Madura. Information is now available on a real-time basis, and the islands of information have been done away with. The implementation has also helped decentralise responsibilities to the place of origin. In the process, the company has reduced its response time to both internal and external customers. Singh details some benefits: “Order execution has increased from 75 percent to 92 percent, and lead-time from WO to FG has reduced from 22 days to 14. Similarly, dormancy (six-month-oldstock) has been cut from 4.23 percent to 3.65 percent, which means wastage has reduced.” This indicates the return on investment. APO has helped Madura increase its accuracy to 70 percent, and the company’s aim is to touch 80 percent. Similarly, with the help of BIW, it will be able to tap secondary and tertiary sales data to capture design, styling and colour trends. Post-implementation, senior executives at Madura can now monitor variations between its annual budgetary plan and their monthly plans. In this manner, coordinated monitoring of top- and bottom-line growth takes place, which results in improved profitability. The implementation has also brought an integrated order
management, revenue recognition and account receivables functionality, and at the same time has eliminated non-value-adding functions such as reconciliation and consolidation. Profitability assessment for each showroom, brand and customer can be done in the system. It can also suggest replenishment based on alternatives and categorisation, and can generate weekly reports on the sales and inventory for each showroom. Moreover, sales returns can be linked to original sales orders. Today, there is efficient co-ordination between demand, supply and production in the company. The new system facilitates data warehousing for analysis of consumer trends, design performance and competitor moves. The goal of making information available company-wide by passing on critical MIS data to knowledge workers and decision-makers has also been achieved. Besides, order fulfilment rates have increased, while stocks have been reduced to a minimum. Thus, Deploying mySAP AFS has helped the company improve its order fulfilment, trim inventory, and bring down lead time to market. In a nutshell Company: Madura Garments - one of the fastest-growing branded apparel companies with a turnover of Rs. 395 crore increasing by over 30 per cent per annum.Industry: Garment and TextileSAP solution: SAP R/3 plus AFS ERP, SAP APO and SAP BIWNumber of outlets and stores covered: 120 franchisee showrooms and 3,500 retail outletsImplementation partners: Consultants from SAP and PwCNumber of end-users: Around 200 Objectives of the implementation: Bridging the information gap to bring about efficient data flow, increase order fulfillment rate. Order fulfillment Order release-dispatch Inventory (% of sales) Receivables Unsold stock
Pre-ERP 70% 22 days 13% 55 days Around 30%
Post-ERP 90% 18 days 11.7 40-45 days 10%
Snapshot of the ERP deployment at Madura Garments Company Madura Garments has a turnover of Rs 395 crore. It is one of the fastest-growing branded apparel companies in India, with a Solution
CAGR of 30 percent mySAP AFS, APO and BIW
implemented Number of
200 user licences have been purchased
users Servers
For production, Madura is using three Sun Fire V880R, 8-way servers. (The Sun Fire machines are used as a database, application and fail-over server respectively.) Two IBM RS6000 dual CPU machines are used for development and quality
Operating
assurance Solaris 8 is the operating system for Sun Fire. The IBM RS6000
systems Database Cost of
machines run AIX 5.1 Oracle 9i Rs 9 crore. This cost includes the mySAP AFS and BIW
implementation packages, training, implementation charges, as well as all supporting hardware and software Source: Madura Garments
4.4. Tuning tech with business Implementation of SAP solution has given the company a common integrated business transaction application, which it intends to use as a launch pad to further leverage the benefits of technology in alignment with its changing business requirements. Madura Garments is planning to implement SAP BW (Online analytical processing) for information preparation of large quantities of operative and historical data. BW can access data from any operational and legacy systems. The company is planning to implement digital fashion web sites or online stores for internet sales module. A clear and concise IT roadmap has been envisaged in tune with the business strategy for the next two-to-three years, which include digital fashion web sites or online stores with internet sales module
5. Conclusion Today’s manufacturers are looking towards more advances and benefits with their focuses shifted to many different types of networking tools. These tools do enable them to seek better opportunities on more complicated areas working with RFID like inventory control and supply-chain management, as well as the B2B e-commerce transactions. The garment-manufacturing industry always aims for new product development and efficiency, improvement in production. In past years, advanced computer technologies already facilitate new manufacturing operation and build up management tools. To achieve goals like increase productivity, reduce costs, quicken delivery times, guarantee quality, optimize manufacturing resources and above all maximize profits, it becomes essential for management to have accurate and updated information. BI helps effective decision making for textile and apparel companies.
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slidesmis?commentId=5159480%3AComment
%3A53074&groupId=5159480%3AGroup%3A53055
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