Management Information System in Logistics Industry

Introduction

Management information system gives emphasis to the collection, organization,

analysis and distribution of information for the planning and control of business and

organizational operations. Within every organization, management is required to bring

together the data gathered through its functional activities and to analyze that data to help

management decision making. The data obtained can come from a range of resources

( and 2004, ).

Different Management Information Systems

1. Electronic Data Interchange Systems (EDI)

Electronic data interchange systems represents the exchange of documents and

transactions by a computer in one company with the computer(s) of one or more other

companies in an open-system environment. The application of EDI involves the

conversion of a written document into a machine-readable form so that a computer in one

company can communicate directly with the computer of the other company ( 1999, ).

2. Decision Support Systems (DSS)

Essentially, an individually oriented decision support system is designed to satisfy

the needs of a manager at any level in a distributed data processing environment. The
system is designed to support the problem-finding and problem-solving decisions of the

manager. Such a system emphasizes direct support for the manager in order to enhance

the professional judgment required to make decisions, especially when the problem

structures tend to be semi structured and unstructured ( 1999, ).

3. Executive Information Systems (EIS)

EIS is used mostly for highly structured reporting, sometimes referred to as status

access. DSS has become almost synonymous with modeling and unstructured, ad hoc

querying. Executive information systems are aimed at senior executives who currently

have few, if any, computer-based systems to assist them in their day-to-day

responsibilities. EIS brings together relevant data from various internal and external

sources, delivering important information quickly and in a useful way. More important, it

filters, compresses, and tracks critical data as determined by each executive end user. EIS

performs the conceptually simple task of informing senior executives on matters relevant

to their organizational responsibilities. Unlike traditional MIS functions that focus on the

storage of large amounts of information, EIS focuses on the retrieval of specific

information and on status access. The emphasis is on reducing the time and effort that the

executive user must expend to obtain useful information for making the organization

more competitive and its employees more productive.

An executive information system can be defined in its broadest sense as one that deals

with all of the information that helps an executive make strategic and competitive

decisions, keeps track of the overall business and its functional units, and cuts down on

the time spent on routine tasks performed by an executive. As such, an EIS is capable of
providing an executive with the right information in the right format, fast enough to

enable the individual to make the right decisions ( 1999, ).

4. Idea Processing Systems

Idea Processing Systems are systems designed to capture, evaluate, and synthesize

individual ideas into large context that has real meaning for decision makers. The basic

stages of an idea processing system center on inputs in the form of a problem statement

and an observation about the problem. Processing involves idea generation and

evaluation of ideas for solving the problem ( 1999, ).

Literature Review

Management information system is a centralized and usually computerized

information system used by the managers of an organization in making decisions

( 2004, ). According to (1999), a management information system is an information

system designed to provide financial and quantitative information to all the levels of a

management in an organization. Most modern management information systems provide

the data from an integrated computer database, which is constantly updated from all areas

of the organization in a structural way. Access to the data is usually restricted to the areas

regarded as useful to particular managers; access to confidential information is limited to

top management ().

 According to (2000), in evaluating the management information system, attention

is typically directed to the integration of

1. Planning and scheduling

2. Quality control

3. Materials management

4. Production processes

5. Inspection and test

6. Inventory control

7. Level of purchased material ()

Integrated information system is a system designed to evaluate the activities of the

organization. it is designed within a framework that emphasizes profit planning,

performance planning, and control at all levels. It contemplates the ultimate integration of

required business information subsystems, both financial and non-financial, within the

organization. Formerly the primary interest of business information systems was

developing financial statements. When an integrated management information system is

installed, its major purpose is the production of reports that will assist management. A

management information system involves more than a mechanical linking together of

various organizational functions. Going one-step further, it aids management by taking

over routine decision-making. A management information system is a network of related

subsystems, integrated to perform the functional activities of an organization ( 1978, ). In

modern logistics, information technology plays a vital role. Highly integrated systems

across internal and external supply chains are vital (, 2000). The logistics industry

services range along a continuum – through general haulage, storage, inventory

management, integrated distribution and logistics management – associated with

increasing profitability ( and 2004, ). While the past has seen a great accent on managing

data, information, and knowledge, today the accent has moved to helping a typical

company be more effective by optimizing its operations through a better understanding of

what is happening on a day-to-day basis. More specifically, this takes the form of

interconnected E-commerce with customers and suppliers that stretch beyond the

boundaries of the organization. with the click of a mouse, various types of agents,

including smart agents, are capable of accessing critical, timely information, knowledge,

and intelligence needed for optimizing a company’s operations. Tapping into data

services provided by logistics partners, decision makers are able to realize optimum

supply chain strategies. And linked to collaborative computing platforms, a smart

business systems approach enables decision makers to search for others within and

outside the organization who are engaged in related activities ( and 2003 ).

Management Information Systems in Logistics Industry

Scientific and technological advancements and the boom of the world economy

have propelled the emergence of logistics as an industry. Logistics is now considered as a

new economic sector all around the world. Logistics activities such as planning,
implementing, and controlling the flow of goods, are vital to modern industrial

enterprises. The provision of logistics services – organizing and managing the flow of

goods through the supply chain is now an industry in its right. The logistics industry is

now seen as an important element of a nation’s economy.

The level of development of the logistics service is one of the most important

indices of a nation’s level of industrialization and its overall competitiveness. Logistics is

regarded as a medium for the development of an economy. One of the ways to support

the growth of the logistics industry is through information systems. The industry will

benefit if logistics information systems will be used. Logistics companies should adopt

advanced technology like ERP to improve the quality of management. This would help

logistics companies communicate and share information and encourage them to use

Internet technology. The use of management information systems like ERP (Enterprise

Resource Planning Software) will eventually foster the development of information

platforms and make possible the efficient communication of information ().

Information Systems in Logistics Industry

ERP (Enterprise Resource Planning)

ERP software suites are business applications that integrate processes across the

enterprise and link them to a common data repository. ERP provides greater access to

accurate information, raising the visibility of the business results across organizational

boundaries. ERPs are being used now by companies to upgrade software to leverage the
Internet and employ product extensions for greater business intelligence. Increased focus

on more effective business management and accurate financial reporting has driven the

use of ERP. ERP systems integrate data from the core operational areas and make them

available for dissemination across the enterprise. The accessibility to reliable data from

across the enterprise exposes bottlenecks or weaknesses in the supply chain while

speeding the time to solution. Visibility of information supports rapid decision-making,

better operational control, and streamlining of processes – leading to reduced costs (,

2006).

ERP for Small and Medium Size Enterprise

Logistics is an industry that is composed of thousands of enterprises, which are

highly interdependent. Cooperation and coordination among those logistics parties are

very intricate and broad. To achieve an effective logistics chain management, all the

stakeholders must be highly integrated. This can only be achieved through an integrated

information platform that results in the usage of a uniformed information system such as

the Enterprise Resource Planning. ERP can be a good investment for logistics companies

that will benefit them in the long run. However, introduction and implementation of the

ERP system can also be challenging. The selection of appropriate software can be

difficult. The management needs to fully understand their own business processes enough

to know which specific functional requirements to seek in the software. The focus should

be on what the software could do to help achieve more effective business processes. The
software must match the organization’s business processes. This can be achieved through

accepting the package and make changes in its business or customizing the software.

Critical Analysis

Management information systems used the computer as a means of providing

information to solve recurring operational problems. There is a need for a better approach

that will position the decision makers at the center of the decision- making process ( and

1999, ). One of the hindrances to the alignment of logistics chain is the data exchange.

Enterprises use their own MIS system for storing data and functions management.

Varying methods of data exchange and archive among enterprises leads to

incompatibility and possible misinterpretation and eventually to errors. Moreover, an

enterprise may have its effective enterprise management system. Alignment of logistics

chain would be complicated by their dissimilarities. Failure to integrate the logistics

chain can result to cost and time inefficiencies.

Advantages of ERP Systems (. 2002, )

Benefits How
Reliability in accessing information Improvements of reports, consistent and

accurate data
Reduced data and operations redundancy Data are accessed from the database, updates

operations and avoids multiple data input

Decreased delivery and cycle time Minimizes retrieving and reporting delays
Cost Reduction Time savings, improvements in control through

company-wide analysis of organizational

 decisions
Easy Adaptability Easily adapts to the changes in the processes of

the business
Improved scalability Prearranged design with add-ons
Improved maintenance Vendor supported
Global Outreach Extended modules

Disadvantages of ERP Systems ( 2002, )

Disadvantages Solutions
Time-consuming Minimize sensitive issues, internal politics

and raise general consensus

Expensive Cost may vary. Business process

reengineering cost is more costly

Vendor dependence Single vendor vs. multi-vendor consideration,

long-term committed support

Conclusion

The logistics industry is rapidly growing. Logistics as an industry is seen as a key

to economic growth and development. The growth of logistics industry can also benefit

other industries such as logistics facility manufacturing and Internet-based e-commerce.

A strong logistics industry can benefit the economy because it can attract foreign

investors and enterprises. The use of information systems such ERP and MRP and

provision of platforms for industry’s development is essential to support its growth.

Information systems allow enterprises to share and exchange information. Information

system help the management in the decision making process and allows efficient

communication of information. Management information systems improve business

insight by supporting calculated decision-making process through better access to

information. Information systems allow the management to access information that can

help in effective and efficient decision-making.

For DELL: http://e-learning.dmst.aueb.gr/mis/Cases/Dell/index.htm

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

REF: http://ivythesis.typepad.com/term_paper_topics/2008/01/the-current-man.html

The Current Management Information System of Dell Company

Contents

1. Executive Summary

2. Main Body of the Report

2.1.1. Management Information System

2.1.2. Dell Computer Corporation

2.1.3. Information processing tools for operational, tactical and strategic

levels of the organization

2.1.4. Inventory control systems in an organization

3. Conclusion

4. Recommendation

5. References

Executive Summary

This report will review management information system of Dell. After

reviewing the MIS of Dell, the report will discuss information processing then

suggest the appropriate information processing tools for operational, tactical and

strategic levels of the organization. The report will also include inventory control

systems in an organization and why it is important for the company to make the

inventory systems updated.

Management Information System

Management information system involves the information system and the

organization. MIS begins where computer science ends. Computer scientists

deserve accolades for developing and delivering even more advanced forms of

information technology: hardware technology; software technology; and network

technology. Yet because no technology implements itself, there is more to MIS

than just information technology. MIS has dimensions. The four interrelated

dimensions of MIS are as follows: First, MIS involves not just information

technology, but also its instantiation; second, MIS involves, as reactive and

inextricable elements, both an information system and its organizational context;

third, MIS involves information technology as a form of intellectual technology;

and fourth, MIS involves the activities of a profession or corporate function which

are integral to the essence of what MIS is (Currie & Galliers, 1999).

Dell Computer Corporation Company Background

Dell Computer Corporation is a major manufacturer of personal

computers, computer peripherals, and software. Among the leading producers of

computers in the world, Dell sells its products directly to customers through the

Internet and mail-order catalogs rather than through retail outlets. The company

is based in Round Rock, Texas. At Dell Computers, customers are brought into

the product planning and manufacturing processes, with all employees

encouraged having contact with customers. Through effective collaboration

across boundaries, ideas can be shared about product designs and value

propositions. The result is faster and more customer-focused product and service

innovation. To produce the capacity for this, considerable attention must be

placed on organizational structures, processes, skills and culture. Such

elements may need a radical overhaul in established companies (Dennis &

Harris, 2002). Dell was founded in 1984 by Michael Dell. In 1983, during his

freshman year at the University of Texas, he bought excess inventory of RAM

chips and disk drives for IBM personal computers from local dealers. He resold

the components through newspaper advertisements at prices far below retail

cost. By 1984, his sales totaled about $80,000 a month. In April 1984, Dell

dropped out of school to launch his company (Ford, Honeycutt, & Simintiras,

2003).
 The new company soon began manufacturing its own IBM-compatible

computers under the name PCs Limited. Because Dell sold computers directly to

users through advertisements in magazines and catalogs, the company could

price its machines lower than those sold through retail stores. Sales reached

nearly $6 million during the company’s first year, climbing to $34 million the

following year. By 1987, Dell was the leading mail-order computer company in

the United States. In that year, it created a sales force to target large

corporations and began adding international offices to capture the direct-mail

market outside the United States (Ford, Honeycutt, & Simintiras, 2003). While the

company continued to grow rapidly; Dell experienced a series of setbacks that

hurt profits. In 1990, the company began selling computers through retail stores,

an effort it abandoned in 1994. In 1991, Dell launched a line of notebook

computers, but quality problems and inadequate production planning forced the

company to stop selling for a year. In 1994, Dell launched a new line of

notebook computers and expanded efforts to increase overseas sales. Dell also

began focusing on the market for servers, which used the computers to run

local area networks. By the late 1990s, Dell was firmly in place as the world’s

number one direct seller of computers. More than 50 percent of the company’s

computer sales transactions took place via its website, which generated

worldwide sales in excess of $40 million a day (Ford, Honeycutt, & Simintiras,

2003).

Information Processing Tools

 Information or Data processing is the analysis and organization of data. It

is used extensively in business, engineering, and science and an increasing

extent in nearly all areas in which computers are used. Businesses use data

processing for such tasks as payroll preparation, accounting, record keeping,

inventory control, sales analysis, and the processing of bank and credit card

account statements. Engineers and scientists use data processing for a wide

variety of applications, including the processing of seismic data for oil and

mineral exploration, the analysis of new product designs, the processing of

satellite imagery, and the analysis of data from scientific experiments (Thierauf,

1978).

Data processing is used extensively in business, engineering, and science

and to an increasing extent in nearly all areas in which computers are used. Data

processing is divided into two kinds of processing: database processing and

transaction processing. A database is a collection of common records that can be

searched, accessed, and modified, such as bank account records, school

transcripts, and income tax data. In database processing, a computerized

database is used as the central source of reference data for the computations.

Transaction processing refers to interaction between two computers in which one

computer initiates a transaction and another computer provides the first with the

data or computation required for that function. Most modern data processing

uses one or more databases at one or more central sites (Thierauf, 1978).
 Transaction processing is used to access and update the databases when

users need to immediately view or add information; other data processing

programs are used at regular intervals to provide summary reports of activity and

database status. Examples of systems that involve all of these functions are

automated teller machines, credit sales terminals, and airline reservation

systems (Thierauf, 1978).

The information processing tools that Dell uses include computers, the

internet, maps, spreadsheets, models, and databases. For the operational level

of Dell, the most appropriate tool for information processing is maps. Through the

said information processing tool, decisions on how to operate the organization

can be initialized and made. Maps can be used to determine which country/place

information will be acquired from, it can also assist in determining the

demographic level of people and information will be gathered . Maps can be in

the form of charts that can also provide necessary information. The information

gathered in turn can assist in helping to decide how an organization will be

operated. For the tactical level of Dell, the most appropriate tool for information

processing is databases. Through the said information processing tool, the

records that can assist in finding out the strength and weakness of the company

can be used to determine the tactic that will be used by the organization. For the

strategic level of Dell, the most appropriate information processing tool is the

internet or World Wide Web. Through the internet, trends and strategies by other

companies can be known. After analyzing the trends and strategies used by
other companies, an appropriate strategy can be formulated to use by the

organization.

Inventory control systems

Individual businesses need, first and foremost, an efficient inventory

control system. This implies the minimum amount of inventory that will provide

the consumers with what they need whenever and wherever they need it.

Effectiveness of the inventory system means basically having an inventory mix

that is most likely successful in satisfying consumer needs (Samli & Sirgy, 1995).

The inventory control systems used by Dell is up to date and reliable to prevent

problems to arise. The inventory system of Dell makes sure that anything the

consumer need will be available to them at any given time. It is also what the

company uses to know if certain products are still available or misuse of the

inventory system may cost problems to the company.

Conclusion

Management information system involves the information system and the

organization. Dell benefits a lot from the management information system. The

system helps the company create strategies that will help the company conquer

any problems and threats from competitors. The system also assists the

company in processing the needed information. Management Information

Systems also helps a company to create or update its inventory control system.

Recommendations
 Since the MIS of a company is a vital part of its operations and its survival

in the modern world, it must be well updated and it must compete well with MIS’s

competitors. The MIS of a company should be created from high standards so

that it can be of stiff competition against its counterparts. The MIS system should

help the company to achieve its goals and assist the company in reaching its

potential.