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MANAGEMENT INFORMATION
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SYSTEM
MIS in a Manufacturing Industry
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Case study
Of
Madura Garments

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fghjklzxcvbnmqwertyuiopasdfgh Dayal KantMunda(05)

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Prabhakar(15)
Praveen

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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 garment-
maker 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-old-
stock) 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, co-
ordinated 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.
Pre-ERP Post-ERP
Order fulfillment 70% 90%
Order release-dispatch 22 days 18 days
Inventory (% of sales) 13% 11.7
Receivables 55 days 40-45 days
Unsold stock Around 30% 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
CAGR of 30 percent
Solution 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
assurance
Operating Solaris 8 is the operating system for Sun Fire. The IBM RS6000
systems machines run AIX 5.1
Database Oracle 9i
Cost of 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.

References
1. http://vuattach.ning.com/group/vureportandslides/forum/topics/vu-
reports-and slidesmis?commentId=5159480%3AComment
%3A53074&groupId=5159480%3AGroup%3A53055
2. http://portal.acm.org/citation.cfm?id=581541

3. http://www.expresscomputeronline.com/20050221/management01.sht
ml

4. http://blog.maia-intelligence.com/2008/12/08/mis-for-manufacturing-
industry/

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