Management Information Systems(MIS)
Management information is data collected (often in the transaction processing systems of the organization), processed and formatted in such a way as to be useful to managers to aid them in planning, control and decision-making. Management information tools include the following.
- Databases and database management systems: capturing and storing data (e.g. on customers, products and inventory, suppliers or transactions in progress) in a structured way, so that they can be shared by different users, and interrogated flexibly for a variety of applications.
- Decision Support Systems: e.g. spreadsheets and computer models, used to examine the effect of different inputs and scenarios on the outcome of a plan or decision. Examples in procurement include trend and spend and analysis tools and tender evaluation tools
- Management Information Systems: Integrated systems for recording, storing and analyzing a wide range of sales, purchase, point-of-sale, inventory, maintenance, HR, financial and business intelligence data to support management decision making.
A key problem in many organizations is that management information is fragmented within the business: separate functional IT systems may have evolved over many years, resulting in islands of information, so that information is available to one function but not visible or accessible to other internal or external stakeholders.
Knowledge Management Systems
May be defined as‟ the systematic process that supports the continuous development of individual, group and organizational learning; involving the creation ,acquisition, gathering, transforming, transfer and application of knowledge to achieve operational objectives‟( John P Wilson, Human Resource Development) Mullins identifies knowledge management both with organizational learning and the ability of the organization ‟to make use of its intellectual assets‟
Knowledge management is closely linked to organizational learning. It recognizes that learning and doing are important to organizational success and that knowledge gained in developing products and processes, monitoring and reviewing projects etc. should not be lost to the organization. Knowledge sharing can reduce the likelihood of a risk event occurring by ensuring that mistakes will not be repeated. MP Kerr („Knowledge Management‟; Occupational Psychologist) identifies seven drivers for knowledge management in organizations.
- Business pressure for innovation
- Inter-organizational enterprises (e.g. mergers, takeovers)
- Networked organizations (including supply chains), and the need to coordinate geographically dispersed groups (e.g. in virtual organizations)
- Increasingly complex products and services with a significant knowledge component
- Hyper competitive global markets (with decreasing product lifecycles and time to market, putting pressure on innovation and responsiveness)
- The digitization of business environments and the ICT revolution ( including the explosion of available knowledge, and tools for managing knowledge)
- Concerns about the loss of knowledge, due to downsizing, out sourcing and staff mobility).
Different organizations and sectors will have their own particular issues with knowledge management. e.g. the current struggle of music, film, software and consumer electronics companies to protect their business-critical intellectual property (copyright, patents and designs). Generally, organizations may struggle to find a balance between the need to protect knowledge (confidentiality and intellectual property: requiring a culture of protection and control) and the need to capture, share and disseminate it (requiring a culture of trust and transparency).
A systematic approach to knowledge management includes the following processes;
• Acquiring knowledge (e.g. from environmental scanning, market research, purchasing research, benchmarking, modeling, networking and so on).
• Generating or creating knowledge, through processes such as ideas generation (e.g. brainstorming and think tanks); research and development; stakeholder consultation ( e.g. suggestion schemes, quality circles, early supplier involvement); lesson learning ( e.g.
project reviews and learning capture) and cultivating supplier and workforce diversity ( for diverse perspectives and information)
• Transforming information into new knowledge (e.g. by compiling, combining, analyzing, interpreting or re-formatting).
• Capturing unspoken, internal (tacit knowledge) to convert it to open, stated (explicit) knowledge, so that it can be communicated, shared and used.
• Sharing or disseminating knowledge throughout the organization (e.g. via ICT networks, cross functional teams)
• Protecting distinctive, value adding knowledge for competitive advantage (e.g. via access controls, confidentiality agreements and intellectual property protections).
• Applying knowledge to develop core capabilities ( such as innovation or agile supply) which cannot be easily imitated by competitors.
• Storing knowledge effectively in information and knowledge management systems
The introduction of new technology or systems is often managed by phased implementation, to minimize the risks of teething troubles and to allow time to embed and adjust the system. Direct Changeover is a comparatively simple, but risky, approach where an old system is completely replaced by a new system in one step. It may be the appropriate solution where two systems are very different. New Systems are introduced often during downtime- such as a bank holiday weekend or business closure-to minimize disruption.
A less risky approach is to use phased (or incremental) implementation where one discrete change (or part of the overall change program) is made and bedded in before moving on to the next. Changes may be made to one process, product category or supplier at a time, say. Parallel running allows old and new systems to be run in parallel for a period of time. Results can be cross checked, to evaluate the new system, and the risks to disruptions are minimized, as the old system provides a back-up. Parallel running will have to be carefully planned to avoid confusion and inefficiency.
Pilot programs may be used in selected units of the organization, or for selected suppliers, so that the new systems can be tested live (or online) while limiting the risk of disruption in the event of problems. This allows bugs to be ironed out and gives users practice in the new system; staff involved in the pilot program can then be used to coach others.
Integrated Management systems
Dependent and Independent Demand
The need to accurately assess demand is crucial in today’s business environment. Accuracy in forecasting brings with it the opportunities to maximize resources and minimize spend and waste. The increased business emphasis in forecasting and demand management marks it out as an identified aspect of business operations where substantial gains can be made and competitive
advantage enhanced. Confidence in the predictability of demand enables better decisions at the operational level. When linked to effective inventory management the two areas combine to be greater than the sum of their parts
The Distinction between dependent and independent demand
Many stock items are subject to dependent demand-that is, the extent to which the item is used depends on the production schedule of a larger item of which it forms part. To estimate the demand for such items requires detailed examination of the product breakdown. For example, if 1000 units are being manufactured and each unit requires 5 modules, then the production requirement is for 5000 modules. The number of modules ordered is dependent on the number of units being produced.
The situation is easier in the case of items subject to independent demand. E.g. the amount of oil required to maintain the manufacturing machine in working order does not depend on which products are being processed on that machine. It is possible to estimate that a particular amount of oil will be used each day, week or month, regardless of the exact detail of the production schedule.
As a further example, what items are bought out in a typical service organization? This will depend on the exact nature of the organization, but the following are the likely answers. Notice that in all cases the items are characterized by independent demand; they are not related to the exact nature of the service organization’s outputs. Clearly these purchases are not limited to service companies but they serve to illustrate the difference between dependent and independent demand.
- Office equipment and supplies such as stationery
- Computer hardware and software
- Motor vehicles
- Advertising and design services
- Maintenance services
The distinction between dependent and independent demand is important because some inventory control systems (such as materials requirement planning or MRP) take into account the peculiar difficulties of dependent demand while other methods are more suited to independent demand items. Both methods require good inventory management as the optimum goal to operate efficiently carrying as little stock as possible.
