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MASTER OF BUSINES ADMINISTRATION-MBA SEMESTER 2

MB0044-PRODUCTION & OPERATIONS MANAGEMENT

Q1. WHAT IS PRODUCTIVITY? WRITE A BRIEF NOTE ON CAPITAL PRODUCTIVITY.

ANS 1.

Production Management encompasses all activities which go into conversion of a set of inputs

into outputs which are useful to meet human needs. It involves the identification of the requisite

materials, knowledge of the processes, installation of equipments necessary to convert or

transform the materials to products. The quantities to be produced have to be ascertained,

processes established, specifications detailed out, quality maintained and products delivered intime to meet the demands. Decisions need to be taken about the location

of the facility, variety of machineries required to be installed, technologies to be

deployed, recruitment of workforce with adequate training to perform the tasks to achieve

productivity with utmost efficiency. Constraints on resources and competition demands that

optimization be obtained in all functions at all levels. Different materials will have to be procured,

stored, transported inside the organisation for transformation using processes. Information flows

throughout the cycle to instruct, to monitor and to control the processes to establish relevant

costs and look for opportunities for continuous improvement. All these functions generate their

own subsystems which will help in establishment of accountability and recognition of

performance necessary for improvement.Strategies at various levels will have to be formulated with appropriate implementation

procedures established with checks and balances. Flexibility will have to be designed into the

system to take care of fluctuations in the market both for purchased items as well as the

demand. Technological changes have to be accommodated both as challenges and

opportunities for development to be abreast of the global environment.

Capital Productivity

Capital deployed in plant, machinery, buildings and the distribution system as well as workingcapital are components of the cost of manufacture and need to be productive. Demand

fluctuations, uncertainties of production owing to breakdowns and inventories being created

drag the productivity down. Therefore, strategies are needed to maximize the utilization of the

funds allotted towards capital. Adapting to new technologies


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1. Outsourcing Strategies

When capacity requirements are determined it will be easy to determine whether some goods or

services can be outsourced so that the capital and manpower requirements can be reduced and

the available capacities are used to augment core competencies thus reducing the cost of theproduct or service to the customer. However, the following factors may restrict outsourcing

(a) Lack of expertise the outsourced firm may not have the requisite expertise to do the job

required

(b) Quality considerations Loss of control over operations may result in lower quality. This is a

risk that the firm gets exposed to.

(c) Nature of demand When the load is uniform and steady, it may not be worthwhile to

outsourcing. Absence of spervisaion and control may be a hindrance to meet any urgent

requirements of the customer. This affects the business especially if no production facilities are

built in the organization

(d) Cost When the fixed costs that go along with making the product does not get reducedconsiderably

2. Methods Improvement

Methods Improvement starts with Methods analysis focus of this process is how a job is done

breaking it down to elemental tasks so that they are amenable for analysis.. This is done for

both running jobs and new jobs. For a new job, the description becomes the input for analysis.

For current jobs, the analyst depends on observations, records and suggestions of the persons

involved in the job. When improved methods are suggested, they are implemented and records

created for assessing the consequences of the methods improvement procedures. The analyst

should involve all concerned persons in the process so that acceptance becomes possible andopportunities open up for further improvements. Moreover, the people actually involved would

be interested in improving their productivity and will help the analyst in the process.

3 Balancing of Workstations

Assembly lines necessitate out stringing together workstations which carry out operations in a

sequence so that the product gets completed in stages. Since the workflow has to be uniform

and operations may require different periods for completion the necessity of Line Balancing is

felt.

Capacities at workstations and the workforce to man are so adjusted that a product in the

process of assembly almost approximately the same amount of time.

4. Rationalization of Packaging Methods

With logistics becoming an important function of the supply chain and outsourcing becoming the

norm, packaging has become an important aspect, packaging has become important . Space is

at a premium and therefore stacking and storing have to more scientific. Movements inside the

premises from one location to another location are being done with automated systems and

they need that the packaging systems are designed for safe transit, continuous monitoring


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both for quantities and operations. In case of outsourced products the materials used and their

design should facilitate reuse of the same which brings in economy.

5 Quality Circles

Kaoru Ishikawa is generally considered to have promoted the concept of Quality Circles. It is

well known that he is the originator offishbone diagrams to identify the root cause of anyproblem. The causes for the existence of a problem are classified as pertaining to the material,

processes or method or any factor that goes into production. The matter is further investigated

and pursued till the exact cause is determined. Quality circles use these principles in solving

problems. The teams select projects selected on the above basis and implement actions to

achieve improvement in the processes with a view to improve quality. Since these activities are

carried out without affecting the regular day to day work and involve little involvement of the

managers, team work gets reinforced and results in continuous improvement in methods and

quality. The capital deployed is minimal, if at all, and therefore productivity is enhanced.

Q2. EXPLAIN BRIEFLY THE COMPUTER INTEGRATED MANUFACTURING.

Answer: Computer Integrated Manufacturing

Integration occurs when a broad range of manufacturing and supporting activities are linked.

Activities include engineering design, production planning, shop control,order processing,

material control, distribution etc. Information flow across all functions takes place with the help

of computers. Transmission, processing, distribution and feed back happen almost in real time

so that intended activities are conducted rapidly. This process helps in rapid production and also

reduce indirect costs. As response times decrease, customer satisfaction increases resulting in

better business. CIM helps in avoiding accumulation of materials resulting in better throughput

and better utilization of space. Bar coded labels that accompany materials contain instructions

for processing them which are read by sensing devices and display the status on monitors. This

information is available to all concerned personnel responsible in planning, marketing etc. so

that they will be aware of the status of any order and if expediting is needed to meet deadlines,

they will be able to seek intervention. Identifying shortages, ensuring faster deliveries becomes

easy with CIM.

One of the keys to success in the manufacturing business is to lessen errors and to enhance

productivity. The more one can produce with fewer flaws, the more one can make at the bottom

line. Over a period of time factory owners have integrated computer systems in order to

streamline the production process. CAD, or computer aided design, has been able to aid the

operators in the formulation and blueprints of more sophisticated products and technology.

CAM, or computer aided manufacturing, has offered the means by which to produce the more


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sophisticated items. CAM also enhances the productivity of the factory's output. Together

the CAD and CAM systems reduce cycle times, enhance productivity, and aid in the

streamlining of the overall production process.

Since the 1980's CAD and CAM have worked together to move from the idea phase to the

application phase. This process has not ceased because of the implication. The factory sectorhas slowly been phasing in computer integrated manufacturing, or CIM over the years. This

integration will allow for the digital information and computer control of the production process to

be intertwined throughout and within the factory.

In the CIM system some processes will be different. Data entry will now be stored in hard drives.

This will allow for the manipulation and the retrieval of the data with a simple keystroke. The

means by which the processing of data into the production of products will also be streamlined

within hardware and software. This will allow operators to alter and enhance programs in order

to improve products. The CIM system will also provide the necessary algorithms to bring all the

data together. The data will then be able to intermingle with the sensor and modificationcomponents of the system.

While the CIM system is the optimal choice to aid in the manufacturing process, it does come

with a unique set of challenges. The greatest challenge is to get all the different machines

within the factory to work on the same system. In the typical factory, there are a variety of

machines that perform different tasks, that are made by a variety of suppliers. The issue is to

get every one of these machines to accept the programming, and tasks from one mainframe

computer.

The second challenge of the CIM system is encapsulated within the data itself. While manyoperators may be lost on the actual production floor, there will be a need for operators to

maintain the integrity of the data that is transmitted to the machines. The challenge is in

acquiring competent individuals who can assure that all the data within the system is at its

optimum operating integrity.

The third, and final challenge that has been encountered in the use of the CIM system is

process control. This entails assuring that the whole process runs smoothly. This particular

challenge ties the data entry people, the programmers, and the production

operators together. The factory will need to assure that the individuals working with the system

throughout the factory are competent and knowledgeable. These individuals will need to be welltrained, and probably need to update their training periodically.

The goal of the CIM system is to eliminate the waste within the manufacturing process. This is

done by taking the design, analysis, planning, purchasing, cost accounting, inventory control

and distribution departments and interlink them with the factory floor, material handling, and

management departments. The CIM system will have an impact on every system within the

factory.


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The CIM system, which is sometimes referred to as the integrated computer aided

manufacturing system, operates on both hard and software. Simply put, the software is what

runs the factory, or the brains. The hardware is what makes the machines run, or the muscles.

The CIM system runs on an efficient output process. This means that the whole factory works

together, not as separate parts. As a unified unit, it operates for the peak benefit of the wholefactory.

Simply put, the CIM system does not backload or store up work. It does not warehouse

products. The CIM system keeps work flowing through computer integration in order to keep all

the parts of the system constantly functioning. It registers all the raw material received by the

factory. It then walks the material through the factory and the production process.

The CIM system fractions every individual "center" of the factory into work cells. As work cells,

they are then divided into individual stations. The stations are then broke down to the individual

processes, and the processes are what metamorphosizes the raw materials into actualproducts. This may seem complicated, but it streamlines the whole manufacturing process. With

each division of the factory broken down in such a manner, it allows operators to make any

necessary changes to the system without shutting down the whole system.

Cim is a very interactive, hands on system. If it is applied correctly, it will enhance the

productivity of the whole factory. It will link several departments and functions together. It is

simple to install. It usually is installed through a LAN, or local area network, connection.


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Q3. DESCRIBE BRIEFLY THE AUTOMATED FLOW LINES.

Ans3.

When several automated machines are linked by a transfer system which moves the parts byusing handling machines which are also automated, we have an automated flow line. Aftercompleting an operation on a machine, the semi finished parts are machine in the sequencedetermined by the process requirements a flow line is established. The parts at various stagesfrom raw material to ready for fitment or assembly are processed continuously to attain therequired shapes or acquire special properties to enable them to perform desired functions. Thematerials need to be moved, held, rotated, lifted, positioned etc. for completing differentoperations. Sometimes, a few of the operations can be done on a single machine with a numberof attachments. They are moved further to other machines for performing further operations.Human intervention may be needed to verify that the operations are taking place according tostandards. When these can be achieved with the help of automation and the processes are

conducted with self regulation, we will have automated flow lines established. One importantconsideration is to balance times that different machines take to complete the operationsassigned to them. It is necessary to design the machines in such a way that the operationtimes are the same throughout the sequence in the flow of the martial. In fixed automation orhard automation, where one component is manufactured using several operations andmachines it is possible to achieve this conditionor very nearly. We assume that product life cycles are sufficiently stable to invest heavily onthe automated flow lines to achieve reduced cost per unit. The global trends are favouringflexibility in the manufacturing systems. The costs involved in changing the set up of automatedflow lines are high. So, automated flow lines are considered only when the product is required tobe made in high volumes over a relatively long period. Designers now incorporate flexibility in

the machines which will take care of small changes in dimensions by making adjustments orminor changes in the existing machine or layout. The change in movements needed can beachieved by programming the machines. Provision for extra pallets or tool holders or conveyorsare made in the original design to accommodate anticipated changes. The logic to be followedis to find out whether the reduction in cost per piece justifies the costs of designing,manufacturing and setting up automated flow lines. Group Technology, Cellular Manufacturingalong with conventional Product and Process Layouts are still resorted to as they allowflexibility for the production

system. With methodologies of JIT and Lean Manufacturing finding importance and relevance inthe competitive field of manufacturing, many companies have found that well designed flowlines suit their purpose well. Flow lines compel engineers to put in place equipments thatbalance their production rates. It is not possible to think of inventories (Work In Process) in aflow line. Bottlenecks cannot be permitted. By necessity, every bottleneck gets focused uponand solutions found to ease them. Production managers see every bottleneck as an opportunityto hasten the flow and reduce inventories. However, it is important to note that setting upautomated flow lines will not be suitable for many industries Automated Assembly Lines : Allequipments needed to make a finished product are laid out in such a way as to followthe sequence in which the parts or subassemblies are put together and fitted. Usually, a frame,body, base will be the starting point of an assembly. The frame itself


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consists of a construction made up of several components and would have been assembled orfabricated in a separate bay or plant and brought to the assembly line. All parts or subassemblies are fitted to enable the product to be in readiness to perform the function itwas designed to. This process is called assembly. Methodologies of achieving the final resultmay vary, but the basic principle is to fit all parts together and ensure linkages so that theirfunctions are integrated and give out the desired output. Product Layouts are designed so that

the assembly tasks are performed in the sequence they are designed. You will note thatthe same task gets repeated at each station continuously. The finished item comes out atthe end of the line The material goes from station 1 to 5 sequentially. Operation 2 takes longertime, say twice as long. To see that the flow is kept at the same pace we provide two locations2a and 2b so that operations 3, 4 an 5 need not wait. At 5, we may provide more personnel tocomplete operations. The time taken at any of the locations should be the same. Otherwise theflow is interrupted. In automated assembly lines the moving pallets move the materials fromstation to station and moving arms pick up parts, place them at specified places and fastenthem by pressing, riveting, screwing or even welding. Sensors will keep track of these activitiesand move the assemblies to the next stage. An operator will oversee that the assemblies arehappening and there are no stoppages. The main consideration for using automated assemblylines is that the volumes justify the huge expenses involved in setting up the system.

Rapid Prototyping : Prototyping is a process by which a new product is developed in smallnumbers so as to determine the suitability of the materials, study the various methodsof manufacture, type of machinery required and to develop techniques to overcome problemsthat my be encountered when full scale manufacture is undertaken. Prototypes do meet thespecifications of the components that enter a product and performance can be measured onthose. It helps in confirming the design and any shortcomings can be rectified at low cost.If serious defects or problems arise during the manufacture, a thorough change in design oreven its replacement may be considered. To arrive at decisions to make use of the advantagesstated above, it is important that the prototypes are made within the shortest possible time.Rapid prototyping facilitates this. It uses virtual designs from Computer Aided Design

CAD or animation modeling which transforms dimensional data to 3dimensional views. Thephysical space of the product is amenable to have cross sections made. Cross sections taken atvery close positions gives thin layers which enable the generation of a solid model of thedesigned product. The data that is thus created helps build a solid model exactly as per thedrawings. Any shape can be generated in this method. Advanced technologies likeSLS ( Selective Laser Sintering), FDM (Fused Deposition Modeling), LOM(Laminated ObjectManufacture), EBM (Electronic Beam Melting) are some of Rapid Prototype ModelingProcesses. Since the basis data about the product is already available in CAD, the aboveprocesses can produce models in a matter of a few days. Conventional machines like lathes,milling machines, grinding machines, EDM (Electro Discharge Machining) also help in theproduction of prototypes. Because of their advantages Rapid Prototyping is being increasingly

used. A bimonthly magazine TCT Magazine calling the Rapid Prototyping as Time CompressingTechniques is dedicated to the publication of latest developments in this field as researched anddeveloped by practitioners around the world.


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Q4. WHAT IS MEANT BY TOTAL QUALITY MANAGEMENT? MENTION THE 14 POINTS OFDEMINGS APPROACH TO MANAGEMENT.

Ans 4.

Total quality management or TQM is an integrative philosophy of management for continuously

improving the quality of products and processes. TQM functions on the premise that the qualityof products and processes is the responsibility of everyone who is involved with the creation orconsumption of the products or services offered by an organization. In other words, TQMcapitalizes on the involvement of management, workforce, suppliers, and even customers, inorder to meet or exceed customer expectations. Considering the practices of TQM as discussedin six empirical studies, Cua, McKone, and Schroeder (2001) identified thenine common TQMpractices as cross-functional product design, process management, supplier qualitymanagement, customer involvement, information and feedback, committed leadership, strategicplanning, cross-functional training, and employee involvement.

1. Create Constancy of PurposeThe customer is the most important part of transport service. Customer demands are always

changing. It is mistake to presume that services offered at present can keep an organizationsolvent and ahead of competition. The transport agency must create a constancy of purpose byputting the customer first. The transportation organizations highest priority must be toprovide the best transportation services to its community at the lowest cost possible.The organization is responsible to both its community and its own workforce in maintaining ahigh level of excellence and value. Therefore, the transportation organization must strive tomaximize efficiency and effectiveness through constant improvement. To create a constancy ofpurpose necessitates the development of a mission statement for the transport corporation. Theplan-do-check-act (P-D-C-A) cycle allows the statement to evolve as customer demand growsand changes. This flexibility permits innovation, which is achieved by putting resources intoresearch, education, and maintenance of the transport system. Innovation generates new andimproved services. For example, use of electric- and gas-based vehicles can reduce pollution in

urban areas (Shridharan 2002). The corporate sector should lobby for electric-and gas-basedvehicles for urban areas. A real concern is the availability of a wide network of service stationssupplying gas or replacing discharged batteries with charged ones. Gas and battery industriescan work together with the automakers industry to provide solutions with sustained businessopportunities for themselves.

2. Adopt New PhilosophyIn todays economic age, businesses cannot survive with commonly accepted levels ofmistakes, defects, people on the job who do not understand the job and are afraid to askquestions, and managements failure to understand problems within the corporation. Acceptabledefective services and poor work performance are among the most severe roadblocks to betterquality. Everyone working in a transport corporation can find ways to promote quality and

efficiency, to improve all aspects of the transportation system, and to promote excellenceand personal accountability. Employees, with the support of top management, should adopt anew work philosophy by meeting in cross-functional teams or quality circles to set priorities forstaff training. The major benefit of the new philosophy is the creation of a continuous learningenvironment. The common thread in adopting a new philosophy is meeting the needs of thosewho pay for and use the services provided by the transportation organization.


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3. Cease Dependence on Mass InspectionLasting quality comes not from inspection, but from improvements in the system. To achievebest economy and productivity, transport agencies should know what quality they are delivering.The organizations managers must be knowledgeable in the statistical control of quality. Theymust proceed under the new philosophy: the right service quality characteristics must be builtin without dependence on inspection. The statistical control of the process provides the only

way for transport operators to build quality service and the only way to provide managersevidence of uniform, repeatable quality and cost of service. One of the first steps for managersis to learn enough about the statistical control of quality to access the qualification of anoperator by talking with them in statistical language.

4. End the Practice of Awarding Business on Price Tag AloneTodays requirements for transport service suppliers are uniformity and reliability. Price hasno meaning without a measure of quality. Without adequate measures of quality, business driftsto the lowest bidder, low quality and high cost being the inevitable results. Instead, theorganization should seek the best quality in a long-term relationship with a single supplier foronly one item. The results of implementing this strategy are longer lasting items and greaterquality service at no additional cost. Transport agencies should select suppliers that can provide

statistical evidence of quality. Since transport organizations tend to think of their suppliers aspartners in their operations, they must consider joint planning for improvement and jointimprovement activities to serve customers better than their competitors.

5. Improve the System of Transport ServiceQuality can be built into all transportation activities and services and can be assured bycontinuous examination to identify potential improvements. This requires close cooperationbetween those who provide the services and those who consume them. Improvement is not aone-time effort. Management is obligated to look continually for ways to reduce waste andimprove quality. Every worker and every department must commit to constant improvement.Quality circles/cross-functional teams work together to improve transport service delivery. Thesegroups may use basic quality tools to identify issues that need attention. For example, which

faults are local and which ones belong to the system? The responsibilities should be givenwhere this fault belongs. The use of statistical quality tools helps to identify trouble spots andtheir sources. Quality circles/teams continuously work to meet the needs of the peoplethey serve, resulting in lower costs and improved quality of transport operations and services.Thus, improved transport service can result from focusing not only on achieving presentperformance levels, but more importantly, by breaking through existing performance levels tonew, higher levels.

6. Institute TrainingQuality circles help the human resource division to select training programs that increase the jobskills of both main and support staff. Training must be totally reconstructed. Statistical methodsmust be used to learn when training is finished and when further training would be beneficial.

On-the-job quality improvement training ensures that every employee has a thoroughunderstanding of customer needs for transport services.

7. Institute LeadershipThe leader creates opportunities for all employees (good and bad performers) to interact andidentify opportunities for improvement. The job of supervisor is not to tell employees what todo or to punish but to lead them toward better job performance. Leading consists of helpingworkers do a better job and of using learning by objective methods for those employees in needof individual help. Supervisors should be trained continually. They should receive training in


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synergetic or cooperative supervision and work in supportive teams to improve instructions andlearning. Leadership training will help to introduce new best practices in transportation servicesto satisfy customer needs.

8. Drive Out FearImproved performance cannot occur unless employees in the transport organization feel

comfortable to speak truthfully and feel confident that their suggestions will be taken seriously.Most workers are afraid to ask questions or to report trouble. Suggesting new ideas is risky;people fear punitive assignments or other forms of discrimination or harassment. To counter thisfear, total quality encourages applying new methods, creating new solutions, and implementinginnovative experiments. The economic loss from fear is appalling. To ensure better quality andproductivity, employees must feel secure. In a secure environment, workers are not afraid toexpress ideas not afraid to ask questions, not afraid to ask for further instructions, and not afraidto report vehicles out of order, poor lighting, or other working conditions that impairquality service in transportation.

9. Breakdown Barriers Between DepartmentsAccording to Deming, people can work superbly in their respective departments, but if

departmental goals conflict, the company could face ruin. Lack of coordination or disintegrationbetween departments can lead to costly rework, unnecessary duplication of effort, and a heavyloss in resources. Quality Function Deployment (QFD) and quality circles improve cross-communication and encourage brainstorming among members of the transport organization.QFD helps to capture the voice of the customer and convert it into service designrequirements. This strategy is not only a powerful tool for integrating departments of thetransportation organization, but it also strongly promotes the principle of do it right the first time(Srividya and Metri 2000). Sharing a unified purpose and direction helps to improve thetransport organizations services.

10. Eliminate Slogans, Exhortations, and Targets for the WorkforceSlogans, like those encouraging zero accidents or zero defects, and posters reinforcing the

slogans do not help workers do a better job. Slogans, posters, and other such devices aremanagements lazy way out. A better approach is to provide the means to the desired ends. Forinstance, the transportation staff prevents wasteland reduces accidents by managing its ownquota-free environment. If the transport organizations focus is on improving its work processes,service quality will increase, efficiency and effectiveness will rise, and no value-added activitieswill diminish.

11. Eliminate Numerical QuotasNumerical quotas will not help workers do a better job. In fact, numerical quotas cost as muchas loss in terms of poor materials and mistakes. In many factories at the end of the day, workersare idle the last hour or two. They have completed their quotas for the day and are waiting forthe whistle to blow; they do no more work yet they cannot go to home. Numerical goals can

even produce a negative effect because they generate frustration. Therefore, the quota systemwill not help the organizations competitive position or contribute to continuous improvement.Instead of numerical quotas, hard work, pride, service, and growth should be emphasized.Removing quotas encourages employees to apply new ideas to old tasks. For instance, bustransportation schedules and stop locations are now planned to meet the communitys needs.The goal is to fulfill the needs of the community, not to increase the number of peopletransported.


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12. Remove Barriers to Pride of WorkmanshipThe transport industry cannot function properly without employees who are proud of their outputand who feel respected as individuals and professionals. For example, inspection simplyidentifies defects but does not explain how to prevent them. Intrinsically, people want to provideservice without defects. Leadership and continuous system improvement make this possible. To

achieve pride in work, superiors must listen to the transport staff/employees and transportstaff must listen to the recipients of their service (i.e., the community). Often, staff andcommunity do not have the same knowledge base or purpose of work. Communicating theorganizations mission and achieving respect among the staff and the community is one of thegreatest challenges facing transport organizations.

13. Encourage Education and Self-improvement for All EmployeesThe transport organization needs not only good people, but people who are growing througheducation and life experiences as well. Both management and employees must continuouslyacquire knowledge to be of service to the community. They should be educated in newmethods, including teamwork and statistical techniques. For instance, transport employees mayreceive training on ISO 14000 for providing environmental-friendly transport services to the

community.

14. Take Action to Accomplish TransformationThe essence of TQT is an organization-wide focus on meeting the needs of those who useand/or pay for transport services. Every activity, every process, and every job in thetransport organization can be improved. Everyone within the organization can be given anopportunity to understand the TQT program and their individual role within thateffort. Improvement teams that include broad representation throughout the organization canhelp ensure success of initial efforts and create opportunities for cross-disciplinary dialogand information exchange. Implementation of Demings 14 points requires special topmanagement team, such as a quality council, with a plan of action to carry out the transportagencys quality mission.


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Q5. DESCRIBE BRIEFLY THE PROJECT MONITORING AND CONTROL.

Ans 5.

Project Managementis the discipline of planning, organizing, securing, and managing resources to achieve specific

goals. A project is a temporary endeavor with a defined beginning and end (usually time-constrained, and often constrained by funding or deliverables),undertaken to meet unique goalsand objectives, typically to bring about beneficial change or added value. The temporary natureof projects stands in contrast with business as usual (or operations), which are repetitive,permanent, or semi-permanent functional activities to produce products or services. In practice,the management of these two systems is often quite different, and as such requires thedevelopment of distinct technical skills and management strategies. The primary challenge ofproject management is to achieve all of the project goals and objectives while honoringthe preconceived constraints. Typical constraints are scope, time, and budget. The secondaryand more ambitious challenge is to optimize the allocation of necessary inputs and integratethem to meet pre-defined objectives.

Monitoring and controllingMonitoring and controlling process group processes. Monitoring and controlling consists ofthose processes performed to observe project execution so that potential problems can beidentified in a timely manner and corrective action can betaken, when necessary, to control theexecution of the project. The key benefit is that project performance is observed and measuredregularly to identify variances from the project management plan.

Monitoring and controlling includesMeasuring the ongoing project activities ('where we are'); Monitoring the project variables (cost,effort, scope, etc.) against the project management plan and the project performance baseline(where we should be); Identify corrective actions to address issues and risks properly (

How can we get on track again); Influencing the factors that could circumvent integrated changecontrol so only approved changes are implemented. In multi-phase projects, the monitoringand control process also provides feedback between project phases, in order to implementcorrective or preventive actions to bring the project into compliance with the projectmanagement plan. Project maintenance is an ongoing process, and it includes Continuingsupport of end-users Correction of errors Updates of the software over time Monitoring andcontrolling cycle In this stage, auditors should pay attention to how effectively and quickly userproblems are resolved.

Over the course of any construction project, the work scope may change. Change is a normaland expected part of the construction process. Changes can be the result of necessary designmodifications, differing site conditions, material availability, contractor-requested changes, value

engineering and impacts from third parties, to name a few. Beyond executing the change in thefield, the change normally needs to be documented to show what was actually constructed. Thisis referred to as change management. Hence, the owner usually requires a final record to showall changes or, more specifically, any change that modifies the tangible portions of the finishedwork. The record is made on the contract documents usually, but not necessarily limited to, thedesign drawings. The end product of this effort is what the industry terms as-built drawings, ormore simply, asbuilt. The requirement for providing them is a norm in construction contracts.When changes are introduced to the project, the viability of the project has to be re-assessed. It


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is important not to lose sight of the initial goals and targets of the projects. When the changesaccumulate, the forecasted result may not justify the original proposed investment in the project.

Q6. WRITE A BRIEF NOTE ON JUST-IN-TIME (JIT).

Ans 6.

Just in time (JIT) is a production strategy that strives to improve a business return on investmentby reducing in-process inventory and associated carrying costs. Just-in-time production methodis also called the Toyota Production System. To meet JIT objectives, the process relies on

signals or Kanban between different points in the process, which tell production when to makethe next part. Kanban are usually 'tickets' but can be simple visual signals, such as thepresence or absence of a part on a shelf. Implemented correctly, JIT focuses on continuousimprovement and can improve a manufacturing organization's return on investment, quality, andefficiency. To achieve continuous improvement key areas of focus could be flow, employeeinvolvement and quality. Quick notice that stock depletion requires personnel to order new stockis critical to the inventory reduction at the center of JIT. This saves warehouse space and costs.However, the complete mechanism for making this work is often misunderstood. For instance,its effective application cannot be independent of other key components of a lean manufacturing


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system or it can "...end up with the opposite of the desired result." In recent yearsmanufacturers have continued to try to hone forecasting methods such as applying at railing 13week average as a better predictor for JIT planning; however, some research demonstrates thatbasing JIT on the presumption of stability is inherently flawed. The philosophy of JIT is simple:inventory is waste. JIT inventory systems expose hidden cost of keeping inventory, and aretherefore not a simple solution for a company to adopt. The company must follow an array of

new methods to manage the consequences of the change

The ideas in this way of working come from many different disciplines including statistics,industrial engineering, production management, and behavioral science. The JIT inventoryphilosophy defines how inventory is viewed and how it relates to management. Inventory isseen as incurring costs, or waste, instead of adding and storing value, contrary to traditionalaccounting. This does not mean to say JIT is implemented without awareness that removinginventory exposes pre-existing manufacturing issues. This way of working encouragesbusinesses to eliminate inventory that does not compensate for manufacturing process issues,and to constantly improve those processes to require less inventory. Secondly, allowing anystock habituates management to stock keeping. Management may be tempted to keep stock tohide production problems. These problems include backups at work centers, machine reliability,

and process variability, lack of flexibility of employees and equipment, and inadequate capacity.In short, the Just-in-Time inventory system focus is having the right material, at the right time,at the right place, andin the exact amount-Ryan Grab sky, without the safety net of inventory. The JIT system has broad implications forimplementers.

Transaction cost approachJIT reduces inventory in a firm. However, a firm may simply be outsourcing their input inventoryto suppliers, even if those suppliers don't use Just-in-Time (Naj 1993). Newman (1994)investigated this effect and found that suppliers in Japan charged JIT customers, on average,a5% price premium.

Environmental concernsDuring the birth of JIT, multiple daily deliveries were often made by bicycle. Increased scale hasrequired a move to vans and lorries (trucks). Cusumano (1994) highlighted the potential andactual problems this causes with regard to gridlock and burning of fossil fuels. This violatesthree JIT waste guidelines: Time wasted in traffic jams Inventory specifically pipeline (intransport) inventory Scrap fuel burned while not physically moving Price volatility. JIT implicitlyassumes a level of input price stability that obviates the need to buy parts in advance of pricerises. Where input prices are expected to rise, storing inventory may be desirable.

Quality volatility

JIT implicitly assumes that input parts quality remains constant over time. If not, firms mayhoard high-quality inputs. As with price volatility, a solution is to work with selected suppliers tohelp them improve their processes to reduce variation and costs. Longer term price agreementscan then be negotiated and agreed-on quality standards made the responsibility of thesupplier. Fixing up of standards for volatility of quality according to the quality circle Demandstability Karmarker (1989) highlights the importance of relatively stable demand, which helpsensure efficient capital utilization rates. Karmarker argues that without significantly stabledemand, JIT becomes untenable in high capital cost production. Supply stability In the U.S., the


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1992 railway strikes caused General Motors to idle a 75,000-worker plant because they had nosupply. Benefits Main benefits of JIT include:

Reduced setup time. Cutting setup time allows the company to reduce or eliminate inventory for"changeover" time. The tool used here is SMED (single-minute exchange of dies).The flow ofgoods from warehouse to shelves improves. Small or individual piece lot sizes reduce lot delay

inventories, which simplifies inventory flow and its management. Employees with multiple skillsare used more efficiently. Having employees trained to work on different parts of the processallows companies to move workers where they are needed. Production scheduling and workhour consistency synchronized with demand. If there is no demand for a product at the time, it isnot made. This saves the company money, either by not having to pay workers overtime orby having them focus on other work or participate in training Increased emphasis on supplierrelationships. A company without inventory does not want a supply system problem that createsa part shortage. This makes supplier relationships extremely important. Supplies come in atregular intervals throughout the production day. Supply is synchronized with production demandand the optimal amount of inventory is on hand at any time. When parts move directly fromthe truck to the point of assembly, the need for storage facilities is reduced. Minimizes storagespace needed.

MASTER OF BUSINES ADMINISTRATION-MBA SEMESTER 2

MB0047-MANAGEMENT INFORMATION SYSTEMS

Q1. How hardware & software support in various MIS activities of the organization?Explain the transaction stages from manual system to automated systems

Ans. 1.

Hardware support for MISGenerally hardware in the form of personal computers and peripherals like printers,fax machines, copier, scanners etc are used in organization to support various MIS activities ofthe organization.Advantages of a PC :


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Advantages a personal computer offers area) Speed A PC can p rocess dat a a t a ve r y h ig h sp ee d . I t ca n pro cessmillions of instructions within fraction of seconds.

b) StorageA PC can store large quantity of data in a small space. It eliminates the need ofstoring the conventional office flat files and box files which requires lots of space. The s t orage

sys t em in a PC i s such t ha t t he i n f o rma t i on can be t rans f e r red f rom p lacet o another place in electronic form.

c) Communication A PC on the network can offer great support as a communicator incommunicating information in the forms of text and images. Today a PC with internet isused asa powerful tool of communication for every business activity

d) Accuracy A PC i s h igh l y re l i ab le in th e sense t ha t i t cou ld be used t operform calculations continuously for hours with a great degree of accuracy. It isposs ib le to obtain mathematical results correct up to a great degree of accuracy.

e) Conferencing A PC wi th int ernet of fers fac il it y of video conf erencing world wide.

Business people across the globe travel a lot to meet their business partner,colleagues,a n d c u s t o m e r s e t c t o d i s c u s s a b o u t b u s i n e s s a c t i v i t i e s . B y v i d e oc o n f e r e n c i n g inconvenience of traveling can be avoided. A block diagram of a computermay be represented as Input unit is used to give input to the processor.Examp les o f i npu t un i t Keyboard, scanner, mouse, bar code reader etc. Ap rocesso r re f e rs t o un i t wh i ch p rocesses t he i npu t rece i ved t he way i thas been instructed. In a computer the processor is the CPU Central Processing Unit. Itdoes all mathematical calculations, logical tasks, storing details in the memory etc. Output unitissued to give output s from the computer. Examples of output unit Monitor,pr in ter, speakers etc.

Organization of Business in an E enterprise Software Applications in MISInternet technology is creating a universal bench or platform for buying and sellingof goods, commodities and services. Essentially Internet and networks enable integrationof information, facilitate communication, and provide access to everybody from anywhere.

A nd so f t ware so lu t i ons make t hem f as te r and se l f -r e l i an t as t he y ca n ana l yze da t a information, interpret and use rules and guidelines fordecision-making. These enabling capabilities of technology have given rise to fourbus iness models tha t together work in an E enterprise organization. They are:

E business

E communication

E commerce

E collaboration These models work successfully because Internet technology provides theinfrastructure for running the entire business process of any length. It also providesemail and other communication capabilities to plan, track, monitor and control thebusiness operations through the workers located anywhere. It is capable of linking todisparate systems such as lo gi st i cs , dat a acq ui s i t io n an d ra dio f r eq uen cy us edsystems and so on. Low cost connectivity physical, virtual and universal


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standards of Internet techno logy make it a driving force to change conventional businessmodel to E business enterprise model. Internet has enabled organizations to changetheir business process and practices. It has dramatically reduced cost of data andinf ormation processing, its sending and s tor ing . Information and information products areavailable in electronic media, and is a residenton t he ne t work . Once eve ryone i s connec t ed e lec t ron i ca l l y , i n f o rma t i on c

a n f low seamlessly from any location to any other location. For example, product informationis available on an organization website which also has a feature of orderplacement.Ano r d e r p l a c e d i s p r o c e s s e d a t t h e b a c k e n d a n d s t a t u s o f a c c e p t a n c e , r e j e c t i o n i s communicated instantaneously to the customer. Such

order is then placed directly on the order board for scheduling and execution. These basiccapabilities of Internet have given rise to number of business models. Some of them are givenin Table

T h e I n t e r n e t a n d n e t w o r k s p r o v i d e p l a t f o r m a n d v a r i o u s c a p a b i l i t ie s w h e r e b yc o m m u n i c a t i on , c o l l a b o r a t i o n , a n d c o n v e r s i o n h a s b e c o m e s i g n i f i ca n t l y f a s t e r , transparent and cheaper. These technologies help to save time, resource and

enable faster decis ion making . The technology adds speed and inte lligence in thebusiness processimprov ing qua l i t y o f se rv i ce t o t he cus t omer . The bus iness p rocess o f se r v i ng t he customer to offer goods, products or services is made up of the followingcomponents. Enquiry processing Order preparation Order placement Order confirmationOrder planning Order scheduling Order manufacturing Order status monitoring Orderdispatching Order billing Order receivable accounting Order payment processing The entireprocess in parts or full can be handled through these technologies and software solutions. Itprovides important strategic, competitive advantage. Further, the technology is flexible andcapable of handling any business models such as: Retailing, Trading, AuctioningManufacturing, Distribution & Selling Outsourcing, Subcontracting Servicing, Training,Learning, Consulting The resultant effect is the reduction in cost of business

operations, improved customer loyalty and retention and better quality offer to thecustomer. Four major applications mentioned earlier make this achievementpossible. We go into deta ils of each one of them.

Transformation stage manual systems to automated systemsThe manual system which was prevalent in the organizations before industrial revolution wasslowly transformed into digital form by means of computer and related electronicinstruments. A transformation had to necessarily go through the following stages a) Appraisal ofthe procedures b) Types of documents c) Storage systems d) Formulations and coding e)Verification and validation f) Reviewing g) Documentation

Q2. Explain the various behavioral factors of management organization?As per Porter, how can performance of individual corporations be determined?

Ans 2 :

Management organizations:


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A n o r g a n i z a t i o n i s a s t r u c t u r e t h a t u s e s t h e r e s o u r c e s f r o m t h e e nv i r o n m e n t l i k e manpower, raw materials, capital and returns the output like products andservices to the environment. It constitutes the rules, policies, responsibilities andprocedures that are adopted by the organization.

Behavioral factors

The imp lemen t a t i on o f compu t e r based i n f o rma t i on sys t ems i n genera l and MS S in particular is affected by the way people perceive these systems and by how theybehavein accep t i ng t hem. User res i s t ance i s a ma jo r behav io ra l f ac t o r assoc ia t ed with the adoption of new systems. The following are compiled by Jiang et al.(2000) Reasons that employees resist new systems:1. Change in job content2. Loss of status3. Change in interpersonal relationships4. Loss of power5. Change in decision making approach6. Uncertainty or unfamiliarity or misinformation

7. Job security The major behavioral factors area) Decision styles symbolic processing of

a) is heuristic DSS and ANN are analytic

b ) N e e d f o r e x p l a n a t i o n E S p r o v i d e s e x p l a n a t i o n , A N N d o e s n o t ,D S S m a y provide partial explanation. Explanation can reduce resistance to change

c) Organizational climate some organizations lead and support innovations andnew technologies whereas other wait and lag behind in making changes

d) Organizational expectations over expectation can result in disappointmentsand

t e r m i n a t i o n o f i n n o v a t i o n . O v e r e x p e c t a t i o n w a s o b s e r v e d i n m o s te a r l y intelligent systems

e ) R e s i s t a n c e t o c h a n g e c a n b e s t r o n g i n M S S b e c a u s et h e i m p a c t s m a y b e s i g n i f i c a n t .

Performance of individual corporations:Out of many possible interpretations of a strategy an organization adopts in business, it isfound that a majority is concerned with competition between corporations.Competition means cultivating unique strengths and capabilities, and defending them againstimitation by other firms. Another alternative sees competition as a process linked to innovationin product, market, or technology. Strategic information systems theory is

concerned wi th the use o f i n fo rmat i on te chno lo gy to suppor t o r sh arpen ane nt er pr is e' s c om pe t i t i ve s t r a t e g y . C o m p e t i t i v e s t r a t e g y i s a nenterpr ise ' s p lan fo r ach iev ing sus ta inab le compet i t i ve advantage over , o r reducing the edge of, its adversaries. The performance of individual corporations is determinedby the extent to which they manage the following (as given by Porter) a) The bargaining powerof suppliers b) The bargaining power of buyerc) The threat of new entrants d) The threat ofsubstitute products And e) Rivalry among existing firms. Porters classic diagram representingthese forces is indicated below.


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There are two basic factors which may be considered to be adopted byorganization in their strategies: a) low cost b) Product differentiationE n t e r p r i s e c a n s u c c e e d r e l a t i v e t o t h e i r c o m p e t i t o r s i f t h e y p o s s es s s u s t a i n a b l ecompe t i t i ve advan t age i n e i t he r o f t hese t wo . Ano t he r impor t an t cons ide r a t i on i n positioning is 'competitive scope', or the breadth of the enterprise's target marketswithini t s i ndus t r y , i . e . t he range o f p roduc t va r i e t i es i t o f f e r s , t he d i s t r i bu t i on ch an ne l s it employs, the types of buyers it serves, the geographic areas in which itsells, and the array of related industries in which it competes. Under Porter's

framework, enterprises have four generic strategies available to them whereby theycan attain above average performance. They are:

a) Cost leadership b) Differentiation c) Cost focus And d) Focused differentiation. Portersrepresentation of them is indicated below


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According to Porter, competitive advantage grows out of the way an enterprise organizes andperforms discrete activities. The operations of any enterprise can be divided into aseries of activities such as salespeople making sales calls, service technicians performingrepairs, scientists in the laboratory designing products or processes, and treasurers raisingcapital. By performing these activities, enterprises create value for their customers. The ultimatevalue an enterprise creates is measured by the amount customers are willing to pay for itsproduct or services. A firm is profitable if this value exceeds the collective cost of performingall of the required activities. To gain competitive advantage over itsr i va l s , a f i rm mus t e i t he r p rov ide comparab le va lue t o t he cus t omer , bu t perform activit ies more efficiently than its competitors (lower cost), or performactivit ies in u n i q u e w a y t h a t c r e a t e s g r e a t e r b u y e r v a l u e a n dc o m m a n d s a p r e m i u m p r i c e (diff erent ia tion) . As per Bo rden 1964 , quotedin Wiseman 1988many differentiation bases can be classified as 4 Ps as given below:1 . P roduc t (qua l i t y , f ea t u res , op t i ons , s t y l e , b rand name, packag ing , s i zes, services, warranties, returns) 2. Price (list, discounts, allowances, payment period, credit terms) 3. Place (channels, coverage, locations, inventory, transport) And4. Promotion (advertising, personal selling, sales promotion, publicity).The various attributeslisted above can be sharpened the firms product by the support of a suitable informationtechnology

Q3. Compare various types of development aspect of Information System? Explain thevarious stages of SDLC? Development of Information Systems

Ans 3.) D e v e l o p m e n t a n d I m p l e m e n t a t i o n o f t h e M I S

Once the plan of MIS is made, the development of the MIS calls for determining thestrategy of development. As discussed earlier, the plan consists of various systemsand subsystems. The development strategy determines where to begin and in what sequencet he deve lopmen t can t ake p lace w i t h t he so le ob jec t i ve o f assu r i ng t heinformation support. The choice of the system or the subsystem depends on itspos it ion in the total MIS p la n, the s iz e of the syst em, the use r 's


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understanding of the systems and the complexi ty and i ts interface with othersystems. The designer first develops systems independently and starts integrating themwith other systems, enlarging the system scope and meeting the varying information needs.Determining the position of the system in the MIS is easy. The real problem is the degree ofstructure, and formalization in the system and procedures which determine the timingand duration of development of the system. Higher the degree of structuredness

and formalization, greater is the stabilization of the rules, the procedures, decisionmaking and the understanding of the overall business activity. Here, it is observedthat the user's and the designer's interaction is smooth, and their needs are clearlyunderstood and respected mutually. The development becomes a method of approachwith certainty in input process and outputs.

b) Prototype ApproachWhen the system is complex, the development strategy is Prototyping of theSystem. Prototyping is a process of progressively ascertaining the information needs,developing methodology, trying it out on a smaller scale with respect to the data and thecomplexity, ensur ing that it satisf ies the needs of the users , and assessthe problems of development and implementation. This process, therefore, identifies the

problem areas, inadequacies in the prototype vis--vis Fulfillment of the information needs. Thedesigner then takes steps to remove the inadequacies. This may call upon changingthe prototype of the system, questioning the information needs,streamlining the operational systems and procedures a nd mo ve us eri n t e rac t i on . I n t he p ro t o t yp ing app roach , t he des igne r ' s t ask becomesdifficult, when there are multiple users of the same system and the inputs they usea re used by some o t he r use rs as we l l . Fo r examp le , a l o t o f i npu t da t acomes f rom the purchase department, which is used in accounts and inventorymanagement. The attitudes of various users and the ir role as the originators ofthe data need to be developed with a high degree of positivism. It requires, of allpersonnel, to appreciate that the information is a corporate resource, and all haveto cont r ibute as per the des ignated ro le by the des igner to fu l f i l l the

corporate information needs. When it comes to information the functional, thedepartmental, the personal boundaries do not exist. This calls upon each individualto comply with the design needs and provide without fail the necessary data inputswhenever required as per the specification discussed and finalized by the designer. Bringingthe multiple users on the same platform and changing their attitudes towardInformation, as a corporate resource, is the managerial task of the systemdesigner. The qualification, experience, knowledge, of the state of art, and anunderstanding of theco rpo ra t e bus iness , he lps cons ide rab l y , i n ove rcom ing t he p rob lem o f chang ing th e attitudes of the multiple users and the originators of the data.c) Life Cycle ApproachThere are many systems or subsystems in the MIS which have a life cycle, that is,

they have birth and death. Their emergence may be sudden or may be a part of thebusiness need, and they are very much structured and rule based. They have 100% clarity ofinputs and their sources, a definite set of outputs in terms of the contents andformats. These details more or less remain static from the day the system emergesand remains in that static mode for a long time. Minor modifications or changes dooccur but they are not significant in terms of handling either by the designer or theuser of the system. Such systems, therefore, have a life and they can be developed in asystematic manner, and can be reviewed after a year or two, for significant modification, if any


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Examples of such systems are pay roll, share accounting, basic financialaccounting, finished goods accounting and dispatching, order processing, and soon. These systems have a fairly long duration of survival and they contribute in a big way assources of data to the Corporate MIS. Therefore, their role is important and needs tobe designed from the view point as an interface to the Corporate MIS.T able below shows the

difference between the two approaches helping the designer selectan approach.


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d) Implementation of the Management Information SystemT h e i m p l e m e n t a t i o n o f t h e s y s t e m i s a m a n a g e m e n t p r o c e s s. I t b r i n g s a b o u t organizational change it affects people and changes their workstyle. The process evokes behavior response which cou ld be either favorableor unfavorable depending upon the strategy of system implementation. In the process ofimplementation, the system designer acts as a change agent or a catalyst. For a successfulimplementation he has to handle the human factors carefully. The user of the system has acertain fear complex when a certain cultural work change is occurring. The first andthe foremost fear is about the security to the person if the changeover fromt he old to new is not

a smooth one. Care has to be taken to assure the user that such fears are baseless and theresponsibility, therefore, rests with the designer. The second fear is about the role played bythe person in the organization and how the change affects him.On many occasions,the new role may reduce his importance in the organization, the work design maymake the new job impersonal, and a fear complex may get reinforced that thecareer prospects may be affected. There are certain guidelines for the systemsdesigner for successful implementation of the system. The system designer shouldnot question beyond a limit the information need of the user.1. Not to forget that his role is to offer a service and not to demand terms.

2.Remember that the system design is for the use of the user and it is not thedesigner's prerogative to dictate the

des ign fea tur es. In sho r t , the des i gne r sho uld res pect the demands of theuser.

3. Not to mix up technical needs with the information needs. He should try todevelop suitable design with appropriate technology to meet the information needs. Thedesigner should not recommend modifications of the needs, unless technically infeasible


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4. Impress upon the user the global nature of the system design which is required to meet the

current and prospective information need.

5. Not to challenge the application of the information in decision making. It is the

sole right of the user to use the information the way he thinks proper.

6. Impress upon the user that the quality of information depends on the quality of input.

7. Impress upon the user that you are one of the users in the organization and that

the information is a corporate resource and he is expected to contribute to the development

of the MIS.

8. Ensure that the user makes commitment to all the requirements of the system

design specifications. Ensure that he appreciates that his commitments contribute largely to the

quality of the information and successful implementation of the system.

9. Ensure that the overall system effort has the management's acceptance.

10. Enlist the user's participation from time to time, so that he is emotionally involved in the

process of development.

11. Realize that through serving the user, he is his best guide on the complex path

of development.

12. Not to expect perfect understanding and knowledge from the user as he may be

the user of a Non computerized system. Hence, the designer should be prepared to change the

system specifications or even the design during the course of development.

13. Impress upon the user that t he change, which is easi ly possible in manual

system, is not as easy in the computer system as it calls for changes in the programs at cost.

14. Impress upon the user that perfect information is nonexistent His role therefore still has an

importance in the organization.

15. Ensure that the other organization problems are resolved first before the MIS is taken for

development.

16. Conduct periodical user meetings on systems where you get the opportunity to

know the ongoing difficulties of the users.

17. Train the user in computer appreciation and systems analysis as his perception of the

c o m p u t e r i z e d i n f o r m a t i o n s y s t e m w i l l f a l l s h o r t o f t h e d e s i g n e r ' s e

x p e c t a t i o n . I m p l e m e n t a t i o n o f t h e M I S i n a n o r g a n i z a t i o n i s a p r o c

e s s w h e r e o r g a n i z a t i o n a l transformation takes place. This change can occur in a

number of ways. The Lewin's model suggests three steps in this process. The first

step is unfreezing the organization to make the people more receptive and interested in the

change. The second step is choosing a Course of action where the process begins and reaches

the desired level.o f s t ab i l i t y , and t he t h i rd s t ep i s Re f reez ing ,


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where the change is consolidated and equilibrium is reinforced. Many a times, This

p rocess i s imp lemen t ed t h rough an ex t e rna l change agen t , such as a

co n su lt a nt playing the role of a catalyst. The significant problem in this task is the

resistance to change. The resistance can occur due to three reasons, viz., the

factors in ternal to the users of in format ion, the fac tors inherent in the

design of the system and the factors arising out of the interaction between thesystem and its users. The problem of rsistance

can be hand led t h rough educa t i on , pe rsuas ion , and pa r t i c i pa t i on . Th i s i t s

elf can be achieved by improving the human factors, and providing incentives to

the users, and eliminating the organizational problems before implementing the system.

SDLCSys t em deve lopmen t cyc le s t ages a re somet imes known as sys t em s t udy .Sys t em concep t s wh i ch a re impor t an t i n deve lop ing bus iness i n f o rma t i onsys tems ex pe d i t e problem solving and improve the quality of decision making. T h esys t em ana l ys t has t o do a l o t i n t h i s connec t i on . They a re con f ron t edwi t h t he challenging task of creating new systems and planning major changes in theorganization .The system analyst gives a system development project, meaning anddirection.The t yp i ca l b reakdown o f an i n f o rma t i on sys t ems l i f e cyc le i nc ludes a f easib il it y st ud y, requirements, collection and analysis, design, prototyping,implementation, validation, testing and operation. It may be represented in the formof a block diagram as shown below:


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a) Feasibility studyIt is concerned with determining the cost effectiveness of various alternatives in thedesigns of the information system and the priorities among the various system components.- 13

b) Requirements, collec tion and analysisIt is concerned with understanding the mission of the information systems, that is,

the application areas of the system within the enterprise and the problems that the systemshould solve.

c) DesignIt is concerned with the specification of the information systems structure. Thereare two types of design: database design and application design. The databasedesign is the design of the database design and the application design is the design of theapplication programs.

d) Prototyping A prototypeis a simplified implementation that is produced in order to verify in practice that the previousphases of the design were well conducted.)

ImplementationIt is concerned with the programming of the final operational versiono f t he i n f o rma t i on sys t em. I mp lemen t a t i on a l t e rna t i ves a re ca re f u l l y ve r i f ies andcompared.

f)Validation and testingIt is the process of assuring that each phase of the development p rocess i s o faccep t ab le qua l i t y and i s an accu ra t e t r ans f o rma t i on f rom t hepr ev io us phase

Q4. Compare& Contrast E-enterprise business model withtradit ional business organization model? Explain how in E-enterprise manager role &responsibilities are changed? Explain how manager is a knowledge worker in E-enterprise?

Ans 4:-

Managing the E enterpriseDue t o I n t e rne t capab i l i t i es and web t echno logy , t r ad i t i ona l bus iness o rgan i za t i on de f i n i t i on has undergone a change where scope o f t he en t e rp r i se

now inc ludes o t he r company l oca t i ons , bus iness pa r t ne rs , cus t omersand vendors. It has no geographic boundaries as it can extend its operations whereInternet works. All this is possible due to Internet and web moving traditional paperdriven organization to information driven Internet enabled E businessenterprise. E business enterprise is open twenty four hours, and beingindependent, managers, vendors customers transact business anytime from anywhere. Internet capabilities have given E business enterprise a cutting edge capabilityadvan t age t o i nc rease t he bus iness va lue . I t has opened new c hanne l s o f business as buying and selling can be done on Internet. It enables to reach new


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markets across the world anywhere due to communication capabilities. It hasempowered customers and vendors / suppliers through secured access to information toact, wherever necessary. The cost of business operations has come down significantly due tothe elimination of paper driven processes, faster communication and effectivecollaborative working. The effect of these rad ica l changes is the reduct ion inadministrative and management overheads, reduction in inventory, faster delivery of

goods and services to the customers. In E bus iness enterp rise tradit ional peopleorganization based on 'Command Control'p r i n c i p l e i s a b s e n t . I t i s r e p l a c e d b y p e o p l e o r g a n i z a t i o n t h a t i s

e m p o w e r e d b y information and knowledge to perform their role. They aresupported by information systems,application packages, and decision support systems. It is no longerfunctional, product, and project or matrix organization of people but E organizationwhere peop le work in ne twork env i ronment as a team or work group inv i r t ua l mode . E bus iness enterprise is more process driven Technology enabled anduses its own information and knowledge to perform. I t is lean in number, f lat instructure, broad in scope and a learning organization. In E business enterprise,most of the things are electronic, use digital technologies and work on databases,

knowledge bases, directories and document repositories. The business processes areconducted through enterprise software like ERP, SCM, and CRM supported by data warehouse,decision support, and knowledge management systems. Today mosto f t he bus iness o rgan i za t i ons a re us ing I n t e rne t t echno logy , ne t work , andwi re le ss technology for improving the business performance measured in terms of cost,

efficiency, competitiveness and profitability. They are using E business,

EcommerceSo lu t i ons t o reach f a raway l oca t i ons t o de l i ve r p roduc t and se r v i ces . Theenterprise solutions like ERP, SCM, and CRM run on Internet (Internet / Extranet)& Wide Area Network (WAN). The business processes across the organization andoutside run on Etechnology platform using digital technology. Hence today's business firm is

also called E enterprise or Digital firm. The paradigm shift to E enterprise Has broughtfourtransformations, namely: Domestic business to global business. Industrial manufacturingeconomy to knowledge based service economy. Enterprise Resource Management toEnterprise Network Management. Manua l documen t d r i ven bus inesspr oc es s to pap er le ss , au to ma te d, ele ct ro ni ca ll y transacted business process.

These transformations have made conventional organization design obsolete. The basisof conventional organization design is command & control which is nowcol labora tes & cont ro l . T h is Chang e h as a f fec ted the organ iza t ionstr uct ur e, sco pe of op er at io ns, reporting mechanisms, work pract ices,workflows, and bus iness processes at large. The comparison between conventionalOrganization design and E enterprise is summarized in Table


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Comparison between Conventional Design and E OrganizationIn E enterprise, business is conducted electronically. Buyers and sellers through Internet d r i vet he marke t and I n t e rne t based web sys t ems . Buy ing and se l l i ng i spossible on Internet. Books, CDs, computer, white goods and many such goodsare bought and sold on Internet. The new channel of business is well known- 16 -

Case Study: Information system in a restaurant.

Case Summary: A waiter takes an order at a table, and then enters it online via oneof the six terminals located in the restaurant dining room. The order is routed to aprinter in the appropriate preparation area: the cold item printer if it is a salad, thehot-item printer if it is a hot sandwich or the bar printer if it is a drink. A customersmeal check-listing (bill) the items ordered and the respective prices are automaticallygenerated. This ordering system eliminates the old three-carbon-copy guest check system aswell as any problems caused by a waiters handwriting. When the kitchen runs out of a fooditem, the cooks send out an out of stock message, which will be displayed on thedining room terminals when waiters try to order that item. This gives the waitersfaster feedback, enabl ing them to gi ve be t te r ser vic e t o t he cus tom er s.Ot he r sy st em fe at ur es ai d ma na ge me nt in th e planning and control of theirrestaurant business. The system provides up-to-the-minute information on the food items

ordered and breaks out percentages showing sales of each item versus total sales.Th i s he lps management p lan menus accord ing to cus tomers tastes. Thesystem also compares the weekly sales totals versus food costs, allowing planningfor tighter cost controls. In addition, whenever an order is voided, the reasons forthe void are keyed in. This may help later in management decisions, especially if the avoidsconsistently related to food or service. Acceptance of the system by the users isexceptionally high since the waiters and waitresses were involved in the selectionand design process. All potential users were asked to give their impressionsand ideas about the various systems available before one was chosen.


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Questions to be analysed:1. In the light of the system, describe the decisions to be made in the area ofs t ra teg ic p lann ing , manager ia l cont ro l and opera t iona l cont ro l? What in fo r ma t i on wo u ld you require to make such decisions?2. What would make the system a morecomplete MIS rather than just doing transaction processing?3. Exp la in the probab le ef fectsthat making the system more formal would have on the customers and the

management.Solution:1 . A managemen t i n f o rma t i on sys t em (M I S) i s an o rgan i zed comb ina t i ono f peop le ,ha rdware , commun ica t i on ne t works and da t a sou rces t ha t co l l ec t s , t r ans f o rms a nd distributes information in an organization. An MIS helps decision making byproviding timely, relevant and accurate information to managers. The physicalcomponents of an MIS include hardware, software, database, personnel and procedures.Managemen t i n f o rma t i on i s an impor t an t i npu t f o r e f f i c i en t pe r f o rmance o f va r io us managerial functions at different organization levels. The information systemfac i l i ta tesdec is ion making. Management funct ions inc lude p lanning, cont ro l l ing and dec i s i on mak ing . Dec i s i on mak ing i s t he co re o f managemen t and

a ims a t se lec t i ng the bes t - 21 -

MB0047-Management Information System alternative to achieve an objective. The decisionsmay be strategic, tactical or technical. Strategic dec isions are character ized byuncertainty. They are future oriented and relate directly to planning activity.Tactical decisions cover both planning and controlling.Techn i ca l dec i s i ons pe r t a in t o imp lemen t a t i on o f spec i f i c t asks t h rough ap pro p r i a t e technology. Sales region analysis, cost analysis, annual budgeting, and relocationanalysis are examples of decision-support systems and management information systems.There are 3 areas in the organization. They are strategic, managerial andoperational control. Strategic decisions are characterized by uncertainty. The decisions to bemade in the area of strategic planning are future oriented and relate directly toplanning activity. Here basically planning for future that is budgets, target markets,policies, objectives etc. is done. This is basically a top level where up-to-the minuteinformation on the food items or de re d an d br ea ks ou t pe rc en ta ge s sh ow in g sa le sof each item versus total sales is provided. The top level where strategic planning isdone compares the weekly sales totals versus food costs, allowing planning for tighter costcontrols. Executive support systems function at the strategic level, support unstructureddecision making, and use advanced graphics and communications. Examples of executivesupport systems include sales trend forecasting, budget forecasting, operating plandevelopment , budget forecast ing , pro fit planning, and manpower planning. Thedecisions to be made in the area of managerial control are largely dependent uponthe information available to the decision makers. It is basically a middle levelwhere planning of menus is done and whenever an order is voided, the reasons forthe void are keyed in which later helps in management decisions, especially if the voids arerelated to food or service. The managerial control that is middle level also gets customerfeedback and is responsible for customer satisfaction. The decisions to be made in the area ofoperational control pertain to implementation of specif ic tasks through appropriatetechnology. This is basically a lower level where the waiter takes the order andenters i t onl ine v ia one of the s ix terminals located in the restaurant diningroom and the order is routed to a printer in the appropriate preparation area. The itemsordered list and the respective prices are automatically generated. The cooks send


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out of stock message when the kitchen runs out of a food item, which is basicallydisplayed on the dining room terminals when waiter tries to order that item. Thisbasically gives the waiters faster feedback, enabling them to give better service tothe customers. Transaction processing systems function at the operational level ofthe organization. Examples of transaction processing systems include ordertracking , order processing, machine control, plant scheduling, compensation, and securities

t rading. The informat ion requi red to make such dec is ion must be such thati t h ig h l ig h t s t he trouble spots and shows the interconnections with the other functions. Itmust summarize all information relating to the span of control of the manager. The informationrequired to make these decisions can be strategic, tactical or operational information.- 22 -

Advantages of an online computer system:1. Eliminates carbon copies2. Waiters handwriting issues3. Out-of-stock message4. Fasterfeedback helps waiters to service the customersAdvantages to management:1. Sales figures and percentages item-wise2. Helps in planning the menu3. Cost accountingdetails2. If the management provides sufficien t incentive for efficiency and resu lts to

the ir cus tome rs , i t wou ld make the sys te m a mo re compl e te MIS and sot he M I S shou ld suppor t t h i s cu l t u re by p rov id ing such i n f o rma t i on wh i chwil l aid the promotion of eff iciency in the management services and operationalsystem. It is also necessary tos t udy t he keys t o success f u l Execu t i ve I n f o rma t i on Sys t em (E I S) deve lopme nt an d operation. Decision support systems would also make the system acomplete MIS as it constitutes a class of computer-based information systemsincluding knowledge-based systems that support decision-making activities. DSSs serve themanagement level of the organization and help to take decisions, which may berapidly changing and not easily specified in advance. Improving personal efficiency,expediting problem solving (speed up the progressof p r o b l e m s s o l v i n g i n a n o r g a n i z a t i o n ) , f a c i l i t a t i n g i n t e r p e r s o n a lc o m m u n i c a t i o n , p r o m ot i n g l ea r n i ng a n d tr a i n i ng , i n cr e a s i ng o r g an i z a t io nal co nt ro l, ge ne ra ti ng ne w evidence in support of a decision, creating acompetitive advantage over competition, encouraging exploration and discovery on thepart of the decision maker, revealing new approaches to thinking about the problemspace and helping automate the managerial processes would make the system acomplete MIS rather than just doing transaction processing.3. The managementsystem should be an open system and MIS should be so designedt ha t i t h i gh l i gh t s t he c r i t i ca l bus iness , ope ra t i ona l , t echno log i ca l and env ironmen t a l changes t o t he conce rned l eve l i n t he managemen t , so t ha t t heac t i on can be t aken t oc o r r e c t t h e s i t u a t i o n . T o m a k e t h e s y s t e m a s u c c e s s , k n o w l e d g e wi l l h a v e t o b e formalized so that machines worldwide have a shared and commonunderstanding of the information provided. The systems developed will have to beable to handle enormous amounts of information very fast.

A n o rg an i za t ion o pe ra te s i n an ever -inc rea s ing comp et i t ive, g lo bal env i ron men t . Operating in a g lobalenvironment requires an organization to focus on the efficient execution of itsprocesses, customer service, and speed to market. To accomplish these goals, theorganization must exchange valuable information across different functions, levels,and business units. By making the system more formal, the organization can more- 23 -


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MB0047-Management Information System efficiently exchange information among itsfunct ional areas, bus iness uni ts, suppl iers, and customers. As the transactions are takingplace every day, the system stores all the data which can be used later on when the hotel is inneed of some financial help from financial institutes or banks. As the inventory is alwaysentered into the system, any frauds can be easily taken care of and if anything goes missingthen it can be detected through the system.

Q5. What do you understand by service level Agreements (SLAs)? Why arethey needed? What i s the role of CIO in drafting these? Explain the varioussecurity hazards faced by an IS?

Ans5:-

A service level agreement(frequently abbreviated as SLA) is a part of a service contract where the level of service isformally defined. In practice, the term SLA is some t imes used to refer to the

con t rac t ed de l i ve ry t ime (o f t he se rv i ce ) o r pe r f o rmance . As anexample, internet service providers will commonly include service level agreementswithin the terms of their contracts with customers to define the level(s) of service beings o ld i np la in l anguage t e rms ( t yp i ca l l y t he (SLA) w i l l i n t h i s case have atechnical definition in terms of MTTF, MTTR, various data rates, etc.)A service levelagreement (SLA) is a negotiated agreement between two parties where one is thecustomer and the other is the service provider. This can be a legally binding formalor informal "contract" (see internal department relationships). Contracts between the serviceprovider and other third parties are often (incorrectly) called SLAs as the level of servicehas been set by the (principal) customer, there can be no"agreement" be tween th i rd par t ies ( these a greeme nts are s imply a "con t ract"). Operating Level Agreements or OLA(s), however, may be used by internal groups to

support SLA(s).The SLA records a common understanding about services, priorities,responsibilities, guarantees, and warranties. Each area of service scope should have the"level of service "defined. The SLA may specify the levels of availability,serviceability, performance, operation, or other attributes of the service, such asbilling. The "level of service" can also be specified as "target" and "minimum,"which allows customers to be informed what to expect (the minimum), whilst providing ameasurable (average) target value that shows the level of organization performance. In somecontracts, penalties may be agreed upon in the case of non-compliance of the SLA (but see"internal" customers below). It is impor tan t to note tha t the "ag reement" relates tothe services the customer receives, and not how the service provider delivers that service.SLAs have been used since late 1980s by fixed line telecom operators as part oftheir contracts with their corporate customers. This practice has spread such that

now i t is co mmo n fo ra cus t omer t o engage a se rv i ce p rov ide r by i nc lud ing a se rv i ce - l eve lagreement in a wide range of service contracts in practically all industriesand ma

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