The University of Manchester University Language Centre Area of study: Pre-sessional Course (PS5) Location of Study: Manchester

The Management Information System for

Manufacturing Supply Chain in China

Yongyan Zhu Supervisor: Barbara Golijanek

Date: 30 August 2013

List of Contents

1. Introduction....................................................................................................1 2. The Management Information System: An Overview.....................................3 2.1 The Essential Functions of an MIS..........................................................3 2.2 The Relationship between MIS and Organizations.................................5 3. The Manufacturing Supply Chain in China: An Overview...............................6 3.1 The Functionality of The MIS for Manufacturing Supply Chain..............7 3.2 Application of model for MIS..................................................................8 3.3 How to design an MIS in Manufacturing Enterprises in China.............10 4. Conclusion....................................................................................................11 References........................................................................................................13

1. Introduction

In recent years, manufacturing industry in China has risen rapidly and China has become one of the biggest manufacturing countries in the world. However, Chinese manufacturing industry is still in the low position of vertical division system in the world manufacturing industry. A low degree of informationization and weak

competitiveness of Chinese manufacturing supply chain is a crucial factor for its inability to fit informationization demand of supply chain management in modern manufacturing. Therefore, it is necessary to develop a management information system for manufacturing supply chain.

Supply chain management plays a very important role in the effective delivery of products or services. The strategy of supply chain integration can reduce costs, shorten lead times and improve service levels. However, many enterprises often consider the supply chain as a cost rather than as a potential mean to identify products or services. In fact, enterprises can improve their supply chain through optimizing their distribution networks and distribution channels, reducing inventory and speeding up inventory turnover. To

accomplish this, the most crucial factors are the real-time, availability and better integration of relevant information and the improvement of visibility for instance information in the overall supply chain in each enterprise. As a result, management

information system (MIS) plays an essential role in this process.

The aim of this paper is to critically demonstrate the situation of the management information system for manufacturing supply chain in China. Chapter one explores the essential functions of MIS and the relationships between MIS and enterprises and the third section focuses on MIS application in manufacturing enterprises in China as a key factor for development. This paper concludes by summarizing the main points and by identifying the prospect of the application of MIS in the manufacturing supply chain.

2.

The

Management

Information

System:

An

Overview

Lucey (2004: 2) illustrates that an MIS can be defined technically as a system to convert data from internal and external sources into information and to communicate that information, in an appropriate form, to manager at all levels in all functions to enable them to make timely and effective decisions for planning, directing and controlling the activities for which they are responsible. Throughout this paper the term MIS will refer to taking a productionorientated view instead of being concerned with other technical facets of computer based systems.

2.1 The Essential Functions of an MIS Laudon and Laudon (2011:7) indicate that an MIS should consist of management information about significant people, places, and things within the organization or in the environment surrounding it (see Figure 1).

Customers

ENVIRONMENT ORGANIZATION MIS

Processing Classify Arrange Calculate

Suppliers

Regulatory Agencies

Competitors Output

Input

Feedback

Figure 1: Functions of an MIS (Laudon and Laudon, 2011).

To make decisions, control operations, analyze problems and create new products or services. Organizations need an MIS to produce information which contains three activities -- input, processing and output. Input means collecting raw data from its external

environment or from within the organization. Processing transforms the raw input into a more significant form. Output conveys the processed data to users or to the next process. MIS also needs feedback, which is the process during which the output is returned to its input in order to regulate its further output.

2.2 The Relationship between MIS and Organizations Organizations face different types of environment with varying rates of change. An organization will develop a fixed and mechanistic control system with a requirement for more formal information in specified form if it is in a peaceful, relatively invariable environment. However, since it is difficult to define information inputs and outputs rigidly in a confused and volatile external environment, an adaptive and reliable MIS is fairly necessary (Lucey, 2004:107). Studies by Earl and Hopwood (1986) suggested that the most successful organizations are those that retain a significant level of informality in their organizational structure and the way they handle

information.

The MIS should suit each individual part of the organization and must be designed to complement the control and operating characteristics of the different sections, departments and functions. The extent of centralization, decentralization and the spread of decision making throughout the organization also have implications for MIS design.

3. The Manufacturing Supply Chain in China: An

Overview

At present, the research about manufacturing supply chain in China has just begun. In the past, domestic enterprises were mainly concerned about the level of supplier and manufacturer, which is just a short part of supply chain. Studies were also mainly confined to the selection and positioning of suppliers, cost reduction, quality control, guarantee of continuity of supply chain and other issues, which did not consider suppliers, distributors, retailers and users as a whole and the strategic supply chain management. Therefore, we can say that at present the enterprises in China have not formed the supply chain with real significance. However, we should appreciate that in recent years with the increase in enterprises supporting by multinational companies, some enterprises in China gradually begin to operate unconsciously according to the concept of the requirements of supply chain management.

3.1 The Functionality of The MIS for Manufacturing Supply Chain Bi (1996) states that the MIS for Manufacturing Supply Chain builds on four levels of functionality: 1) transaction activity functionality, 2) business control functionality, 3) coordination functionality, and 4) decision analysis and strategic planning.

A. Transaction activity functionality Transaction assignment, customer activities order mainly include: shipping, order entry, inventory and by

selection, A

pricing, is

invoicing,

inquiry.

transaction

system

characterized

formalized rules, procedures, and standardized communications; a large volume of transaction; and an operational, day-to-day focus (Wibowo et al., 1999).

B. Business control functionality The MIS should control the logistical service level, performance measurement and resource utilization. It should build on the perfect index system to evaluate the planning and performance.

Information systems play an essential role of controlling and strengthening the efficacy of control (Huang et al., 2010).

C. Coordination functionality In logistical operation, it is beneficial to improve the timeliness, quality and efficiency through strengthening the information

integrated and information circulated. The MIS plays an important role in coordinating operation such as order processing, order assignment, inventory management, warehouse operation and transportation.

D. Decision analysis and strategic planning Decision analysis focuses on software tools to assist management in identifying, evaluating and comparing strategic to improve

effectiveness. Strategic planning focuses on information to evaluate and refine logistics strategy (Huang et al., 2010).

3.2 Application of model for MIS A situation that can be used to illustrate the model is the MIS situation that exists between China, Hong Kong, and the final destination countries such as the USA or Europe (Humphreys et al., 2001). By applying MIS services, local enterprises in Hong Kong are able to control over their suppliers in mainland China, which can be requested to adopt MIS for communication and sharing information.

This can stabilize the performance of suppliers from mainland China, which will lead to a stable input to local enterprises in Hong Kong. Besides, the cost of searching, switching and monitoring the suppliers in mainland China can also be reduced with the aid of an MIS. The introduction of an MIS service to downstream foreign buyers will seek to minimize a certain level of undesirable instability by increasing the bargaining power over the foreign customers, or conversely decreasing the power of foreign customers over Hong Kong enterprises. For example, some Hong Kong trading firms attempt to attract foreign customers by providing free Internet access. At the beginning the customers may not be willing to set orders on the Internet, but by providing free hardware and free Internet access, Hong Kong trading firms can encourage foreign customers to explore what is on offer: update product information, place online orders at special discount based on a purchasing profile maintained by the MIS, and even interactively monitor the status of shipments. This type of strategic MIS can also help to lock the customers in and at the same time build an entry barrier to competitors. (Humphreys et al., 2001)

3.3 How to design an MIS in Manufacturing Enterprises in China In order to design a successful MIS to fit its business plan, enterprises should draw up an information system plan. This plan should illustrate how to achieve the organizations goal and also state the development direction, rationale, implement strategy and budget clearly (Thompson et al., 1997). Organization-wide

information requirements that must be addressed by the plan can be elicit with enterprise analysis and critical success factors (CSFs).

Besides, people also need to identify the core activities in the systems development process. Laudon and Laudon (1991: 364) reported that the core activities in systems development are: systems analysis, system design, programming, testing, conversion and production and maintenance. Systems analysis is the study and analysis of problems of existing systems and the identification of requirement for their solution. Systems design provides the

specifications for an information system solution, showing how its technical and organizational components fit together.

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4. Conclusion

This

paper

has

given

an

account

of

essential

definition

of

management information system with the aspect of its functions in a manufacturing enterprises. Besides, the relationship between MIS and organization is clarified according to the external environment as well as the interior structure. In response to the four levels of functionality of manufacturing supply chain, this paper also takes the supply chain between China, Hong Kong, and the final destination countries as an example of the application of model for MIS. Finally, a larger amount of factors need to be considered, an information system plan need to be elaborated and the core activities in the systems development process need to be identified in order to design a effective MIS in manufacturing enterprises in China.

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One of the future directions of the development of MIS is the design of personalized service. Personalized service is a targeted service way which is implemented on the basis of the user's settings. It provides and recommends relevant information to meets the demands of users by means of various sources of collecting, sorting and classifying resources. In general, personalized service may break the traditional passive service model, and take the advantage of a variety of resources in order to meet the needs of individual users for the purpose of comprehensive services initiatively. In the network environment, personalized service is a way of network information services. To carry out the network personalized service is an important method of improving the quality of information service and the efficiency in the use of information resources, which highlights the initiative of information service and develops a new information service ideas. To sum up, personalized service breaks the traditional passive service model, takes the advantages of network resources and a variety support of software, and also meets the needs of individual users for the purpose of

comprehensive services.

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References

Lucey, T. (2004). Management Information Systems. CengageBrain. com.

Laudon, K.C., & Laudon, J.P. (2011). Essentials of Management Information Systems. Boston: Prentice Hall.

Earl, M.J., & Hopwood, A.G. (1986). From Management Information to Information Management (pp. 315-325). North-Holland

Publishing Co..

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Bi, S. (1996). Management Information System Analysis and Design. Beijing: China Machine Press.

Wibowo, A.M., Ramachandran, G., Kui, L.F., Fei, S., & Iswanto, Y. (1999). Supply Chain Information System. National University of SingaporeGraduate School of Computing.

Huang, W., & Zhao, H., & Huang, L., & Du, W. (2010). Management Information System Applied in The Logistics. 2010 International Conference on Intelligent Computation Technology and Automation. Humphreys, P.K., Lai, M.K., & Sculli, D. (2001). An Inter-

organizational Information System for Supply Chain Management. International Journal of Production Economics, 70(3), 245-255.

Thompson, S.H.T., William, R.K. (1997). Integration between Business Planning and Information Approach. Systems Journal of Planning: an

Evolutionary-contingency

Management

Information Systems 14, no. 1.

Laudon, K.C., & Laudon, J.P. (1991). Business Information Systems. Dryden Press.

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