Management Information

System
PepsiCo Company Pakistan - Final Project
Submitted To: Ms Jaweria Manzoor
Compiled By:
Farah Zaka
Sana Akbar
Sana Chaudhry
Sania Pervaiz
Tehmina Rasheed
Zoya Ishaq

Dated: 29th November 2010

What is Information System?

An information system (IS) is any combination of information technology and
people's activities using that technology to support operations,
management, and decision-making. In a very broad sense, the term
information system is frequently used to refer to the interaction between
people, algorithmic processes, data and technology. In this sense, the term is
used to refer not only to the information and communication technology
(ICT) an organization uses, but also to the way in which people interact with
this technology in support of business processes.

So in short it is an information system that collects, processes, stores,

analyses and disseminates information for a specific purpose. The basic
components of computer based information system are as follow:

Hardware
Software
Data

 Network
Procedure
People

What is Management Information System?

Definition: MIS refers broadly to a computer-based system that provides
managers with the tools for organizing, evaluating and efficiently running
their departments. In order to provide past, present and prediction
information, an MIS can include software that helps in decision making, data
resources such as databases, the hardware resources of a system, decision
support systems, people management and project
management applications, and any computerized processes that enable the
department to run efficiently.
Within companies and large organizations, the department responsible for
computer systems is sometimes called the MIS department.
The development and management of information technology tools assists
executives and the general workforce in performing any tasks related to the
processing of information. MIS and business systems are especially useful in
the collation of business data and the production of reports to be used as
tools for decision making.
Commonly, MIS are used within organizations to allow many individuals to
access and modify information. In most situations, the management
information system mainly operates behind the scenes, and the user
community is rarely involved or even aware of the processes that are
handled by the system.

EXAMPLES
A computer system used to process orders for a business could be
considered a management information system because it is assisting users
in automating processes related to orders. Other examples of modern
management information systems are websites that process transactions for
an organization or even those that serve support requests to users. A simple
example of a management information system might be the support website
for a product, because it automatically returns information to the end user
after some initial input is provided.
Online bill pay at a bank also qualifies as a management information system
when a bill is scheduled to be paid, the user has provided information for
the system to act against. The management information system then
processes the payment when the due date approaches. The automated
action taken by the online system is to pay the bill as requested. Since the
bills within an online bill pay system can be scheduled to be automatically
paid month after month, the user is not required to provide further
information. Many times, the bill pay system will also produce an email for
the user to let him know that the action has occurred and what the outcome
of the action was.
Many people use management information systems every day without
thinking about the actual system they are using. The individual will see a
website and enter information with the expectation that a specific action will
happen; these websites, just like the accounting systems used by
large corporations, act as management information systems to automate the
process.
Applications of MIS

With computers being as ubiquitous as they are today, there's hardly any
large business that does not rely extensively on their IT systems.
However, there are several specific fields in which MIS has become
invaluable.
Strategy Support
While computers cannot create business strategies by themselves they can
assist management in understanding the effects of their strategies, and help
enable effective decision-making.

MIS systems can be used to transform data into information useful for
decision making. Computers can provide financial statements and
performance reports to assist in the planning, monitoring and
implementation of strategy.
MIS systems provide a valuable function in that they can collate into
coherent reports unmanageable volumes of data that would otherwise be
broadly useless to decision makers. By studying these reports decisionmakers can identify patterns and trends that would have remained unseen if
the raw data were consulted manually.
MIS systems can also use these raw data to run simulations hypothetical
scenarios that answer a range of what if questions regarding alterations in
strategy. For instance, MIS systems can provide predictions about the effect
on sales that an alteration in price would have on a product. These Decision
Support Systems (DSS) enable more informed decision making within an
enterprise than would be possible without MIS systems.
Data Processing
Not only do MIS systems allow for the collation of vast amounts of business

data, but they also provide a valuable time saving benefit to the workforce.
Where in the past business information had to be manually processed for
filing and analysis it can now be entered quickly and easily onto a computer
by a data processor, allowing for faster decision making and quicker reflexes
for the enterprise as a whole.
Management by Objectives
While MIS systems are extremely useful in generating statistical reports and
data analysis they can also be of use as a Management by Objectives (MBO)
tool.
MBO is a management process by which managers and subordinates agree
upon a series of objectives for the subordinate to attempt to achieve within a
set time frame. Objectives are set using the SMART ratio: that is, objectives
should be Specific, Measurable, Agreed, Realistic and Time-Specific.
The aim of these objectives is to provide a set of key performance indicators
by which an enterprise can judge the performance of an employee or project.
The success of any MBO objective depends upon the continuous tracking of
progress.
In tracking this performance it can be extremely useful to make use of an
MIS system. Since all SMART objectives are by definition measurable they
can be tracked through the generation of management reports to be
analyzed by decision-makers.

Why are we focusing attention on developing MIS?

 The information explosion growing base of knowledge workers

The rapid pace of change(globalization, rapid social changes,
legislative changes, downloading, funding cuts, job losses, tax reforms
and so on)
The increasing complexity of Management (demands on quality,
competitiveness, timely delivery, etc.)
The interdependence of organization units (finance, family welfare,
fund-raising, personnel, etc.)
The improvement of productivity (better outreach, more clients, more
programs, better accuracy, etc.)
The availability of computers for End-users(easy access, hands on
service, wide literacy and interest)
The recognition of information as a resource

Benefits of MIS

Effective management information systems are needed by all business

organization because of the increased complexity and rate of change of
todays business environment. For Example, Marketing manager need
information about sales performance and trends, financial manger returns,
production managers needs information analyzing resources requirement
and worker productivity and personnel manager require information
concerning employee compensation and professional development? Thus,
effective management information systems must be developed to provide
modern managers with the specific marketing, financial, production and
personnel information products they required to support their decision
making responsibilities.
An MIS provides the following benefit:
1. It facilitates planning: MIS improves the quality of plans by providing
relevant information for sound decision making. Due to increase in the size

and complexity of organizations, managers have lost personal contact with

the scene of operations.
2. It minimizes information overload: MIS change the larger amount of data
in to summarized form and there by avoids the confusion, which may arise
when managers are flooded with detailed facts.
3. MIS Encourages Decentralization: Decentralization of authority is possible
when there is a system for monitoring operations at lower levels. MIS is
successfully used for measuring performance and making necessary change
in the organizational plans and procedures.
4. It brings Co ordination: MIS facilities integration of specialized activities by
keeping each department aware of the problem and requirements of other
departments. It connects all decision centers in the organization.
5. It makes control easier: MIS serves as a link between managerial planning
and control. It improves the ability of management to evaluate and improve
performance. The used computers has increased the data processing and
storage capabilities and reduced the cost.
6. MIS assembles, processes, stores, retrieves, evaluates and disseminates
the information.
7. It reduces redundancy: Reducing the level of redundancy equates to costsavings. When redundancy is reduced and/or eliminated, this saves on man
hours worked and frees up employees to take on other tasks. In addition,
processes can be streamlined through information systems, which further
reduce redundancy.
8. It increases efficiency: Efficiency is another tangible benefit of assimilating
information systems. When computers can take over some of the tedious,
detailed and mundane tasks, this makes processes move more quickly with a

higher degree of accuracy. While it's true employees still play an importance
role in ensuring data is entered correctly, once entered in the program, the
management information system can effectively increase efficiency and data
integrity.
Thus, investing in information systems keeps a business competitive and
helps an organization carry the ability to maintain visible status in the global
economy. Without IS, a business will more than likely fall rapidly behind.
9. MIS enhances Supply Chain Management: Improved reporting of business
processes leads inevitably to a more streamlined production process. With
better information on the production process comes the ability to improve
the management of the supply chain, including everything from the sourcing
of materials to the manufacturing and distribution of the finished product.
The benefits of integrating technology within an organization can truly be
limitless depending on the level of creativity, strategic planning and
innovation in the decision processes.

10. Quick Reflexes: Better MIS systems enable an enterprise to react more
quickly to their environment, enabling them to push out ahead of the
competition and produce a better service and a larger piece of the pie.

"Today, leading companies and organizations are using information

technology as a competitive tool to develop new products and services,
forge new relationships with suppliers, edge out competitors, and radically
change their internal operations and organizations.
Laudon and Laudon

Challenges of Using Information Systems in Business

While the benefits typically outweigh the drawbacks, it is important that
organizations recognize the challenges and responsibility that do come with
integrating information systems.
1. Welcoming the Change: Organizational change is typically one of the
largest hurdles a business has to contend with when updating their business
environment to include new technology. Change is hard and management
may find that many employees do not welcome this change.

2. Cost of Investment: Development and cost is another challenge. A project

such as this can be extremely costly, so it is critical to do proper analysis,
design and testing prior to adding new systems. A business will want to be
sure the technology will provide long term benefits and the costs do not
outweigh the return on the investment.
While the benefits are numerous and payoff can be excellent, the initial costs
of incorporating information systems are very pricey. Many businesses find
themselves either delaying or avoiding new technology because of the initial
investment involved.
3. Need to determine reliability: Additionally, the company will need to
determine reliability and accuracy so that the maximum benefits will be
derived. This means time will need to be invested in careful system analysis

before development to insure that the information system will meet the
requirements of the business processes.
4. Privacy and security: Privacy and security is another huge challenge for
organizations that use technology. Information is a valuable commodity and
there is a large responsibility that comes with maintaining data. A lot of
sensitive information is collected through the course of business and this
responsibility is one that should be taken seriously.
When making decisions, privacy should be considered and any laws abided
to. In addition ongoing security is essential, and this is an expensive
maintenance that bears no incoming revenue.
Unfortunately many organizations put security on the backburner in favor of
other processes such as marketing, accounting or sales because these are
what impact incoming revenue; however even one data breach can destroy a
business, so these days security is just as important as other business
processes. Security cannot and should not be ignored, and is a significant
challenge in using information systems.

5. Constant Monitoring Issues: Change in management, exits or departures

of department managers and other senior executives have a broad effect on
the working and monitoring of certain organization practices including MIS
systems. Since MIS is a critical component of an organization's risk
management strategy and allied systems, constant monitoring is necessary
to ensure its effectiveness. Quality of inputs into MIS needs to be monitored;
otherwise consistency in the quality of data and information generated gets
affected. Managers are not able to direct business, operational and decisionmaking activities with the requisite flexibility.

6. Dealing with unquantifiable information: A potential problem with relying

on electronic communication and processing of information is the loss of the
vital human element. Sometimes, because of the complexity of information,
an MIS report cannot effectively summarize it. Very rich information is
needed to coordinate and run an enterprise, and certain classes of
information cannot be quantified. For example, it might be wrong to evaluate
an employee's performance solely based on numbers generated by an MIS.
Numbers can indicate a performance problem, but a face-to-face meeting is
necessary to discuss the nature of the problem.

How to develop MIS

The set of two overheads on steps in MIS development is to be introduced
while discussing the different stages. These steps are more appropriate for a
computer based MIS.
Preliminary Investigation
In this phase, the agency needs to critically assess its current system in
order to justify the cost and time involved before deciding on having a new
MIS. The facilitator needs to clarify the MIS need not always involve
computers. However, if there are computers the work gets accelerated.
Requirements Analysis
The facilitator discusses the methods and means of ascertaining the
information needs to be addressed by MIS. Further, the mechanisms for
gathering information from primary and secondary sources are to be
determined by agencies. A critical factor is ascertaining MIS needs of primary
and secondary users.

System Design
The facilitator explains basics of a MIS system elucidating the inputs, the
processing and the outputs. While inputs include information provided by
front-line workers, the outputs could be various types of reports, including
those sent periodically to funders. The procedures define how and in what
format the information will be inputted and by whom and at what intervals.
The storage could be manual or electronic or both. Design specifies the
operational parameters at a drawing board stage. One of the inputs for MIS
could be information from a client database.
Other stages
The facilitator systematically discusses the different steps in MIS
development in a
universalized perspective. In other words, it needs to be specified that these
steps need to be tailored to ones own situation. In the acquisition stage,
hardware is procured after
appraisals and cost analysis. Draw attention to the need to ensure
compatibility between what is being acquired and what is already available
within the agency.
The implementation step is a crucial one consuming considerable amount of
time in MIS development. Here the application development is done
customized to the agencys needs. The procedure and user manuals are
developed and personnel are oriented in using MIS. The software is installed
once it is tested and debugged.
The development of effective information systems holds a number of
challenges for small businesses. "Despite, or perhaps because of, the rapid
development of computer technology, there is nothing easy or mechanical
about building workable information systems, " Laudon and Laudon stated.
"Building, operating, and maintaining information systems are challenging

for a number of reasons." For example, some information cannot be captured

and put into a system. Computers often cannot be programmed to take into
account competitor responses to marketing tactics or changes in economic
conditions, among other things. In addition, the value of information erodes
over time, and rapid changes in technology can make systems become
obsolete very quickly. Finally, many companies find systems development to
be problematic because the services of skilled programmers are at a
premium.
Difference between DSS & MIS
MIS and DSS are business-related information systems, which share some
similarities but are ultimately differentiated in terms of components,
dynamics, analytical methods and general properties. MIS function to furnish
managers with reports on past and current organizational performance,
thereby enabling the monitory of actual business performance and aiding the
prediction of future ones. Within such a context, it may be described as
addressing the needs of those managers who are interested in weekly,
monthly or yearly results, compared to day-to-day ones. Furthermore,
founded upon the TPS, MIS draws data from internal organization sources,
summarizes it and presents that regularly and answers structured questions,
is processed via a simple method that relies on comparison and
summarization. Therefore, processing involves reports, simple models and
low-level analysis, outputting summary and exception reports. As regards
users, professionals and staff managers primarily employ MIS.
In comparison, DSS may be defined as a coherent system of computer
based technology used by managers as an aid in their decision making in
semi-structured tasks. While, MIS functions to produce routine-reports, DSS
employ sophisticated data modeling and analysis tools for the purpose of
resolving quasi-structured problems. Secondly, whereas MIS is used by a

limited group (staff managers and professionals) DD are used by groups,

individuals and managers across various levels. Thirdly, DSS is characterized
by an adaptability, which contrasted with the semi-flexible nature of MIS.
Lastly, DSS data sources are much more varied, comprising inventory,
accounting and production sources and not just internal business ones, and
its analytical tools are more sophisticated, including simulation, statistical
analysis are in-built spreadsheets.
The essential difference between the two is in focus. DSS, as the permanent
status indicates, is about leadership and senior management surrounded by
an organization providing good, reliable judgment as ably as vision. MIS, on
the other hand, is about focusing on the actual flow of information itself.
MIS focuses on operational efficiency (comfort organization "do things
right). It plans reports on variety of subject, reports are standard,
structured, routine, constraint by organizational system.DSS focuses on
making effective decision (help collective "do the right thing) and on finding
making, unstructured and available on request, immediate, friendly.
MIS is basically a compassionate of link to facilitate communication between
managers across different areas in a business association. MIS plays a pivotal
role in enabling communications across the floor of an organization, between
multiple entities therein.
DSS, many consider, is advancement from the original MIS. However, this is
not the sole difference between the two. While there may not be too much
separating the two, the difference is still within, as is apparent when we say
DSS is advancement over MIS. These and few other differences have been
summarized below:

1. MIS functions to produce routine reports, DSS employ sophisticated

data modeling & analysis tools for the purpose of resolving structured
problems.
2. MIS is used by a limited group (staff managers & professionals); DSS
are used by groups, individuals & managers at various levels.
3. DSS is characterized by an adaptability which contrasted with the
semi-inflexible nature of MIS.
4. DSS data sources are much more varied comprising inventory,
accounting & production sources & not just internal business ones & its
analytical tools are more sophisticated (simulation, statistical analysis).
Thus, MIS & DSS are differentiated in terms of components, dynamics,
analytical tools & general properties.

TP D
S
SS
EI
S
Oper
ation
al
Mana
gem
ent
Deci
sion
s

Tacti
cal
Mana
gem
ent
Deci
sion
s

Strat
egic
Mana
gem
ent
Deci
sion
s

Support

MIS
Information about

DSS
Information and modeling to

Report Form

performance
Periodic reports

analyze problems
Interactive Inquiries

Format

or On Demand
Pre-specified

Flexible and Adaptable

Processing

Fixed format
Extract and manipulate data

Analytical modeling
of data

Five Elements of a Usable MIS:

Timeliness
To simplify prompt decision making, an institution's MIS should be capable of
providing and distributing current information to appropriate users.
Information systems should be designed to expedite reporting of information.

The system should be able to quickly collect and edit data, summarize
results, and be able to adjust and correct errors promptly.

Accuracy
A sound system of automated and manual internal controls must exist
throughout all information systems processing activities. Information should
receive appropriate editing, balancing, and internal control checks. A
comprehensive internal and external audit program should be employed to
ensure the adequacy of internal controls.
Consistency
To be reliable, data should be processed and compiled consistently and
uniformly. Variations in how data is collected and reported can distort
information and trend analysis. In addition, because data collection and
reporting processes will change over time, management must establish
sound procedures to allow for systems changes. These procedures should be
well

defined

and

documented,

clearly

communicated

to

appropriate

employees, and should include an effective monitoring system.

Completeness
Decision makers need complete and pertinent information in a summarized
form. Reports should be designed to eliminate clutter and voluminous detail,
thereby avoiding "information overload."
Relevance
Information provided to management must be relevant. Information that is
inappropriate, unnecessary, or too detailed for effective decision-making has
no value. MIS must be appropriate to support the management level using it.
The relevance and level of detail provided through MIS systems directly
correlate

to

what

is

needed

by

the

board

of

directors,

executive

management, departmental or area mid-level managers, etc. are in the

performance of their jobs
Input to Management Information System
Internal Data Sources:
TPS and Related databases
Entreprise Resource Planning Systems: It is an integrated computer-based
application used to manage internal and external resources,
including tangible assets, financial resources, materials, and human
resources. Its purpose is to facilitate the flow of information between all
business functions inside the boundaries of the organization and manage the
connections to outside stakeholders. Built on a centralized database and
normally utilizing a common computing platform, ERP systems consolidate
all business operations into a uniform and enterprise-wide system
environment.
Data warehouses and data marts: A data warehouses a database used for
reporting. The data is offloaded from the operational systems for reporting.
The data may pass through an Operational Data Store (ODS) for additional
operations before it is used in the DW for reporting. A data warehouse
maintains its functions in three layers: staging, integration and access.
A data mart (DM) is the access layer of the data warehouse environment that
is used to get data out to the users. It is a subset of data warehouse.
Specific Functional areas: These functional areas include Marketing, Human
resouce, Accounting, Finance departments, etc.
External Data Sources:

Stakeholders: Customers, Suppliers, Competitors and Stockholders, whose

data is not already captured by the TPS.
Internet : Tthe Internet is a global system of interconnected computer
networks that use the standard Internet Protocol Suite (TCP/IP) to serve
billions of users worldwide. It is a network of networks that consists of
millions of private, public, academic, business, and government networks, of
local to global scope, that are linked by a broad array of electronic and
optical networking technologies.
Extranet: An extranet is a computer network that allows controlled access
from the outside, for specific business or educational purposes. An extranet
can be viewed as an extension of a company's intranet that is extended to
users outside the company, usually partners, vendors, and suppliers. It has
also been described as a "state of mind" in which the Internet is perceived as
a way to do business with a selected set of other companies (business-tobusiness, B2B), in isolation from all other Internet users. In
contrast, business-to-consumer (B2C) models involve known servers of one
or more companies, communicating with previously unknown consumer
users

Outputs of an MIS
Scheduled reports: A scheduled business report is a report that comes out at
a predetermined time. It can be produced periodically or on a schedule (daily.
weekly, monthly, quarterly, semi-annually, annually)
Key-indicator Reports: Summarizes the previous days critical activities.
Typically available at the beginning of each day
Demand Reports: Reports that come out when somebody needs them, it
gives certain information on managers request

Exception Reports: Report that comes out only when something happens, like
an accident or other non expected occurrence. These are automatically
produced when a situation is unusual or requires management action.
Drill-down Reports: Provides increasingly detailed data about a situation. Drill
Down reports are triggered by clicking on a designated field of an existing
report

Internet

Financial

MIS

Business Transactions

Transaction Processing Systems

Accounting MIS
Key-indicator Report

Database of Valid Transactions

Drill-down Report
Exception Report
Marketing MIS

Business Transactions

Human Resource MIS

Database of External Data
Extranet

Demand Report
Scheduled Reports

Employees

Corporate intranet
Database
Corporate
of External
Databases
Data of internal data

Expert Systems

Database of Valid Transactions

Application Databases
Management Information Systems
Business Transaction
Transaction Processing Systems
Executive Support Systems

Operational Databases
Input and Error List

Decision Support Systems

Key-indicator Report
Drill-down Report
Exception Report
Demand Report
Scheduled Reports

Functional Aspects of MIS:

MIS in accounting:
management information system is used for generating reports including
inventory status reports financial statements performance reports etc. These
reports are essential for analyzing different aspects of business. These
reports also help to answer 'what-if' questions like what would be the effect
on cash flows of a company if the credit term is changed for its customers
etc.
MIS reports also support decision making and it helps to integrate the
decision maker and the quantitative model being used. These automated
systems allow managers to make decisions for smooth & successful
operation of businesses. The systems includes computer resources people
and procedures used in the modern business enterprise

In the accounting sense, we can list out the following MIS reports:
1. Periodical financial reports
2. Periodical costing & Budget reports
3. Inventory Reports
4. Debtors/creditors Age wire reports
5. Any other reports required by the management.
In order to provide past, present and prediction information, an MIS can
include software that helps in decision making, data resources such as
databases, the hardware resources of a system, decision support systems,
people management and project management applications, and any
computerized processes that enable the department to run efficiently.
MIS in management:
The system ensures that an appropriate data is collected from the various
sources, processed, and sent further to all the needy destinations. The
system is expected to fulfill the information needs of an individual, a group of
individuals, the management functionaries: the managers and the top
management.
The MIS satisfies the diverse needs through a variety of systems such as
Query Systems, Analysis Systems, Modeling Systems and Decision Support
Systems the MIS helps in Strategic Planning, Management Control,
Operational Control and Transaction Processing.
The MIS helps the clerical personnel in the transaction processing and
answers their queries on the data pertaining to the transaction, the status of
a particular record and references on a variety of documents.
The MIS helps the junior management personnel by providing the

operational data for planning, scheduling and control, and helps them further
in decision making at the operations level to correct an out of control
situation.
The MIS helps the middle management in short them planning, target setting
and controlling the business functions. It is supported by the use of the
management tools of planning and control.
The MIS helps the top management in goal setting, strategic planning and
evolving the business plans and their implementation.
The MIS plays the role of information generation, communication, problem
identification and helps in the process of decision making. The MIS,
therefore, plays a vital role in the management, administration and
operations of an organization.
MIS for Manufacturing Industry
The automation in manufacturing companies has significantly improved in all
areas of processing, but at the same time it has also created a staggering
amount of data.
Though IT departments have taken advantage of hardware improvements to
economically store the increased data, there never seems to be enough time
or resources to meet the needs of factory managers who face the fact gap
that exists between the data and the usable information required to make
real business decisions.
For manufacturing/operations companies, getting the right information to the
right people in a timely manner has never been more important than it is
today to reduce hidden costs, to increase production, and to maximize
profits.
Manufacturers have to manage the complexity of their supply chain, internal
manufacturing, and operations along with meeting their distribution and

customer requirements. Manufacturers today are faced with making

extremely complicated decisions in real-time, on a daily basis, with limited
information. Manufacturers face increasing globalization, more competition
than ever, and customers whose demands reflect their own knowledge and
expectations of a global market.
Every manufacturing company is different like different processes, different
tracking systems and different challenges. All of these variations add up to
the fact that you need a management information system (MIS) that caters
to the specific needs as well. While looking for a MIS solution you may define
your needs and formulate a list of requirements that simplify the adoption of
information technology for improving performance.
In the manufacturing industry, information quality issues exist throughout
the supply chain. One reason for this is that manufacturers depend on data
from suppliers, contract manufacturers, distributors, retailers, and
consumers in order to effectively and efficiently source raw materials,
forecast demand, make and market their products. Very seldom will
manufacturers have control over the quality and format of this external data.
Through incremental improvements in data quality throughout the supply
chain, however, manufacturers can realize significant performance
improvements, including improved speed and efficiency of product
manufacture, improved ability to perform demand analysis, improved
channel partner effectiveness through timely and accurate product and
pricing information, and improved customer satisfaction through timely and
accurate customer information. Measurement and verification are needed to
ensure the information quality program is reaching its objective.
The single biggest obstacle to deploying a MIS in manufacturing is data:
availability, quality, and access. Several factors make it difficult to ensure
optimal performance in manufacturing. Data and events come from many
disparate sources, including those of your suppliers, contract manufacturers,

and other business partners. Data types and formats vary from one source to
the next. Business partners in the collaborative supply chain may use
different data schemas and systems to track their manufacturing process.
Large volumes of data must be processed from each interface and
subsystem used in the manufacturing process.
A MIS tool should also easily integrate with operational applications and
legacy systems that already exist in a typical manufacturing environment.
Real-time manufacturing data need to be put into many different contexts for
other roles in the organization that are contributing to the optimal
performance of the real-time enterprise.
Manufacturing companies today have extensive inventories to track and
move, a greater number of products to generate, numerous suppliers to
negotiate with and quality standards to maintain. They also have an everincreasing need to acquire, satisfy and retain additional customers to remain
profitable. Because of these complex pressures, it is imperative that all the
links in the supply chain be managed successfully.

CASE STUDY:
MIS
Of
PepsiCo
Lays Sales Department

The
PepsiCo Family:
Pepsi was founded in 1898 by Caleb Bradham, a New Bern, North Carolina,
druggist, who first formulated Pepsi-Cola.
Today, Brand Pepsi is part of a portfolio of beverage brands that includes
carbonated soft drinks, juices and juice drinks, ready-to-drink teas and coffee
drinks, isotonic sports drinks, bottled water and enhanced waters. PepsiCo
Americas Beverages (PAB) has well known brands such as Mountain Dew,
Diet Pepsi, Gatorade, Tropicana Pure Premium, Aquafina water, Sierra Mist,
Mug, Tropicana juice drinks, Propel, SoBe, Slice, Dole, Tropicana Twister and
Tropicana Season's Best.
PepsiCo Americas Foods (PAF) is PepsiCo's food and snack business in North
and South America. Its portfolio of businesses includes Frito-Lay North
America, Quaker Foods & Snacks, Sabritas, Gamesa and Latin America
Foods.
Frito-Lay North America
In 1932, C.E. Doolin entered a small San Antonio cafe and purchased a bag of
corn chips. Little did he dream this savory chip would become one of the

nation's most popular snacks. Mr. Doolin learned that the manufacturer of
the chips was eager to sell his small business, so he purchased the recipe,
and began to sell FRITOS Corn Chips from his Model T Ford.
Meanwhile, that same year, Herman W. Lay began his potato chip business in
Nashville by delivering snack foods. Not long after, Mr. Lay purchased the
manufacturer, and the H.W. Lay & Company was formed. H.W. Lay &
Company became one of the largest snack food companies in the Southeast,
and LAY'S brand Potato Chips is still America's favorite potato chip.
Years later, in 1961, the Frito Company and the H.W. Lay Company merged to
become Frito-Lay, Inc. Today, Frito-Lay North America makes some of the
most popular snacks in the US, including LAY'S and RUFFLES potato
chips, DORITOS tortilla chips, TOSTITOS tortilla chips and dips,
CHEETOS cheese flavored snacks, FRITOS corn chips, ROLD GOLD
pretzels, SUNCHIPS multigrain snacks, CRACKER JACK candy coated
popcorn.
PepsiCo Asia, Middle East & Africa:
PepsiCo Asia, Middle East & Africa (AMEA) makes, markets and sells a
number of leading snack food brands including Lays, Kurkure, Chipsy,
Doritos, Smiths, Cheetos, Red Rock Deli and Ruffles, through consolidated
businesses as well as through noncontrolled affiliates. Further, either
independently or through contract manufacturers, AMEA makes markets and
sells many Quaker-brand cereals and snacks. AMEA also makes markets and
sells beverage concentrates, fountain syrups and finished goods, under
various beverage brands including Pepsi, Mirinda, 7UP and Mountain Dew.
These brands are sold to authorized bottlers, independent distributors and
retailers. However, in certain markets, AMEA operates its own bottling plants
and distribution facilities. In addition, AMEA licenses the Aquafina water
brand to certain of its authorized bottlers. AMEA also, either independently or
through contract manufacturers, makes markets or sells ready-to-drink tea

products through an international joint venture with Unilever (under the

Lipton brand name).
PepsiCo in Pakistan:
In Pakistan, Pepsi was introduced in 1979. Initially Pepsi faced a lot of
problems because Coca Cola had the larger share.
However, PepsiCo started gaining strength in the 80s in Pakistan. PepsiCo
has a number of offices and factories located in the major cities of Pakistan
such as Lahore, Karachi, and Islamabad etc. Every office has two divisions of
PepsiCo that are Beverages and Food & Snacks working simultaneously.

PepsiCo Lahore:
The main head office of PepsiCo in Lahore is situated in Gulberg. There are 8
departments at this head office for each Division. The departments are as
follows:

Sales
Marketing
Finance
Planning
Controls
Research & Development
Operations
Human Resource

There are some shared departments between the two divisions, such as
Administration and Information Technology.
Every department has its own Information System.

The department that we have studied for our project is Sales in the Lays
Division. Under the Sales, there are further sub departments. Those are:

Sales
Sales Operations
Sales Development
Key Accounts
Sales Information System

The Sales department of the Food and Snacks department uses software
named as Pepsi Distribution System. It is a Management Information System
as it supports the Middle and Top Level management takes decisions
regarding their Store Keeping Units (SKU), the snacks they produce. The
Middle Level Sales and Marketing managers make different sets of reports
based on the data collected through this IS (Information System), e.g. Sales
Analysis, Market Trends, History, etc. Initially when the Food and Snacks
division was established in Lahore, they had no proper IS for the Sales
department. Later Pepsi Distribution System software was developed to
facilitate them.
The Sales Information System sub department is responsible for the
operations and maintenance of this software. This department maintains the
entire database of the IS that supports Sales department.
Identifying the need for Pepsi Distribution System:

The previous system being used was not fulfilling the departments

requirements.
It was unclear in terms of its purpose and structure.
Due to different pressures, there was always too much work and too
little time for the staff in Sales. And there was no structured software

for them to work at.

The Sales department lacked a clear visibility in terms of the number of

sales, number of distributors, trends of sales, etc.

Business was growing by each day and things were not scalable.

Software was needed that kept track of the distributors and their sales.
A link between the distributors and the sales department had to be
established.

Thus a solution was required urgently. After justifying financially and

culturally to the Top Level Management, the Sales Information System hired
an In-house, contractual free lancer to develop such a software that
eliminated all the problems of the previous software and fulfilled the
requirements of the company. The software was developed within 4 to 5
months. Some form of Prototyping Approach for developing the software as it
was needed on urgent basis. All the modules were not made immediately.
The software cost about $1000. It was less costly than getting it made form a
Software House. And the already existing softwares being used at PepsiCo
were expensive and the off the shelf options did not cater to all their needs.
The best solution at that time was to get it custom made.
Pepsi Distribution System (PDS) and its Process:
PDS is a software that connects Lays distributors with Sales. It runs in real
time and can be used anywhere in Pakistan by the Sales employees and the
distributors. It is a Web based application and can be called an Extranet. It
gives access to the employees and distributors to enter the data onto the
database and make further reports on it. The database is all made on Oracle
and PHP, a Web based application language. At the distributors end, it can
be called a TPS but the at the managements end it is an MIS.
When a new distributor is added to the chain of distributors, the Sales
Information System creates the distributors profile under the respective
areas information and a confirmation email is sent to the distributor. The
distributor is given a unique user id and password. This username allows the
distributors to access a specific portion of the application. Once the
distributor logs on to the Website, a confirmation email is sent to the Area
Sales Manager and Sales Reporting Officer. A link is created between the

respective parties. The distributor is also known as the Data Entry Operator
as he enters the data and details of the sales made to the distributor of the
Store Keeping Units and of the sales made by the Data Entry Operator to the
local area retailers.
The Data Entry Operator logs onto the Website, places the order for e.g. X
stock of X snacks.
The following screenshot shows the log in window of the software.

The system gives a notification to Area Sales Manager that the particular
distributor requires this much of stock. The Manager then selects the
distributor and enters the details of the sales on an invoice of the stock on
the application. The stock is the delivered to the distributor.

Screenshots for Selection of Distributor and entering the details on the

Invoice are as follows:

Once the distributor receives the stock, he enters its receiving information
onto his profile. Hence the details of the sales to the distributors are
automatically entered onto the database and the Sales department has the
record of day to day transactions that take place. At the end of the
distributor, the distributor needs to enter information once the stock is
received and also the details regarding the number of stock sold further to
retailers.
Screenshot for the distributors Inventory Receipt is as follows:

At the end of each day, the Sales personnel can also check their closing sales
through this software. They can also get the details for the entire month at
the end of the month. Thus, this application has enabled the Sales
department to channelize their information in an appropriate and organized
manner.

The above screenshots show the Closing Day orders Summary and the
Closing Month Summary.

The Information System enables the users such as the Sales team to make a
number of reports based on that data collected through the database. They
can generate reports on Daily Sales, Weekly Sales, Monthly Sales, Trend in a
particular area, Distributor Wise Sales, Stock Report etc.
The reports include complete comprehensive detail about the stock sold to
each distributor and then further sold to retailers. This helps the Middle level
Manager have a complete overview about the market trends of each and
every product of theirs.
The screenshot for the reports page is as follows:

Here are some of the reports generated by the Sales department through the
Pepsi Distribution System IS:
Stock Report (Kgs)
01/NOV/2010

Start
Date:
End
Date:
City

Faisalaba
d City

30/NOV/2010
SHOW REPORT

Distribut
or ID

Distributo
r

Openin
g
Stock

Primar
y Sale

Total
Stock

Seconda
ry

Warehou
se Stock

1282

Zafar
TradersFaisalaba
d

2188.7

8528.2
88

10717

11922.2

-1205.2

1284

Galaxy
TradersFaisalaba
d

6930.4

6930.4

7813

-882.6

724

US
Traders
Faisalaba
d

2082.1

13037.
63

15119.7

13215.7

1904

Raza
TradersFaisalaba
d

14234.
06
42730.
4

14234.
1
47001.
1

14562.9

-328.8

47513.8

-512.7

5769

-5769

251
Faisalabad City
Total

Gujranwa
la Belt

Click here
to choose a
date from
a one
month
pop-up
calendar.

4270.7

1306

Awais
TradersMuridke

754

Rana
TradersSheikhupu
ra

6144.3
2

6144.3

7137

-992.7

767

Haseeb
TradersHafizabad

3047.2

3709.0
4

6756.2

3960.1

2796.1

758

Faizi Juice
& SnacksShadrah

1565.3

1565.3

6748.9

-5183.6

750

Junaid
TradersKamonki
M
HadeedSheikhupu
ra

-3535

5253.7

7622.6

-2368.9

4612.5

15107.
1

19719.
6

34772.6

-15053

1698

K.S
Trading
Company
Gujranwal
a

10969.
09

10969.
1

8481.8

2487.3

1701

Hamza
Traders
Gujranwal
a

9391.1
84

9391.2

8437.5

953.7

403

Crystal
Foods
Gujranwal
a

2599.4
4

2599.4

11887.4

-9288

732

HA
Traders
Gujranwal
a

3863.7

12238.
71

16102.
5

11237.1

4865.4

Nationwide Brand
Wise Coverage
01/NOV/2010
Start
Date:
End
Date:

Nov-10

3535

5253.7
44

Gujranwala Belt
Total

Month

2194

Gujranwa
la City

Lays
67831

30/NOV/2010
SHOW REPORT

Cheetos
41566

Kurkure
16844

Brand Wise Price Wise

Coverage
Area:
Start

24 - Lahore City
01/NOV/2010

Cravy's
8478

Date:
End
Date:

Click
here to
choose a
date from
a one
month
pop-up
calendar.

30/NOV/2010
SHOW REPORT

Distributor
Lays

Cheetos

Five
Rupee
s

Ten
Rupees

Twenty
Five
Rupees

Fifty
Rupees

Seventy
Five
Rupees

National
Distribution
s Network

609

1046

663

389

Mani
Traders

906

1002

952

Johri
Distributors

1601

1609

Fareed
SonsLahore

568

Imran
Traders

Three
Rupees

Five
Rupees

Ten
Rupees

160

540

646

162

127

276

240

1577

1567

425

1584

498

847

521

237

82

231

307

544

629

330

137

120

343

364

Ibaad &
Hassan
Distribution

1144

1157

756

333

197

1107

857

Al-Raheem
Marketing

827

1053

579

268

142

645

711

Amin &
Sons

441

714

306

130

96

397

446

Nawaz
Sons

451

708

376

99

55

339

192

Asif
Brothers

1147

1457

598

172

60

681

695

Nimra
Trader

844

935

351

128

67

873

506

ZH
Distribution

1499

1547

554

196

150

1338

754

Omar
Trading

1226

1267

656

195

139

1089

545

Al Razzaq
Distribution

Sizzle
Enterprises
City Total

499
12,306

654
14,625

351
8,570

162
4,175

84
1,904

463
9,906

442
7,203

Sales Summary Report

Start
Date:
End
Date:
DISTRIBUTO
R NAME

Zafar TradersFaisalabad

401.4

459.7

445.7

448.3

539

601

540.1

708.5

180

215

240

320

325

462

413

453

Raza TradersFaisalabad

571.3

609.4

624.8

610.2

840.5

908.7

927.9

1022.9

US Traders
Faisalabad

326.2

268.3

321.4

409.6

626.3

627.3

625.8

648.2

Awais TradersMuridke

262.1

206

208.1

231.2

236

221.3

257.2

271.7

Galaxy
TradersFaisalabad

Madina
Traders-K
Abdul Malik

Distributor Wise KPI

281 - ABS Traders

Distributor
:
01/NOV/2010
Start Date:
30/NOV/2010
SHOW REPORT
End Date:

# of
Routes

# of
Stores
Service
d Per
Route

SKU/
Invoice

0
0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0
0

Distribut
or ID

Distributo
r Name

Custom
er Count

741

Sahal
Enterprise
s-Gujrat

745

Days

# of Stores
Planned

# of
Stores
Service
d

#of
Stores
Added

# of
Racks
Injected

1
2
3
4
W 44
5
6
7
8
9
10
11

0
0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0
0

Distributor Wise
Twice Productive
Customers
01/NOV/2010
Start
Date:
30/NOV/2010
End
Date:
SHOW REPORT

City

Gujrat
City

Drop Size/ Outlet

KG
RPS
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Hazara
Belt

728

Hazara
Belt

793

AK
MarketingAbbotabad
New
Malik-Wah
Cantt

Jehlum
Belt

717

Iftikhar
Distributor
-Jehlum

773

Atif
TradersGujar
Khan

281

953

Abbas
Khan &
CoChakwal

143

Nawaz
Sons

815

Jehlum
Belt

Jehlum
Belt

Lahore
City

580
846

1,031

Advantages:

There is structured decision making in the department now.

Business visibility is clear now for the Middle and Top Level
Management

It has helped them reduce cost as a lot of the paper work and time lags
have been reduced.

The IS is cost efficient in terms of its development and maintenance.

It caters the need of the hour of the Sales department.

PDS provides a range of reports that assist the management in

decision making. For e.g. it assists the management in taking a
decision regarding new schemes to promote their snacks in different
areas given that areas market trends.

Easily accessible for the personnel and distributors anywhere and

anytime.

Sales departments of PepsiCo companys Lays Division all over

Pakistan can use the software.

Drawbacks:

After 3 years of using PDS, the personnel now feel that it lacks
flexibility in terms of the fact that new modules can be added to the
current application at the moment. With the growing needs of the
business, the department needs more flexibility.

The implementation part was a little difficult on the side of the

distributors as all of them may not be educated or trained for the
software. Thus, training had to be given to the distributors and it was
hammered in their yearly objectives to input data.

Limited scope of modification.

Concluding Remarks:
PDS has played a major role in streamlining the information collected by the
Sales department of Lays Division. It has assisted them in keeping track of
each and every transaction that occurs in the business. It has enabled the
Division to cut down many of its initial costs. There is a smooth flow of
information throughout the department because of the software.
Hence, it can be said that the IS being used by the Sales department has
been successful in achieving its desired results

Bet you cant eat just one!

References

http://www.bestpricecomputers.co.uk/glossary/management-informationsystem.htm
http://www.webopedia.com/TERM/M/MIS.html
http://www.wisegeek.com/what-are-management-information-systems.htm
http://ceris.metropolis.net/pac/pac07.pdf
http://www.management-hub.com/information-managementadvantages.html
http://www.ehow.com/about_5494879_advantages-disadvantagesinformation-management-systems.html#ixzz14QqNpEX1
http://lecture-notes-forstudents.blogspot.com/2010/03/difference-betweendss-mis.html
http://www.slideshare.net/businessintelligence/mis-presentation
http://www.isfaq.com/business/13106.html
http://www.scribd.com/doc/36390899/MIS
http://www.pepsico.com/Company/The-PepsiCo-Family/PepsiCo-AmericasBeverages.html

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