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Manufacturing – Information Management Systems

In todays advancing technology state, one must be aware of information management systems and how they are shaping lives. Many industries are involved in information technology, and it is that technology which enables them to survive. Five major industries are health, services, manufacturing, finance, and retail. It is hard to say which one is affected more by technology because they all are in their own individual ways.

The topics of IT they all share, but the way that information technology is used and introduced in each industry makes them different. In such a highly competitive environment, businesses need to take advantage of all the technology they can in order to survive and gain the upper hand. This semester, I focused on the manufacturing industry because it is how many of products become products and how they are brought to us, the consumer.

Data and Knowledge Management

A company is made up of managers and employees. The hierarchy of the management team and the different levels of data information at each level needs need to be recognized, as does the fact that from top, strategic management to clerical and shop floor workers, all the members have varying needs regarding information systems. The general pyramid-shaped hierarchy is the most common organizational structure found in businesses. At the bottom are the clerical and shop floor workers, then the operational managers, next are the middle managers, and at the top are the senior managers. The largest group is the clerical and shop floor workers.

Some common characteristics of information at each level are the data range, time span, level of detail, the source, the degree of structure, and the purpose. Data range is the amount of data from which information is extracted. Top management needs a wide data range while the lower levels need a narrow range to focus on their specific divisions. Time span refers to how long a period of time the data covers. Top management need data that reaches far into the past, while lower level managers need only a time span of hours or days.

The level of detail is the degree to which the information generated is specific. For top management they need summarized information that is not greatly detailed, while operational managers need highly detailed information. The way that information is presented varies depending on the user or manager. Some different presentation methods are graphically, with text, tabular, or audibly. One way used in some manufacturing companies is called OLAP (Online analytical processing). OLAP presents information through illustrations of cubes of tables or graphs that you can rotate to get all of the dimensions of relevant information.

There are different information systems for the different levels of management. The different systems are transaction-processing systems (TPSs), Decision Support Systems (DSS), Expert Systems (ES), Executive Information Systems (EIS), and Management Information Systems (MIS). Shop floor managers typically use transaction-processing systems because they provide them with up-to-date information and help them to serve customers, place purchase orders, and provide information to other employees.

Operational managers use TPSs, report-generating applications, and electronic monitoring of employees to do their job. Middle managers use Decision Support Systems and expert systems to assist them in solving problems that are typically more complex and nonroutine than problems faced by operational management. Senior managers also use DSSs and ESs, but they also like to not use computers in their decision making because they felt that computers and such should be used by lower level managers.

IT Concepts and IT Fundamentals

An important issue for manufacturing companies is the hardware they use and the software that runs it. Managers should consider software first before hardware, but most companies already have their hardware and now they need the software to run it. Hardware starts with the computer, which has four operations: accept data, store data and instructions, process data, and output data. Software is the collective term for programs, which are sets of instructions to computer hardware. Managers must understand different types of software and be able to evaluate programs, because much of their work is highly dependent on software. Software deals with the data like managing inventory levels, setting prices, tracking sales, etc. The hardwares productivity is based on its durability and adaptability.

In one of our class discussion, Kevin King talks about GM and how using computer aided design technology has improved their business greatly. GM has teamed up with EDS and Sun MicroSystems to create a program called PACE, the Partners for the Advancement of CAD/CAM/CAE Education. These companies have been providing hardware and software for computer-aided design, manufacturing and engineering of automobiles to universities all over. For GM, using CAD has reduced its development of cars from 3 years to 18 months, which is quite amazing7. Computer-Aided Design software is used heavily in manufacturing, and this is just one example of how it is changing companies today.


Telecommunications have become such an integral part of businesses today that it is hard to imagine the world without it. Telecommunications has brought four basic improvements to business: better business communication, higher efficiency, better distribution of data, and instant transactions. Networks are a vital part of telecommunications. LANs (local area networks) and WANs (wide area networks) are the two types of networks. These networks are what connect terminals together to the server, which connects the rest of the companys computers.

An example of how telecommunications is changing the world is by high-speed internet connections. This article talks about Broadband turning every electrical outlet into a high-speed internet connection. The way it will work will be by carrying data by fiber-optic or telephone lines to bypass high-voltage lines, and then inject it into the power grid downstream, onto medium voltage wires4. Some are excited about this and some are a little weary because there are some drawbacks to the process and the idea is still being tested. Telecommunications has come a long way and it is still advancing, but this just shows how some people are trying to utilize its existence to better their companies for their customers.

Integrating Islands of Technology

An increasing number of organizations that share information for their mutual benefit have replaced their paper-based transactions. Instead, they use interorganized information systems that utilize telecommunications to exchange electronic data. This concept is called electronic data interchange. Numerous benefits result from EDI like cost savings, speed, accuracy, security, system integration, and just-it-time support. Manufacturing companies receive some tremendous benefits from EDI. By linking its vendors, customers, and subcontractors, a manufacturing firm can use EDI to quickly query raw or interim goods suppliers, who in turn can provide on-time delivery of the exact amount of resources needed . Manufacturers monitor retailers inventory, replenish retailers product inventory and update inventory records, and invoice retailers and use electronic funds transfer to pay suppliers. A few bad things about EDI are no control over the speed of communication, security challenges, and the difficulty in ensuring non-repudiation. Here is an example of how EDI may happen in a company.

This figure1 illustrates how EDI benefits retailers, manufacturers, and suppliers. However, some companies are turning toward XML instead of EDI. XML is a tool that tells computers how to interpret a text file. Using the two together though results in a lot of saved money. In an article, the issue of whether EDI can survive XML is discussed. Researchers say that XML lets companies make connections much quicker than EDI. However, in the last couple of years EDI has improved itself by making itself more applicable to smaller companies, less expensive, and easier to use. THEREFORE, XML is getting more attention, but EDI will still be with us8.

As example of how EDI has helped in the manufacturing world is at Nissan. EDI implementation has brought benefits to Nissan and their suppliers. EDI has helped Nissan reduce mail to suppliers by 90%. Nissan started to use EDI in 1989 and immediately received cost savings because of reduced labor requirements and mailings. There was also a reduction in the level of human/manual errors and a shortening of the lead-time for delivery information to their supplier base .

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