Functional Subsystems

FINANCE & ACCOUNTING

Main Goal:
Finance- Ensure financial viability of the
organization, enforce financial discipline ,
plan & monitor financial budgets (credit to
customers, cash management, financing
arrangements (loans, sales of stocks,
leasing), collection process).
Accounting- Classification of financial
transactions & standardization into std.
financial reports (income statement and
balance sheet), preparation of budgets,
classification and analysis of cost data.
FINANCE & ACCOUNTING:
Transactions
Credit Applications
Sales Billing
Documentary Collection
Payment vouchers
Cheques
Journal vouchers
Stock transfers
Accounts Receivable records
Accounts Payable records
Payroll records
Inventory control records
Ledgers
FINANCE & ACCOUNTING: Operational
control
Periodic financial reports
Budget status to all financial managers
Tax returns
Share transfers
Profit & loss accounts
Payment & receipts analysis
Payroll, PF accounts
Calculation of direct costs- Overhead & std. cost
Daily error & exception reporting
Reporting unprocessed transactions and
processing delays
FINANCE & ACCOUNTING: Tactical
control
Variance b/w budget & expenses
Large outstanding payments/receipts
Credit & payment status
Cost increases & pricing
Cost of processing accounting data, error rates.
FINANCE & ACCOUNTING: Strategic
control
Methods of financing
Pricing Policies
Tax planning
Planning of systems for cost accounting &
budgeting
Long range tax accounting policy to
minimize impact of taxes
SALES & MARKETING
Main Goal: Maximize the sales & ensure
customer satisfaction
4 P’s of marketing
◦ Product
◦ Place
◦ Promotion
◦ Price
SALES & MARKETING SUBSYSTEMS:
TRANSACTIONS
Sales Orders
Promotion materials
Feedback forms
SALES & MARKETING SUBSYSTEMS:
OPERATIONAL CONTROL
Sales analysis by regions, customer class &
sales persons
Sales target V/s Achievement
Seasonal variations
Effect of model changes
Performance of sales outlet
Cost of sales, campaigns & benefits.
Hiring & training salesforce.
Day to day schedules
Feedback analysis
SALES & MARKETING SUBSYSTEMS:
TACTICAL CONTROL
Advertising techniques & analysis of their impact
Customer preference surveys
Correlation of prices & sales
Sales force deployment & targets
Exploring alternate market channels
Timing of special sales campaigns
Overall performance against a marketing plan
Data on the customer , competitors, competitor
products & sales force requirements
Market share & trend
Modifications based on feedback
SALES & MARKETING SUBSYSTEMS:
STRATEGIC CONTROL
Search for new markets & marketing
strategies
Analysis of competitors strategy
Technology & demographic forecasts &
product changes
Customer analysis results
Consumer survey
Income Projections
Demographic Projections
Technology Projections
Manufacturing Subsystem
Main Goal: To optionally and optimally deploy human
resources, machines and materials to maximize quality
production of goods by the organization
Functions:
Product engineering
Planning of production facility
Employment and training
Quality Control and Inspection
Needs of New Marketplace:
Lean
Agile
Flexible
Managed for Quality
Manufacturing Subsystem –
Transactions
Production order (based on explosion of sales
orders and inventory requirements)
Assembly orders
Finished parts documents
Scrap items documents
Time keeping documents
Manufacturing Subsystem- Operational
control
Monitoring up to date production information
by examining assemblies, giving early
warning about likely shortages
Scheduling better production dynamically
Preventive maintenance schedules of
machines
Monitoring tools, machine and personnel
availability
Detailed reports of actual performance
against production schedules
Manufacturing Subsystem – Tactical
control
Identifying and controlling areas of high costs
such as WIP inventories
Identifying critical bottlenecks in Production
Identifying alternate production schedules
based on tools, machines, materials and
personnel availability
Performance measures of machines to decide
on replacement
Planned or standard v/s Actual performance
Manufacturing Subsystem –
Strategic control
Yearly production quotes and alternate
schedules
Policies on machine replacement, augmentation
and modernization
Introduction of new production technologies
Identifying best product mix
LOGISTICS & MATERIAL
MANAGEMENT SUBSYSTEMS:
Main Goal:
To have readily available material needed
& to keep optimal levels of stock
Purchasing, receiving, inventory control
& distribution.
LOGISTICS & MATERIAL
MANAGEMENT SUBSYSTEMS:
TRANSACTIONS
Purchase requisitions
Purchase orders
Manufacturing orders
Tickets for inventory
Shipping Orders
LOGISTICS & MATERIAL MANAGEMENT
SUBSYSTEMS: OPERATIONAL CONTROL
List of excess & deficient items required.
List of items rejected
Critical items required
Backlog of supplies
Value of inventory in hand
Goods received, rejected & issues
Past due purchases, shipments to customer
Overstocked items/out of stock items
Inventory turnover reports
Vendor performance summaries
Shipper performance analysis
LOGISTICS & MATERIAL
MANAGEMENT SUBSYSTEMS:
Tactical Control
Developing vendor & shipper performance
measures
Determining the impact on the materials cost,
availability & procurement with design changes &
new product information
Determining optimal reorder levels
Determining issues of items to shops v/s std need
Controlling high value inventory
Comparing planned vs actual
LOGISTICS & MATERIAL
MANAGEMENT SUBSYSTEMS:
Strategic Control
Developing vendor for critical items
Developing optimal levels of inventory
Determining proportion of material to be
reordered from different vendors
Deciding varieties in inventory
Analysis of new policies with regard to
vendors
“Make V/s Buy” strategies
PERSONNEL MANAGEMENT
SUBSYSTEMS
Main Goal: To make use of available
human resources in the org. Includes
hiring, training, record keeping,
payment & termination of personnel
PERSONNEL MANAGEMENT
SUBSYSTEMS: TRANSACTIONS
Documents describing employment
requisitions
Document describing job descriptions
Training requirement specifications
Personnel data documents
Information regarding pay rate changes
Time cards (no of hours worked)
Pay cheques
Documents describing benefits
Termination notices
PERSONNEL MANAGEMENT
SUBSYSTEMS: OPERATIONAL
CONTROL
Routine assessment
Procedure for hiring & termination
Procedure for changing pay rates & issuing
benefits
Leave Records
Loan/advances & recoveries
Skill Inventory
Procedure for training
PERSONNEL MANAGEMENT
SUBSYSTEMS: TACTICAL CONTROL
Performance appraisal
Demographic make-up of personnel & its impact on
retirement
Production incentives & relation to productivity
Morale of personnel
Absentee reduction
Leave & overtime policies
Personnel deployment policies
Analysis from reports of variances resulting from
differences between planned & actual performances
for such classifications as no. of employees hired,
cost of training & recruiting, salary paid,
distribution of wage rate etc.
PERSONNEL MANAGEMENT
SUBSYSTEMS: STRATEGIC CONTROL
Large range human resources requirement
at different levels
Policies on wages & incentives
Policies on HR development & training
Policies on personnel welfare & facilities
Analysis of shifting pattern of employment
& education
R & D Management
Main goal: Continuously improve existing
products and develop new products and
processes
R & D Management -
Transactions
Product Literature
Designs
Implementation plans
Reports
R & D Management –
Operational Control
Progress against goals
Budgeted expenses V/s Actuals
Status of outstanding orders for equipment
and components
R & D Management –
Tactical Control
Setting intermediate goals and assess
progress
Check availability of equipment and
appropriate selection
Determine resource allocation
Deployment of personnel to projects based
on talent and performance
Information on similar and related research
projects undertaken by other groups
R & D Management –
Strategic Control
Which Products?
What type of Improvements?
What Long range research is most promising?
Technical collaboration
New Human resource requirement