Management Information Systems Islamia University of Bahawalpur Delivered by: Tasawar Javed Lecture 5

Information System For Competitive Advantage Learning objectives General system model of firm Environmental Resource Flows Managing physical resources---SCM Competitive Advantage Porter’s Value Chains

The Firm & its Environment Firm is a physical system that is managed through the use of a virtual system Physical system of the firm is an open system in that it interfaces with its environment Firm takes resources from its environment, transforms the resources into products or services and returns the transformed resources to the environment

The General Systems Model of the Firm Standards Info & Data Information Decisions Management Information processor Data Physical resources Physical resources Input Resources Transformation process Output resources

The General Systems Model of the Firm Flow of resources from the environment, through the firm, and back to environment Flow of virtual resources are at the top Flow of physical resources are at bottom It includes: The physical resource Flow The virtual resource Flow The firm’s control Mechanism The Feedback Loop

The General Systems Model of the Firm The Physical resource Flow It includes: personnel, material, machines, and money Personnel are hired by the firm then… Transformed to higher skill levels through T&D Materials enter in the firm as raw input & transformed in to finished goods Machines are purchased, used and scrapped Money enters in firm in the form of sales receipts, investment, and loans and transformed into payments to suppliers, tax Physical resources are used to produce to product & services

The General Systems Model of the Firm The Virtual Flow Data, information and info in the form of decisions Two way flow of data and info that connects the firm to its environment

The General Systems Model of the Firm The Firm’s control Mechanism It enables the firm to control its own operation includes The performance standards the firm must meet The firm’s management, and An information processor that transforms data into information The Feedback Loop Composed of the virtual resources Data are gathered from the firm & from the environment and entered into the into information processor, which transform data into info Info goes to management to make decisions to affect necessary changes in the physical system Info processor uses standards to determine when the firm is not performing as planned

The Firm in its environment As we know environment is very important in the firm’s success Firm exist for the purpose of providing products and services that meet environment needs Environment varies firm to firm School is different than sports ground and so on The environmental elements are organizations & individuals that exist outside the firm These elements exist in a larger system called a society

The Firm in its environment society Government Financial community Global community suppliers The Firm customers Labor union Competitors Stake holder or owners

Managing the physical resource Flow - SCM Manage resources from supplier to firms and then to customers It should be timely and efficient It includes following activities: Forecasting customer demand Scheduling production Establishing transportation networks Ordering replenishment stock from supplier Receiving stock from suppliers Managing inventory- RM, work in process, finished goods Executing production Transporting resources to customers Tracking the flow of resources from supplier, through the firm & customers

Thank you!!! Q&A