Assignment - 01

Management Information System MGT 438

Cargills food city

Name : S.Karthikeyan Reg. No : S/07/726

We are living in a time of great change and working in an Information Age. Managers have to assimilate masses of data, convert that data into information, form conclusions about that information and make decisions leading to the achievement of business objectives. For an organization, information is as important resource as money, machinery and manpower. It is essential for the survival of the enterprise. Before the widespread use of computers, many organizations found difficulties in gathering, storing, organizing and distributing large amounts of data and information. Developments in computer technology made possible for managers to select the information they require, in the form best suited for their needs and in time they want. This information must be current and in many cases is needed by many people at the same time. So it has to be accurate, concise, timely, complete, well presented and storable. Most firms nowadays depend on IT.

Cargills food city

Cargills food city is one of the bigger supermarket sale shop in sri lanka. It is mainly focus on its people, products and brands over the last decade have brought the company phenomenal growth and success. Food retail is a high volume low margin business and double digit sales dip can put in doubt the continued availability of shelf space. Cargills controls over half of supermarket retail sales in Sri Lanka and over seven percent of grocery shopping altogether. This year it will add another 40 supermarkets and 35 smaller Cargills express outlet to the network if electricity services can be connected at the same pace at which it finds buildings large enough to locate supermarkets. Smaller express stores have ditched the meat counters that require large deep freezers and dont sell a few other categories. The concept will be used to establish a presence in smaller towns which cannot sustain a Food City. Supermarkets still have a long way to go. Even today most people buy food from daily markets or directly from producers. Organized food production and consumption of processed and branded food remain relatively new. As a company, Cargills is doing a remarkable job keeping things simple which allows it to expand quickly.

Contact Details
Address: No. 190, Thirugnanasampanthar Street, Trincomalee. T.P No: 026-2226001
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Business processes of Cargills food city

Main processes of any type of businesses are selling & pricing. Selling is the process of thinking about what will motivate the customer to buy. Pricing is the process of thinking about what will create gross profit for the company. They are both very necessary. Sometimes it is more important to focus on just one at a time. Cargills food city mainly focuses on effective use of Human resource, methods, equipment & materials. In order to achieve this effectively, cargills have core processes & excellent supply chain management system. Processes that are identified in cargills food city are, Receive stock or purchase stock Local store (food city) receives the stock from the warehouse or purchases the stock. Organize & Display stock Local store (food city) receive & display the stock receive from warehouse for easy access by their customers. Selling stock Sell the goods to their customer. Ordering stock. Pricing process Pricing appropriate prices for goods. Counting inventory or measuring inventory/stock evaluation. Billing process. Payroll. Finance & Accounting. Managing human resource.

Basic process model for this business

Requirements Requirements

Supplier

Inputs

Processes (Value added tasks)

Outputs

Customer

Feedbacks

Feedbacks

Managing the process

Plan
Description Instructions Control limits Action instructions Inputs & Outputs Customers Resources

Do
- Run process - Use plans - Resources - Validate - Qualify

Check
- Monitor - Analyze data

Act
- Actions to control & improve

Cargills food city as a system

Input Processes Output

Inputs of this system are,

Labour. Land. Capital. Goods. Methods.

Outputs of this system are,

Profit. Customer satisfaction. Goodwill. Value added Goods.

Processes of this system are,

Receiving, organizing, displaying, ordering & selling stock. Pricing. Billing. Managing human resources. Finance & accounting.
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Cargills food city can be described as a system. It is transferring inputs to outputs through their well-organized processes. Not only the processes. But they also have an inventory control system through maintaining a database. Initially, each Cargills food city has a variety of goods sitting on store shelves. These goods must all be contained within some kind of database system. New shipments of goods should be entered into this system as they arrive. When a customer purchases an item, the current inventory count should be decreased by one. Food city requires that a product will be automatically placed on a department ordering list by the system when the minimum stock number (point of order) is reached. Managers should also be able to adjust the defaults of an order if necessary. For example, in the case of a promotion of a certain product, the manager may wish to order a larger than normal quantity. Any adjustments made to the order form should constitute a temporary change in the amount of stock ordered, and should not affect the regular minimum or maximum default values contained in the database. This order should not be sent to the warehouse until permission has been obtained from the department or head manager. Food city manager should also have the ability to cancel an order altogether. As new products hit the market, they should be able to add a new item to the database. Similarly, managers should be able to delete an item from the database in the case that it may not be selling. Some mechanism allowing the manager to adjust the information contained in the database will be a beneficial tool. This mechanism should include among other things the ability to change the product point of order value, change the product maximum order value, transfer items between departments, and add and delete departments as necessary. Changing current inventory stock is a function that should be given to everyone in some form. For example, cashiers will automatically decrease the item count when a product is sold to a consumer. Stockers and/or manager will also need the ability to increase current stock count as new stock arrives. The order form should contain the default amount of stock to be ordered for each item, and should be able to be adjusted by the manager under special circumstances (such as a promo). When the manager gives his/her OK to the system, the system should send the order to the warehouse. The order form must contain the order number, food city or food city ID, address, department and date, as well as the list of item codes, item bar codes, item descriptions, and quantities ordered. The form should also include the name of the manager who has submitted the order.
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An important concern of cargills is products on order. If some product has been ordered, and it takes a while for that product to arrive, we do not want the same product ordered several days in a row. The system must contain some sort of list of items on order. As the items received come in, they should be taken off this list. Since Food city has a good inventory control system, they will not face any difficulties regarding stock. Therefore, cargills food city is functioning as a system in order to fulfill their customers expectations, achieve the target in the market & sustain in the market for long term.

Subsystems of Cargills food city

Sales subsystem
1. Sales

A customer queues at the checkout counter after completing his shopping. The customer places the items in the counter. The cashier then scans each item and places it in a bag. For each item, if the item is expired, the system should flash a warning. The cashier then discards the item. The customer can then decide to go get another item, or continue without it. If the barcode is missing on the item, the cashier keys in the product number. If the barcode reader recognizes the code, the price is displayed. For items sold by weight (e.g. fruits and vegetables), the items are placed on the scale and the cashier keys in the code for the product. The customer may have coupons (e.g., 4 for 1, 10% less, 50 Rs. off) for some products. The cashier keys in the coupon number, so that the appropriate amount is deducted from the bill. After all the items are scanned, the cashier relays the total to the customer and waits for the payment. The customer can pay by cash, credit or debit card. Problems can arise if the card does not have enough credit or if the debit card PIN is not recognized. Also, a customer can ask for cash-back if he pays by debit card. The cashier only has access to the cash register immediately after a sale has been made. At other times, the register is locked by the system.

2. Delivery
At the checkout counter, the customer can choose to have the purchases delivered. The delivery charge is then added to the total. Some discounts may be applicable (e.g. for students). The name of the client, his address and phone number is stored in the system. The purchases are then queued for delivery. On delivery, the customer needs to acknowledge receipt of the goods.
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3. Returns
An item sold can be returned by a customer within 7 days from the date of purchase. Before accepting the return, it is verified whether the return deadline still holds and also whether the item is in proper condition. However, food products are not accepted for return. The customer has to take the items to the customer service. The service agent then keys in or scans the item code to verify whether the item actually was bought from their store. The item is checked and approved for return. If the customer has the original receipt, he gets refunded in the same form than his original payment.

Inventory control and Purchasing subsystem

1. Inventory control

Inventory control ensures that fresh items are regularly maintained in the store. For each item purchased, the expiry date should be recorded. For items sold by weight, the expiry date is assumed to be the same for all items when a delivery is received from a supplier. If the expiry date of an item equals the current date, the store personnel should be alerted. The employees then take action to remove the expired items from the shelves. If certain items in a store are going to expire soon, the store manager is alerted. The definition of soon would vary with the product, e.g. the alert for chocolates can be given a month before, whereas the alert for perishable items like fruits and vegetables can be given 4 to 7 days before. If a lot of stock is remaining, then the product can be put on sale (e.g. reduced price or two-for-one offers), so that the items are sold before they expire. Since items in the real world can be lost, are destroyed or stolen, there is a need to make sure that the inventory that the system has on file for each product actually corresponds to reality. The employees of the store should therefore investigate the stock periodically, and update the store inventory to reflect reality.

2. Purchasing
The food city chain has a warehouse annexed with the foodcity that is used to store large quantities of the products that the individual stores sell. At the end of each day, the system looks at the inventory of the store. If the stock of a product in a store has fallen below a certain threshold, the warehouse is contacted in order to replenish the stores stock. All requested products that the warehouse has in stock are shipped together in one shipment to the store that placed the request early next morning. If a product is not in stock, the request for that product is put on hold. The purchase subsystem also handles renewal of
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warehouse stock by purchasing products from suppliers. The suppliers create accounts with the system by calling the food citys administration. Using a user name and a password, registered suppliers can log into the system at any time to set or update the list of products they offer and at what price. It is possible that some goods are offered by several suppliers. When the stock of a product in the warehouse falls below a certain threshold, the system determines the supplier that currently offers the best deal on the product, and contacts the supplier to place an order that replenishes the warehouse to the maximum capacity

Security subsystem

The security subsystem aims to reduce thefts and other incidents in the store. A security tag is attached to some products, which is demagnetized after purchase to prevent the security alarms from going on. Cameras (CCTV cameras) are installed in various places in the store to aid in inspection of customer behavior.

Marketing subsystem

The marketing subsystem maintains statistics of sales and returns. The goal is to maximize sales by studying customer behavior and psychology. For instance, the statistics gathered by the marketing system can be used to estimate how many items of a product are sold on average per day depending on various parameters (such as time of the year, etc...). This information can then be used to optimize purchasing strategies.

Payroll subsystem

The payroll subsystem keeps record of the employees, e.g. how many hours they work, and handles payments of salaries.

SWOT Analysis of Cargills food city

Strengths
Existence of strategic, experienced & well trained work force (Employees). Proactive management team. This business has strong ethical values and an ethical mission statement. It is a very competitive organization.
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 Good with databases and analysis. Reselling a product is quick. Good customer service. Well recognized business in sri lanka. Attractive atmosphere.

Weakness
Too busy for customer. No other vertical market. Only receive a percentage of sales. Lots of potential competition. Bottlenecks during the rush hours.

Opportunities
Ability to expand premises and diversify product range. Current trends in industry and commerce to reduce costs. Use product to find new vertical market for a new base product. Advance technologies are available to foster more effective human resources activities. Promote team work across divisions. Lot of planning going on.

Threats
Other supermarkets and small independent shops. Vendor changes selling policy and drops resellers. Competing with vendors own sales teams and other more local resellers. Other businesses may attract employees away from business.

How Cargills food city can overcome weakness & threats using the concepts of MIS
The constituency of management requires systems to help them monitor, control and administer the activities of the firm. They try to answer this general question: How well are things working? The term management information system designates a category of information systems that serves management. Such systems usually generate reports on the performance of all aspects of a
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business. Such information is used to monitor and control the business and to predict future performance. Management information systems therefore summarize and report on a businesss basic operations using data supplied by transaction processing systems. Decision support systems are also used by management to support nonroutine decision-making. Decision support systems focus on problems that are unique and rapidly changing. That means, they focus on weaknesses & threats. As such, procedures for arriving at these solutions may not be fully defined in advance. Therefore decision support systems must operate as what if? systems, whereby management can ask questions about the effects of changes in the way a business operate. Although decision support systems use internal information from transaction processing and management information systems, they may also use information from external sources such as competitor product pricing information. Decision support systems often use a variety of models to analyze data and to condense large amounts of information into a form in which it can be analyzed by the decision-makers. To provide maximum Convenience for the shoppers, Cargills food city seeks to pay close attention to customer requirements. This means taking appropriate steps that result in fulfilling these needs in the form of a hygienic, one stop environment, offering a large selection of reasonably priced quality products. These are organizing through the management information system. Further, Information systems use in the store by using the barcode reading system and the use of debit cards and electronic data interchange in order to quick & easy access for both customer & cashier. The barcode reading system is used to read the codes which is kept on the label of the goods that customer buying so that this code will give the computer the price of the good only if it is already stored in the computer of the store. The debit cards are used so that if the customer doesnt have cash money can take out their credit cards or debit cards to transfer the money on the card to the account of the store. Through using these systems, customers inconvenience is ignores. They use management information system effectively to make their advertisement in local Medias. And they have always connected with their head office through management information systems. Therefore, the food city has well-structured management information system to fulfill their customers expectations & to compete with their competitors & to overcome their weaknesses and threats.