Explain Internal and External Information System

Internal and External information system:

A sound External Logistics Information system is based on enlisting the cooperation of customers and providing adequate and relevant information for advance planning, operation and control – of logistics activities. Co-ordination is required, both within and outside the organization for the planning and control of logistics and the other functions of management.

The sources of data for the external information system for customer service are no doubt the customers themselves, and information can be collected from them through the sales staff. The following information is desirable from various internal departments for the external information system.

1. Purchasing
2. Production
3. Marketing
4. Finance And Control
5. Physical Distribution

These departments may be expected to provide guidance, whenever requested or whenever found necessary. For eg, the production department may have to explain why a customer complains of a particular product quality. The marketing department may have to set up objectives and norms of customer service based on sales statistics and sales promotion efforts. The physical distribution manger will have to study and modify, if necessary, the other processing system, delivery time, the material handling system, etc., and update his policy on dispatches.

The Internal Information System is made up of the elements of the information flow within an organization. This flow of information is between the departments of purchasing, production, marketing, finance, etc., on several important issues. The internal information system covers data processing, data analysis and compilation of control reports. Control reports are of various types-status reports, exception reports and summary reports, on the basis of which decisions may be made by respective manager-, the organization.

There is also an exchange of information between the physical distribution managers and such departments as finance, marketing, production, purchasing. The departments and type of information received and supplied by the physical distribution department given below: –

Purchasing

–          Supplier preferences in meeting specified delivery periods.

–          Names, addresses, etc., and other details about the purchasers

–          Delivery request deadlines.

–          Supplier prices and price discounts.

–          Alternative sources of supply and process

Production

–          Production quantities and planning

–          Warehouse material handling systems.

–          Logistical innovations

–          Production capacity

–          Production innovations

Marketing

–          Competitor logistics costs

–          Customer complaints

–          Sales costs

–          Customer service norm

–          Prices arid price adjustments

–          Special customer service requirement

Finance

–          Budget for physical distribution costs.

–          Various estimates of costs

–          Customer credit rating

–          Credit procedure

–          Capital availability

–          Status of capital request