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Production Information Management System (PIMS)

Production Information Management System (PIMS)

18.11.2018 | Comments: 0

PIMS is one of the most informative databases created for large industrial firms. The base, which allows a complete strategic analysis of the economic information of the enterprise. This is an attempt to establish quantitative regularities of the influence of factors of production and the market on the long-term profitability of enterprises.

There are a number of common production factors, the most significant of which are:

— Capital intensity. All other things being equal, capital-intensive enterprises have a lower level of long-term profitability than less capital-intensive ones.

— Relative product quality. Enterprises whose products consumers evaluate higher than the products of their main competitors, and have the best financial results.

— Performance. Enterprises with higher labor productivity, measured by the indicator of net (added) products for each employed, ceteris paribus more profitable. It is particularly advantageous to increase productivity if it is not associated with additional investment.

— Competitive position of business. As a rule, a higher market share relative to the main competitors provides a higher relative profit and income flow.

— Low cost per unit (effect of the experimental curve).

— Vertical integration. It is established that in a stable market conditions vertical integration has a positive effect on economic activity and, conversely, in an unstable market (ie, with sharp changes in market conditions) enterprises with more developed vertical integration are less effective.

— Innovations. Increased investment in R & d, market research, development of the sales network improve the results of economic activity only when the company has a strong position in the market.

In real economic practice, strategic factors are often interrelated. In the PIMS project, these relationships are presented in the form of two dimensional matrices, along the axes of which 3-5 levels (qualitative characteristics) of the factors under consideration are reflected. Such factors are, for example, price-quality, quality-market share, quality-intensity of investment, market share-return on investment, etc. In the cells of the matrix shows the relative price, expected market share, the level of profitability of the investment. In the process of multi-step calculations in the online mode, the Manager of the enterprise compares the data characterizing the activities of enterprises operating in the industry. The final report contains suggestions on what internal variables the enterprise should change to improve its results.

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