Real-Time Information and Control

• One of the interesting advances arising from the use of the computer and from electronic gathering, transmission, and storage of data is the development of systems of real-time information. This is information about what is happening while it is happening. It is technically possible through various means to obtain real-time data on many operations. For years, airlines have obtained information about seat availability simply by entering a flight number, trip segment (e.g. London to New York), and date into a memory system, which immediately responds with the information. Supermarkets and department stores have electronic cash registers in operation that immediately transmit data on every sale to a central data storage facility, where inventory, sales, gross, profit, and other data can be obtained as sales occur. A factory manager can have a system that report things as the production point reached, labor-hours accumulated, and even whether the project is late or on time in the manufacturing process.
• Some people see real-time as a means of getting real-time control in areas of importance to managers-in other words, control defeated at the very information shows a deviation from plans. But reference to the management control feedback loop in Figure 18-1 shows that real-time information does not, except possibly in the simplest and most unusual cases, make possible real-time control. It is possible in many areas to collect real-time data that measure performance. It may also be possible in many of these bases to compare these data with standards and even to identify deviations. But the analysis of causes of deviations, the developement of programs of correction, and the implementation of these programs are likely to be time-consuming tasks.
• In case of quality control, for example, it may take considerable time to discover what is causing factory rejects and more time to put corrective measures into effects. In the more complex case of inventory control, particularly in a manufacturing company, which has many items-raw materials, component parts, good in process, and finished goods-the correction time may be very long. Once it is learned that an inventory is too high, the steps involved in getting it back to the desired level may take a number of months. And so it goes with most other instances of management control problems: time lags are unavoidable.
• This does not mean that prompt measurement of performance is unimportant. The sooner managers know that activities for which they are responsible are not proceeding in accordance with plans, the faster they can take action to make corrections. Even so, there is always the question of whether the cost of gathering real-time data is worth the few days saved. Often it is, as in the case of the airline business, in which ready information on seat availability is likely to be crucial to serving customers and filing airplanes. But in a major defense company producing one of the highest-priority defense equipment items, there was little real-time information in an otherwise highly sophisticated information control system. Even for this programi it was thought that the benefit of gathering real-time data was not worth the expense because the correction process took so long.
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Fundamentals of Management : Controlling [BBA 2305]