Necessary Equipment For Inventory Management System Research Paper
Type of paper: Research Paper
Topic: Inventory, System, Management, Business, Software, Computers, Time, Information
Inventory Management System
In the modern business era, inventory management system is very instrumental. A business cannot perform fully as expected without proper inventory management tools in place. This is automated management business inventory methods where every sale and purchases are listed in an organized manner. This system ensure that customers have enough always of what they want and goal balancing against retailers financial needs of maintaining as little stock as possible. Since inventory mismanagement leads to customer disappointment, an inventory management system is mandatory for big business enterprises. It is also very important for small businesses to have inventory management systems so as to boost them increase their production, perform and at the same time be a strong competitor in its global and local competition business. It generally means to maximize the sale and profit. Therefore, there is no other better option than implementing inventory management system for small business such as the local clothing store. Inventory management systems concentrate on delivery and monitoring of goods to customers. This kind of tracking system is very crucial in retail stores involved in more than one product variety for sale. Inventory tracking systems are used to monitor orders, delivery and shipment schedules (Arsham, 2006).
For this kind of business, a Stand Alone Inventory Management System is the best and cost effective because it works offline and is not connected to other systems. Stand alone systems are used to store customer data and inventory stored in local database.
Inventory management system comprises of many equipments that work together so as to achieve the desired goal. First of all, the hardware part of it. Computer hardware comprises of all physical equipment that enables the computer to function properly which consist of magnetic, mechanical, electrical and electronic devices that comprise a computer system, disk drives, CPU, keyboard, mouse, or screen. Another necessary hardware component of the inventory management systems is individual workstation, it include computers compatible with inventory management systems software and connect to the main server to access the database. Inputted data is updated in the main database where it can be accessed from a workstation; this is a very useful tool for checking inventory levels to assist the management in making proper decisions for customer satisfaction (Schreibfeder, 2009). It is also very important for small businesses to have inventory management systems so as to boost them increase their production, perform and at the same time be a strong competitor in its global and local competition business. It generally means to maximize the sale and profit.
In addition to the necessary hardware components, other hardware pieces can be used to improve the efficiency of the system. For instance, a bar code scanner can be used to scan in and out inventory; the transaction will be reflected in the system immediately. This hardware is very efficient than updating inventory manually, she will just have to scan the items bar code during stocking time and when sold so that the quantity left is easily known. Bar code scanners can be incorporated into a personal assistant (PDA), it can be incorporated by the system as a small workstation since it can access information from the database. PDA with a bar code scanner is very convenient because data can be inputted directly into the system on the go. The user can check inventory levels and get product information without looking for a workstation to do so (David, 2004)
Software component is the main part in inventory management system implementation. Software gives instruction to the hardware on the computer. A software solution has flexible scalability that helps the business grow. There are many software solutions today that help in managing inventory in a firm.
Costs involved in the creation of Inventory Management System
Inventory Management System implementation has some costs involved that must be met in order to achieve full system functionality, these costs include:
Purchasing of hardware such as computer, operating system, mouse, keyboard, screen, printer and other devices.
Software cost depends on whether you purchase a readymade inventory management system, or she will get a programmer to programme one. In either of the options, its cost should be figured out. An antivirus should also be purchased.
Another cost is based on maintenance, these include; supplies such as drums for printer, paper, ink, extra disk storage, operating system and computer upgrade, and software upgrade. Should be done whenever necessary.
Setup costs include the time required in customizing the system for the user, entering data and parameters.
Training and support costs; this is the time required to teach the users how to use the system and debug it on demand, the shorter the response time the more expensive it will cost.
Archiving; the equipment and time required for backing up the data and system regularly. Should be done regularly to help in security purposes in case of system failure.
The accuracy of an inventory management system has a great impact on any business. A clothing store like this for instance requires accurate inventory data to help in stock control; inaccurate inventory can eventually lead to items getting out of stock which leads to customer dissatisfaction and a potential loss in the business. Therefore, the accuracy of the inventory database should be improved by developing a procedure to ensure compliance.
A process for material handling should be developed. The procedure should provide steps to be taken when bringing stock into the shop.
Training users how to use the processes. The users should be fully trained on the inventory procedures; they should understand the effect and importance of inventory accuracy to the business.
Monitor the users and implement audits. If the users cannot follow the rules provides, inventory procedures will have no value. Paperwork and counts audits can verify if users are following the procedures.
Cycle counting procedure implementation. This involves investigating the cause of discrepancies in the inventory when found.
Workflow diagram illustrating how the system works
It is very necessary to make sure that all users have proper knowledge and training of the system and all the aspects of how to utilize successfully all the features. Once the user is confident with the system, it will help the business benefit and also help them reach their objectives and goals. Trends and technology are changing constantly in today’s market and therefore there are continuously new and improved systems available to firms. If the system is fully implemented as expected, the business firm will have a range of benefits which include; increased efficiency and productivity, saves time and money, more organized business, improved accuracy of inventory orders, and making the customers satisfied since it helps in meeting their demands quickly (Stylus, 2008).