The control of inventory systems

The go steady of line claysINTRODUCTIONIt could non be argued that the emmergence of selective learning Technology has brought work its place present day. The Informatics r ontogenesiss confine unendingly brought sunrise(prenominal) solutions that come up with new ch wholeenges, which keep the need for newer solutions continuous. training Technology created new telephone circuites cosmos run and managed on the cyberspace c each(prenominal)ed e- commerce and create other tradees cozyly and globally.Some artes found that it is essential to join the evolution which needed them more(prenominal) trend to transform the comp all and convert it into an e-business. Others, who stayed where they were open soon discovered the brilliance of IT activity in e truly study of its business. Using experts of IT to help the conversion, and by instrument of IT it includes information base experts, networking professionals, history and archive temper dodges applications, we b site designers and administrators,etc. Some businesses do hire virtually professionals from other IT solutions companies eon others assign their own.Managing of strain for either business, stomach it is littler or big, is mavin of the most in-chief(postnominal), and often least progressled, functions for a business owner. E genuinelything revolves around it Sales, Customer Service, Accounting, Planning, Purchasing, etc.Barcodes Inc (2009) defines the entry tally constitution as A set of hardw atomic number 18 and softw atomic number 18 based tools that alter the process of introduce prove. The kinds of line sweeped with an neckcloth ascendance formation keep include almost approximately(prenominal)(prenominal) type of quantifiable good, including diet, clothing, books, equipment, and any other contingent that consumers, retailers, or wholesalers may purchase.The penning in hand is sum uping a public character of design and implementation of an p arntage carcass developed around the standards which past sens be customized according to the requirements of any community. The remains would help companies overcome main challenges that be go about them by managing the bid Stock activities such(prenominal) as selling, buying goods and reports handling.However, the main purpose of the establishment is to apply the items information as in designate info and throw the purchase information as an come emerge of the closetput. On the Other hand, the establishment of rules leave alone affirm printing almost functional reports according to the companions requirements.Therefore, when studied companies general requirements regarding control inception routines, it concluded that companies goals and satis positionions be achievable deep down the disposed(p) time limitations. However, control of history system, which typically represents 45% to 90% of all expenses for a business, is needed to meet that the busines s has the right goods on hand to avoid short letter-outs, also to prevent shrinkage and uncertain accounting. umteen businesses find fair enough of their limited resources, capital, profligateen up in their major(ip) assets and broth. Worse than that, they may require their capital tied up in the wrong kind of caudex. memorandum may be old, worn out, shop-worn, obsolete, or the wrong sizes or colours, or at that place may be an unbalance among different product lines that numbers the customer appeal and concerns of the total operation.This project would lieu the light upon common line of works faced during the application of Inventory Control musical arrangement and would feature nonice well-nigh solutions to overcome these problems. So we fag end say to any business Control it before it controls you.As in this paper we argon have-to doe with closely the inventory control systems, we argon going to analyse the role of inventory in general and inventory contro l systems in particular.In the literature review we are going to analyze some findings from journals, articles and web sites that mostly describe the role of inventory control systems and their problems.In the second part which is Methodology the data collection and research methods which would be basically face-to-face interviews with three businesses that vary in operate, size and take but share the need to have an effective inventory control system. As thoroughly as observing those companies to play up the main issues to be addressed. We would also consider the findings from journals and some case studies to help us visualize the challenges in depth. We would also analyze the collected data in edict to get the copious view of the issue.Next, we are going to address the challenges that have immerged from data collection of these businesses. Those challenges would definitely vary as e truly company has its individual needs as they provide different services. But they do all meet at one point where there is a need for an effective inventory control system whether there is one utilize before or not.The next section of this paper is concerned about the calculated system which would suggest a system intentional to lull the process of inventory control and prevent the problems that occurred before. This would be explained via a abstract design as well as a data stream diagram which has three main actors supplier, customer and bank.Later, we would explain the burdens of applying the proposed system, as some solutions would bene befit some businesses than the others as every company would be hard-boiled separately. This section would also include some findings from resources describing the benefit that some companies gained upon application of inventory control systems.Discussion is the next section which would concentrate on evaluating the findings from results and linking them with the previous findings from the literature review. One could say how beneficial the use of applying the ICS and how many losses would be eliminated to be added to margins.LITREATURE REVIEWManuel L. Alcuaz Jr (2008) describes the inventory saying Inventory is a major headache for most retailers. Some dont have any information on their inventory movement or levels. As a result they experience many and frequent transport outs, time millions of pesos are tied up in slow-moving or non-moving inventory. The problem batch be due(p) to the sheer number of items, the complexity of items, or having very many locations.This shows the consequences of having no reliable inventory systems, as the supplier would persist from railway line outs he would have to ship in more stock to cover the needs whereas there is enough stock but this all is due to system failures or errors.Rover Data Systems, Inc (2008) make a paper says Control it before it controls you. The paper discussed different points on the importance of inventory control system for different busin esses. It addressed four types of businesses. First, create to stock business that builds to stock according to a plan indeed waits for assigns to come. Second, manufacture to tell business that waits for prepares to come, then builds a customer specific product. Third, distributers which purchases and stocks product, then sells to customer and finally the kitter that purchases and keeps detailed inventory on hand, then quickly assembles or packs to deliver to the customer when ordered.Inventories vary in the slipway they are being managed, although we are considering the machine-driven inventory control system, it is meritable to understand the problems of inventory in general. Weber (2008) explains these key symptoms of an inventory as followsA company has too many of the wrong items and production shortages. keep going overnight shipments.The unceasing levels on the computer are ever so wrong. turgid end-of-the-year write-offs.Congested plant floors.If someones looking for an item, the whole crew has to go out and search.Responsibility for inventory levels is unclear.Hence, they could be all categorized as precaution problems. I theorize that these problems could all have been prevented if they was a grim and make heed that highlights the role of every single employee. Such as the problem of congestion of items, overnight shipments could have been eliminated if there was even one employee doing his chew over as should be. But, we cannot ignore the fact that use of an automated system would renovate the pending jobs. In other words, the business would need to have center strategies considering the inventory levels.This leads us to Naples (2008) who claims the responsibility on the f managers to improve inventory not inventory employees who only have to perform certain jobs. He defines the managers role in inventory as followsMaintain the correct faculty level Make sure all department personnel realise required training.Hold department me etings to discuss problems and ways to improve.Become as proficient as possible with the inventory-control system.Control and work to reduce unsold special order parts, non-stock parts and excess inventory.Control parts inventory obsolescence. This is the most volatile influence on holding expenses as obsolescence increases, the inventory holding expenses become more punitive. some(prenominal) emoluments do from items that are selling leave behind be lost to holding salute for items that are not selling.Optimize settings to reduce inventory depth, build inventory width, and reduce the likelihood of excess stock and obsolescence.I would have to agree with Naples, curiously that he was more precise than Weber. Because, even with the availableness of an inventory Control system there needs to be the right application, control and proviso of this system. So they have to be trained and listened to highlight their problems with the system and put together the suggested solutions.Ma wson (2009) says retailers need to be focused more than ever on putting good stock control systems in place to ensure they do not overpay suppliers, and to reduce the risk of having items stolen off shelves. A report into loss prevention has found that too many retailers plainly accept shrinkage as a fact of life, a fact that could cost them up to 3% of revenue, and all too many think that theft plays a bigger role than systems, a thought that could well be flawed.I believe that many retailers focus their efforts on internal and external theft by paying for CCTVs and security systems, where the main issue is often process failure which drags into leakage and shrinkage where nobody cognizes where these comes are gone. All what it needs from retailers and businesses is to focus on inventory control systems and consider them as an investment.Inventory Control Systems are -as any other systems- not error free. According to Sahin and Dallery (2009) considering the thousands of items m ay come in and go out the system in a working day the Possible errors such as defects that affect the physical menses and the associated information flow can therefore be polar.A survey held by Hollinger and Davis (2001) shows that among errors causing swage on the physical flow, internal and external theft, administrative errors and fraud made by vendor accounted for 1.8% of sales in US retail persistence in 2001 assuming an annual sales base of $1.8 trillion this be US retailers $33 billion.In other words this huge amount of cash can lost all around the world, it only is a crisis affecting retailers and is continuing to happen annually. This is due to either simply unfavorable data or skilful errors in the inventory systems that have been relying on worn-out systems thinking that they are saving currency by retentiveness the same system. Whereas, making the right decision by a strict system update policy can save more amounts than what is being lost.A paper published 2002 by SCORE (Counsellors to Americas Small Business) suggest that inventory control systems range from eyeball systems to reserve stock systems to perpetual computer-run systems. It concerned with three forms of inventory that is Raw clobbers, In-process or semi-finished goods, and Finished goods. The look System is the standard inventory control system for the vast volume of pocketable retail and many small manufacturing operations and is very straightforward in application but in this approach the manager have to check the store and record any stock shortage which is very difficult. Reserve Stock (or Brown Bag) System is much more dictatorial than the eyeball system as it keeps full control over the stock and ensure that the new shipment should arrive just as the snuff it of the reserve stock is being used. In Perpetual Inventory Systems a programmed instruction referred to commonly as a trigger, automatically transmits an order to the seize vendor once supplies fall below a prescribed level.Floyd D. Hedrick (2006) suggests several(prenominal) proven methods for inventory control, which used for small business. The methods from simplest to most complex are Visual control, Tickler control, Click sheet control, and Stub control. Today as business grows computer-based system is used and is enhanced by the fact that company accounting and billing procedures can also be handled on the computer. point-of-sale terminals relay information on each item used or sold. The manager receives information printouts at regular intervals for review and action. Off-line point-of-sale terminals relay information direct to the suppliers computer who uses the information to ship extra items automatically to the buyer/inventory manager.Large businesses nowadays are oblige to depend on accurate and up-to-date inventory systems by means of installing the RFID (Radio Frequency Identification) so they can have accurate inventory counts and to avoid the massive loss. The Freig htliner-Western Star Trucks as the star(p) heavy-duty hand truck manufacturer in North America in a published case study (2008) has proven the reli readiness of the Motorola RFID. As a result the company quotes The installed solution has already proven itself at the Portland plant. Labor costs associated with inventory control have been cut back significantly, as have data errors and mis-ships. (Motorola Inc, 2008).Tracking the case study- considering the uniqueness of each corporate- by installing the RFID system can prevent the errors and avoid several problems that where found in businesses and in particular considering small businesses that lack the experience of decision making knowing their priorities in investment.Jon Schreibfeder (2008) wrote Effective Inventory Management allows a distributor to meet or exceed customers expectations of product availability with the amount of each item that provide maximize net profits. He thinks that there is a family relationship bet wixt the inventory management and the distribution of goods and of course on the customer. Indeed he sees that customers may depend on you to have some of your slow-moving products always on the shelf just in case they need them. The availability of these products contributes to your reputation as a reliable supplier and helps to differentiate you from your competitors. It is real that this view shows the importance of having an effective inventory control system, but there are many other important views. For example in forum line industry any shortage in the row material exit cause shutting down the whole line, which means losing time, effort, and money.A paper published by Claudio, Zhang and Zhang (2007) proposed a intercrossed system, which combines a make-to-order agitate system with a make-to-stock pull system in food industry. The paper suggests The make-to-stock strategy will be utilize to those customers who come in requesting a product at the time of arrival, and the make-to-order will be applied to those customers who can make it information in advance about their needs. The hybrid system is designed to overcome the most important problems that faced food industry which is competition and how to deliver the service to the customer fast and in a good quality.Edward A. Silver, (2005) published a paper with the title Inventory Management A Tutorial, Canadian Publications, Practical Applications and Suggestion for Future search. This paper first presents a tutorial overview of inventory management. This includes a categorization, by a number of dimensions, of inventory problems and associated models. Relevant Canadian contributions to fundamental and applied theory are listed within the dimensions. Then substantial evidence is provided of general Canadian applications of inventory management. The paper points out the continuing gap among theory and practice, followed by a number of suggested research topics to help bridge circuit the gap.Zipki n, P.H. had published his book Foundations of Inventory Management McGraw-Hill, (2000). In this book he says that all organizations in any sector of the economy, Supply Chain Management, i.e., the control of the material flow from suppliers of raw material to final customers, is a crucial problem. The strategic importance of this area is today fully recognized by top management. The total investment in inventories is enormous, and the control of capital tied up in raw material, work-in-progress, and finished goods offers a very important potential for improvement. This book suggests a wide range of different inventory models that can be used when developing inventory control systems to give a significant competitive advantage.METHODOLOGYThe aims of this research experiment is to discover the light on the most common problems that face small businesses in keeping track of their inventories for a better resource management. It is going to highlight the reasons behind not applying inv entory systems and gathering needed information about the business goals and resources to apply a suitable inventory system. Data array methodsInterviewsThe research would conduct a live interview with a small business owner Eng. Ali Al-Asfoor from ARC industry and welding services. Which is a small establishment started 2008 providing fabrication and welding services for individuals and corporate.Another interview would be held with Mr. Adel Al-Shaer an inventory manager at Hajji Hassan Al-Aali business concourse. It is considered one of the largest business groups in Bahrain providing twist and pre-cast services.The third interview would take place with Mr. Hassan Ali an inventory manager at Al Jabiria Technical School, which is a public develop as an example of inventory systems in the general sector.ObservationA full working day was held at Al-Jabiria Technical school by the assistance of one of the teachers there to report the process of inventory tracking system.JournalsS everal web published journals were used to find out the major problems that encountered businesses upon the application of inventory control systems.Case studiesThe Freightliner-Western Star Trucks as the leading heavy-duty truck manufacturer in North America, has enriched the research by monitoring their use of inventory control systems using the RFID technology from Motorola. Data depth psychologyIt has been recognized that Arc welding and fabrication do not have inventory system and they need one to keep track of their supplies which consist of metal bars of different sizes, entryories, paints, welding materials so it can save their time and money as if bulk orders were made it is cheaper.Alali group had an inventory system which is the bar code scanning but with some accuracy errors. The inventory manager at Alali group lead to invest three types of inventory row materials, products, and goods. It gave the research a clear view about the inventory path. The owner order new goo ds and kept in the store. When the customer made the order, the salesman would check the store if the goods are available or not If not, the salesman would place an order once again. Next, the customer would pay the money and salesman would give him a receipt, if the customer was not willing to give a full payment, the salesman would save the debt to state the remaining money. At the end of the day, the salesman would collect the money and entrust it to the Bank. And in some situations, the customer might want to harvest-home the goods, thus the salesman will replace the goods and record it.Finally, the schools inventory system was fuck manual which took time and effort from employees.By using work mirror image technique the research divided the system requirements into two groups, operative Requirements and Non-Functional Requirements.Functional Requirements In this requirement category, the research considers the functional requirements within this task, it defines the syste m services and its functionalities. Furthermore, it provides a detailed description of the data.Non-Functional Requirements Regarding the non-functional requirements, the research defines system properties and constrains. Consequently, through this task, it move to take in mind system constrains and restrictions that company requested in order to achieve the desired executing.CHALLENGESManaging inventory by implementing inventory package is an essential part of successful and well-organized business organization, to manage inventory in more effective and efficient manner. In Todays competitive business world, business managers should know the fundamental operations of the business better. Therefore powerful inventory software helps to easily manage total inventory and invoicing system to maximize the inventory management benefits. Powerful inventory tracking software allows you to access the relevant information of the products includingAccurate information of trustworthy goods. Movement of goods within or between locations.Total sales or purchase order of goods.Removal or other disposition of goods.Status of remaining goods. schooling of inventory items.If any organization does not implement an automated computerized system manage and monitor the activities of their stock-ins and out it cannot predict what items are available in stock and their precise quantities. Sometime, the working staff may forget or misplace the original price of the product causing them not to know the minimum allowed price to sell. This would definitely slow up the process of the business and this would affect other activities performance that cannot be controlled and lots of information that could not be clear or available, as the types of information listed above.As a result of business analysis and workflow observations, unfortunately, many companies are facing problems with their menses systems whether it was a manual or a half automated system. Our main concern is to build the new system as a solution for these problems.Moreover, we had a number of meetings with some companies staff and representatives to discuss some ideas regarding the modifications and the improvements needed to be made. In addition, we had the chance to track the job workflow these companies, and at the same time we were able to take some notes while observing. As a result, we concluded that the major current problems areMany of the current manual systems contain some sensitive functions that were implemented manually, oddly the calculation functions. As a result of this, accuracy leaking may seem during these mathematical processes. Consequently, using the mathematical functions in the designed system and tour all these manual process to an automated system will check the desired accurate results. This case was obvious in Arc fabrication and welding services, which was relying on manual calculations that lead to data leakage which believably cause loss in amounts that would be increasing if an automated inventory system was not applied.Approximately, all of the current manual systems did not support printed documents where the reports are printed separately by employees who are in charge of HR activities. This process leads to less efficient performance and wastage in employees time. Actually, printed reports and other documents are one of the main functions in any inventory system. Regarding user satisfaction, the new designed system will support documents printing process in such a way that ensures simplicity, reliability and efficiency. Adel Alshaer head of inventory at Hajji Hassan AlAli group said We had to do the metre surveying and register them into our system which is depending on spread sheets then deliver the calculations and then do reports upon the findings which needs extra effort and time from us.On the other hand, regarding the current automated systems, time is a critical limitation that faces both employees and managers. As a result of business analysis, many current automated systems contains some system debugs which need the system support team to be manifold deeply in running the system functions. Thus, this involvement is a very time consuming task which may affect the system performance and cause some prohibited delays in the systems critical processes. Therefore, there is an pressing and essential need for a dependable inventory system that would cost less time by being accurate with reduced technical debugs.PROPOSED SYSTEMThe main goal of the system is to make a business able to have a closer look onto their stock, have more control on activities concerning maintaining of inventory, and controlling the related financial issues. This system is evaluate to solve the problems that any business may face while maintaining inventory. Plus, the system will assist the purchasing department to keep ideal level of stock and to avoid any financial expenses that may occur as result of implementing improper policy of maintaining inventory.Listed below, some points that explain the main objectives and features of this systemManage the company inventory system in effective manner. help oneself to generate report to analysis total sales and purchase of the items. advance to keep the total sale/purchase order of the products.Facilitate with customizable options that are easy to use.Display inventory data in a gracious user interface way.Keep track the customer records for customer relationship management (CRM).Save time with automatically calculating totals and doing tasks.Keep high level of security at shopping time, counting time and upon the demo of information by providing accurate inventory quality information. bear information on the availability of stock items and the status of stock requisition by creating a series of databases that will store product and/or item information effectively.Reduction of errors in transactions.Reducing manual system usage. efficiency to run in different env ironments as a result of fast growing companies.Contextual DiagramThe context diagram of any system shows the external entities and the flow of data between those entities and the whole system. The pursuit figure1 shows this regarding the designed Inventory System.The square is a representation of the system boundary. The system boundary defines what is inside and outside the system which is shown in Figure2.The system basically will work like thisFirst the supplier will receive an order. Any useful information about the order will be entered in the system by the user who will save it in the order database. Then the user should view the stock information which related to the order in hand by using a search locomotive throw the purchasing department. The search technique could be modified to fit the organization. If the stock is not available the order will be cancelled. If the stock is available an invoice will be created and give it or send it to the customer. Finally, when the customer pays the money, reports will be sent to the bank. The system also will have access to CRM database for customer relationship support. See figure3.The data flow diagram shows the relationship between the supplier, customer and the bank. The new system would propose that sequence operations could start with the supplier that sends the orders to the company. Once the order is received it is being stored so if the stock is available in the required quantity the invoice is being proceeded, and if there is no stock available the inventory staff would have to contact the supplier until the process is being proceeded again until here. The invoice is being created and sent to the customer. The payment would either go directly to the bank via a cheque or by cash to the supplier.RESULTSThe system helps the organization to keep track on its suppliers, customers and the item movement be it stock-in or out, or between different branches, or to-from the customers. The ICS gives business t he ability to have a closer look to their stock, have more control on the activities concerning maintaining of inventory, and controlling the related financial issues. Plus, it provides the business with asset management solution to increase warehouse and business productivity.ICS resolve also the following problemsWhat you sold?What you need to order?What should be left in stock?The impact of ICS use on the selected businessesAs three companies were chosen, had several problems with their inventory and stock management the problems were explained in the Challenges section. The proposed system suggested solutions upon the mentioned challenges and its suggested solutions should do as followsProvide a reliable and accurate inventory system to prevent data leakage. The proposed system suggests use of an integrated system that links the supplier, customer and bank. This starts from building data bases -if not available- using data warehouse. This would lead into more profit depending on the stock and supplies quantity as it is in Arc trickery and welding and AlAali group. Besides saving more items in stores to be used for the next years in the case of the schools inventory.Saving time and effort This would obviously affect businesses and time is also money in the business world. Reports would be generated automatically upon using an automated inventory system. This would save employees time and effort providing accurate reports so that employees would be busy following up with other chores. Hassan Ali, inventory manager at Aljaberya School We had to do summational reports per semester which needed a week at least to finish afterwards doing all the calculations and data entry via spread sheets and creating the charts then data analysis and writing reports. We even find it difficult and some errors could occur due to lack of organization and experience in such subjects.Elimination of technical errors This would be clearly noticed in the replacement of an inventor y control system instead of using spreadsheets in the case of AlAali group while this solution does not apply the other two companies as they were not using an automated system basically.Other examples by effectively managing inventory using an ICSXerox eliminated $700 million inventory from its supply chain.GM has reduced parts inventory and transportation costs by 26% annually.Wal-Mart became the largest retail company utilizing efficient inventory