ABSTRACT
Inventory is often the largest priced asset of a business after the fixed asset.
Keeping the inventory also means keeping a tab on the realizable value, market
value of all the stocks, stock in production and finished stock. A computerized
inventory management system to order and update the stocks was designed and
goods were supplied to implement the possible solutions. The retail business vision
is to maximize profit from customer satisfaction and loyalty towards the store by
providing more personalize service for the customer. The major problem of the
store is they do not have proper inventory control system in guiding and managing
their sale and inventory level of the store. By proposing sales and Inventory
Management System to the store as the replacement of old manual ways, the
project aims in providing system with enhanced and more flexible functions to the
store. The objective of the system is to provide functions in managing goods in the
store more efficiently. In order to achieve the objectives derived, the scope of the
project will focus on the aspects such as database, report generating, quality
control (QA) and point of sale of the store. Besides, the development of system
will be based on online/offline system or window based. In developing the system,
phase development prototype is chosen. This methodology will perform the
development stage in according to modules underlines in the scope of the project.
Thus, version by version of the system will be developed before the whole
complete system is ready to use. The expected result of the system is that the user
interface to be developed will be user-friendly so that it can be handle easily by
people with no IT background.
The traditional way retailer keeps their sales and inventory details is in
spreadsheets which are not effective anymore when the size of the shop and
products gets bigger. This is because more items will be made available in a larger
quantity, thus tracking the sales made with inventory level in the shop would be
complicated and time consuming for the retailer. Besides, the situation gets worst
when the retailer does not have proper method to determine items purchased by
their customers.
Thus, this project will provide solution for retailers that are still using traditional
way in keeping their inventory. Groceries Sales and Inventory System is a
computer-based system that provides the shop structure for maintaining and
controlling goods to be stocked. The approach of Groceries Sales and Inventory
System is commonly used to avoid product overstock or outrages by integrating
daily ‘Point of Sales’ with store’s inventory level.
OBJECTIVES
As the available existing system provides limited functions to the user, thus this
project will contain enhanced and more flexible functions to the store. The
objectives include:
i. To provide function to manage goods in the store more efficiently. Basic
functions such as ‘add’, ‘delete’, and ‘update’ for data management will be made
available.
ii. Filling system in managing all transactions and documents that are relevant as
the aid in the stock tracking routines.
iii. To automatically generate daily report on sales and inventory activities
iv. To provide notifications on the goods’ expiring date for clearance activity.
v. To generate receipt with proper format for customer references
vi. To provide point of sales for each day
vii. To reduce time and cost to control and manage inventory
RESEARCH LIMITATION
Due to time constraints, the project has the following limitations:
Lack of new request status checking
The system does not provide any means in checking request for new products and
this
makes the requesting process incomplete where the user has to check it manually.
Lack of decision support element
The system does not analyze the data in capture in the database such as provide the
patterns of customer buying behavior to the user but just have the capacity of
retrieving the data in the form of report.
LITERATURE REVIEW
2.1 SALES AND INVENTORY MANAGEMENT SYSTEM: HISTORY AND
CONCEPTS
Each day, millions of people take part in countless sales transactions across the
globe, creating a constant flow of value which forms the backbone of our
economies. In general, sales mean a transaction that takes place between two
parties where the buyer receives goods (tangible or intangible), service or assets in
exchange for money. Thus, the process requires each party to give up something in
return for something valuable for them. On the other hand, inventory means the
raw materials, work-in-process goods and finished goods that are considered to be
the portion of a business’s assets that are ready for sales. This explains that,
business needs inventory available to make sales to the customer in return for
money which will generate the profits. There are two kinds of problem that are
faced by business in managing inventory level which are high inventory and low
inventory. Holding a high level of inventory for long periods of time is not usually
good for a business due to costs incur for inventory storage, obsolescence and
spoilage. On the other hand, low level of inventory is not good either as the
business may face the risk of losing potential sales and potential market share as
well. In an attempt of resolving inventory problems, the solution lies on efficient
inventory management.
As the technology development advance, another new technology for inventory
tracking has made its way into stores, warehouses and factories in recent years
(Edward A. Silver, 2007). Radio frequency identification (RFID) uses a microchip
to transmit product information to a scanner or other data collective device. Thus,
the constant ‘beep, beep,beep’ of bar codes being scanned at the check-out lane
represents the modern inventory management systems of stock tracking.
ADVANTAGES OF SALES AND INVENTORY MANAGEMENT
SYSTEM
As the advantages of switching to modern inventory control system clearly proven
by many businesses, it is the time for Rahmath Store to start implementing it in
their store to
see the differences will be brought to the store. In Donald Reimer (2008) in his
study
with the title of ‘Computerization is the key in maintaining proper inventory
levels’
identified few benefits as follows:
Inventory management increases profitability
Activities such as forecasting, controlling and managing inventory increase sales
and
productivity of the store resulting in greater profitability. Besides, accuracy
improvements on the inventory level will result in reduction of fixing costly
mistakes.
Spend management also will be improved as the system provide quick access to
current
and historical pricing, cross-referenceable product codes and tools set for
managing
purchasing activities (Zipkin, P.H., 2000).
Inventory management improves cash flow
Purchasing the correct inventory in the right amount to meet customer demand and
at the
same time eliminating slow-moving, obsolete inventory leads to better cash flow
and
eventually to higher profits.
Inventory management improves decision-making
Real-time business intelligence across all areas of the store is possible with rapid,
accurate data collection. Not only that, issues and events integrated with the system
enables to proactively identify and solve the issues.
Inventory management increases customer satisfaction
Anticipating in seasonal promotion and changing marketing conditions by having
the
right products in stock for customers.
2.4 POINT OF SALE (POS) CONCEPTS AND USAGE
Tim Bajarin (Jun, 2013) writes on his article ‘Bringing the Checkout Counter to
You’ that station or aisle where individuals transport and place products they have
chosen to purchase from the location is a checkout counter or cashier stand. The
typical process that occurs at checkout is that cashier scans and rings up each item
on the cash register and obtains the total. The transactions at the checkout are
process using POS system that the retail store adopts according to its needs.
According to Kaplan, Karen in his article on Los Angeles Times entitle of "Do-It-
Yourself Solution: Small Grocery Chain Has Big Plans for Its Retailing Software",
stated that POS term is applicable for a retail shop or store, the checkout counter in
the store where transactions between customer and store can occur. The term Point
of Sale is often used in connection or relative with the hardware and software for
checkouts POS systems are being utilized in many different industries since its
technology merge ranging from restaurants, hotels & hospitality businesses,
casinos, salons and as well as retail environments. Currently, most of retail POS
Systems were the most sophisticated, powerful and user-friendly computer
networks in commercial usage. Moreover, the POS systems carry out more than
just POS tasks where POS solutions available that include fully integrated
accounting, inventory tracking & management, open-to-buy forecasting, customer
relation management (CRM), service management, rental services, operation
reporting and payroll modules (Quorion,2011). POS software is as only good as its
integration with the many different popular software and services nowadays. For
example, accounting programs, where all of the daily activities and transactions
would automatically import into accounting without any labor input.
CHAPTER 3
METHODOLOGY
As the system contains many module binds together to work as a complete
application, phased development- based is the best methodology to anticipate this
problem where it breaks an overall system into a series of versions, which are
developed
sequentially. Thus, system prototype will be developed based on one module after
another. The analysis phase identified the overall system concept then categorizes
the
requirements into a series of versions. Besides, visibility of layout in window
based
application is one of critical part. This allow author to identify navigation and
usability
problems when developing one of the modules before spending a lot of time
developing
the entire system completely. Once version 1 is implemented, work begins on
version 2.
Additional analysis is performed based on the previously identified requirements
and
combined new ideas and issues that arose from the user’s experiences with version
1.
The advantage of phased development- based methodologies of quickly getting a
useful system into the hands of users provides business value sooner to the user.
Moreover, because users begin to work with the system sooner, they are more
likely to identify important additional requirements sooner. These are some of the
reasons why the author chooses this methodology for development process.
The main method used for this research work is interview. Data were collected
from 5 heterogeneous supermarkets and used as a tool for obtaining facts. About
10 goods were ordered for and were supplied. When they are supplied the update
of the stocks including supplier records were being taken from time to time. The
Computerized Inventory Management System is designed with the use of
Microsoft Visual Basic and Microsoft Access.
Difficulties in the Manual Inventory System
The current system operates manual inventory system, from stocks, products,
ordering and purchases etc recorded in a book. This is faced with errors,
incompleteness, and insufficient data for analysis. Information regarding stocks,
products, sales and purchases are still in black and white which is not properly
organized and managed. From the wholesalers to retailer bills, tickets, vouchers,
receipts of products are recorded in a book but further operations are not being
properly handled. As a result, it is difficult in processing, updating and managing.
The factors for these difficulties are:
1. Time Consumption: Manual inventory systems are time consuming, as the
business owner must keep track of inventory sales on a daily basis, while updating
the system manually at the end of the day.
2. Poor Communication: A manual inventory requires employees and managers to
write down each time an item is removed from the inventory. If one employee
forgets to mention that the last coffee product has been removed from the
inventory, a manager expects the item to still be available for a customer during a
sale. Compared with a technical inventory system, a manual inventory system does
not help the communication in the workplace.
3. Physical Counts: A manual inventory system does not provide any number, as
all numbers from the inventory are gained through physical inventory counts. One
of the difficulties of running a manual inventory system is that physical inventory
counts must be performed frequently to control the items in the inventory. This is
time consuming and can cost the business money, if employees must come in to
help out outside of business hours.
4. Daily Purchases: Keeping track of daily purchases is another difficult
controlling measure with manual inventory systems. A manual inventory system
requires the employees to write down the items sold during a single work day. This
can be a difficult task, as one employee may lose the list of items sold or another
may forget to write down a sale.
Ordering Supplies: A manual inventory system does not update at the end of the
day with updated inventory counts. This means you must go through the inventory
items each time you need to place an order for new raw materials, products or
supplies for the inventory. This can be a time consuming process, as you will
physically have to go through each product box and browse through the items.
PROJECT PHASES
There are basically four phases in the project activities which compriseof:
i. Planning:
- The problem faced by chosen shop is identified and the solution is proposed
- The objectives and scope of project are defined clearly
- The project activities are planned according to the time frame
ii. Analysis:
- Data is gathered and analysis on literature are done
- Interview session with Rahmath Store are conducted for requirements collection
purposes
iii. Design:
- Project model and prototype are designed
- UML diagrams are designed
iv. Implementation:
- Coding of project is initiated until the system is completed
- Testing is carried out to test the usability of the project
- Make it available for the user
3.4 TOOLS, MECHANISMS AND SOFTWARE
Conclusion
This research has designed a Computerized Inventory Management System to
ascertain stock level of a supermarket, when to order for more products, keep
status and updates of transactions, thereby helping managerial decisions, progress
level and stock taking. But there is always a room for improvement in any software
no matter how efficient the system may be. The important thing is that the system
should be flexible enough for future modifications. The system has been factored
into different modules for the management of inventory system to make system
adapt to the further changes. Every effort has been made to cover all user
requirements and make it user friendly.