Inventory System Thesis Essay
Networking is an essential skill for most business people, but especially for entrepreneurs - Inventory System Thesis Essay introduction. The strong association between the entrepreneur as a person and his or her business demands that entrepreneurs should get out into the world and create and maintain business relationships. AIM Global INC. is a marketing company conceptualized to provide unmatched quality distribution of exceptional products and services to local, regional and global markets. A harmony of advanced technology, distinct marketing strategies and excellent product lines, together with the guidance of exemplary leadership secures the success of AIM Global.
Knowing for its success Mr. Richard Cabautan joined the team of AIM Global and introduced it to his fiancee Ms. Merly Baza. And last June 2008 Ms. Merly Baza along with her two other siblings Ms. Mylene Baza (oldest) and Mr. Marlon Baza (youngest) decided to get a franchise of AIM Global and making Mr. Richard Cabautan as its manager. And so AIM Global Tuguegarao was born. They are just one of the hundred networking agency here in the Philippines, they recruit members that could help them promote and sell their products. Recruiting members is their specialty but their main objective is to sell their products and be known.
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This business entity offers different food supplement like coffee that aids headache, memory enhancer, skin whitening and many more. Now their firm (AIM Global Tuguegarao) is growing rapidly in just short period of time. Having hundreds of members from different part of Cagayan and still counting. And this is where we enter, the timing was just perfect. As their small business is getting bigger, asking them for a little favor with a bigger help for them in return would be a great deal. An advance sales and supplies monitoring system would do the trick.
Overview of the Current State Technology. Figure 1. 0 The business starts when a customer request for a product as shown on the figure 1. 0, after paying the customer will now have his/her requested items and a copy of receipt. At the end of the day the manager computes the sales and matches it with the remaining products. This is done by going over the receipts and computes it along with the counting of the remaining products. And when a product reaches the minimum number of stock the manager will have to order for a new product immediately so that they will not have any problem on the availability of the product whenever it is needed.
The ordered products will be added to the stocks as soon as it arrives. Then the manager will have to compile all the receipts for the month and sends it to the main office for sales rebates. Project Rationale A good inventory tracking system accomplishes four things: 1) it shows what merchandise is in stock, 2) it shows which items are on order, 3) it notifies the retailer when ordered merchandise is scheduled to arrive, and 4) it tells what merchandise has been sold. This information is used to plan future purchases, to determine what is selling and when it is selling, and it helps determine what items need to be reordered or discontinued.
The effectiveness of a pen and paper system depends on many things. These items include how much inventory the company carries, the variety of items, the frequency of ordering, and the number of new or one-time-only purchases. The AIM GLOBAL is currently using a pen and paper system. The firm manually checked their sales and products on a daily basis. This is updated every day and is used to track how many items have been sold and what portion of the inventory remains. And this is done by using their copy of receipts and the products left to tabulate their sales.
The counting of product is done at the end of the day because a minimum number of products are required before ordering a new one. If a business maintains a small inventory with few items then a manual system may work fine. However in a growing business like the AIM GLOBAL with more than one item in stock a computerized system may be more effective in tracking the inventory and maintaining all the records. Our proposed system (Advance Sales and Supplies System) has the capability to track, monitor and gives an alert if a specific product reaches the minimum allowance stock amount.
A search index is also added for the users to easily track items from the warehouse that needs to be replenish which include the product location, availability, description and price of the item. Login account for different users will be created for database security purpose. The users that can access the system are Store Manager and the Owner itself. The system will have a database that includes adding of new product and modifying and deleting existing product. The system will compute for mark-up prices. The system can also provide a hard copy of daily, monthly and yearly reports.
The Advance Sales and Supplies System can be integrated with other add-on products like bar code scanners, receipt printers, and can also be integrated into the main accounting software. This helps to keep all financial records up to date and available for analysis by management. The benefits to this type of system are obvious. First it is easier to maintain and utilize than a manual system. Entry of sales information is often as simple as scanning in the bar coded merchandise when it is delivered, and scanning the item at the check out counter when it is sold.
This scanned information updates inventory records and also records cost and sale price. Profits are automatically calculated and made available for instant analysis. Pricing can be updated automatically from the main computer. The updated price is automatically applied to all of the selected items in stock. Product information can be updated simply by changing the data in the computer. Tracking sales is much simpler because all the calculations are done by the computer and can be printed out in a number of financial reports. Even the financial reports can be customized to show profit by day or by item.
Keeping an exact count on what items have been entered into the inventory, and which items have been sold also enhances security. This up-to-date count will let the retailer know if merchandise is being stolen. Taxes on items can also be set up to portray a variety of tax rates. CHAPTER II Project Description Statement of the Problem General Problem “Inventory” to many business owners is one of the more visible and tangible aspects of doing business. Raw materials, goods in process, and finished goods, all represent various forms of inventory encountered in a manufacturing organization.
Each type represents money tied up until the inventory leaves the factory as a purchased product. Likewise, merchandise stocks in a retail store contribute to profits only when their sale puts money into the cash register. And so manual system means more human error, longer hours to work on and gives you a lot of paper work. In the case of AIM Global they need to work on how to keep track of their sales and products everyday and must be well managed to maximize their profit. Having a manual and poor inventory arises many loses, it can be unreliable, inefficient and costly.
Specific Problem 1. Slow data retrieval Since they are using pen and paper system they are mainly dependent on the papers or documents that they have. In their case they used their receipts to monitor everything. And this cause some delays because they need to manually go over those receipts everyday just to make sure that everything is going just fine. Consider the time it takes to bring a product into your store, implement your quality control protocol, add a price, place it on a shelf, and then record it in inventory accordingly.
And it takes longer to find old records because you aren’t just retrieving them from a database. 2. Data inconsistency Data inconsistency mean “Same data with different type or Data which have more than one versions” this happen because the update is not properly done. Updating sales and products is done by four people in their firm, the manager and the owners which can lead to many different updates. Traditional methods in inventory tracking rely on hand counts and reports from distribution sites which an often be miscalculated and lead to inaccurate numbers. . Time Consuming Since they need to write everything that happen, from the receipts that they give to the customers up to the product updates. It would not only slow down your work but also contributes in paper wastages that happen during writing or updating. That could also result in wasting your time doing something over and over again. 4. It is very Tedious Doing something manually nowadays gives you a lot of stress specially when handling a business. It gives you a lot of paper work that sometimes slows down sales opportunity.
And if things go wrong the worst’s case scenario is low customer service due to products in availability. 5. Data Security They don’t have any filing cabinet where they can keep their important documents and records such as sales for the day, number of products on hand and number of products that needs to be replenished. This could lead to product losses. These could also mean that anyone who enters the premises can access any of those data which is not good for the company because it will result to theft.
Objectives of the Study Main Objective Inventory control is an important element of a retail business, and there are many ways to improve sales, reduce loss, and increase product turnover simply by analyzing reports. A truly effective inventory system will minimize the complexities involved in planning, executing and controlling a supply chain network which is critical to business success. The opportunities available by improving a company’s inventory management can significantly improve bottom line business performance.