Abstract
Analysis and Implementation of an Inventory Management System – A Business’s inventory is one of its major assets and represents an investment that is tied up until the item is sold or used in the production of an item that is sold. It also costs money to store, track and insure inventory. Inventories that are mismanaged can create significant financial problems for a business, whether the mismanagement results in an inventory glut or an inventory shortage.
Successful inventory management involves creating a purchasing plan that will ensure that items are available when they are needed (but that neither too much nor too little is purchased) and keeping track of existing inventory and it use.
The main objectives of research are to analyze the inventory management process in the company. The other objectives are to learn how the company keeps all the data of inventory perfectly, to find out the composition of inventory, to study the various inventory ratio and to analyze the inventory management techniques used in the company.
Inventory management being a very important concept in all the company’s having a void coverage often calls for the managerial attention. In the modern times inventory management has become the integral part of the all companies.
So all the firms gives special importance for inventory management. The major objectives of the research is to examine the effectiveness of inventory management system adopted by Kaashiv Infotech; The research mainly focuses on the techniques used by the company to control the inventory.
Introduction
The key decision in manufacturing, retail and some service industry businesses is how much inventory to keep on hand. Inventory is usually a business’s largest asset. The instant inventory levels are established; they become an important input to the budgeting system. Inventory decisions involve a delicate balance between three classes of costs: ordering costs, holding costs, and shortage costs.
Inventory is defined as, “the quantity of goods or materials on hand”.
Inventory management is the system of keeping tab on the goods available and sold, along with managing stock so that the retailer is never out of it. Inventory management is a complex and time consuming process and is usually the top priority for retail decision makers. Unless you have a very specific and slim product mix, there is a high chance that you may end up spending lots of time just tracking inventory. This is of course a very important process and once finessed, will become the strength of the business. Remember, inventory management comprises of many units of the supply chain and each unit may end up using a different tracking system.
Inventory management is vast and covers many aspects of the retail business. Here are a few components that are part of the management system; – inventory forecasting, pricing, cost of storing inventory and replenishing exhausted goods, managing space to store inventory, shipping and return/exchange processes and policies, demand and sales forecasting, and inventory status.
Why do we need Inventory Management ?
There are many reasons why keeping an inventory is necessary. With the modern day retail industry is booming and ecommerce penetrating into the market, it is very important for a retailer to not delay the product availability. If a customer doesn’t find what he or she needs, they will simply move to another retailer. Inventory helps manage the time to delivery by always having a ready stock of products. There is an also a high chance that production will be uniform through the year, but buying patterns will change; festivals and holidays will see a boom in purchase, whereas, the end of a financial year will see a dip in buying. Retailers may want to hold back goods during a price or stock revision, to increase demand or offer discounts.
Inventory Management Systems
There are a lot of cost effective inventory management systems available which offer a suite of tools that allows:
- In-depth and real time insights into the inventory, consumer and supplier, ultimately delivering the right goods at the right time and at the right cost.
- Product performance indicators with the ability to forecast.
- Customer support for vendors and customers; this could include self-help like what we see with many online retailers.
- Keeping track of sales, costs, discounts and providing on-demand or timely reports.
- Reducing the chance of fraud either by a customer or by an employee.
- Modern day inventory management solutions are now cloud enabling their tools to allow on-demand and real time management of the process.
Managers can now access their business ERP from virtually anywhere in the world, even using their own personal devices! The cloud provisions for systems to stay simple initially, and dynamically scale along with the business, a growth model many recommend.
Methods to Supervise Inventory
The success of a business depends on how well the owner(s)’s ability to maintain adequate quantities of items sold. Records provided by an inventory control system should call attention to the need for reorder when necessary or eliminate “dead wood” inventory when called for.
Inventories are controlled and supervised by three (3) methods:
- Perpetual Inventory Control
- Actual Counting Piece
- Looking It Over
Perpetual Inventory Control
The perpetual method is the most frequently used method. It is more costly than the other two but it is an efficient way of keeping count. In this system, complete data records are kept on each item of merchandise and additions or subtractions are made with each transaction. There is an inventory balance plus a receipt of sale, minus the actual sale to reflect the quantity at hand.
Actual Counting Piece
This is another method used to control and supervise inventory. It is used to actually count inventory item-by-item. This is an exhausting task and not many companies or businesses do it. Salespeople are usually involve in this process and there is a large margin of error to be considered as the salespeople go through the monotonous and tiring task of counting everything.
Looking It Over
The third method is “Looking over” the inventory. It is the easiest and cheapest way of controlling and supervising inventory, but there is bound to be errors. With this method, it is hard to pinpoint the inventory levels, the items that need to be ordered, and the items that the store is overstocked with.
Components of a Project Report
A project report varies according to the MBA final year project course at top colleges, depending on the consequences and the requirements of the concerned project. But broadly, a project covers the following components:
- Title page
- Table of contents
- Introduction
- Background of the project
- Project objectives
- Methodology
- Results
- Discussion and Analysis
- Conclusion
- Bibliography or references
- Appendices
Project Report Pages : 80
Can be used in : Operations Management Final Year Project
Delivery Time : Within 2 hours.
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