53234300 Introduction to Inventory Control System

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INTRODUCTION TO INVENTORY CONTROL SYSTEM

An inventory control system is a process for managing and locating objects or materials. In

common usage, the term may also refer to just the software component.

Modern inventory control systems often rely upon barcodes and RFID tags to

provide automatic identification of inventory objects. In an academic study performed

at Wal-Mart, RFID reduced Out of Stocks by 30 percent for products selling between 0.1

and 15 units a day. Inventory objects could include any kind of physical asset:

merchandise, consumables, fixed assets, circulating tools, library books, or capital

equipment. To record an inventory transaction, the system uses a barcode scanner or RFID

reader to automatically identify the inventory object, and then collects additional

information from the operators via fixed terminals (workstations), or mobile computers.

Common Components of an Inventory Control System?

Barcode ScannerWe can help you find a scanner for use on any barcode symbology in any environment.

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Inventory Software

We carry inventory software for control and tracking of warehouse or point of sale

inventory. Bundle our software with barcode scanning hardware for a complete inventory

management system solution. Download a free inventory software demo program for your

computer.
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Barcode Printer

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Barcode Label

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IMPORTANCE OF INVENTORY CONTROL SYSTEM

Inventory control is important to ensure quality control in businesses that handle

transactions revolving around consumer goods. Without proper inventory control, a large

retail store may run out of stock on an important item. A good inventory control system

will alert the retailer when it is time to reorder. Inventory control is also an important

means of automatically tracking large shipments. For example, if a business orders ten

pairs of socks for retail resale, but only receives nine pairs, this will be obvious upon

inspecting the contents of the package, and error is not likely. On the other hand, say a

wholesaler orders 100,000 pairs of socks and 10,000 are missing. Manually counting each

pair of socks is likely to result in error. An automated inventory control system helps to

minimize the risk of error. In retail stores, an inventory control system also helps track

theft of retail merchandise, providing valuable information about store profits and the

need for theft-prevention systems.

Computers and Inventory

Automation can dramatically impact all phases of inventory management, including

counting and monitoring of inventory items; recording and retrieval of item storagelocation; recording changes to inventory; and anticipating inventory needs, including

inventory handling requirements. This is true even of stand-alone systems that are not

integrated with other areas of the business, but many analysts indicate that productivity

and hence profitability gains that are garnered through use of automated systems can be

increased even more when a business integrates its inventory control systems with other

systems such as accounting and sales to better control inventory levels.."
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How Does an Inventory Control System Work?

Automated inventory control systems work by scanning a barcode either on the

item. A barcode scanner is used to read the barcode, and the information encoded by the

barcode is read by the machine. This information is then tracked by a central computer

system. For example, a purchase order may contain a list of items to be pulled for packing

and shipping. The inventory control system can serve a variety of functions in this case. It

can help a worker locate the items on the order list in the warehouse, it can encode

shipping information like tracking numbers and delivery addresses, and it can remove

these purchased items from the inventory tally to keep an accurate count of in-stock items.

All of this data works in tandem to provide businesses with real-time inventory tracking

information. Inventory control systems make it simple to locate and analyze inventory

information in real-time with a simple database search.

Inventory control systems maintain information about activities within firms that

ensure the delivery of products to customers. The subsystems that perform these functions

include sales, manufacturing, warehousing, ordering, and receiving. In different firms the

activities associated with each of these areas may not be strictly contained within separate

subsystems, but these functions must be performed in sequence in order to have a well-run

inventory control system.

In today's business environment, even small and mid-sized businesses have come to

rely on computerized inventory management systems. Certainly, there are plenty of small

retail outlets, manufacturers, and other businesses that continue to rely on manual means

of inventory tracking. Indeed, for some small businesses, like convenience stores, shoe

stores, or nurseries, purchase of an electronic inventory tracking system might constitute awasteful use of financial resources. But for other firms operating in industries that feature

high volume turnover of raw materials and/or finished products, computerized tracking

systems have emerged as a key component of business strategies aimed at increasing

productivity and maintaining competitiveness. Moreover, the recent development of

powerful computer programs capable of addressing a wide variety of record keeping

needsincluding inventory managementin one integrated system have also contributed

to the growing popularity of electronic inventory control options.

Given such developments, it is little wonder that business experts commonly cite

inventory management as a vital element that can spell the difference between success and

failure in today's keenly competitive business world. Writing inProduction and InventoryManagement Journal, Godwin Udo described telecommunications technology as a critical

organizational asset that can help a company realize important competitive gains in the

area of inventory management. He noted that companies that make good use of this

technology are far better equipped to succeed than those who rely

on outdated or unwieldy methods of inventory control.
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APPLICATION

An inventory control system may be used to automate a sales order fulfillment process.

Such a system contains a list of order to be filled, and then prompts workers to pick the

necessary items, and provides them with packaging and shipping information.

An inventory system also manages in and outwards material of hardware.

Real-time inventory control systems may use wireless, mobile terminals to record inventory

transactions at the moment they occur. A wireless LAN transmits the transaction

information to a central AVALON.

Physical inventory counting and cycle counting are features of many inventory control

systems which can enhance the organization control systems WORK ONLY with

computers.

What Industries Use Inventory Control Systems?

Inventory control systems are employed in a wide variety of applications, but they

all revolve around tracking delivery of goods to customers. Inventory control is crucial in

retail stores, especially those with a large number or variety of merchandise items for sale.

Inventory control is also used in warehouses to track orders and shipments, and for

automated order processing. Other important applications of inventory control systems are

in manufacturing, shipping, and receiving.
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THE FUTURE OF INVENTORY CONTROL SYSTEMS.In the latter part of the 1990s, many businesses invested heavily in integrated order

and inventory systems designed to keep inventories at a minimum and replenish stock

quickly. But business owners have a variety of system integration options from which to

choose, based on their needs and financial liquidity.

At the same time that these integrated systems have increased in popularity,

business observers have suggested that "stand-alone" systems are falling into disfavor. A

1996 study by the International Mass Retail Association (IMRA), for example, concluded

that stand alone Warehouse Management System (WMS) packages acquired to perform

individual functions will soon become obsolete because they do not integrate well with

other systems.

Another development of which small business vendors should be aware is a recent

trend wherein powerful retailers ask their suppliers to implement vendor-managed

inventory systems. These arrangements place the responsibility for inventory managementsquarely on the shoulders of the vendors. Under such an agreement, the vendors obtain

warehouse or point of sale information from the retailer and use that information to make

inventory restocking decisions.

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53234300 Introduction to Inventory Control System

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