Inventory Control SystemsSummary

Sidharth ShahFafadia Tech

What is Inventory Control System?

Blind Monks and Elephant (Source: Wikipedia)

Some definitions• Supervision of the supply and storage and

accessibility of items in order to insure an adequate supply without excessive oversupply

• Detailed monitoring and recording of product identifications and quantities to ensure proper planning, use, distribution and disposal

• Consists of all the activities and procedures used to control and maintain the right amount of each item in stock or to provide the required level ...

Case Study 1: PC Vendor• Has 4 shop retail chain, with 2 warehouse• Challenges

– Not accurate track of available parts, prices and dead/slow moving items (Gray Area, specially when humans cannot remember more than 3 things at a time)

– Inflow/Outflow mismatch– Billing and Invoicing still maintained by hand

• Low accountability, high waste• Lot of adjustments to be made on paper• Sorry, out of stock

– Don’t want to hire extra pair of hands to track inflow and outflow– Single Point of failure – E.g. when sick, no one has a clue of what's

available

Case Study 2: Goods Trader• 3 warehouses, one show room (Crockery)• Challenges

– Sales team has a guesstimate on available products (lack of company wide digital catalog)

– Lack of infrastructure and employee co-operation– Losses due to Samples, replacements and

breakage – Inability to take decisions due to lack of reports

Fail?• I had installed inventory control systems and

failed. (Case Study 1) – Barcode didn’t work– Billing was generated again using hand– All I want is something that tracks inflow and

outflow.• We don’t wish to invest in infrastructure since

we have a people issue first (Case Study 2)– Heck we don’t even have electricity in 2 of our

warehouses

Top 5 reason

• Inventory Information isn’t kept up-to-date• Inventory logistics are convoluted and difficult

to follow• Users aren’t adequately trained on process• No process in place for timely notification of

inventory status• Processes are reactive, not proactive

Existing SolutionsHardware Software

Barcode Scanners & Printers Inflow (http://www.inflowinventory.com/)

POS Tally ERP(http://www.tallysolutions.com/website/

html/index.html)

Handheld Scanner MS Dynamics

(http://www.microsoft.com/dynamics/en/us/default.aspx)

RFIDs Visual Inventory Control(http://

www.dynamiccontrolsoftware.com/)

Pareto Principle(And how does it apply to software)

Our Approach• Project Proposal• Iterative Development and Training• Kanban and Scrum

• Eliminate Waste• Amplify Learning• Delay Commitment• Empower User

• Advantages– Manage Risks and Client Expectation– Room to measure what works and what doesn’t

For Proposals• Who are stake holder and key executors?• What is the current approach? • How do you see inventory control system,

helping you?– What are key indicators, how does one measure

it?– Who will benefit from it?

• Reporting aspect• Existing infrastructure

Inventory Control Technicalities• Reorder point• EOQ (Economic Order Quantity)• ABC Analysis

– Raw material– WIP– Finished Goods

• Policy – LIFO vs. FIFO

• Tight integration with business rules/culture

Screen Shorts