The Development of an IT System to Support Inventory Management

Subject: Management
Pages: 20
Words: 8096
Reading time:
28 min
Study level: Undergraduate

Acknowledgments

This study may not be achievable without the cooperation, guidance and support and of a few person and organization. University adopted Supervisor Dr. —PQR1—, Lecturer, Department of Department of Accounting/ Financial Management, ABC University, was the resource of the inspiration and motivation to this dissertation effort. He has provided vital assistance along all the way. His help is really immeasurable.

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Department of Financial Management2, ABC University, is another resource to gaining this study. It has provided valuable modulation, books, Journals, Researches and too many efforts for this study. Teacher and staffs of the Department and the Faculty Dean are extremely helpful. Devoid of their assistance this study could not have reached its ultimate conclusion.

Encouragement, love and caring of my family ensured a working environment for such a project without disturbing the normal family routine.

All the optimistic attributes of this dissertation have driven from those mentioned above. The conclusions or any other errors, omissions and mistakes within this dissertation are attributable just to the author.

Problem Statement

Introduction

This dissertation describes the perceptions & opinions of The Development of an Information system for Inventory Management Study factors affecting their drives & examination.

Background of the project

Inventory management is the active control program, which allows the management of sales, purchases and payments. It is involved in maintaining the appropriate level of stock in a warehouse. It also includes a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. On the other hand, Information System (IS) is the system of persons, data records and activities that process the data and information in a given organization, including manual processes or automated processes. So the application of Information System for Inventory Management Study gives dynamism to a company. Thus, the study along with information systems focuses on why and how technology can be put into best use to serve the information flow about the stock level within an organization.3

Background of the Organization Chosen

Trinidad Energy Supplies & Services Limited (TESS) is a medium-size business located in Southern Main Road, Marabella, Trinidad, and Tobago. It was established in 1994 by owners Mr. Ricardo and Mrs. Jasmine Mohammed, and ever since has been involved in the retail and wholesale of janitorial and industrial chemical and lab equipment to the public. Lab equipments at TESS mainly consist of items to be supplied for a wide range of schools in Trinidad and Tobago. Furthermore, there are over five hundred (500) lab items available at TESS. At present, TESS has a permanent staff of twenty employees and from time to time, a temporary staff is hired on contract to work on-site in the chemical manufacturing department or in the service of boilers/chillers.

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The company’s major difficulty of operation deals with the stock inventory management of chemical and lab items. The stock inventory process is based on traditional and manual processes done using stock cards for recording and monitoring stock levels. Sales are used to be recorded using a general bill or stock book. Other types of chemical/lab that consist of larger items are usually observed and reordered by simply monitoring the amount.

Therefore, this situation presented a number of troubles. The current manual process of stock keeping is very lingering, and complicated to perform since to carry out the process only one person is assigned. In addition, stock cards that are used to store information about items may sometimes be damaged, distorted or misplaced.

Another problem is that is no computerized database system present to support the data entry, storage, and referencing of the large volumes of stock items, so as to provide for data timeliness, accuracy, integrity and security. There is also no network available for more than one user to share data, applications and hardware so as to improve the efficiency and productivity of business processes. Lastly, all these matters have increased lack of motivation in employees because of rising work load.

Rationale of the Research

In traditional Inventory Management, orders are the only information that the firm’s exchange, but information system now allows firms to share demand and inventory data quickly and inexpensively. It has a substantial impact on inventory management. The application of this system, especially in the growth oriented industries, has significantly lowered the time and cost to keeping record about inventory stock and control over them. As a result of this success story, there is now a general belief within industry that capturing and sharing real-time demand information is the key to improved management of inventory. So as can be for Trinidad Energy Supplies & Services Limited (TESS).

So, the need arouse to analyze the impact of Development of an Information System for Inventory Management Study. The purpose of this dissertation is to test this belief by rigorously measuring the value of information system in the field of inventory management, which contributes to the reduction of lead times and shipment frequency, by reducing the time and cost to process orders.

Objectives of the Research

Considering these matters in view, my dissertation paper broadly aims to provide a synopsis of the key developments, to reflect on emerging trends, and to address some frequently asked questions about this literature. I attempt to keep the technical aspects of Information System in check, and focus instead on the key implications of this literature for Inventory Management.4

To facilitate achieving the broad objectives as cited above, this study aims to attain following specific operational objectives-

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  1. Clarifying the role of information system for inventory management in smoothing out variations in operation performances.
  2. Removing stock out or shortage through information system.
  3. Identify how information system for inventory management can be treated as the safeguard against price changes and inflation.
  4. To convey how information system for inventory management facilitates advantages of quantity discounts.
  5. Ensuring data integrity5, and a more efficient method of stock control via the creation of a stock inventory database that will provide for data entry, storage, referencing and production of stock level reports for monitoring.
  6. Integrating access control to offer security of data.
  7. To design and implement a database6 that will store the information held by the system.
  8. To provide Inventory System access to all necessary personnel (data entry, update and deletion).
  9. To provide a full range of reports that will satisfy informational requirements.
  10. To provide training to personnel responsible for supporting the Inventory Management System.
  11. To review and implement either stockless, RFID or online inventory management, or which is the latest technology in inventory management and to establish the distinct features that are, or can be, applied in the case of inventory management.

Scope and Limitation of the project

My focus is on the Management Information System (MIS), which has been used extensively by both empirical and theoretical researchers.7 My aim is to explain the driving forces for using information system for inventory management. Here I have discussed major developments with respect to customer requirements, Stock level, shortage or surplus pf stock and networked inventory management. Reviews some decision systems for inventory management, and compares traditional inventory management to information system for inventory management. Summarizes the results of the study, and provides an outlook on further research.8

This project will only focus on the design and implementation of a stock inventory database, graphical user interface and peer to peer network for use only by the staffs and management at Trinidad Energy Supplies & Services Limited (TESS). Furthermore, such a system would only deal only with the stock inventory process of managing transmission parts for the industrial chemical and lab equipments.

Research Question

Here we have presented some empirical research questions associated with this literature.

  • How does information system for inventory management helps in smoothing out variations in operation performances?
  • Can we avoid stock out or shortage through using information system for inventory management?
  • How information system for inventory management can be treated as the safeguard against price changes and inflation?
  • How information system for inventory management facilitates advantages of quantity discounts?

Detailed Gantt chart

ID Task Name Duration Start Finish
1 Development of Proposal 52 Days 20-01-07 15-03-07
2 Target Selected Business 4 Days 22-01-07 25-01-07
3 Investigation of Business 9 Days 26-01-07 09-01-07
4 Documentation of Investigation 4 Days 04-02-07 07-02-07
6 Composition of Project Title 1 Day 08-02-07 08-02-07
7 Acquire Letter of Authorization 1 Day 09-02-07 09-02-07
8 Approval of Project 1 Day 10-02-07 10-02-07
9 Project Introduction 3 Days 11-02-07 13-02-07
10 Document Background of Organization 6 Days 14-02-07 19-02-07
11 Document Key Phrases of Project 1 Days 20-02-07 20-02-07
12 Document Objectives-Activities and Deliverables 8 Days 21-02-07 28-02-07
13 Document Relevance of Other Courses 1 Day 01-03-07 01-03-07
14 Document Required Resources 1 Day 02-03-07 02-03-07
15 Get All Possible References 2 Days 03-03-07 04-03-07
16 Document The Critical Success Factors 3 Days 05-03-07 07-03-07
17 Document Risk Assessment Factors 4 Days 08-03-07 11-03-07
18 Do Gantt Chart 2 Days 12-03-07 13-03-07
19 Do Work Breakdown Structure 1 Day 14-03-07 14-03-07
20 Finish Off Proposal 1 Day 15-03-07 15-03-07
21 Continue Research/Start Literature Review 10 Days 16-03-07 26-03-07

Figure: Detailed Gantt chart.

Relevant Literature Review

Overview of the Topic

Inventory is more than a substantial investment; it is usually a company’s largest asset. Smart companies have found that the ability to manage this asset is a key factor in their ultimate success or failure. The major types of Inventory Management solutions are as follows:

Barcodes

A barcode is an encoding tag or label that is placed on all merchandise that allows computers to track and ring up products much faster and more accurate than if it were to be performed by hand. Using barcodes can actually reduce the amount of training time needed for employees. A scanner is fairly simple to operate, and automatically does the computation for you.

Max Patel described the use of bar coding and barcode scanners have transformed operational efficiencies of a phenomenal number of businesses both large and small.

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John Schreibfeder also states that bar codes can help your business by providing value-added services to customers, also improving inventory accuracy and making employees more productive. There are many more advantages including operational efficiency, better customer service, and improved visibility of key business information to management.

But there are also disadvantages of using barcodes such as you have to be able to see them, the bar code cannot be written on or defaced, you cannot change the data once they are printed and also they take up space on the object they are printed on.

Barcodes today are becoming outdated as newer technologies exist and there is a lot of fierce competition out there in trying to bring in the customers.

RFID

Radio Frequency Identification allows a business to identify individual products and components, and to track them throughout the supply chain from production to point-of-sale.

As Charles Atkinson as said in his article, instead of using technology to track inventory as it is moved, RFID counts inventory automatically from a remote location. This is superior to perpetual inventory tracking or perpetual inventory for a couple of reasons. Most notably is that RFID accounts for shrinkage. RFID counts what is actually there, and it can tell you exactly where it is.

Mark Henricks and Mark Roberti states that RFID is an innovative technology similar to the Internet and how it has revolutionized and many businesses today are introducing RFID to better solve inventory management solutions.

There are many advantages of RFID, there is iinventory efficiency because line of sight is not required to read RFID tags, return on investment although the cost may be high at first, the total cost of ownership should go down over the years and provide a return on investment, vulnerability to damage minimized barcodes can be damaged in many ways.

But there are also disadvantages to RFID, there are dead areas and orientation problems there may be certain areas that have weaker signals or interference. In addition, poor read rates are sometimes a problem, security concerns because RFID is not a line of sight technology like bar coding, additionally, when RFID is used for high security operations such as payment methods, fraud is always a possibility and there are many more to name such as, proximity issues, high costs, etc.

Online Inventory

By using the internet to store your valuable inventory information, you will realize several significant advantages over the traditional paper or home PC based solutions.

The Internet Advantage: access anytime, anywhere, internet access can now be found in even the farthest reaches of the world, which means you can get to your information from home, work, or even across the continent, if and when you need it, offsite storage of the actual inventory data which means that no matter what happens to your computer, your property, or even the surrounding community, you’ll still have your complete inventory information to assist you, no special software to install or upgrade, all that’s required is a web browser. You can access it from any computer that has a web browser and an Internet connection.

But here are some disadvantages of online inventory as it more relates to drop-shipping. The first is inventory, your supplier may not have an accurate online accounting of inventory and you may end up selling an item your supplier cannot send to your customer, the second disadvantage is timing and control, your supplier may be slow to ship for various reasons and you have little control over the speed of shipping or the accuracy of the shipment itself.

Slow shipping is one of the biggest complaints of customers online, shipment accuracy brings us to the third problem with drop-shipping: returns, making returns of drop-shipped items, for whatever reason, is a huge hassle for the seller – especially if that retailer wants to hide the fact that he/she is drop-shipping to the customer.

The biggest of the disadvantages to drop-shipping is pricing. Drop-shipped items are usually at a higher price-point compared to true wholesale pricing (pricing based on bulk purchases). So many sellers may find themselves out-priced by those who inventory instead of drop-shipping.

While for many retailers online, drop-shipping is the way to do business most effectively, many find that it has too many problems for their particular situation.

Stockless Inventory (Just In Time)

The term “stockless inventory” implies the elimination of inventory. In a stockless system, virtually no space, inventory, or staff members remain in a storeroom because storage service is contracted to a distributor.

Rene T. Domingo talked about the stockless operation and how it is necessary in a competitive environment, also talking about the negativity of inventory.

Too much money is tied up in inventory that is still waiting to be used (LaPlante, 1992).

JIT is every component in the manufacturing system arriving just in time for it to be used. Since the products arrive just in time there is no need for stock holding facilities of any kind.

Since JIT is a stockless production and does not allow room for defects or error having trustworthy reliable suppliers is an important factor.

Just-in-time manufacturing can be a positive influence on a company. However there are many risks associated with attempting to implement JIT manufacturing techniques. When looked at it appears to be a very simple, quick, and easy thing to do. In reality it is a very complicated technique that takes long term commitment and an initial cost with no guarantee of success. If implemented successfully it would eliminate waste, make the company more productive and more efficient.

Advantages of stockless is decreased inventory costs throughout the value chain, rolling out a true build-to-order system will lead to stockless inventory solutions and stockless suppliers, decreased production costs throughout the supply chain with sophisticated collaborative planning and execution processes and real-time information provision throughout the supply chain, production can be better planned and capacities optimally streamlined and there are many more including increased customer orientation, shortening vehicle production and reliable delivery lead times allows for higher product individualization, quality relationship with suppliers, no down time, possible increase in profits and increased flexibility for suppliers.(but each will differ in each company)

As with the others there are disadvantages of stockless, although the advantages outweigh the disadvantages, the disadvantages can have a negative effect on the company. The disadvantages are long term commitment, possible large initial cost with no short term returns, problems with supplier can cost company large amounts of money, and risk of never successfully implementing JIT.

On this research study we will try to analyze how inventory management can impact an organization through these major solutions with the help of Information System. For this purpose, this literature review includes writings, research and scholarly opinion concerning the description, measurement and evaluation of “Information Systems for Inventory Management”. It provides the background needed for managing and controlling inventory in a firm through information system and how its factors most significantly influence organisational success.

The views and opinions of contemporary business world concerning inventory management, relevant Information technologies and Models, organisational strategies and productivity are discussed. Together, the historical theories and modern techniques form a solid basis upon which to design a research study to further refine the causal relationships affecting Inventory Management.9

Literature Review

Inventory Management that is based on information system has brought many scholars to give their valuable opinion about it. Some mentionable quotations about this literature have been discussed below.10

“Inventory accuracy starts with an understanding of the conditions under which errors occur and ends with error-resistant processes, intelligent use of information technology, a well-trained and highly motivated workforce, and an ongoing process of continuous improvement. In between, there’s cycle counting, root cause analysis, process evaluation, user interface design, procedures, employee training, accountability, control methods, process checks, audits, exception reporting, transaction techniques, measurement, counting methods, bar codes, RF systems, speech-based technology, light systems, and software.” [David J. Piasecki: Inventory Accuracy: People, Processes and Technology.]

Inventory control is concerned with minimizing the total cost of inventory.11 This term often used as stock control also. The three main factors in inventory control decision-making process are:

  • The cost of holding the stock (e.g., based on the interest rate).
  • The cost of placing an order (e.g., for row material stocks) or the set-up cost of production.
  • The cost of shortage, i.e., what is lost if the stock is insufficient to meet all demand.

The third element is the most difficult to measure and is often handled by establishing a “service level” policy, e. g, certain percentage of demand will be met from stock without delay.

The ABC Classification: The ABC classification system is to grouping items according to annual sales volume, in an attempt to identify the small number of items that will account for most of the sales volume and that are the most important ones to control for effective inventory management.

Reorder Point: The inventory level R in which an order is placed where R = D.L, D = demand rate (demand rate period (day, week, etc), and L = lead time.

Safety Stock: Remaining inventory between the times that an order is placed and when new stock is received. If there are not enough inventories then a shortage may occur.

Safety stock is a hedge against running out of inventory. It is an extra inventory to take care on unexpected events. It is often called buffer stock. The absence of inventory is called a shortage.

To have a strong command and control over all these facts of inventory management, an organized Information System (IS) is mandatory. Information systems (IS) make it possible to improve organizational efficiency and effectiveness, which can provide competitive advantage.12

An autonomous information system design for inventory management is proposed for an efficient supply chain management. By using rewritable RF-ID tags instead of popular bar codes as a job ID, which represents a manifest of an item, each processing system directly communicates with the tag information of each item, and autonomous item management can be realized. The following four basic functions are designed, to introduce new items, to link each item to processes, to update item information, and acquire process records. The prototype systems, which handle RF-ID tags as processed items, selecting correct items and processes according to a production plan, are confirmed. (Itsuki, R.; Shibata, H.; Ikkai, Y.; Komoda, N.: the autonomous information system design for item management using rewritable RF-ID tags in supply chain)

Inventory control software eliminates the need to individually change prices one inventory item at a time. Through a global price change window, one can set rules and conditions for inventory categories that require price updates. Utilizing pricing methods (like Markup and Margin percentages), one can quickly do mass changes to inventory without the tedious effort of manual data entry.

Discussion on Literature Review

From the above discussion on the literature review, we can spread our analysis highlighting two important issues.

  • Why online inventory is the best choice? and
  • How inventory management can impact an organization?

By establishing an online system an organization can maximize their inventory investment to meet their unique business requirements. So it can be termed as the best choice for inventory management, as this online inventory system provides the organization with the following advantages.

  • Identify a wide range of inventoried and non-inventoried items.
  • Define the inventory calendar of their own choice.
  • Set up multiple price lists (in multiple currencies), multiple companies, and multiple warehouses.
  • Cross-reference part numbers with customer part numbers for quick reference during order entry and inventory processing.
  • Define buying authority thresholds for specific buyers.

The Impact that Inventory management has on an organization are stated below:

  • Complete control of inventory.
  • Complete information about the value of the inventory
  • Complete visibility on Quantities on hand, Quantities committed and Quantities sold
  • Response time to demand changes reduced
  • Increased sales
  • Knowledge of the exact size of merchandizing inventory
  • Frequent analysis of purchases, sales and inventory records.
  • Removal of unnecessary use of warehouse space used by unneeded part of inventory.
  • Reduction in excess merchandize stock.
  • Taxes and insurance premiums paid on excess merchandize inventory avoided.
  • By providing timely accurate information pertaining to inventory location, movement and valuation, receipt of goods, sale and return of goods and profits an organization can make sure that its inventory is visible throughout a network.

With inventory management you can set your product catalog to hide products that are not in stock, or change prices based on the amount of products available in the warehouse. The quantity available can be displayed to the shopper and this can prevent unnecessary confusion when the shopper adds items not available to a shopping cart. The store buyer can be automatically notified about low inventory levels.

Methodology

Research Methodology

The main objective of this dissertation is to identify how the chosen research methodology will match the main objective of the dissertation question and how it will be achieved. Essentially there are two types of research methodology; they are qualitative and quantitative research. While the quantitative research is carried out through obtaining primary data such as questionnaire, qualitative research is a research that is conducted through interviews and observations. Therefore, the method enables a researcher to explore the details of individual perceptions over phenomena.

Research Approach

The research approach that develops the methodology explained below is based on descriptive research theory and inductive reasoning. This is important to develop the foundation by which the research will be designed, conducted and consequently analyzed.13

Firstly, it is important to establish the research approach in order to create a significant qualitative methodology. The research approach undertakes a specific design that is “the overall strategy chosen to obtain the information required answering the research question” (Ghauri and Gronhaug p 47, 2002). The research approach will review the types of research design and data collection methods. The research approach is built on logical relations and not just beliefs.

Descriptive research is used when the research question is understood (Ghauri and Gronhaug 2002). In the research approach, the data measurements are dependent on the obtainment of required information and the quality of the information.14 The outcome of the research, therefore, is dependent on the measurement procedures used in the collection of the data, and this in turn is dependent on the types of data collection (Ghauri and Gronhaug p 47 2002).

This is an important concept of qualitative research, where the description is either inductive or deductive. Inductive research begins with a question and seeks to describe it, and deductive research begins with the problem by working backwards to the answers. Therefore, this research uses the inductive approach to build the theory from the data gathered to explore possible conclusions towards Information Systems for Inventory management Study.

Research Design

Proper management of chemical inventory is a key component in ensuring that laboratory results are produced as accurately and as efficiently as possible. Being able to track where chemicals are located, accurately monitor stock levels, record quantities used and check expiry dates are all part of a process that impacts both the efficient operation of the lab and the accuracy of the results that they produce. [Bolton, S.(2007), Labtronics Inc., Take Real Control Over Chemical Inventory Management, W3Markets, Inc.]

Improper management of chemical inventory can have serious consequences for the lab. For example, inaccurate recording of chemical usage can result in unexpected inventory shortages. If a chemical is required for an analysis and needs to be ordered or the lab is suddenly out of stock on a particular reagent that requires preparation time, samples that should be analyzed are going to be delayed. 15

So being in the business retail and wholesale of janitorial and industrial chemical and lab equipments, Trinidad Energy Supplies & Services Limited (TESS), should develop an information System for its inventory management. For this purpose we have discussed the project under some specifis areas.

Quality Management

Quality management covers the following topics:

  1. Quality Planning
  2. Product Description
  3. Product Plan

Quality Planning

According to Sommerville (2004)16, “Quality planning is the process of developing a quality plan for a project. The quality plan should set out the desired software qualities and describe how these are to be assessed”. A quality plan should therefore offer options and avenues for improving and assessing the quality of the proposed system. The following is the quality plan developed for the project:

Quality Plan for project
Figure 1-6: Quality Plan for project (Adapted by Sommerville 2004).

Product Description

A computerized database inventory system, which should be used by the permanent staff at the company, is termed as stock inventory database. The aim of this product is to offer a faster, accurate and easier method of keeping stock. In addition, the Graphical User Interface (GUI) grants a simple method of navigating through the database whereas the peer-to-peer network should allow for evident concurrent access and manipulation of data.

Product Plan

A critical release date set for the entire proposed system was set since successful implementation would mean allowing time for staff to be trained and become more acquainted with the new system.

Configuration Management

Configuration management deals with “the development and use of standards and procedures for managing an evolving software system” Sommerville (2004)17. Requirement changes may take place during the development and operation of the system. So it is important to originate a consistent plan for the inclusion of such new requirements into the new system versions.

There are certain specific items that will be managed for the development of the stock inventory database, GUI and peer to peer network, which are as follows:

  1. Risk Plan
  2. Project Budget
  3. Feasibility Report
  4. Requirements Specification Document
  5. Logical Systems Design Specification
  6. Test Plan (White box and Black box)
  7. Implementation Plan
  8. User Documentation
  9. Backup Plan

Risk Management and Plan

To define Risk Management, Sommerville (2004)18 said “the process of identifying risks, assessing their severity, planning measures to put in place if the risks arise and monitoring the software and the software process for risks”. In this sense, risk must be identified, analyzed and dealt with by putting in place counter measures to deal with any potential threat to the project objectives.This fact of risk management is an essential matter for all projects as they can be vulnerable to potential risks. So I have tried to identify all the possible threat and plan contingency to avoid and deal with possible risk factors. A risk plan is needed to be formulated to assist in such management of risks.

The table below is an illustration of the risk plan to be used for the project. As seen, it clearly shows the type, nature, probability and impact of some potential risks together with strategies to deal with all identified threats.

Risk ID # Risk Item Category Probability Impact Avoidance Strategy
1 Staff turnover Human 50% 5 Present document to staff explaining that I am doing project that requires consistent data.
2 Absenteeism of staff Human 50% 4 Consult other staff or continue work on other aspects of project.
3 Budget going over limit Human/Organisation 60% 4 Planning, organizing and monitoring accounting schemes for purchasing or items.
4 Management change Human 20% 9 Research and document management history.
5 Existing computer system(s) unavailable Technical 40% 7 Ensure systems secured in safe place. If Damaged, repair or purchase new system.
6 Requirements change Organization 40% 8 Implement change management policies, adapt to new changes.
7 Project size underestimated Human 50% 10 Dedicate more working hours to each remaining day
8 Priority change Human 40% 8 Constant contact with business, continue work on other aspects.

Figure: Risk Plan.

Implementation Plan

A parallel implementation strategy is to be used with single cutover. According to Adams, Powers and Owles (1985)19, “both systems are operated concurrently for some period of time.” Parallel implementation will be used as both current and new systems will be operated concurrently. This will be done to allow all users already trained in the manual system to continue using the current system until the new system has proved itself.

Technical Issues

Technical issues would deal with the necessary elements to be considered in order to develop the proposed systems. Furthermore, technical issues are broken down in hardware and software issues.

Hardware Issues

The following is a list of important hardware to be considered while developing the physical proposed system:

  1. HP Dell Dimension desktop computer
  2. HP DeskJet Printer.
  3. Crimping tool kit
  4. Category 5 Cable
  5. Pack of RJ45 connectors

Software Issues

The following is list of important software components to be considered in order to run the proposed system:

  • Microsoft Access 2003
  • Microsoft Windows XP Professional

Project Budget

The following the project budget, clearly outlining the cost of each new component to be purchased:

Component Quantity Cost (TT$)
Dell Dimension Computer 1 5, 000.00
HP DeskJet Printer 1 1, 500.00
Crimping Tool Kit 1 800.00
30ft Category 5 Cable 1 500.00
Pack RJ45 Connectors 1 80.00
TOTAL COST $7, 880

Figure 1-7: Cost of New Hardware Components.

Feasibility Study

According to Kendall & Kendall (2002)20, a “feasibility study is used to gather broad data for the members of management that in turn enables them to make a decision on whether to proceed with a systems study.” In this sense, this section deals with providing management with a clear indication of the nature of the project in terms of business options, costs/benefits and return on investment. This section will form the basis of a feasibility report, which is expected to be used to initiate the project.

Business options

The company’s perception is to recover cost and gain profits by computerizing the system to minimize processes so as to increase efficiency and effectiveness. This should capture the various activities taking place. In this case, the company would provide auto parts (mainly transmission parts) and accessories to public customers. Furthermore, the business would re-order stock when items reaches a certain re-order level. All stock must be reordered when it reaches its specified re-order level. Furthermore, all stock cards must have up-to-date stock level information.

Cost/Benefit Analysis

According to Powers, Adams and Mills (1984), cost/benefit analysis must ensure that “Identifiable benefits must equal (or preferably exceed) identifiable costs”.21 So each cost should be weighted against each benefit received.

Others

We can also carryon the feasibility study through break-even analysis and calculating return on investment.

System Analysis

Few questions were asked to the permanent employees of TESS, whish are as follows:

  • To find out the work experience of employees at the company.
  • Finding out the job function of the employees.
  • Finding out the average amount of customers that each employee would have to deal with on a daily basis.
  • What are the types of information shared?
  • What are the problems encountered while sharing information.
  • How much time is taken to transfer the total number of sales records to the stock cards?
  • What are the problems with the retrieval of stock card information?
  • What may be the benefits to be gained from using the proposed database?

With making questions to employees of TESS, we also have asked some questions to its customers that have been mentioned below:

  • How long were customers shopping at the company.
  • Why the customers prefer to purchase items from the company.
  • How often the customers would purchase goods at the company.
  • What brand of product that customers demand the most.
  • What number of products purchased on one visit to the company?
  • How long they need to purchase the product.
  • Whether or not a computerized system in TESS would be beneficial to customers.

Requirements Specification

This stage deals with the production of a summary of the proposed system. The purpose of the design and implementation of a stock inventory database, graphical user interface and peer to peer network for TESS, was to improve efficiency and increase productivity while managing the stock inventory processes of transmission parts.

The stock inventory database system is projected to support staffs in running their tasks in a convenient and more manageable way by minimizing processes, so that it may increase motivation and lessen work load. It also helps the organization to earn profit and run the business smoothly.

For this purpose, a graphical user interface will be developed in order to assist employees in supervising the new system, thus creating a user-friendly environment to validate the effectiveness of the system. Moreover a peer-to-peer network will be developed to permit two users to access the database, share data and print stock reports and other documents.

Design

The design of a new system for TESS, can be segmented into following areas:

Logical Systems Specification

The logical systems specification will deal with the identification of three (3) hardware and software combinations, comparison of the three and the selection of the most suitable option

Logical Design

The logical design will deal with providing textual descriptions followed by a high level functional design and Graphical User Interface Design. Furthermore, such a GUI design will include logical design for screens, forms, and reports.

Physical Design

The physical design will show the design of screens and reports for specific pages. Furthermore it would also show how normalisation of data for the stock inventory database will be done.

Test Plan

The test plan will deal with the creation of a Blackbox and Whitebox test plan. In addition, the Blackbox test plan will encompass the creation of a system test plan and an acceptance test plan. Whitebox will deal with creating Unit Module and Integration test plans.

Development

This section is concerned with the actual formation (development) of the Stock Inventory Database, Graphical User Interface and Peer-to-Peer network for TESS. Additionally, development would rely on the requirements in terms of feasibility, analysis, and design. It is important to note that implementation of the system would focus on the actual setup, installation and configuration of the network.

Testing and Implementation

In this stage we need to test the new system and after that we will go for implementing it. The implementation plan consist the following tasks:

  1. Site preparation:
  • Check power outlets availability
  • Layout office furniture
  1. Installation of Hardware:
  • Crimping of cables
  • Running of cables
  • Placement of computers and printer
  • Connecting crossover cables to PCs
  1.  Installation of Software:
  • Ensure that Microsoft Access was installed
  • Copy the Stock Inventory Database to the computer
  1. Testing of Hardware:
  • Test network compatibility using database
  • Test network connections
  • Printer Connection
  1. Training:
  • Role and Purpose of new system
  • Rules and Regulations of system
  • Questions and Answers
  • System Demonstration
  • User/System interaction
  • User comments and evaluation
  • Distribution of User Guide
  • Conclusion of Training Sessions
  1. Cut over- Covert to new system:
  • Data entry – old data copied to system
  • Remove of parallel system
  • Sign off Stock Inventory Database and Peer to Peer network

Evaluation

Evaluation of the system will take into account, the initial end user requirements as they relate to the aims and objectives of the project. Furthermore, it will also consider the comments made by users while testing the system.

Strengths

  • The peer to peer network was configured for security, file sharing and printing and proved to be working as planned
  • The stock inventory database was secured and user-level security allowed for a more secure environment for employees to store data.
  • The processes from the old system were minimized allowing for work to be done much faster. The time taken to search, calculate, view, enter and retrieve data was shortened as users now have faster access to data.
  • Workload was decreased due to file sharing on the network.
  • Users responded positively towards the final product in terms of the design, functionality and its Graphical User Interface. They were particularly impressed with the features such as automatic reports and calculations.
  • Users were also impressed with the automatic generation of reports and easy navigation between screens.
  • Accuracy was improved due to fixed calculations and specified rules for data entry
  • As a result of the project, my skills definitely improved for using software applications such as Microsoft Visio, Access, Word, Excel, PowerPoint and Project.
  • My time management skills have improved as a result of the project, since the importance of time was taken into consideration at all stages.
  • As a result of the project, I have a better understanding about the importance of theoretical tools used throughout the project such as Dataflow Diagrams and Entity Life Histories
  • Working with the project allowed me to clearly understand the importance of communication and research, combined with persistence and hard work.

Weaknesses

  • Due to deadline time constraints, the new system was not developed with value added features such as pop up alerts for the reorder list. However, more research on using Microsoft Access should have been initially done on my part.
  • There are no restrictions on the amount of goods that are sold since users can enter a quantity greater than the amount in stock. As this mistake would not affect the amount in stock, in terms of going below ‘0’, sales records would not totally affect the actual records if the quantity field is entered incorrectly. From this, I have learned that validation rules should be enforced totally throughout the database and that more in dept testing should have been done in order to produce a higher quality product.
  • The network do not provide for expansion since it uses a direct crossover cable instead of a hub or a switch. Although the current system only requires two computer systems, expansion should have been provided for.

Recommendations

  • The database can be upgraded to allow for pop alerts for the reorder list and more features to be added as any drawbacks occur
  • Microsoft Access 2003 or later can be used to allow for more restrictions on the database to deal with incorrect entries
  • The network can be upgraded via the installation of a hub or a switch to allow for future network expansion.
  • Categories of transmission parts can be added in order to allow for an increase in the amount of Toyota transmission parts available.
  • The database can be upgraded in order to allow for the inclusion of all transmission parts for stock inventory.

Conclusion

Information technology systems permeate organizations, supporting almost everything–apart from managing IT items themselves. Although software-configuration-management systems can provide some management assistance, they aren’t designed to handle the totality of a distributed enterprise or to act as a management information resource. Software sources constitute major organization assets, but they can’t be treated as such until they’re inventoried. Software inventorying is one of a set of integrated technologies developed to address problems of managing constantly changing technological and business processes. Those technologies are aspects of an evolving business paradigm called the paradigm of change. Creating an enterprise IT inventory is a complex task requiring large amounts of information, but such an investment can produce considerable payoff.

In this paper we have tried to develop an Information system for the Inventory Management of TESS through developing a Stock Inventory Database, Graphical User Interface and Peer-to-Peer network. The new system allowed for the achievement of all objectives set out. This included the creation of a database with functionality providing for data integrity and security, a Graphical User Interface to provide an organized and manageable view of information, and a Peer-to-Peer network, which was configured for security and the provision for simultaneous usage.

The importance and effect of the Information System (IS) in day-to-day operations management, especially in Inventory Management has widen and explored the present dynamic and heterogeneous business environment. But these are yet to implement, operate and exploit it fully in a formal and professional manner so as to enable them to derive maximum business gains out of it.

Appendix- 1: Questionnaire asked to employees

The rationale behind this questionnaire is to collect data relating to the nature of the business and its processes. All data collected will be analyzed and used in the project entitled, “The Development of an Information System to Support Inventory Management for Trinidad Energy Supplies & Services Limited (TESS).” Furthermore, all data gathered will be kept confidential.

Questions

  1. How long have you been employed at the company?
  2. What is your job function?
  3. What tasks do you perform in carrying out your job function?
  4. On average, how many customers do you interact with on a daily basis?
  5. What type of products do customers usually demand the most throughout the year?
  6. What brand of parts is in most demand from customers throughout the year?
  7. What information is shared by other workers?
  8. What problems do you encounter when sharing information?
  9. On average, what is the total number of sales transactions you record on a daily basis?
  10. How long do you usually take to transfer sales information onto stock cards?
  11. Why do you usually take so long to transfer the sales information?
  12. Do you encounter any problems in retrieving information from the stock cards then state the nature of such problems?
  13. How long does it normally take to prepare stock reports?
  14. What type of computer user are you?
  15. Which of the following would assist you in viewing the material on the proposed computerized system?
  16. What features would you like to have in the proposed computerized stock inventory database?
  17. What benefits would you gain from using the proposed computerized stock inventory database?
  18. Which of the following benefits would you expect from having the proposed database on two computers?
  19. Do you have any suggestions for improving customer service at TESS? If so, please provide your suggestions.

Appendix- 2: Questionnaire asked to the customers of TESS

The rationale behind this questionnaire is to accumulate data relating to the customer of TESS views and opinions. All data collected will be analyzed and used in the project entitled, “The Development of an Information System to Support Inventory Management for Trinidad Energy Supplies & Services Limited (TESS).” Furthermore, all data gathered will be kept confidential.

Questions

  1. How long have you been a customer at TESS?
  2. Why do you prefer to purchase your items from the company?
  3. How often do you purchase goods from Trinidad Energy Supplies & Services Limited (TESS)?
  4. What type of products do you usually purchase?
  5. What brand of products do you demand the most?
  6. How many products do you usually purchase in one visit to the company?
  7. How long does it take for you to purchase items?
  8. Why do you take so long to purchase items?
  9. Do you think that a computerized system in TESS would be beneficial to you?
  10. If yes, what benefits would you gain from the company having two computerized sales terminals?

Appendix- 3: Questionnaire asked to the manager of TESS

  1. What are the main functions of the current stock inventory system?
  2. What type of information is used in the current system?
  3. Please briefly describe the process of stock inventory within the company?
  4. What are the problems faced within current stock inventory system?
  5. Besides stock level reports, what other reports are prepared?
  6. In what way do you think these problems can be solved?
  7. What features do you want to see in the new system?
  8. Do you think that the transmission part for the chemical and lab should form the basis of the database?
  9. What would you expect for the future maintenance of the database?
  10. In what way(s) should the new system be introduced into the company?
  11. How long would you expect training to carry on for?
  12. What type of computer user are you?
  13. How often do you want backup of information to take place.

Appendix- 4: Final Project Gantt Chart

(SHELL CHART-not detailed).

TASKS TIME FRAME
JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC
PROJECT PROPOSAL X X X
LITERATURE REVIEW X X X
DRAFT CHAPTER X X X
FINAL X X X X
SOFTWARE DEMO X

Bibliography

Adams, D.R, Powers M.J, Owles, V.H, (1985), Computer Information Systems Development: Design and Implementation, South-Western Publishing Co.

Bolton, S., (2007), Take Real Control Over Chemical, Inventory Management, Copyright – W3 Markets, Inc., Web.

Buchan, J., & Koenigsberg, E., (1963), Scientific Inventory Management, Prentice-Hall.

Copacino, W. C., (1997), Supply Chain Management: The Basics and Beyond, ISBN: 9781574440744, The St. Lucie Press/ /Apics Series on Resource Management, Publisher: CRC.

Donath, B., (2002), The IOMA Handbook of Logistics and Inventory Management, Institute of Management & Administration, John Wiley and Sons.

Intellisoft, (2006), Serial Number Tracking Software Solutions, Web.

Itsuki, R., Shibata, H., Ikkai, Y., and Komoda, N., (2003), The Autonomous Information System Design For Item Management Using, Re-writable RF-ID Tags In Supply Chain, Lisbon

James C. EMERY, (1987), Management Information Systems: The Critical Strategic Resource, Oxford Univ Pr.

Kendall, K.E, Kendall, J.E, (2002), Systems Analysis and Design, 5th Edition, Prentice Hall.

Khosrowpour, M. (2001), Pitfalls and Triumphs of Information Technology Management, ISBN 13: 9781878289612, Idea Group Pub

Lucas, H. C., (1976), The Analysis, Design, and Implementation of Information Systems, McGraw-Hill.

Michael J. Earl, (1996), Information Management: The Strategic Dimension. ISBN13: 9780198257608, Oxford University Press, USA

Piasecki, D. J., (2003), Inventory Accuracy: People, Processes and Technology. ISBN 0972763104, Ops Publishing, Kenosha, Wisconsin

Prichard, J. W. & Eagle, H. R. (1965), Modern Inventory Management, John Wiley and Sons Ltd.

Sherman C. Blumenthal, (1969), Management Information Systems: A Framework for Planning and Development, Prentice-Hall.

Sommerville, I. (2004), Software Engineering, 7th Edition, Pearson Education Limited.

Toomey, J. W., (2006), Inventory Management: Principles, Concepts and Techniques. 1st edition, ISBN: 9780792383246.

Footnotes

  1. Your Supervisor’s Name.
  2. Your Department’s Name.
  3. Sherman C. Blumenthal, (1969).
  4. Lucas, H. C., (1976).
  5. Data integrity is the assurance that the data is consistent, correct and accessible.
  6. Database is a structured collection of data that is stored in a computer system.
  7. Toomey, J. W., (2006).
  8. Toomey, J. W., (2006).
  9. William C. Copacino, Supply Chain Management: The Basics and Beyond.
  10. Piasecki, D. J., (2003), Inventory Accuracy: People, Processes and Technology.
  11. Piasecki, D. J., (2003), Inventory Accuracy: People, Processes and Technology.
  12. Itsuki, R.; Shibata, H.; Ikkai, Y.; Komoda, N. (2003).
  13. Myers, James N., 1999.
  14. Ghauri and Gronhaug p 47 2002.
  15. Bolton, S., Labtronics Inc., Take Real Control Over Chemical Inventory Management.
  16. Sommerville, I,. (2004), Software Engineering, 7th Edition, Pearson Education Limited, pp. 652.
  17. Sommerville, I,. (2004), Software Engineering, 7th Edition, Pearson Education Limited, pp 690.
  18. Sommerville, I, (2004), “Software Engineering”, 7th Edition, Pearson Education Limited, (pg. 98).
  19. Adams, D.R, Powers M.J, Owles, V.H, (1985), “Computer Information Systems Development: Design and Implementation”, South-Western Publishing Co., (pg. 470).
  20. Kendall, K. E. & Kendall, J. E, (2002), Systems Analysis and Design, 5th Edition, Prentice Hall, pp. 58.
  21. Powers M.J, Adams, D.R, Mills, H.D, (1984), “Computer Information Systems Development: Analysis and Design”, South-Western Publishing Co., (pg. 184).