Low-Cost Inventory System
Most businesses today, regardless of its size has recognized the advantages of automating routinely tasks in a business. Such routinely tasks covers accounting services, ordering systems or point of sales systems. One of the most common and helpful system businesses need specially those engaged in marketing goods is an automated inventory system which could help the management keep track of the number of stocks they have and perform simple analysis such as determining which items have high demands or which items are not easily sold out.
Inventory management is an integral part of a retail business such as a clothing retail shop whether the shop engages in e-commerce of a traditional shop. It helps the management decide which stocks they are going to buy or which stocks should not be bought item. If one engages in online marketing, it could also help to keep your costumer be informed of which stocks are still available, which stocks are on a pre-ordered basis and other basic information on your products. A good and working inventory system is very helpful in keeping a business alive.
For a small clothing store, an inventory system is very beneficial for the owner in terms of management of stocks and determining stocks with high demands. A large budget would not be necessary to implement such automated system. There are lots of commercially available inventory systems that could be purchased however, it is still good to have a customized system to be able to cater to the specific needs of the specific business.
With a manual inventory system, recording of sales, purchases and expenses are manually done as well as the recording of inventory of stocks. This is very tedious on the part of the owner since, in every transaction made, the record book must be present to record such, otherwise, their record will not be complete. If the owner wants to know their daily sales, weekly or monthly sales, they need to manually add up their sales based on their sales records. This is also true if the owner wants to know their net income for a specific duration. Record of purchases as well as expenses must be also readily available for the data they need. To determine what stocks to buy, the owner or the clerk assigned to this task needs to manually go over their sales record of stocks and manually deducts these to its inventory records to be able to know the actual stocks available. Likewise, if the owner needs help in determining which stocks needs to be reordered because they are in demand. There is a possibility that the true status of the company would not be fully represented while using a manual inventory system because of the possibility of missing some records that are very hard to track back but vital to the company. Other problems that could be encountered is inefficient data management, inconsistent data with no backup and recovery mechanisms, and aside from not being user friendly, it is maintenance is time-consuming. A well implemented and maintained inventory system can improve customer service levels, decrease labor costs, minimized overstocking, track lost sale and increase the operating efficiency of a company.
With an inventory management system well in-place, tracking down of expenses, purchases, sales and inventory records is easier while having a support for tracking down stocks on the basis of quantity and their value. Access to information and support to management decision making is also readily available while removing racks and racks of files to be converted into a database system. Of course, a backup mechanism will also be employed. For each transaction, a receipt will also be automatically printed, removing the burden of itemizing and writing each purchases in a receipt form before handing it down to the customer.
In implementing an automated inventory system, all stock information must be entered into the system with the stock number of each piece of clothing as the unique identifier of each. Each time stocks arrive the corresponding number of items must be entered and each time a purchase is made, the corresponding quantity of the stocks purchases must be entered by the cashier (BarcodesInc.com, 2012). Any updates on prices should also be made. To be able to maintain the inventory system and to come up with valid results, it is a must that all transactions pass through the system.
Before implementing an inventory system, the company must make sure that all their stocks have barcode numbers or stock numbers which will be needed by the system to identify correctly each of the stocks in their inventory. If a product does not have a stock number then it must be assigned one. It must also prepare their staff for the changes that are about to happen in their business procedure since this will present a slight business operation changes especially if the staff is not open to the help of technology in their organization.
Since, the store is a small clothing store, the number of equipments required would be computer capable of N-computing (no system unit required since all will be connected to the server) corresponding to the number of cashiers the store has together with barcode scanners and receipt printers. The use of barcode scanners is a good choice compared to manually encoding the stock numbers of each of the stocks to lessen the possibility of committing errors. Networking devices such as LAN cables should also be present to be able to connect all the computers with another set of computer that would serve as the server and also as the administrator computer where the updating of prices, expenses and stocks added to inventory would be done and other administrative services. There is no worry, with regards to the updating of inventory of stocks since this will be automatically done in every transaction. With regards to the storage capability of the server, there is no need for a midrange computer, an ordinary server will do since the data to be stored is minimal.
Bulk of the budget needed for the system is on equipment if there is no readily available equipment because, there will be minimal cost for the inventory system itself. If the company opts to purchase a commercially available system, prices range from $100 – $500(inflowinventory.com, 2012). However, the disadvantage of such is the possibility that all the requirements of the company will not be met. If the company opts to hire a software developer to create the automated system specifically for the company, the company needs to pay for the software requirements the programmer will need as well as the services of the programmer which would range from $300 – $1000 depending on the complexity of the requirements.
Workflow Diagram for a Small Inventory System
BarcodesInc.com (2012). Inventory control Systems. Retrieved from http://www.barcodesinc.com/articles/inventory-control-system.htm
Inflowinventory.com (2012). Software Solutions. Retrieved from http://www.inflowinventory.com/software-purchase.aspx/