Review of Related Studies — Inventory System
The following statements given are related to our study about the inventory system which is found very useful for the proponents in making the system. “It is nearly impossible to overemphasize the importance of keeping inventory levels under control,” Ronald Pachura wrote in an article for IIE Solutions. “Whether the problems incurred are caused by carrying too little or too much inventory, manufacturers need to become aware that inventory control is not just a materials management or warehouse department issue.The purchasing, receiving, engineering, manufacturing, and accounting departments all contribute to the accuracy of the inventory methods and records.
” 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 in Production and Inventory Management 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.According to Udo, companies that make good use of this technology are far better equipped to succeed than those who rely on outdated or unwieldy methods of inventory control. Automation can draidatically affect all phases of inventory management, including counting and monitoring of inventory items; recording and retrieval of item storage locations; 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 when a business integrates its inventory control systems with other systems, such as accounting and sales, to better manage inventory levels. According to Dennis Eskow in PC Week, business executives are “increasingly integrating financial data, such as accounts receivable, with sales information that includes customer histories.
The goal: to control inventory quarter to quarter, so it doesn’t come back to bite the bottom line.Key components of an integrated system … are general ledger, electronic data interchange, database connectivity, and connections to a range of vertical business applications. ” David Cahn, a director of product strategy for business applications at a firm in New York, confirmed this view in an interview with Eskow: “What drives business is optimization of working capital. The amount of control you have on inventory equals the optimization of the capital. That’s why it’s so important to integrate the inventory data with everything else. ” Source : http://www. referenceforbusiness.