Speaking of inventory management and its impact on business operations, make’s it essential to have an information
system (IT) that is capable of providing timeless information to decision makers. Such information can include the minimum level to place a new order, tracking inventory between warehouse and show case shelves, on shelves movement, fast moving items, level of demand ….etc.
Information about inventory can differ according to the industry, each organization function within, for example a pharmaceutical company, where its inventory mainly, drugs and medications would require different set of information than a fashion company dealing with clothes. Regardless of the type of organization, it will require an information system that will take care of its inventory management. Moreover, one of the latest technologies used by many companies and stores nowadays is the “RFID” (Radio-Frequency identification) that generates a tag for that specific item and would then enable the store to track it.
However; “RFID” would need to be integrated to the main company information system in order to feed in all the required information about the inventory; therefore, many large organizations such as pharmaceuticals would consider ERP (Enterprise Resource Planning) as a great solution, since they are dealing with a unique set of products. The two technologies together are capable of providing accurate data about the cost and usage of inventory, which will then help the finance team to forecast budget,
procurement team forecast order supply and track the dispensed medications, marketing team to prepare the required campaigns, etc. Moreover, imagine you place the same order twice; because you do not have updates on your stock, is’nt that just a waste of resources!
My class mates would recall the case study we had about Zara Fashion store (2003) in MIS course, Zara did not have an integrated system managing their inventory, even though their products were fast moving and they would barely have stock. One of the practices they had was predicting the required order and the employee had to go and physically count the inventory! Guess what?! They never failed in their estimations! Most of the class agreed that at the time the case was written Zara was doing a great job; however with globalization and strong competition out there they will not be able to survive with their current system.
Do you think a fully integrated IT system is essential for having a successful inventory management? Or experience would be enough in handling the situation? considering globalization, mass customization, customer satisfaction, rapid product and
service development… etc.
“Please note that the images below are samples googled”