Computerized Inventory Systems

1. Computerized Inventory Systems Jared O’Sullivan Ross Dohaney Adam Smith Kyle Robertson

2. Introduction Inventory, as defined in Operations & Supply Chain Management, is the stock of any item or resource used in an organization. An inventory system is the set of policies and controls that monitor levels of inventory and determine what levels should be maintained, when stock should be replenished, and how large orders should be (Jacobs, Chase, Balakrishnan: 2010). We will be focusing on computerized inventory systems in this presentation, an extension of what was not mentioned in the text. This presentation will highlight and focus on many of today’s modern systems and their benefits. We will also use the system implemented by Sobeys Inc., CAO/Magic, as an example.

3. Terms & Definitions • Shrink – Perishable or damaged goods which are not up to standards to sell • UPC – Uniform Product Code • ERP – Enterprise Resource Planning • RFID – Radio Frequency Identification • EPC – Electronic Product Code • GS1 – International Barcode Standards

4. History • 1930’s – A team at Harvard University designs the first modern-day checkout system • Late 1940’s to Early 1950’s – 1st barcode system developed using ultraviolet ink • Late 1960’s to Early 1970’s – Grocery Manufacturers of America “GMA” develop a Uniform Grocery Product Code (UGPCC/UPC) • 1990’s – Implementation of modern inventory systems (ERP/SCM) • Mid 1990’s – Revolution of the Internet • Early 2000’s – Mainstream adaptation of Radio Frequency Identification (RFID’s) • Mid 2000’s – Revolution of wireless technology

5. Types of Systems • Radio Frequency Identification (RFID) • EPC • Manual Entry • Vendor Managed Inventory

6. Implementation of Systems • Small vs. Large Scale • Cost • Feasibility • Limited Standardization

7. How it Works

8. Advantages & Disadvantages Disadvantages: • Forecasting of system may not always be accurate (does not take into account small local events, local holidays, etc.) • Technical glitches are possible • A mis-key of information could create an ordering problem • Reduces shelf stock making shelves look “bare” to customers • Potential problems with vendors who use the store’s backshop to store their products – makes for increased inventory for the vendor’s themselves Advantages: • Improves in-stock position of a firm’s goods • Improves customer’s confidence on knowing that the products they want are in stock • Reduces inventory and saves costs by ordering as needed • Reduced shrink of perishable goods (mostly in grocery and restaurant industries) • History reports of goods can be available depending on the software used (improves product knowledge) • Saves time for workers, which can be reallocated to other tasks

9. SWOT Analysis Strengths • Increases Productivity • Maintains Competitiveness • Automatically Manages & Orders Goods • Less Overstocking & Shortages • Provides Detailed Reports on Goods Weaknesses • Possible System Failures & Glitches • Can’t Predict Certain Demands • Lack of Consistency of Using Systems • Resistance to Learning a New System • High Cost to Implement and Train Employees • Threats • Rising Costs with Technological Updates & Advancements • Threat of Leaking Confidential Information • Lack of Stock in a Store Creates more stock Vendors have to Carry • Power Outages and Natural Disasters that can Affect the System • Opportunities • Specialization of Systems to the Company’s Desires • RFID Guns and Other New Technology Aids the System’s Functionality • Better Communication both Upstream and Downstream

10. Trends and the Future • JIT or Lean Operations • Vendor Inventories • Zero Inventory

11. Sources • http://people.stfx.ca/x2009/x2009iuo/Operations%20Management%20Presentation/The%20impact%20of%20ERP,%20SCM,%20CRM.pdf • http://www.answers.com/topic/inventory-control-system#ixzz1eB0k0bGM