REPORT FOR FINMAN CLASS

1. INVENTORY
MANAGEMENT
GROCERY
STORE

2. Inventory management is a system used to oversee
the flow of products and services in and out of an
organization. Businesses utilize inventory
management strategies to create invoices and
purchase orders, generate receipts and control
inventory-related accounting.

3. How Inventory Management Systems
Work in Grocery Store:
If you're standing in the middle of a big
retailer such as Wal-Mart, and you look
around, you're witnessing one of history's
greatest logistical triumphs. Retailers such as
Target, Lowe's and Best Buy stock tens of
thousands of items from all over the world.
Wal-Mart's system helps it maintain its
signature "everyday low prices" by telling
store managers which products are selling
and which are taking up shelf and warehouse
space.

4. Inventory management systems are the
rule for such enterprises, but smaller
businesses and vendors use them, too.
Mismanaged inventory means disappointed
customers, too much cash tied up in
warehouses and slower sales. Factors such
as quicker production cycles, a proliferation
of products, multi-national production
contracts and the nature of the big-box
store make them a necessity.

5. Modern inventory management systems
must have the ability to track sales and
available inventory, communicate with
suppliers in near real-time and receive
and incorporate other data, such as
seasonal demand. They also must be
flexible, allowing for a merchant's
intuition. And, they must tell a
storeowner when it's time to reorder
and how much to purchase.

6. OBJECTIVES:
• Sufficient Inventory
One objective of an inventory management is
to ensure that the inventory is stocked at all
times to suit the needs of customers. This
includes inventory systems that keep track of
products ready for sale and inventories that
track supplies or raw materials to create the
final product. The company can lose sales and
customers if products are not readily available
when customers need them.

7. • Minimizing Unnecessary Capital
All of the items in a company's inventory are
considered assets, because of the monetary
value attached to the items. If the items in
the inventory system expire or do not sell,
the items become a less valuable or even a
liability. An inventory management objective
is to ensure that the inventory items are
used when they have the original value, so
the company does not lose money by having
the inventory

8. • Maintaining Production
Another objective for an inventory management is to
have a steady continuity in production, if the items in
the company's inventory are raw materials or
supplies for creating the products being sold.
Production can slow down, if the inventory is missing
raw materials or runs out of supplies. If the business
is lacking finished products for sale, it is losing money
from the lack of sales. The objective could also be to
have a steady production schedule to stay on track.

9. WHY
INVENTORIES?
Inventories are needed because
demand and supply can not be
matched for physical and
economical reasons. There are
several other reasons for carrying
inventories in any organization.
• To safe guard against the
uncertainties in price fluctuations,
supply conditions, demand
conditions, lead times, transport
contingencies etc.
• To reduce machine idle times by
providing enough in-process
inventories at appropriate locations.

10. • To take advantages of quantity discounts, economy
of scale in transportation etc.
• To decouple operations i.e. to make one operation's
supply independent of another's supply. This helps
in minimizing the impact of break downs, shortages
etc. on the performance of the down stream
operations. Moreover operations can be scheduled
independent of each other if operations are
decoupled.
•

11. • To reduce the material handling cost
of semi-finished products by moving
them in large quantities between
operations.
• To reduce clerical cost associated with
order preparation, order procurement
etc

12. INVENTORY
MANAGEMENT
TECHNIQUES

13. Inventory Management Techniques and Their
Importance
An inventory is a warehouse or storage location where a business
maintains stocks of its products so that it can ensure swift delivery
of those products on the order. With the ever increasing demand in
products, more and more management practices have evolved to
ease the process of product procurement by the customer. Highly
efficient delivery systems and supply chains are developed to
ensure efficient delivery of the products to their consumers. In the
current scenario when customer satisfaction and service have
become a prime reason for a business to stand apart from its
competition, the need for effective inventory management is largely
seen more as a necessity than a mere trend. Project management is
a field of management that deals with the effective management of
various types of projects.

14. • First, a mismanaged
inventory can lead to an
unnecessary increase in
the working capital. The
excess funds could have
been fruitfully directed
to fuel the company’s
growth initiatives or
research and
development efforts.
•Second, effective inventory
management would lead to
low storage costs, which will
in turn lead to an increase in
the company’s profits.
Storage space is expensive; if
you are able to manage your
inventory well and able to
reduce the amount of goods
that you need to store, then
you will require less space,
which will in turn lead to low
warehouse rental costs.
To understand the various inventory management
techniques it is crucial to know why it is important.

15. • Third, it can help you satisfy your customers by providing them with
the products they need in the swiftest manner. Poor inventory
management leads to lower availability of goods and higher
delivery time. Hence, if you want to gain those service satisfaction
stars, you need to manage your inventory well.
• Fourth, goods stored in inventory over a long period may spoil. This
leads to unnecessary overheads in operating a business. Hence,
proper inventory management can help you reduce those costs
greatly.
• Fifth, if you have inventories scattered in various locations, you
need a proper system to manage those inventories on the basis of
demand and supply. Inventory management techniques can help
you go a long way in managing multiple inventories.

16. Just in Time (JIT)
As the name suggests, the JIT inventory
management technique says that the
item will be ordered only if it is needed
for shipping or manufacturing. The item
may be ordered a few days back
depending on the delivery time
promised by the supplier.
A mandatory requirement of this approach is the proper
identification of each item before the manufacturer or
reseller requires it. Since, there can be many goods required
by supplier or manufacturer at any time, each and every
future requirement should be properly identified and timely
ordered

17. There are several components to JIT
that deserve mention in the text:
1.Production in Small Lots:
2. High Quality in Delivery
3. Business Setup Time
4. Excellent Preventative Maintenance
5. Commitment of Supplier on Timely
Delivery
6. Employees with a Flexible Attitude

18. • Dropshipping
The method involves a seller making a
dropshipping contract with another company. The
best part of the technique is that there is no need
to bear the cost of inventory; the seller can
directly transfer the order to a dropshipping
company, which will then take the responsibility
of delivering the item to the customer. The seller
receives a certain percentage of the sales that he
can make. The downside to this method is that
the seller does not have any control over the
shipping of the item and cannot cross check the
quality of the shipment.

19. This is an age-old method of managing
inventories; the method relies on the
principle that if you purchase goods in bulk,
you are able to procure them in much lower
costs. The method can only be employed if a
business is sure that he will be able to sell
that product. If a product is in high demand
then you should consider using this
inventory management technique which is
sure to save you much money.
.
Procuring Bulk Shipments

20. However, there are a certain pointers that should
always be kept in mind if you really want to
successfully manage your inventory:
• Do not maintain too much inventory in your warehouse. If a
certain quantity of product is needed after a year, do not go
forth and unnecessarily bear its storage costs for one whole
year. Make use of the different accurate forecasting methods
to help you efficiently procure the goods in a timely manner
before demand escalates.
• Make sure that you track your inventory items properly. Using
bar codes and inventory tracking software you need to make
sure that there are no counting errors that were incurred while
accessing an inventory. Inaccurate tracking can lead to a false
promise to customers, who will give you a difficult time if you
are not able to fulfill your promise of delivering the order on
time.

21. • You should always use proper
inventory management
software to manage your
inventory. Even if you own a
small business, you will need to
have the proper software with
data backup modules to help
you manage inventory
efficiently.
• You should always have a
backup plan in case of system
failures. Also, you should
backup your inventory data into
remote systems so that there is
no accidental loss of inventory
data. A good backup plan can
go a long way in making your
inventory management more
efficient process.
•Order products on the
basis of priorities. The
products that are in most
demand should be
ordered first and so forth.
If you keep on randomly
storing products in your
inventory, then you will
unnecessarily incur huge
storage costs

23. ABC analysis
The ABC Analysis is a business term
used to define
an inventory categorization
technique often used in materials
management. It is also known
as Selective Inventory Control.
Policies based on ABC analysis:
A ITEMS: very tight control and accurate records.
B ITEMS: less tightly controlled and good records.
C ITEMS: simplest controls possible and minimal
records.

24. • The ABC analysis provides a mechanism for identifying items
that will have a significant impact on overall inventory costwhile
also providing a mechanism for identifying different categories
of stock that will require different management and controls.
• The ABC analysis suggests that inventories of an organization are
not of equal value. Thus, the inventory is grouped into three
categories (A, B, and C) in order of their estimated importance.
• 'A' items are very important for an organization. Because of the
high value of these ‘A’ items, frequent value analysis is required.
In addition to that, an organization needs to choose an
appropriate order pattern (e.g. ‘Just- in- time’) to avoid excess
capacity.
'B' items are important, but of course less important than ‘A’
items and more important than ‘C’ items. Therefore ‘B’ items are
intergroup items.
'C' items are marginally important

25. Inventory
Control
System

26. An inventory control system is
a set of hardware and software
based tools that automate the
process of tracking inventory. The
kinds of inventory tracked with an
inventory control system can
include almost any type of
quantifiable good, including food,
clothing, books, equipment, and
any other item that consumers,
retailers, or wholesalers may
purchase.
What is an
Inventory
Control System?
Modern inventory control systems are almost exclusively based
on barcode technology. Though barcodes were initially
developed to automate the process of grocery store checkout,
their ability to encode a wide variety of alphabetic and numeric
symbols makes them ideal for encoding merchandise for
inventory applications. Inventory control systems work in real-
time using wireless technology to transmit information to a
central computer system as transactions occur.

27. • What Industries Use Inventory Control
Systems?
Inventory control systems are employed in a
wide variety of applications, but they all revolve
around tracking delivery of goods to customers.
Inventory control is crucial in retail stores,
especially those with a large number or variety
of merchandise items for sale. Inventory control
is also used in warehouses to track orders and
shipments, and for automated order
processing. Other important applications of
inventory control systems are in manufacturing,
shipping, and receiving.

28. • Why is Inventory Control Important?
Inventory control is important to ensure quality control in
businesses that handle transactions revolving around consumer
goods. Without proper inventory control, a large retail store may
run out of stock on an important item. A good inventory control
system will alert the retailer when it is time to reorder. Inventory
control is also an important means of automatically tracking large
shipments. For example, if a business orders ten pairs of socks for
retail resale, but only receives nine pairs, this will be obvious upon
inspecting the contents of the package, and error is not likely. On
the other hand, say a wholesaler orders 100,000 pairs of socks and
10,000 are missing. Manually counting each pair of socks is likely to
result in error. An automated inventory control system helps to
minimize the risk of error. In retail stores, an inventory control
system also helps track theft of retail merchandise, providing
valuable information about store profits and the need for theft-
prevention systems.

29. Automated inventory control systems work by
scanning a barcode either on the item. A barcode
scanner is used to read the barcode, and the
information encoded by the barcode is read by the
machine. This information is then tracked by a
central computer system. For example, a purchase
order may contain a list of items to be pulled for
packing and shipping. The inventory control system
can serve a variety of functions in this case. It can
help a worker locate the items on the order list in
the warehouse, it can encode shipping information
like tracking numbers and delivery addresses, and
it can remove these purchased items from the
inventory tally to keep an accurate count of in-
stock items. All of this data works in tandem to
provide businesses with real-time inventory
tracking information. Inventory control systems
make it simple to locate and analyze inventory
information in real-time with a simple database
search.

30. • GOIS Pro is an advanced system software,
which is designed as a complete
inventory solution. This free inventory
application boasts many useful tools and
features which caters all the inventory
needs of a grocery store. If you are
running a grocery store, it is advisable to
use GOIS Pro as your inventory software.
This application is capable of managing
your inventories in a well managed way.
GOIS Pro is an advanced inventory application which can be
accessed and controlled from various mobile platforms and
devices. There are many other useful features of Goods
Order Inventory System Pro which can help your inventory
management requirements

31. Common Components of an Inventory
Control System
Real Time Tracking- This application features real
time tracking. This tool enables the user to keep
an eye on his current stock status and in-transit
orders. A user can monitor the inventories, even
on the go, on his Smartphone or tablet. This
reduces the possibilities of over stock of any
particular item.

32. Bar Code Scanning- It is an
advanced bar code scanning
inventory application. The user
can specify a unique bar code
to a product for maintaining its
individual identity. Later, S/he
can perform the bar code
scanning process directly from
his/her Smartphones or tablet’s
camera. With GOIS Pro, you
don’t have to purchase any
other hardware for bar code
scanning operations.

33. Multi-Platform Support- GOIS Pro can be
accessed on various platforms and devices,
including Macintosh, Linux, Windows
PCs/Laptops, Apple iPhone/iPad and Android
Smartphones & tablets.

34. Multi-user Support- Goods
Order Inventory System Pro
supports up to 25 users
together on its single
dashboard. This means that
25 people can together
control inventories of any
enterprise. GOIS Pro multi-
user support is highly secured.

35. Cloud Storage- GOIS Pro serves up to 500MBs of
Cloud Storage to its user. The user can utilize
Cloud Storage capacity to store important data
inventories. Also, these inventories can be
accessed from any part of the sphere on a
compatible device.

36. Database Management- This inventory software is
also a complete database management system
software. The user of GOIS Pro can manage its
important database without any hassle using GOIS
Pro.
S/he can also
store important
information,
including contact
details of vendors
and suppliers in a
secured way using
GOIS Pro

37. THANK
YOU!!!