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Automation Of Inventory Management Process
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Automation Of Inventory Management Process
BY KATENDE KENNETH KIDONGE B.COM (DR.B.R Ambedkar University, Agra, India) Department of Computer Science Faculty of Computing and Information Technology Email: [email protected], Tel: +256 772 361 159
A Project Report Submitted for the Study Leading to Partial Fulfillment of the Requirements for the Award of the Postgraduate Diploma in Computer Science of Makerere University
Option: Computer Information Systems Supervisor: MR. NIYITEGEKA MICHEAL Department of Information Technology Faculty of Computing and Information Technology
August, 2006
Approval
I certify that this project is the original work of the above named candidate and has been done un- der my supervision. The work has never been submitted for any award of a postgraduate diploma in any institution of higher learning.
Signed: .......................................................... Date: ...........................................
Mr. Niyitegeka Michael Department of Information Technology Faculty of Computing and Information Technology. Supervisor.
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Dedication
I dedicate this manuscript to my parents (Mr. and Mrs. Serunjogi), Sam, Eve, Sylvia, Ann Mr. and Mrs. Tumwesigye, Mr. and Mrs. Semakula, my fellow staff at Uganda-Case Research Collabora- tion and all whose moral support has helped me complete this entire course.
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Contents
List of Tables
- 1 Introduction
- 1.1 Background
- 1.2 Problem Statement
- 1.3 OBJECTIVES
- 1.3.1 General Objective
- 1.3.2 The specific objectives include:
- 1.4 Scope
- 1.5 Significance of the study
- 2 LITERATURE REVIEW
- 2.1 Introduction
- 2.2 Management of Information Systems
- 2.3 Inventory Control Systems
- 2.4 Types of Inventory Manual Systems
- 3 METHODOLOGY
- 3.1 Introduction
- 3.2 Data Collection
- 3.3 Analysis and Design
- 3.4 Development and Implementation
- 4 SYSTEM STUDY AND INVESTIGATION
- 4.1 System Study
- 4.1.1 Problem of the existing system
- 4.1.2 User Requirements of the New System.
- 4.1.3 Functional Requirements of the Proposed System
- 4.1.4 Non functional requirements
- 4.2 System requirements
- 4.2.1 Hardware requirements
- 4.2.2 Software requirements
- 4.3 System Design
- 4.3.1 Design objectives
- 4.3.2 Design features of the database
- 4.3.3 Mapping relationships
- 4.3.4 Final database schema
- 4.4 System Implementation
- 4.4.1 Security and accessibility to the database
- 4.4.2 Implementation
- 4.4.3 Software life-cycle model
- 4.4.4 Testing
- 4.4.5 User manual
- 4.4.6 Application Interfaces
- 5 DISCUSSION, RECOMMENDATION AND CONCLUSIONS
- 5.1 Introduction
- 5.2 Achievements
- 5.3 Limitations
- 5.4 Conclusion
- 5.5 Recommendation
- 1 Business Type Table
- 2 Transactions Table
- 3 Stock Item Table
- 4 Street Table
- 5 building Table
- 6 Customer Table
- 7 Bank Table
Acronyms
DFD .................................................. Data flow diagram
ERD ..................................................Entity Relationship Diagram
GUI ................................................. Graphical User Interface
HTML ................................................. Hyper Text MarkUp Language
PGD ...................................................Post Graduate Diploma
KCC ...................................................Kampala City Council
Ltd ...................................................Limited
IDNo .................................................Identification number
FK ....................................................Foreign Key
PK ...................................................Primary Key
VIL ...................................................Victoria Insglass Limited
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CHAPTER ONE
1 Introduction
1.1 Background
The Ugandan government raises its revenue through the collection of taxes. There are very many types of taxes collected by the government and one is trading licensing fees. The government of Uganda entrusted Local governments (at sub county level) to raise revenue through the collec- tion of trading licenses fees from business entities in their respective localities. Article 191of the constitution of the Republic of Uganda (1995) (12), empowers Local Governments to levy taxes in accordance with any law enacted by the Parliament. Section 79 of the Local Government Act (1997) (7), the Fifth Schedule provided License fees among other revenues that can be levied and collected by local governments.
Privatization of collection of trading license Fees
In 2000, Kampala City Council privatized the collection of trading license fees thereby awarding contracts to private companies in 2001.In the Central division of Kampala District, the company that was awarded the tender to collect trading license fees is called Victoria Insglass Limited.
Inventory Management in Victoria Insglass Ltd
Victoria Insglass Ltd has a special stock which is a licence and is sold inform of offering a ser- vice.The licences that are sold to the public (the business entities) its the stock of this enter- prise.This particular stock (licences)is managed manually by recording it in the manual stock cards. The stock is requisitioned by the issuing officer and does forward it to the managing director. The managing director checks the requisition which and hands over to the accountant to process the payments to be made to KCC.When KCC receives the requisition it processes the required stock to supply to VIL.The daily sales and stock (got from KCC) are recorded by the issuing officer in the stock cards. The stocks are summarized weekly to ascertain stock at hand, sold stock, movement of various stocks and the stock items needed to be ordered. The automation of inventory management system will ease determining stock levels, purchasing time and type of stock to re-order.
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1.2 Problem Statement
Victoria Insglass Limited uses a manual system for its inventory management i.e. the use of stock cards.This has led to the delay to acquire inventory and having slow inventory on the shelf. The company also runs out of some particular stock items that are in demand at crucial times.
1.3 OBJECTIVES
1.3.1 General Objective
The main objective of this project is to develop an automated inventory management system of Victoria Insglass Limited.
1.3.2 The specific objectives include:
- Develop an automated system that will be able to record, store, retrieve and generate reports of inventory useful to management in decision-making.
- Customer satisfaction by having the required stocks by there clients.
- To enable management to know when,what and how much to order in terms of the required inventories.
1.4 Scope
The project covers the automation of licensing inventory process of Victoria Insglass Ltd.It fo- cuses on the stock of licenses a particular time, the value of the stock, the amount of stock needed, details of the various entities that have so far received their licenses and those that have not re- ceived their licenses and have paid up.Other companies dealing in the same trade will also be covered e.g.Kisenyi Development Association.Supermarkerts will also be visited to ascertain the management of there inventory.
CHAPTER TWO
2 LITERATURE REVIEW
2.1 Introduction
This chapter involves the systematic identification, locating and analysis of documents containing information related to the research problem being investigated. It also sells at the relationship of the proposed research to the previous concluded research.
2.2 Management of Information Systems
Laudon,(2001) [9], Define Management Information System the study of Information system in business and management. It also designates a specific category of information systems serving management level functions. It does provide managers with reports or with online access to the organization current performance and historical records. Largely they serve the functions of plan- ning, controlling and decision making at the management level. They summarize and report on company basic operation. These are well-documented advantages of a good information system. The term inventory control refers to effective management and control of inventory items, which have already been purchased and are in the convenience organization.
2.3 Inventory Control Systems
According to Moskowitz(19950 [11], Inventory control - in whatever sense it applies to your busi- ness - can be done manually, of course but you can almost certainly do it faster, cheaper, and better by automating some or all of the inventory control process. Moskowitz(19950 [11], found that the four aspects of inventory control: counting and monitoring the items actually in inven- tory; recording and retrieving the precise locations of items in inventory; recording changes to inventory frequently and precisely enough so you make possible accurate inventory control; and anticipating inventory needs well enough to re-order just in time and to plan for inventory handling requirements. Computerising your inventory system brings you the potential for improving sales
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and profits through better analysis of inventory trends, including patterns of delivery and demand. It will almost certainly pay a significant return on your investment (4). This really spells why the automation of inventory is apparently very much needed and not only computerisation but also with the appropriate software.
2.4 Types of Inventory Manual Systems
Cameron Balloons Virtual Factory (2005) [4]came up with the following manual inventory sys- tems:
- Fixed re-order stock level The fixed re-order stock level is whereby the business decides the minimum level of stocks it can tolerate and then re-orders before the stocks reach this level. The exact timing will depend how long the stocks take to arrive. This minimum level is set so as to be able to give time to the suppliers.
- Fixed time re-ordering Fixed time re-ordering, the firm re-orders stocks at a fixed time each month or week. Organisations set up different times depending on their convenience to re-order stocks.
- Economic order quantity Economic order quantity, firms usually estimates what is needed and order at once. This method is used at the beginning of each yearly quarter.
- Just-in-time production This method involves keeping stocks to an absolute minimum and the raw materials are ordered only when they are needed. It was developed in Japan. It deals in the production of goods. This can be wonderful for helping to reduce the need for working capital, but requires a very high level of organisational skill and a very close relationship with suppliers. These fours methods would suite the company that employs them but still, the manual work is too much plus the related problems that come with it. Combining the four methods and automating the whole inventory control process will give that particular organisation a very big boast in managing its inventory.
Kakeeto(2003) [6] stated the problems that exist with manual inventory record system as being inconsistencies incurred when entering products onto stock cards, increasing volumes of stationery
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sold.
A similar project was done on Stores Management Information System by Bwire(2004) [3].The project is main objective was to determine the stock levels by computing the received and dis- tributed commodities and also to account for the stores rental goods by calculating the rented date and date of return.The aim of the study was to provide an Automated Computerised System for securing,quick evaluation and manipulation of records of goods received and distributed at the store.He also looked at the system to be able to collect,store,retrieve,communicate and use data for the purpose of efficient and effective management.The project mainly deals with stores looking at the aspect of goods whereby the control of services is not tackled.Since Victoria Insglass Ltd deals in some form of different inventory (offering of service by selling licences)and its bought from only one organisation i.e. KCC.
Amoro (2004) [2]in his project Automation of Business Transaction, whereby he focused on the system to be able to track the records of customers, orders and drugs as well as providing the reports on business transaction. His system further focused calculating the discount on large purchases of drugs and also able to carry out registration of drugs and customers particulars. The project was mainly to deal with production and sale of drugs in the organisation putting emphasis on production organisations. Data and system have no meaning till put into context of what business or organization does. This mainly tackled issues concerning organisations dealing in production and able to offer discounts unlike Victoria Insglass Ltd that cannot offer dicounts and does not deal in production but it offers services by selling licences.Inventory control in the convenience store business is important because these businesses depend on the rapid turnover of inventory items with a limited shelf life at relatively small margins. This particular inventory information is what managers base on to make vital decisions of an organisation. The automation of the inventory system will hence help managers make the right decisions because information will be rightly available and in a correct format. Computerizing your inventory system brings you the potential for improving sales and profits through better analysis of inventory trends, including patterns of delivery and demand. It will almost certainly pay a significant return on your investment hence the significance of Victoria Insglass Limited automating its inventory management system.
CHAPTER THREE
3 METHODOLOGY
3.1 Introduction
This section describes the methods that were used to gather the requirements for the system. It covered Data Collection, Analysis and design tools, and Development. The methods highlighted the existing system in its current state and the automated system.
3.2 Data Collection
This phase does describe the techniques that were employed to gather the requirements for the proposed system. The various requirements gathering techniques that were employed included the following:
- Reading:This particular technique was employed to be able to read some of the guiding documents that the company does use to come up with the required rates of the various business entities in Kampala Central Division e.g. The Local Governments Act, 1997 and the Rates manual provided by City Council of Kampala. These are used for assessing and also explained duly to the tax payers (those who are not conversant with the tax) the general purpose of license fees.
- Questionnaire:This technique was used to attain the format of the current system because it provides the chance to collect information from respondents who are conversant with the whole system understudy.
- Observation: This method was also employed so that researcher acknowledges the flow of activities in the licensing process i.e. the capture of data and the steps one goes through to acquire the license.
