Inventory control systems maintain information about activities within firms that ensure
the delivery of products to customers. The subsystems that perform these functions include
sales, manufacturing, warehousing, ordering, and receiving. In different firms the activities
associated with each of these areas may not be strictly contained within separate
subsystems, but these functions must be performed in sequence in order to have a well-run
inventory control system.
In todays business environment, even small and mid-sized businesses have come to rely on
computerized inventory management systems. Certainly, there are plenty of small retail
outlets, manufacturers, and other businesses that continue to rely on manual means of
inventory tracking. Indeed, for some small businesses, like convenience stores, shoe stores,
or nurseries, purchase of an electronic inventory tracking system might constitute a
wasteful use of financial resources. But for other firms operating in industries that feature
high volume turnover of raw materials and/or finished products, computerized tracking
systems have emerged as a key component of business strategies aimed at increasing
productivity and maintaining competitiveness. Moreover, the recent development of
powerful computer programs capable of addressing a wide variety of record keeping
needs*including inventory management*in one integrated system have also contributed to
the growing popularity of electronic inventory control options.
Given such developments, 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
todays keenly competitive business world. Writing inProduction 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. He noted that 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technology are far better equipped to succeed than those who rely on outdated or unwieldy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.
1 COMPUTERS AND INVENTORY
Automation can dramatically impact all phases of inventory management, including
counting and monitoring of inventory items; recording and retrieval of item storage
location; 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 even more when a business integrates its inventory control
systems with other systems such as accounting and sales to better control inventory levels.
As Dennis Eskow noted inPC Week,business executives are “increasingly integrating
financial data, such as accounts receivable, with sales information that includes customer
