CHAPTER ONE

INTRODUCTION

Technology is the present world. Due to the rapidness of research and development,

technology has emerged and is continuously growing. This advancement progress makes our

society more convenient and safe -- turning impossible things possible, making life better and

quicker. Technology plays a vital role in society. May it be in education sector, industrial sector

and the like. However, the contribution of modern technology to society should be distributed

evenly.

Globalization gives way business environment and labor markets with both challenges

and opportunities. Major forces are changing at its fast rate, thus, creating new challenges for

business system worldwide. Now, this 21st century, technology is considered a key to success for

most companies here and abroad. To stay competitive and ensure viability, businesses are

relentlessly pursuing adaptation on modernization.

Automated System is a current trend in the business world; eradicating manual processes,

improving operations and the welfare of the business as a whole. The proponents observe that

only several companies, mostly large scale businesses, are inhibiting this kind of system.

Considering its cost alone, instead of the benefits associated to it.

Inventory is one of the most dynamic aspects of a business operation. A company has to

assure that it keeps track of inventory accurately, because failure to do so, will have

repercussions on the company’s financial stability as well as the level of customer satisfaction.

Especially for a manufacturing type of business like Sta.Maria Dairy Farmers MPCI, having a

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proper inventory management system is a must. SMDFMPCI has been in the industry for more

than 50 years and the system they are using is not that efficient anymore for their growing

business. They are finding a hard time checking and updating their inventory. That is why the

proponents have introduced the use of an automated system. Through this, lots of effort and time

will be used effectively and accurate and updated reports of inventory could be assured.

BACKGROUND OF THE STUDY

The researchers were tasked to find a company that might need improvements on the

processes or systems they are currently using. These improvements can be done through

implementing a more effective system in their day to day operations. They were able to find Sta.

Maria Dairy Farmers Multi-Purpose Cooperative, Inc. (SMDFMPCI). The researchers visited the

location of the cooperative and conducted an interview with Mr. Jay-R Pascual, Production

Head.

SMDFMPCI was organized in early 1950’s. It is located at KM37 PulongBuhangin Sta.

Maria, Bulacan and is considered as the oldest dairy cooperative in the Philippines. It was

established through Sta. Maria Dairy Development Project that was then initiated by the Bureau

of Animal Industry (BAI). During those times, the BAI had initially dispersed Murrah Buffalo

Cows and Bulls to qualified farmer-participants in the area.

In the 1956, the Sta. Maria Farmers Marketing Cooperative (FACOMA) commenced

operation of Sta. Maria Dairy Plant. The commencement of operations was hastened with the

Australian government’s donation of milk pasteurizing equipment.

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Due to lack of operating capital and inadequate milk processing technology, the

FACOMA was forced to sub-lease its property to BAI in 1967. The succeeding years witnessed

the transfer of plant management from the BAI to the Cooperative Marketing System of the

Philippines (CMSP) in 1975; then returned to BAI in 1984.

On April 16, 1989, through a Memorandum of Agreement (MOA) with the Department

of Agriculture (DA), the operation and management of the Sta. Maria Dairy Plant was turned

over to the Sta. Maria Dairy Farmers’ Association, Inc. All plant operations were handled by the

SMDFMPCI while the BAI provided manpower and technical assistance. In 1997, the National

Dairy Authority (NDA) took turn in handling the SMDFMPCI.

SMDFMPCI markets its products in Metro Manila under the brand name “Sta. Maria

Dairy”. It processes various dairy products such as fresh milk, chocolate milk, and soft white

cheese.

SMDFMPCI is still using manual process in most of their operations and encountering

several problems. These problems include loss of data, inaccurate information, unsecured files

and time consuming processes. Through the use of automated system, the company can ensure

that files and information they need are accurate, secured and updated. It can also make

monitoring of their inventories easier than manual process.

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SYSTEM OVERVIEW

Sta. Maria Dairy Farmers is currently using manual process on their inventory

management system. The officer in charge receives the orders through personal

communications, like phone calls, text messages, and email, two days before shipment. They

also accept immediate purchases as long as they have excess or stocks available. They always

assure that the details and terms such as specification of products, mode of payment and

shipment are agreed by both parties upon purchase. Subsequently, the officer in charge would

give the orders to the production department.

At the end of the day, through physical count, the supervisor will use an inventory sheet

in recording the ingredients still on the warehouse, in process, and those that are already finished.

The sheet will be given to the production head and he will transfer the data to the computer using

MS EXCEL. They are doing this every day and that’s how their inventory management system

works. Though this process was used by their company for many years, they are still

encountering difficulties and problems. But through the use of automated system that the

researchers would provide, these problems will be reduced or probably be eliminated.

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INQUIRE WITH OFFICER IN CHARGE

PERSONAL CONVERSATION

PHONE CALLSMESSAGES

DAILY PHYSICAL COUNT USING

INVENTORY SHEETS

TRANSFER OF ORDERS TO THE

PRODUCTION DEPARTMENT

AGREE WITH THE TERMS AND

CONDITIONS OF THE PURCHASE

COMPLETE THE ORDERS AND ITS

DELIVERY

UPDATE INVENTORIES ON MS

EXCEL

The figure below shows the existing system of SMDFMPCI.

STATEMENT OF THE PROBLEM

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The proponents aim to proposed solutions for the following:

In general:

The major problem in the entity’s day to day operation is the inefficiency of their

inventory management.

Sta. Maria Dairy Farmers is using a manual process for their inventory. Through physical

count they are using an inventory sheet to record the status of their inventory. The sheet will be

passed to the office for the data to be recorded in their computer. The entry allots so much time

doing this everyday yet still not safe from chances of errors. These errors could be mitigated if an

automated inventory management system will be inhibited.

To be specific:

Low quality information due to high risk of human error. The current system mostly

relies on the actions of people, which increases the possibility of human error. People

might forget to record a transaction or simply miscount the number of goods.

Multiple processes involved thus requiring a large allotment of time and human

intervention. Manual system requires continuous monitoring to ensure that each

transaction is accounted for and that products are maintained at the appropriate stocking

levels.  The time spent monitoring inventory levels could be used on more productive

activities for the business.

Lack of security. Use of authentications such as passwords is not present in their current

system. Everyone can easily have an access on their records.

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Problem of under-stocking or overstocking. Under-stocking may result to delays of

delivery which would affect customers’ satisfaction. On the other hand, excessive level of

inventories consumes the funds of business, which cannot be used for any other purpose

and thus involves an opportunity cost. The carrying cost, such as the cost of shortage,

handling insurance, recording and inspection, are also increased in proportion to the

volume of inventories.

Proposed Research Project

General objective

The main purpose of this study is to provide an automated system that would fit the

entity’s inventory management needs. The system software,Inventoria Stock Manager, could

help the organization’s handling of inventory that could result to operational efficiency.

Specific objective

The researchers have set specific goals to attain its main purpose.

1. Providing day to day updates without needing too much human intervention. The

proposed system would determine the stock levels of various items in the least possible

time thus more time and efforts will be used efficiently.

2. Prevent human errors that may lead the business to good decision making. Because staff

is no longer required to re-enter data and to make manual computations, clerical errors

are reduced.

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3. Prevent unauthorized access to the records. Only authorized persons will be permitted to

use and view the system.

4. Provide back-ups to ensure that files are safe and secured.Data backup is an insurance

plan. Important files are accidentally deleted all the time. Natural disasters might also

happen. With a solid backup and recovery plan, data loss would not be a problem.

SIGNIFICANCE OF STUDY

Business has to pay attention on how its underlying processes are being managed. Because if

not, several problems may arise that may affect the operations of the entity. For a business that

either sells or manufactures a product, having a proper inventory management system is

necessary. In this study, the researchers have come up to a proposal to eliminate and solve the

particular problems. The significance of this study will not limit itself on the business entity

alone; it may be substantial in many aspects.

To the company. This will save their time and effort in computing their sales and to have

close monitoring of their inventories.

To the customer. This will give them more details and information about the goods and

products of a particular business enterprise.

To the investors. This will enable them to know the operations of the company they used

to be part.

To the government.This will help the regulating bodies to execute their duties and

responsibilities since the information they are monitoring are properly recorded.

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To the academe. This study can be a reference material for future researchers and

students.

To the researcher. This will introduce to the researcher a system that will inspire the

reference of the researcher developing inventory system.

SCOPE AND DELIMITATION

Inventoria Stock Manager brings to your business the ability to control your inventory

with ease.

Its features are:

1. This inventory management system offers a user-friendly interface and easy-to-

understand navigation tools.

2. It also a simple way to save time entering and counting each item in a shipment.

3. This inventory software also allows the user to view a report of sold items as well as by

category listing. Having this information is important when reordering the company’s

own stock.

4. This inventory program also allows the user to view inventory by received history and

location. Having the ability to view these important details can help to better manage the

resources and make better judgment calls about what inventory is located at which

warehouse.

5. Transfer stock between locations

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6. Allowsthe user to store both customers and suppliers into a database that keeps the

information secure.

Inventoria Stock Manager limits itself as given;

1. Multi-user access requires an upgrade.

2. Restoration of deleted data is out of bounds, unless the user has created back up files

prior to the action

3. Can't release invoices; it is limited to orders.

4. The following is the recommended minimum system.

Microsoft Windows XP, Windows Vista, Windows 7 or Windows 8 (64 bit); MAC OS X 10.3 or above

1GB of RAM

30MB of available hard-disk space

Inventoria is professional inventory stock management software for Windows that allows

users to manage inventory in one or several locations. Manage company’s stock levels by

categories, locations, and vendors.

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DEFINITION OF TERMS

Automation -is the use of various control systems for operating equipment such as machinery,

processes in factories, boilers and heat treating ovens, switching in telephone networks, steering

and stabilization of ships, aircraft and other applications with minimal or reduced human

intervention.

Encryption - is the process of encoding messages or information in such a way that only

authorized parties can read it. Encryption doesn't prevent hacking but it reduces the likelihood

that the hacker will be able to read the data that is encrypted.

Globalization -is the process of integration across world-space arising from the interchange

of world views, products, ideas, and other aspects of culture. Advances

in transportation and telecommunications infrastructure, including the rise of the telegraph and

its posterity the Internet, are major factors in globalization, generating further interdependence of

economic and cultural activities.

Inventory management system - is a computer-based system for tracking inventory levels,

orders, sales and deliveries. It can also be used in the manufacturing industry to create a work

order, bill of materials and other production-related documents. Companies use inventory

management software to avoid product overstock and outages. It is a tool for organizing

inventory data that before was generally stored in hard-copy form or in spread sheets.

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Manual Process -means controlled or manipulated by a human operator (not automatically, such

as by a computer) or powered by human or animal muscle power (not by an inanimate source of

power such as an electric motor, gas engine, or sail).

System software (systems software)-is computer software designed to operate and control

the computer hardware and to provide a platform for running application software.

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CHAPTER TWO

Review of Related Literature and Studies

In this chapter, the proponents cited writings composed of related literature and studies,

both local and foreign, which contains facts and information relevant to the investigation at hand.

Foreign Literature

Today companies are competing in a very different environment than they were only a

few years ago. To survive, they must focus on quality time based competition, efficiency, and

costumer relationship. Due to the rapidness of technology, many ways and processes have been

developed to help businesses adapt with those changing needs of the environment.

1Every business is managed through three major functions: finance, marketing and

operations management. Finance is the function responsible for managing cash flow, current and

capital investments. Marketing is responsible for sales, generating costumer demand and

understanding customer wants and needs. But of all the business functions, operation is the most

diverse in terms of the tasks performed. Operations management (OM) is the business function

that plans, organizes, coordinates and control the resources needed to produce a company’s

goods and services. This includes designing the product, arranging schedules, equipment and

facilities, controlling quality and most importantly managing inventory.

In the earliest days, merchants wrote down purchases, or they looked at how many units

were gone at the day's end and then did their best to forecast future needs. Experience and

intuition were key skills, but it remained an inexact method. After the Industrial Revolution,

1R. An Reid, Nada R. Sanders (2012) Operations Management: An Integrated Approach, Fourth Edition. 2-4

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efficiency and mass production became the main goals of businesses, along with an improved

customer experience at the point of sale. A team at Harvard University designed the first modern

check-out system in the early 1930s. It used punch cards that corresponded with catalog items.

Researchers created the forerunner of the modern bar-coding system in the late 1940s and early

1950s. The development of affordable laser technology in the 1960s revived the concept. The

modern bar code, or the Universal Product Code (UPC), was born and caught on just before the

1970s. As computing power became better, the power of UPC codes to help track and manage

inventory improved exponentially. During the mid to late 1990s, retailers began implementing

modern inventory management systems, made possible in large part by advances in computer

and software technology. The systems work in a circular process, from purchase tracking to

inventory monitoring to re-ordering and back around again (Crosby, 2007).

Inventory management involves "system and processes of maintaining the appropriate

level of stock in a warehouse". These activities includes identifying necessary inventory

requirements, and creating replenishment processes, tracking and monitoring the usage of

items/stock, reconciling inventory balances as well as reporting inventory status. It is basically

the process of efficiently controlling the amount of stock in order to avoid excess inventory.

Reliable inventory management will therefore minimize the cost associated with inventory

(Barcodes, 2010).

Inventory management is the unglamorous, but essential, guts of your business. It's

imperative to dig into it—probably more deeply than you'd like. Inventory can go bad, and if you

don't move it, that can mean the difference between profit and loss. Businesses can make a big

impact on cash flow based on how they manage their inventory. (Quittner, 2008)

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Reid and Sanders (2012: 408-411) highlighted the objectives of inventory management system:

1. To provide the desired level of customer service. It is measured by any of the

following:

Percentage of orders shipped on schedule

Percentage of dollar volume shipped on schedule

Percentage of line items shipped on schedule

Idle time due to components and material shortages

2. To allow cost-efficient operations by using a buffer stock, maintaining a level workforce,

allowing longer production runs and taking advantages of quantity discounts.

3. To minimize the inventory investment. A company can measure its minimum inventory

investment by its inventory turnover that is, by the level of customer demand satisfied by

the supply on hand.

Automated Inventory Systems are specialized software that allows businesses to input their

inventory and track the products that are delivered and sold.  At the time of arrival the products

are registered into the database and are added to the list of current inventory.  They can track the

depreciating inventory by using barcodes and scanners on all the products being sold. With point

of sales software, products are subtracted from the inventory count the moment they are sold

instead of being deleted manually at a later time.   This process allows data to be more accurate

than the previous process because the business knows exactly how much inventory they have in

stock at any given time (Field, 2005).

Computerized inventory management systems provide many benefits that are hard to

obtain using paper methods or an in-house spreadsheet. Computerized system allows automating

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some of the manual physical counting steps and provides the ability to analyze all aspects of

inventory control and purchasing. (McHugh, 2011)These systems also make it possible to

integrate the various functional subsystems that are a part of the inventory management into a

single cohesive system. The increased efficiency of inventory systems over the past 25 years

made some things possible that would have been impossible in earlier times (Eskow,1995).

Industry averages suggest that a 20 percent reduction in inventory is achievable with a

computerized inventory control system. The cost of implementing the system goes far beyond

the cost of the software package itself. The effort and time could be as high as five to 10 times

the cost of the package. But the benefits of the system would still far outweigh the costs for a

typical company (Reimer, 2001).

Tina Stehle (2006) stated top five operational benefits using an automated inventory

system:

1. Monetary Savings. Automated solutions for inventory and procurement deliver big

savings over manual systems - from reduced administrative costs to shortened

procurement and fulfillment cycles. Eliminating manual processes, for example, increases

staff productivity; and tracking data to secure vendor rebates can result in significant

monetary savings.

2. Time savings. An automated inventory and procurement solution saves time by

streamlining purchasing and inventory control. Tasks that once took hours or even days

can be performed with a few clicks of a mouse. Staff no longer wastes time matching

receipts with deliveries, figuring out overly complex invoices and keying in redundant

information.

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3. Increased accuracy. An automated inventory and procurement solution increases

accuracy. Because staffs are no longer required to re-enter data from paper documents,

clerical errors are dramatically reduced. Mistakes in ordering are also minimized.

4. Enhanced negotiations. In order to effectively negotiate with suppliers, businesses must

understand exactly what they are purchasing, in what volumes and at what price. An

automated inventory and procurement solution can provide this information, giving

procurement professionals greater leverage to negotiate price breaks, volume discounts

and favorable payment terms.

5. Increased compliance. It is necessary for businesses to standardize procurement

processes and make sure employees at all levels are using pre-negotiated pricing.

Still, new technology and systems will not singlehandedly accelerate your company’s

processes. A change in the company mindset is required as well. Employees must accept that the

way they operated in the past will change (Apter, 2010). The single most important element for

any technology implementation — or for any major change for that matter — is to include those

most impacted by the technology (or change) in the process of creating the future. Including

those who work in the processes and who will use the technology is a critical success factor for

any business process management implementation (Wince, 2010).

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Foreign Study

In today's highly competitive environment, every organization should be sensitive and

wise in dealing with their inventory. Inventory is the quantity of goods and materials on hand

that a manufacturer uses to represent those items that are ready and available for sale.

(Roseline, 2010). It is an asset on the balance sheet of companies and has taken on increased

importance because many companies are applying the strategy of reducing their investment in

fixed assets, like plants, warehouses, equipment and machinery, and so on, which even highlights

the significance of reducing inventory (Coyle et al., 2003). Using inventory system helps

organizations achieve the optimal point; since effective and efficient managing of inventory will

benefit not only from the aspect of management but also other aspects such as reduce costs and

production organization. The system is used to track products and parts as they are transported

from a vendor to a warehouse, between warehouses, finally to a retailer or directly to a customer.

The purpose of a good inventory control system is to maintain a balance between too much and

too little inventory. It provides the foundation for monitoring product sales and measuring

inventory levels. Inventory management systems acts as a blueprint for picking, packing and

shipping items from a warehouse and receiving items into a warehouse or other storage locations

to cut down product obsolescence and spoilage (Monzerka, 2002).

Effective inventory management is essential in the operation of any entity especially for

the manufacturing line of business. It facilitates the manufacturing process by helping

manufacturers efficiently assemble the tools and parts they need to perform certain tasks. For

more complex manufacturing jobs, manufacturers can create multilevel work orders and bills of

materials which have a timeline of processes that need to happen in the proper order to build a

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final product. Other work orders that can be created using inventory control systems include

reverse work orders and automatic work orders (Bolton, 2001).

In today’s business environment, it is almost vital that businesses switch to an automated

system for inventory management because manual inventory can lead to a number of errors,

which will hurt the company in the future (Hartman, 2005). An automated inventory

management system makes everything from inputting information to taking inventory easier.

Doing a hand count of inventory can take days, but with an automated inventory management

system, the same process can be done in a matter of hours.Companies use the system to prevent

running out of inventory stock. These systems can provide a report on needed inventory or place

preapproved electronic orders to suppliers for more inventories, creating a smooth flow of

inventory in the company (Muller, 2003).

Automated inventory control systems are efficient, effective and have helped to improve

the manufacturing industry thereby providing more security to warehouses while improving

customer service.

Local Literature

Starting a business is one thing; keeping it running is another. Without a proper process

structure, tasks like tracking inventories, over time, can wear down a business that has had an

otherwise good start. Even though there is an upsurge in the use of computer software as a

management tool by large industries, it can be assumed that small and medium-sized industry

owners are not yet fully exposed to the reality of the importance of using new technical advances

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in computer software that could tremendously increase production of goods and services at a

significant reduction in cost of operation, increasing efficiency and managerial and technical

know-how of personnel, and hence earning better.

Inventory is the lifeblood of the supply chain. It’s what flows from node to node. And at

each node it’s critical to figure out that perfect balance of supply and demand, or else suffer dire

consequences (Napolitano, 2013). Inventories occupy the most strategic position in structure of

working capital of most business enterprises. It constitutes the largest component of current asset

in most business enterprises. In the sphere of working capital, efficient control of inventory has

passed the most serious problem the turnover of working capital is largely governed by the

turnover of inventory. It is therefore quite natural that inventory which helps in maximize profit

occupies the most significant place among current assets.

International Accounting Standards (IAS) 2, paragraph 6, stated that inventories are

assets of an enterprise which are:

held for sale in the ordinary course of business (raw materials inventory)

in the process of production for such sales (work in process inventory)

in the form of materials or supplies to be consumed in the production process or

in the rendering of services (finished goods inventory)

2There are two methods of keeping merchandise inventories. These are perpetual

inventory system and periodic inventory system. Under the perpetual inventory system, physical

count is taken at the end of accounting period by counting the number of units on hand and this

gives the management a chance to check whether the inventory on hand corresponds to the

2Gloria ArdanielRante, Fundamentals of Accounting P-1, 2010 Edition. 331-333

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amount indicated in the inventory stock card. Not like the perpetual, periodic inventory system

make a physical count at the end of specific period to determine the value of the inventory.

Inventory management involves a trade- off between the costs of keeping inventory and

the benefits of holding it. Different inventory items vary in profitability and the amount of space

they take up, and higher inventory levels result in increased costs for storage, casualty and theft,

insurance, spoilage, property taxes for larger facilities, increased staffing, and interest on funds

borrowed to finance inventory acquisition. On the other hand, an increase in inventory lowers the

possibility of lost sales from stock outs and the production slowdowns caused by inadequate

inventory. Additionally, large volumes of purchases result in greater purchase discounts

(Salvador et.al, 2012).

In this day and age, in order for businesses, small or big, to increase their chances of

success, it will be well to adapt with the use of systems software to help them increase the

efficiency of their “backroom” operations and free them to concentrate on creative aspects of

running their companies (Torrevillas, 2013).

Local Study

Manual system in retrieving, maintaining, securing and filing of records consume time and effort.

There are cases of misplaced records. Furthermore, these files were only kept in envelopes, folder or

wooden tracks. There are also instances when the right information is given to a wrong person which may

affect quality service (California 1996)

Indeed, manual system brings a lot of problem in businesses’ day to day operation. But due to the

fast emergence of technology, many opportunities and challenges have arisen, thus helping them to adapt

on the changing needs of the environment. As J. Hemogenes (2001) mentioned in his unpublished thesis,

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computerization is one of the best solution in the problems encountered by the use of manual system.

Computerization already has a notable impact in the environment today. The factious process of

analyzing and organizing it and coming up with the meaning report has necessitates the active role being

played by computer.

Computer technology has become the even more firmly established. It has been the driving force

in the society where in it has enabled the user to perform all sort of things (Rebusit, 2002). Use of

computerized monitoring system will provide a better transaction processing and record keeping than the

manual ones.

Inventory is one of the critical assets of all organizations. A company has to provide a close

monitoring of inventory because failure to do so might result to repercussions on the company’s financial

stability as well as the level of the customers’ satisfaction.

Through the development of system software, businesses can somehow assure an efficient

operation. The study conducted by Zarina Bernabe (2007) had proven that use of automated inventory

system can lessen a significant amount of time dedicated in creating summary reports of inventory along

with other related records. Moreover, the company which is the Bell Electronics Corporation finds the

system more effective in their inventory management not only because of the improved speed, but also

due to the increased of efficiency by reducing manual inventories.

Jennie Ligones, SAP Philippines country manager, also claimed that after they inhibited

the use of automated systems, processing times for inventory and financial had been shortened

and had allowed them to further fine-tune its internal forms and processes to better address its

growing business requirements. Companies need to be agile especially in today’s new reality.

Small and medium enterprises need to differentiate themselves against growing competition, and

maintain appropriate growth in changing environments (Santos, 2012).

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According to Precious R. Perez (2009) on her thesis, effective inventory system management is

an important part of a manager’s job. Managers are tasked to make consistent reliable and timely

decisions under the challenges of uncertainty, pressure and lack of information. It is often that managers

do not have enough time or information to make a perfect decision but they are forced to solve problems

using resources within their control. Effective inventory control requires managers to ensure inventories

of the right items in the correct quantities.

As technology grows and businesses expand it is becoming more and more obvious that

having manual processes to run operations are no longer a company’s advantage.  If they want a

competitive edge over companies automating is the way to go.

Justification

Some studies suggested that businesses need to adapt to the modern ways for their

chances of success. According to local studies, manual system brings a lot of problem in

businesses day to day operation like increased costs for storage, casualty and theft, insurance,

spoilage, property taxes for larger facilities, increased staffing and interest on funds borrowed to

finance inventory acquisition. A lot of time and effort is needed for physical count so that it is

vital that businesses would switch to an automated system for inventory management. A

systematic and efficient system in managing inventory will benefit not only the aspects of

management but also other aspects such as reduce costs and production organization according

to foreign studies.

The present study is not a duplication instead a replication of the previous works. The

preceding works focuses on implementing an automated inventory system on well-known

entities while the current study is on a manufacturing and progressing entity.

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Synthesis

Thorough understanding of the chosen topic could have been impossible without the aid

of those noteworthy and significant review materials. Those had served as the backbone of the

study. The proponents gathered and scrutinized sufficient resources which they found it useful

during the course of the study. With the materials presented, they were able to cope with

significant theories or principles, basic ideas and other useful thoughts which further introduced

for foundation of their ideas regarding Inventory Management System.

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CHAPTER THREE

HOW THE SYSTEM WORKS

Inventoria Stock Manager is professional inventory management system software used to

manage and monitor the company’s inventory from one small retail outlet to a chain of stores

and warehouses across several locations. The system can easily create new product items on the

spot which comprise of basic information like unit measure, character-based codes or bar codes,

entry and outgoing prices. It can also create purchase orders, then send them to the supplier, and

register the merchandise when you receive it. The item quantity will automatically be updated by

the system. The best advantage of using Inventoria is that the user can receive a warning

notification via email when the quantity decreases to a critic threshold. It has the capacity to

gather the records in plain reports regarding the information you want to extract. They can be

easily saved on the computer or in a cloud, sent via email or fax, as well as printed.

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GETTING STARTED

After you first install Inventoria, the start-up wizard will run. This will prompt you for

your company name, which will appear on top of all your reports.

After the start-up wizard has run you should be able to add items. All defaults should

work "out of the box". Click on the Add New Item option and add your first test item. Fill up the

necessary information.

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Figure 3.1

Figure 3.2.2 Sub-category, Item note and Item website can be left blank. If the item is not available for sale, Unit Sales Price should be zero.

As you can see on figure 3.2.2, the system user can set up the ideal quantity and warning

quantity. The system will give warning once the item in the inventory reached its low level. (See

Figure 3.2.3)

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Figure 3.2.1

Figure 3.2.3

When you have added your first item you can go back and fine tune Inventoria using the

configuration Options (from the Tools menu). This lets you setup more detail about your

business, tax rates etc.

Figure 3.2.4

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Figure 3.3

Use the Add/Edit Category page to add a new or fill in the information about an existing

category. To access the Add/Edit Category page, click Add New Category from the Category

List or click Edit on one of the existing categories.

Figure 3.4

Use the Add/Edit Location page to add a new or fill in the information about an existing

location you have. To access the Add/Edit Location page, click Add New Location from the

Location List or click Edit on one of the existing location.

SELLING OF STOCK

To sell items, click Sell stock on the left side of the home screen. Fill up the

needed information such as the item code, description, location, quantity, etc. You may check the

"Damaged/lost item" box if you are not actually selling that item. Click Sell then it will

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automatically update the status of your inventory and also the customers list. (See figure 3.5.1

and Figure 3.5.2)

Figure 3.5.All information must be filled up. The date of sale is set based on the date on your computer

but it can be changed.

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Figure 3.5.1

Figure 3.5.2

PURCHASING OF STOCK

If you need to replenish your stock, clickOrder Stock on the main window. Enter or

select the supplier name. Click on the Add button to enter the items you wish to buy. You can

select the item codes from the drop down box to fill in the rest of the details for you.

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Figure 3.6Changes in orders can also be made in case a need for it arise. To modify, selectView

Orders to open the records or the draft orders list (Figure 3.6.1). Click Edit to make revisions

on your order.

Figure 3.6.1

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Figure 3.6.2

Once you receive the supplies ordered, update your inventory by clicking Receive stock

on the main window and filling in the necessary information on the Receive stock page. (See

Figure 3.7.1 and Figure 3.7.2)

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Figure 3.7.1

Figure 3.7.2

TRANSFERING OF STOCK

To transfer stocks between locations, select Transfer stock on the main window then use

drop-down controls to select the From Location and the "Transfer to Location." Enter the

quantity you would like to transfer. Please make sure it is already available at the source (i.e.,

From Location).Use the "Requested By" list to choose the employee responsible for this transfer.

You can add employees by opening the stock transfer dialog in the desktop version of Inventoria.

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Figure 3.8

Select View Transfers to see details of a transfer request. If the items are ready to

transfer, click Send. A request for the name of the sender will pop up and then click OK.

(Figure 3.9)

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Figure 3.9

Figure 3.10

It will be noticed that from ‘requested’ the status is changed to ‘In Transit’. Select

Receive once the items are transferred to its desired location.

Notice on Figure 3.11 the changes on the location of the selected items.

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Figure 3.11

MAKING OF REPORTS

Inventoria Stock Manager provides you with inventory related reports to view, Click

reports on the main window, and then choose the report you want. The reports are in a portable-

document format (PDF) file or CSV file. It can also be printed or sent through e-mail.

Figure

3.12

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CREATING BACK-UP AND RESTORE DATA

It is essential to back up your Inventoria data often in the event that you lose data.

Inventoria gives you several options for backing up your data, and makes it easy to restore your

data when you need it. To back up data, click the Tools menu and select Back up Data. Select a

method for backup depending on how you would like to access the data later on. (Figure 3.13)

To restore data, click the Tools menu and select Restore Data. Confirm you want to

restore, and browse to the location of your backup file. (Figure 3.14)

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Figure 3.13

Figure 3.14

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