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COMPUTER SCIENCE PROJECT ON SALES AND INVENTORY MANAGEMENT
CHAPTER ONE
1.0 INTRODUCTION
A computer is an electronic device for storing and processing data, typically in binary form, according to instructions given to it in a variable program. A computer can also be described as an electronic device, which executes software programs. It is made up of two parts - hardware and software. The computer processes input through input devices like mouse and keyboard. The computer displays output through output devices like a monitor and printer. The speed has a very large range and its accuracy is unimaginable.
The impact of the computer has been as far reaching as any development in the history of technology. Twenty years ago computers were on the fringe of our lives but now they control many aspects. Businesses ranging from manufacturing to financial services (Banks) have had to continually educate, retrain their staff and buy new computer systems just to keep up-to-date with this ever changing technology. This project seeks to focus on the effectiveness of computer software in almost every aspect of our life that needs effective management especially in the area of Sales and Inventory Management System (SIMS). Computers have technically become indispensable in today's world.
Sales management is attainment of an organization's sales goals in an effective & efficient manner through planning, staffing, training, leading & controlling organizational resources. Revenue, sales, and sources of funds fuel organizations and the management of that process is the most important function. Sales Management System allows you to easily manage and automate sales teams, generate more revenue with more accurate business intelligence. Sales management gives the sales organization the resources needed to capitalize on every lead/prospect/customer and ensure peak yield for the company.
Sales Management System is an easy to use, fully integrated and a customizable platform that provides comprehensive sales automation for the company. Coupled with Customer Management System, Document Management System and Marketing Management System, the company can provide full comprehensive Customer Resources Management System.
Sales management is a business discipline which is focused on the practical application of sales techniques and the management of a firm's sales operations. It is an important business function as net sales through the sale of products and services and resulting profit drive most commercial business. These are also typically the goals and performance indicators of sales management. A sale is the pinnacle activity involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity. Sales are everything that you do to close the sale and get a signed agreement or contract. Sales manager is the typical title of someone whose role is sales management. The role typically involves sales planning, human resources, talent development, leadership and control of resources such as organizational assets. For us to control sales and meet customer’s specification without over stocking there is need to control our inventory system.
Inventory means a list compiled for some formal purpose, such as the details of an estate going to probate, or the contents of a house let furnished. This remains the prime meaning in British English. In the USA and Canada the term has developed from a list of goods and materials to the goods and material available in stock by a business; and this has become the primary meaning of the term in North American English, equivalent to the term "stock" in British English. In accounting, inventory or stock is considered an asset.
Inventory management is primarily about specifying the shape and percentage of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. The scope of inventory management concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods, and demand forecasting. Balancing these competing requirements leads to optimal inventory levels, which is an on-going process as the business needs shift and react to the wider environment.
Inventory management involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check. It also involves systems and processes that identify inventory requirements, set targets, provide replenishment techniques, report actual and projected inventory status and handle all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. It also may include ABC analysis, lot tracking, cycle counting support, etc. Management of the inventories, with the primary objective of determining/controlling stock levels within the physical distribution system, functions to balance the need for product availability against the need for minimizing stock holding and handling costs.
For optimal sales and inventory management processes, you need robust functionality for managing your logistics facilities. Support for inventory management helps you record and track materials on the basis of both quantity and value. This project seeks to incorporate both sales and inventory management in a simple computer based software called (Sales and Inventory Management System) SIMS, that will be able to handle the inventory control/management as well as taken good care of sales management easily and effectively.
Using this software we can reduce costs for warehousing, transportation, order fulfillment, and material handling – while improving customer service. You can significantly improve inventory turns, optimize the flow of goods, and shorten routes within your warehouse or distribution center. Additional benefits of inventory management include improved cash flow, visibility, and decision making. This software is user friendly and hence easy to use.
Employees can plan, enter, and document warehouse and internal stock movements by managing goods receipts, goods issues, storage, picking and packing, physical stock transfers, and transfer postings.
1.1 STATEMENT OF PROBLEM
The tendency of a company’s development and profit making largely depends on the effectiveness and efficiency of their sales and inventory management system. As we know manual system are quite tedious, time consuming and less efficient and accurate in comparison to the computerized system.
So following are some disadvantages of the old system:
1. Time consuming
2. Less accurate
3. Less efficient
4. Lot of paper work
5. Slow data processing
6. Not user friendly environment
7. Difficult to keep old records
Starline Nigeria Limited, Aba, Abia State Nigeria are facing almost all the aforementioned disadvantages of manual system because of their inability to or consider the importance of a computer based sales and inventory management system. And there is also a problem of lack of efficient communication between the company store departments and production department.
This inability of the company to utilize possibilities has put them in the back pedal (retardation) as far as running a company is concerned. Their operation has been marred and thus this has drastically affected their production and more importantly, their profit process.
1.2 OBJECTIVES OF STUDY
The project objective is to design and develop a simple and user-friendly Sales and Inventory Management System using Visual Basic. This system can be used to store the details of the inventory, update the inventory based on the sale details, produce receipts for sales, generate sales and inventory reports periodically etc. This is one integrated system that contains both the user component (used by salespersons, sales managers inventory managers etc) and the admin component (used by the administrators for performing admin level functions such as adding new items to the inventory, changing the price of an item etc).
The system should allow the user to easily manage the inventory to prevent a mismatch of the physical quantity of an item to the quantity stated on paper. It should also keep track of the sales transactions and update the inventory accordingly. It aims to allow users to perform the following functions:
Add, edit and remove products/items in the inventory
Search for a product in the inventory
Generate Inventory Report
Record, edit and remove sales transactions
Generate Sales Transaction Report
• The main objective of this system is to keep records of the complete inventory.
• It support for inventory management helps you record and track materials on the basis of both quantity and value.
• It improves cash flow, visibility, and decision making.
• For warehouse management, you can track quantity and value of all your materials, perform physical inventory, and optimize your warehouse resources.
This study will help the management to plan operations to achieve set objectives thereby helping the decision making ability of the management easier in the cause of minimizing cost and maximizing profits. It will also assist in developing services among the various department/store of the company as regards stock in commodities thereby enlightening the company to stand the challenges of the 21st century.
1.3 SIGNIFICANCE OF STUDY
Since sales management is the attainment of an organizational goal through effective and efficient manner and inventory management is primarily concerned about specifying the shape and percentage of stocked goods and also it is concerned with the fine lines between replenishment lead-time, carrying cost of inventory, therefore the significant of this project work cannot be undermined. The integral part of every organization is based on the sales they make, the customer they satisfy and the decisions they make. All these can never be attained to effectively without proper management in the sales and inventory department.
The software to be developed will aid to the accurate decision of the management and production can be made. In other not to over emphasize, this software program will be able to help the organization do the following:
1. To keep record of complete inventory
2. Its support for inventory management helps you record and track materials on a daily basis of both quantity and value.
3. It improves cash flow, visibility and decision making.
4. For warehouse management, you can track quantity and value of all your materials, perform physical inventory and optimize your warehouse resources.
This project will help the management to plan operation to achieve set goals thereby helping the decision making ability of the management easier in the cause of minimizing cost and maximizing profits. It will also assist in developing services among the various department/store of the company as regards stock in commodities.
1.4 SCOPE AND LIMITATION OF STUDY
The scope of this system is to provide user efficient working environment and more output can be generated through this. This system provides user friendly interface resulting in knowing each and every usability features of the system.
This system helps in tracking records so that past records can be verified through them and one can make decisions based on the past records. This system completes the work in a very less time resulting in less time consumption and high level of efficiency.
This system is developed in such a way that even a naïve user can also operate the system easily. The calculations are made very quickly and the records are directly saved into databases and the databases can be maintained for a longer period of time. Each record can be retrieved and can be verified for the future transactions.
Also this system provides high level of security for data leaking as only admin people can access the database no changes can be made in it until it verifies the user login id and password. We also have operator login through which operator can take orders but can’t make changes in the database. Limited access is available to the operator.
Limitation presents an obstacle to the project but is scarcely present as far as the project is concerned. Most of the company workers/staff were willing to help with the information that is needed to carry out effective planning of this system but restriction to some vital files was present.
Transportation also posed an obstacle to this study because of the geographical location of the said company (Starline Nigeria Limited) STL. It is usually hard to seek the services of a motorist that will take you to the destination and if found, the cost is nothing to recon about because it is on the high side.
1.5 BACKGROUND OF THE CASE STUDY
The Development of an online Sales and Inventory Management System (SIMS) is carried out under a case study of Starline Nigeria Limited (SNL), a privately owned company located in Aba, Abia State Nigeria.
The Company started as a sole proprietorship in the mid-fifties, marketing pharmaceutical products under the name Owunna and Sons Company, founded by Chief. (Dr) Peter S. Owunna (late). It metamorphosed into Starline Chemists and Company in 1962 under the leadership of the founder.
Starline, just before the outbreak of the civil war in 1967, became a leader in the importation and marketing of pharmaceutical products in Nigeria. However activities resumed after the civil war in 1970 with everything lost. The founder’s guiding principle of perseverance, hard work, honesty and integrity helped to set SNL on the footpath to resumption of business once again. From his humble beginning and strong belief in the Almighty, he nurtured Starline through these most demanding times. Courage foresight and patriotism brought him into industry.
In 1973, Starline Nigeria Limited was incorporated. With her enormous trading experience and distributive network she made great impact in marketing and distributive trade. In the same year, she started candle manufacturing.
Determination led to the establishment of pilot cosmetics factory in 1975, and the plastic factory in 1978. It is interesting to note that a vertical system exists between the cosmetic and plastic factories whereby all needed plastics packaging materials are supplied by the plastic factory.
SNL’s Senior Management team is structured in such a way as to give defined functions and level of accountability for each person giving them adequate responsibilities, influence and power to cope with it. The thrust is to position the company and ensure that it moves through the years from a position of strength, innovation, growth and diversification. This will be an integral part of our corporate policy and SNL is well poised to meet the challenges of the future.
Presently, SNL is the greatest producer of Body Sprays and Bottled Perfumes in Nigeria. In creams, lotions, powders and toiletries SNL has made appreciable impact. SNL’s high quality products are in great demand in the West African Sub-region.
Starline Nigeria Limited has won several awards not excluding NIS Gold Award and Swiss Gold Award and is members of organizations like MAN, PMG-MAN, NACCIMA, NIPMA and Aba Chambers of Commerce. It is also worthy to mention that they are into academic sponsorship (Chief Peter S. Owunna Memorial Foundation: Full educational scholarship for fatherless children).
1.6 DEFINITION OF TERMS
Below are most of the meanings and terms that will be used in this project
SNL – Starling Nigeria Limited
IM – Inventory Management
SL – Sales Management
ISM – Inventory and Sales Management
SIMS – Sales and Inventory Management System
JIT – Just in Time
VIM – Vendor Managed Inventory
CMI – Customer Managed Inventory
DIM – Document Inventory Management
LT – Lead Time
EOQ – Economic Ordering Quality
MM – Material Management
The organizational chart is as follows:
Fig 1.0
CHAPTER TWO
2.0 LITERATURE REVIEW
It is paramount to state that in this project work, we are dealing with three variables namely: computer impact, sales management and inventory management. All these three are fused together to achieve a particular goal. Even though one cannot talk about inventory management without mentioning sale and stocks, but there are differences when critically looked in different perspective. Below are the scholarly reviews of the aforementioned variables.
Computer has been used in many ways for large amount of repetitive processing and often the amount of assistance given to management has been small but properly utilized, the computer can provide tremendous information rapidly and process quantitative data easily so that decision making is aided. More use is being made now of computer for making quantitative models such as sales and inventory management system.
Financial incentives are intertwined in the sales process. This has been a major cause of distrust between buyers and sellers. There have been sales personnel for as long as there have been things to sell. For example, prostitution was one of the earliest forms of sales staffing. Just as a salesperson must seek out new prospects, uncover needs, and agree on a price for his product or service, so does a prostitute. A prostitute engages in pre-call planning and preparation and is skilled in the art of opening a call, presenting selling points, and closing the sale. Prostitution as a profession is considered by many to be the first industry to employ both men and women and the first to record the use of sales techniques (Gilfoyl, 2001).
While prostitution has always received a great deal of criticism as a sales field, there has never been a great movement to change the perception of prostitution, unlike other sales fields that have undergone drastic changes to break stereotyping (e.g., the used car salesman who is only out to make a quick dollar).
“Prior to the Industrial Revolution, when small-scale businesses dominated the economic environment, the task of selling was relatively simple. The majority of small firms had a central concern to meet the growing demand of consumers. Many of the orders were already on hand” (Stills, 1976). It was very common for one person to perform all tasks of the business. The proprietor was focused on producing and meeting orders; selling, marketing, and accounting were regarded as secondary.
The Industrial Revolution brought about major organizational changes to businesses. Industries were now producing mass quantities of millions of different products (Stills, 1976). Because local communities could not absorb all the products, an increase in sales coverage was needed to relieve the surplus created by large factories. The emergence of sales divisions within corporations solved many logistical problems and increased the spectrum and quantity of potential customers. However, sales representatives generally had very little feedback within the company and were viewed as contracted help. They were paid strictly on a commission basis, so they had very little loyalty to either the firm for which they worked or the customers to whom they sold the products. As long as the proper allotments of products were being shipped and the sales representatives were meeting pre-determined quotas, firms generally took very little notice of what consumers wanted. These practices remained unchanged until the late 1970s.
It has since become imperative in the modern sales environment to gain the trust of prospects and customers by delivering on the expectations set by the sales representative. Guy Oaks observed that “trust rests on the expectation that technically competent service will be rendered” (Oaks, 1990).
W. Edwards Deming’s Influence on selling another aspect of sales that should not be overlooked is a change in the production methods of large competitive firms. In the 1950s, U.S. industries were the leaders in nearly every category of industrial products, due to the fact that Europe, Russia, Japan, and even the Middle Eastern nations were still in the process of reconstruction after World War II. Initiatives set forth by the Truman Administration and many American industrialists gave these postwar nations billions of dollars and the latest industrial techniques. One of the men who gained great notoriety during the postwar reconstruction process was W. Edwards Deming, an American statistician and quality control expert.
T. Lucey stated “that inventory management system is a system used in firm to control the firm’s investment in stock. He also maintained that the main objective of inventory management is to minimize the total cost associated with stock holding” therefore, this review the importance of inventory management as relates to recording and monitoring of stock levels, forecasting future demands and deciding when and how many order in stock. On the other hand, expectation and actual performance are compared and comparison serve as basis for determining a proper response to operating resolve in form of proper corrective action to be taken at planning or decision-making level as well as at performance level. Therefore, accurate, timely recording and monitoring of stock level is required and also time forecasting and deciding when and how many to order is also required.
French C. S. stated that “computerized inventory management system will have the power to perform a variety of processing operation on a single pool of data which contrast sharply with manual system”. For instance, an item issued by a store may not only be used in production of invoice, but may also be needed to amend stock positions. This implies that data is not restricted by one person alone. In a situation whereby data been used by one individual becomes inaccessible to another individual is eliminated. Hence data can be used for several operations and activities.
Financial Punch (1986) stated “that computerized inventory management system will exactly permit fast and frequent review of stock, confirm orders and future requirements of raw materials parts and assemblies.
Anderson R. G. observed that “the result of not using computer when it should be used has reduced administrative effectiveness and efficiency while on the other hand is chaotic and ruinous as system will be interrupted unnecessarily, cost will be incurred and organizational change will be made needlessly”. This further straightened the argument that computerization of a system often than not usually required a period of true planning. However, computerization is not meant to save labor cost, but to achieve improved accuracy, better resource utilization or simple to do a job that can’t be done otherwise.
Klug J. R. stated that “inventory management system is very vital to all organizations or firms”. He highlighted further that often it could be expensive, meaning more paper work, more formal procedures and more overhead cost. This implies that a lot of paper works are used in manual system and also there are lots of clerical job which must be performed by a number of staff. In addition, the cost incurred on carrying out inventory control is very high.
Holye K. etal confirms that “inventory management involves decision about assortment” which is optional ordering, maximum stock level etc. Assortment is a term which refers to the variety of stock available. It is a matter of policy: how wide a variety of stock should be