Information Technology in Inventory Management - Research Paper Example

Inventory Management Insert Insert Contents Contents 2 Ethical issues and difficulties in research 11 Resource requirements 12 List of References 13 Introduction Information technology is substantially changing and enormously affecting the way institutions process, access, manages and how people consume information. It is inevitable to tie technology with inventory management in order to reap more benefit in business institutions. The benefits that information technology comes with include giving an accurate mathematical view of the inventory system and speeding up the rate at which raw data is processed. IT is a tool that forms a framework to support the ever increasing needs and duties carried out by an inventory system. Through information technology, the traditional way of acquiring goods and stocking them now benefits from the use of a database. A database provides an organization with enormous benefits including centralizing data. It has eliminated the isolation of data in various individual units of the concerned organization that leads to lots of data redundancy. It offers data central location in the organizations premises which can be accessed easily from the rest of the departments in that organization. Further, it benefits from automation of the routine processes, and proper analysis is carried out on such information so that it is now easier to draw conclusions and make projections from such information. Research Background Inventory management systems are becoming very common in the present world. Currently, there is increased demand for the management of stock. This project is in view of ascertaining the benefits incorporating information technology to aid inventory management processes in an organization. It vividly explains how effective inventory management will be when we invest in the exploding technology and seize its capabilities. Statement of Problem Inventory management is an evolving field with new needs to be catered. Increasing numbers of people in these organizations demands for the proper time management so as to match this kind of population. Varied economic changes and fluctuation of market prices and sudden variations of supply and demand require a better way to address them. These new needs form the basis of this proposal to try and find out how information technology will affect inventory management. The cost of acquiring an IT system, running and maintaining it is seen to be expensive for organizations. On the other hand, IT systems are known to cut down on time requirement and increases efficiency. The research seeks to ascertain the extent to which the cost incurred in installing the system will be replicated in a system efficiency driving it into economic success. Justification Inventory management is a problem in any organization that does stock keeping. It is, therefore, a rather bigger problem especially with most organizations incorporating information technology into its daily activities. Inventory management is a growing field with new and novel things being introduced. These needs require integration into the already existing system. Inventory management like all the other areas requires automation to meet the increased demands, to beat the time limits and enhance the efficiency and effectiveness of inventory management. Current organizations are getting complicated every day thus the need to improve the inventory management to match these complexities. Most are experiencing the disintegration of some departments to form smaller more specific ones with clear objectives and line of operation. There are also new tasks being introduced that require them to be tied to inventory management of the concerned organization. There are challenges emanating from the use of information technology. Since the use of inventory management systems depends heavily on IT, these new challenges posed, threatens exposure of enterprise data. The truth is that any system currently dependent on information technology is at a greater exposure to attacks from hackers and crackers, malware and other viruses and general access to the organization data by other third parties. Such systems require the use of biometrics, highly encrypted passwords, use of firewall and highly responsive viruses to counteract them. Research Question How efficiency in affected by incorporating information technology in inventory management? Objectives To study inventory management employed by in Coca-Cola To establish the challenges faced by inventory management To ascertain how information technology will make inventory management efficient. Literature Review Information Technology in Inventory Management: Brief History Information technology and use of computer systems in business enterprise started to gain extensive use due to their efficiency. Many companies extensively invested a lot of money to create reliable software. Inventory management mainly stock control required a lot of record inputs with emphasis on accuracy and involved large amounts of data. During 1930s theoretical systems which stood out as forebears of checkout systems being used today had already been designed. By 1970s standardized bar-code systems that could read, inventory had been created. At this time, electronics had been integrated with software projects to create systems that later used the name point of sale (Agrahari and Jhunjhunwala, 2012). Designs of automatic checkout system had already been established by 1932 at the Harvard school of business by Wallace Flint. It was the pioneering idea that led to automation of inventory control. By the year, 1980, inventory control systems that could run on personal computers started being used by business enterprises (An inventory of software packages for information work application in information, document and libraries, 1982). Computerized inventory systems Computerized systems, which started from small systems like checkout systems, barcodes, points of sale, inventory decision support systems, have extensively been used in inventory management. Checkout systems whose models were developed as early as 1940 were implemented and installed by most supermarkets by the year 1992. The self-checkout systems were prepared and created by Dr. Howard Schneider. Study by the RBR Company has revealed that installation and use of checkout systems have been growing at a rate of 25% annually starting from the year 2007 (Extensive Analysis and Prediction of Optimal Inventory Levels in Supply Chain Management Based on Particle Swarm Optimization Algorithm, 2009). Point of sale systems that were developed prior to the 1990s was referred to as electronic cash registers. By the year 1973, IBM had already released a store system that could store up to 3663 entries at a point of sale. After the 1990 Bob Henry and Martin Goodwin had created the first point of sale system software ability to be installed on PCs’ operating systems. It system offered high speed and consistency that are very vital in inventory management especially in retail shops like supermarkets that handle a lot of customer sales and products (Mishra, Modi and Animesh, 2013). Modern point of sale systems that have been created after the year 2000 can handle many functions that make inventory management very efficient and comfortable. Some current point of sale systems are cloud based and can run on personal computers, tablets, and smartphones. Critic of the Effectiveness of IT in Inventory Management Inventory decision support systems are systems that will be used by the management of a business entity to make an informed decision about the stock available and the purchases they need to make in the inventory stock. By the year, 1988 Hosseini had started introducing a knowledge-based IT system that achieves application to recommend optimal inventory control decision by top management of a business. For the decision support system to give reliable advice, it has to get extensive and consistent information from other inventory management computer systems like check-out systems or point of sale systems. According to Tang and Lee (2000), information sharing within and integrated computer system or any business is the key to effectiveness (Tang and lee, 2000). Information technology has a lot of challenges that if correctly curbed can create a very useful tool for business. Despite security challenges of inventory systems where record might be tampered with malicious, IT being used in inventory management. It is seen as a blessing to companies due to the numerous advantages of reliability, efficiency, security, consistency and easy decision making it has brought to companies (Shah and Shin, 2007). Research methodology Research Philosophy This research will take on a naturalist’s perspective that the reality of a particular circumstance is one that changes unpredictably and can only be interpreted from people’s perspectives. They believe that at any one given time reality comes in more than one form of interpretation. The approach is to be able to deal with and agree with a lot of uncertainty. It forms the basis for selecting qualitative methods of data collection for this research (Wang, 2014). Research design This research project uses qualitative model to carry out data collection. The decision, to use qualitative model, is because it is useful to extract information from a real environment where the researcher will have to interact with respondents that have a daily experience in making use of the inventory systems in place. Citing definitions given by Knobel et al (2009), the case study research will be detailed and descriptive. Further, it will major on real life context and rely on multiple sources of data collection (Knobel, 2009). Data collection method The requirements of the data will be guided by the objectives of the whole thesis and corresponding investigative approach. Hence, this research data will use the investigative approach with an open and closed-ended questioner to get primary data. At some point, audio recordings made through face-to-face interviews will be used which will help the researcher to get information. Later if the need might be the secondary data will be obtained from information systems, published articles, internal project reports, and minutes of past meetings and data from respective information systems. Quantitative data will also be found by analyzing the mentioned documents (Wang, 2014). Written documents It is a way of collecting data by going through written reports by other researchers about a particular topic; such written documents accessed from physical libraries which require subscription or otherwise. Such documents are company’s magazines, end of year reports and journals. It is quicker than other methods because the researcher reads on already researched materials. It will also give a variety of choices to compare on the effectiveness of information technology in the inventory management. Interviews The approach that will be used for data collection for face-to-face interviews and analysis of documents has the following steps: i. Identify specific respondent and their role in the inventory management setup ii. Understand the typology of the study, retrieve the functional and structural attributes and identify transitional elements iii. Collect data related to the issues that will affect the effectiveness of information technology in inventory management iv. Collect data based on the actions taken by inventory managers to deal with the above issues v. Analyze the data that will be gathered and interpret the findings The research process will make three trips to the UK based Coca-Cola depot company between the months of April and August 2016 to meet with respondents from the company. The researcher will also attend five conferences to obtain recent trends in information technology in inventory management. The researcher shall interview various respondents in the following positions: Chief information Technology Officer Supplies Manager Warehouse Manager Production Manager Finance Manager Sales and marketing manager Human resource manager Customer relations officer The targeted conferences by the researcher are as follows; SAPICS summer conference October 2016 Berlin Germany Supply chain world conference March 2017 Paris, France Data analysis Knobel & Lankshear (1999) define data analysis as the “process of making sense or meaning from a detailed description taken during field research”. Data analysis will be conducted using thematic content analysis. It involves analyzing data by organizing it into categories based on surfacing theme, concepts or similar features (Knobel, 1999). The data will then be coded using different colors to represent different ideas so as larger quantities of data is categorized to be meaningful to help in interpretation. The coded data will then be sorted and finally be analyzed. In the course of the analysis; patterns will be looked at in the data basing on the principle of triangulation that involves checking data validity by moving between interview data and documents (Yao, Dong and Dresner, 2007). Ethical issues and difficulties in research In carrying out the research as proposed, I endeavor to adhere to codes and regulation appertaining research and protection of participants. The research will in respect be guided by; 1. To be able to conform to proper studies, the requisition of permission will be sought for from concerned companies and businesses to be visited. Moreover, the persons, who will be involved, have to consent to the taking part in the interview session before any data is recorded from them. For the case of library and other stores which offer secondary sources information, relevant authorities will be sought after and will only proceed upon approval. Reprint of documents will not occur, and content will be properly referenced. 2. The research will be objective and not meant to cause emotional harm with respect to finding out data about IT solutions to the inventory control strategy. The respondents will be regarded and respected as deserving. Caution will be undertaken to ensure that words are sensible and do not cause havoc and geared towards identifying the efficiencies that IT brings to inventory management. 3. Respondents’ anonymity will be given priority. Because the research is not intended to put anybody in a negative light, they will be informed of the anonymity assurance of the research process. The process will focus on getting data from relevant personnel certified by employing bodies, be of more than 18 years of age, willing to respond, and one deemed to be sober at the time of interview. 4. Research process will culminate at reporting the findings. They finding of the process will not be altered in any way to fit a particular outcome. It will be analyzed as obtained, not taken out of context, does not represent portions of the information and be reported to time. Resource requirements The process will take up finances to a total of $140,000 from the start to its completion. A significant figure of the money stated will be made use of in paying for personnel expenses that will be involved in the interview process for collecting data and signing up for secondary sources. In addition, it includes stipend compensation that is rendered to sub-contractors who will be made use of in carrying out interviews outside the country. Course releases will be made and delivered to principal investigators (PIs). The cost of supporting the PI during their summer will be has been considered in the budget figure above. Their mandate is to execute research through interviewing. Moreover, they will code, make analysis and be involved in data generation for publication reasons. Personnel cost will be $100,000. Expenses considered to be direct for the project will be a value of $17,000. Because it will involve a lot of traveling from one city to another and one company to the other, the cost has been estimated to be $21,000. For contingencies, a value of 12% has been factored to cater for any arising difficulty during the research process. Item Total cost Sub-contractors $20,000 Course release $15,000 Summer compensations $53,000 Coding, analysis, and administration $12,000 Direct expenses $17,000 Transport $21,000 Contingencies $2,000 (12%) Total expenses $140,000 List of References ., M. (2007). Decision Support System for the Integrated Inventory Model with General Distribution Demand. Information Technology J., 6(7), pp.1069-1074. Agrahari, A. and Jhunjhunwala, S. (2012). Inventory Management Process. Journal of Cases on Information Technology, 14(1), pp.1-14. An inventory of software packages for information work application in information, document and libraries. (1982). Information Processing & Management, 18(4), pp.226-227. Extensive Analysis and Prediction of Optimal Inventory Levels in Supply Chain Management Based on Particle Swarm Optimization Algorithm. (2009). Int. J. Inf. Technol. Web Eng., 4(3). Inventory management system using RFID. (2006). Sensor Review, 26(2). Mishra, S., Modi, S. and Animesh, A. (2013). The relationship between information technology capability, inventory efficiency, and shareholder wealth: A firm-level empirical analysis. Journal of Operations Management, 31(6), pp.298-312. Özer, Ö. (n.d.). Inventory Management: Information, Coordination and Rationality. SSRN Journal. Shah, R. and Shin, H. (2007). Relationships among information technology, inventory, and profitability: An investigation of level invariance using sector level data. Journal of Operations Management, 25(4), pp.768-784. Wang, Y. (2014). Enterprise Inventory Management and Simulation. AMR, 933, pp.874-878. Yao, Y., Dong, Y. and Dresner, M. (2007). Analyzing information-enabled stockout management under vendor-managed inventory. Information Technology and Management, 8(2), pp.133-145. Achabal, D.; McIntyre, S.; Smith, S. and Kalyanam K. (2000). A decision support system for vendor managed inventory. Journal of Retailing. 76, 4, pp. 430-454. Lee and Tang (2000) The value of information sharing in a two-level supply chain Journal of management science volume 46, pages: 626 - 643 Read More