2.8 Inventory Management Systems
Modern day inventory is managed by
sophisticated system applications that are designed to manage complex
inventory plans and to a large extent contain processes that initiate and
streamline the operations and inventory management. In the wake of
improvements in the communication technology, companies are deploying one
single ERP system across all factories, offices, departments and locations,
thereby ensuring seamless transactions, visibility and controls.
Inventory in the earlier days used
to be managed by a system known as cardex system. Bin cards were printed and
kept in every bin location. Whenever inventory was put into the bin or
removed, the card had to be updated. Apart from the bin cards, books or
registers were maintained to note down the transactions and reports were
prepared manually. The system was basic and did not provide flexibility to
manage warehouse locations as dynamic locations. The operations being manual
were time consuming.
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In the next phase come the basic
inventory management systems, which were a replica of the accounting books
containing debit and credit entries along with the balance and the Cardex
System continued to be used to manage the shop floor operations.
With the ERP
System introduction, Material Management modules are deployed which work
in tandem with procurement and other modules. Inventory modules contain
intelligent applications that manage the inventory, help in analysis,
categorization and to a large extent initiate actions and processes based on auto
inputs derived from other sources.
ERP systems do contain Warehouse Management
System modules, which can be deployed along with the inventory module to manage
the warehouse operations. Basic inventory modules in ERP do contain location
management of inventory but do not support warehousing operations in
detail. WMS System applications are designed to work like an
extension of the inventory system but are stand alone applications that help in
warehousing, control, direct and manage inventory and operations.
In fact a robust system suite comprising of ERP and
WMS with interfaces built in between the two systems can play a major role in
managing inventory efficiencies. Both the systems need to be robust, strong and
built to suit the business operations requirement as well as logistics
operations requirements. While the inventory management efficiencies depend
upon
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