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 21 st 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 companys 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

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 1950s. 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 governments donation of milk pasteurizing equipment.

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.

INVENTORIES ON MS EXCEL
MPLETE THE ORDERS AND ITS DELIVERY

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

EE WITH THE TERMS AND CONDITIONS OF THE PURCHASE

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 thats 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.

TheOF
figure
below TO
shows
thePRODUCTION
existing systemDEPARTMENT
of SMDFMPCI.
TRANSFER
ORDERS
THE

DAILY PHYSICAL COUNT USING INVENTORY SHEETS

PERSONAL CONVERSATION
PHONE CALLS
MESSAGES

STATEMENT OF THE PROBLEM

The proponents aim to proposed solutions for the following:

In general:

INQUIRE WITH OFFICER IN CHARGE

The major problem in the entitys 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.

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
entitys inventory management needs. The system software,Inventoria Stock Manager, could
help the organizations 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.
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.
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-tounderstand 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 companys
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
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 companys stock levels by
categories, locations, and vendors.

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.

10

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.

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.

11

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.

12

Every 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 companys
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,
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

1R. An Reid, Nada R. Sanders (2012) Operations Management: An Integrated

Approach, Fourth Edition. 2-4

13

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 itprobably 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)
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.

14

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
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

15

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.
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

16

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 companys
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).

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

17

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
final product. Other work orders that can be created using inventory control systems include
reverse work orders and automatic work orders (Bolton, 2001).
In todays 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.

18

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
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. Its what flows from node to node. And at
each node its 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

19

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)

There 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
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

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

20

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,
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

21

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 companys 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 todays new reality.
Small and medium enterprises need to differentiate themselves against growing competition, and
maintain appropriate growth in changing environments (Santos, 2012).
According to Precious R. Perez (2009) on her thesis, effective inventory system management is
an important part of a managers 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.

22

As technology grows and businesses expand it is becoming more and more obvious that
having manual processes to run operations are no longer a companys 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.
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

23

significant theories or principles, basic ideas and other useful thoughts which further introduced
for foundation of their ideas regarding Inventory Management System.

CHAPTER THREE
HOW THE SYSTEM WORKS

24

Inventoria Stock Manager is professional inventory management system software used to

manage and monitor the companys 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.
GETTING STARTED

25

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.

Figure 3.1

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.

Figure 3.2.1

26

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)

Figure 3.2.3

27

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

Figure 3.3

28

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

29

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.

30

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 3.6
Changes 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.

34

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)

35

Figure 3.9

36

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.

37

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

Figure
3.12

CREATING BACK-UP AND RESTORE DATA

38

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)

Figure 3.13

39

Figure 3.14

40