Sales and Inventory

Sales and Inventory System

To understand the need for this type of system -- which is really a combination of software programs -- considers a customer's needs. For example, if you go online and order a new digital camera and arrange to ship it to your home, your purchase triggers different events in the seller's system. The system must decide where the camera will be shipped from, then notify the appropriate warehouse to pack it and ship it. Think about where that information comes from so the camera will reach your home on time.

Data Collection for Decision-Making

Using this type of system, a company makes strategic business decisions regarding raw material purchases, production scheduling, pricing, logistics and other decisions in the supply chain. Sales and inventory data enables the company to increase or decrease production in the factory so the company won't have too many finished goods stored in its warehouses.

Function

A sales and inventory monitoring system collects data to aid in production scheduling. For example, some systems use recent sales data to forecast how many of a type of product will be needed to meet consumer demand in the near future. This includes monitoring the levels of a product at all locations. A good example is a global company with customers all over the world. The customer may live in Japan, but the system must see if the warehouse in Canada has a product available to ship to Japan.

How it Works

The system compares current inventory levels of a product and the number scheduled for production with the number needed, and determines if the level of production must be changed. If necessary, the system sends a message to the master production schedule to increase production. Also, the inventory monitoring system slows down production when a product's retail sales levels don't meet the sales forecast and the company overproduces the product.

Competitive Advantage

Automated sales and inventory monitoring gives a company a...