Retail Inventory Control Project Management

Overview of the Project

Project name: Implementation of the Retail Inventory Management

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Project Sponsors: JC Penny Stores

Project Leader: Navio

Start Date: 10th August 2012

End Date: 25th November 2012

Budget: $ 4,900,000

Project Scope

The following are the expected project outcomes. The first one is that the project will have a system that saves time. This means that if the company has a manual inventory system, the electronic system will help to save on time. The other outcome of the project is that the inventory system adopted by the company should have accuracy such that it can reconcile the actual physical stock with the electronic records

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Project Info

The manual inventory gives an uphill task to the inventory manager, who has to reconcile every receipt and the physical stock. A computerized point of a sale information system that updates the inventory once there is a sale simplifies the inventory management. This may involve installing bar code scanners at the point of sale scanners to mark up every item sold. The inventory should also evaluate how each product is faring in terms of sales. Besides, the systems should provide analysis of the comparison between different products as well as other competitor retails. The inventory systems should also have security measures to keep the inventory away from unauthorized persons.

Objectives

This project will ensure that the organization saves money and time thereby reducing the cost that the company is incurring while maximizing profits.

Product Scope Description

For the project to succeed some resources are needed financial resources to start the project are the first one. This will involve the payment of the staff involved in the execution of the project. The second one is in buying the hardware equipment for installing the retail inventory programs. The other resource needed is training the staff on how to use the retail inventory programs, as they are complicated and sensitive. The staff must be trained on security issues and policies governing the use of the retail inventory (King 2005).

It is also important for the company implementing these systems to have a policy governing the use of the systems to mitigate unethical use. It should spell out the disciplinary measures against anyone accessing the system illegally or leaving the systems insecure as this would provide an opportunity to distort the actual amount of the stock leading to loss and theft (Khosrow 2006). The major tasks in this project will be purchasing the Retail Inventory Management software from ERP vendors who will then use the software where the purchasing officer will do it. It will also involve the purchase of all the physical equipment needed for the success of this project. This is because the software is meant for one-time use and once a client organization acquires the retail inventory management and integrates it into its day-to-day operations it becomes easy for the organization to work and improve on it such that it will not require any service from the vendor.

This ensures that the organization has well-integrated strategies to maintain and integrate the software in the operations. The software being a one-time sale means that diligence to ascertain the effectiveness and the capability of the software to meet the company’s retail inventory needs is imperative. The work of the purchasing team will be to assess the kind of Retail Inventory Management System needed and then bidding for a product that will meet those needs.

Who will be reporting to whom?

Three staff will report directly to the project manager. The project manager will be in charge of the financial aspects of the business. (King 2005). The project manager will purchase equipment both hardware and software from vendors of ERP software. This role will involve ensuring that the software and equipment purchased are in good condition and serve the intended purpose.

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The project manager will be in charge of the installation of the hardware, the software, and training staff in implementing the inventory systems of the company. Below him are the technicians whose responsibility will be to assist the manager (O’Brien 2011).

Stakeholders

The suppliers of the hardware are stakeholders in this project as they determine the success of the project. The Enterprise Resource planning vendors supply the software for the store. The ERP will follow up on the project to ensure that it succeeds. The customers can also enjoy better services as it is possible to identify their needs (Khosrow 2006).

Agreed start and finishing dates

This project will go on for a period of three months from August to October in the year 2012. The following is the sequence of activities involved in the project. The first activity is evaluating the needs that the electronic retail inventory will meet. This will involve conducting an assessment test requesting the managers for information on what they would want from the inventory. The most common need is to create a good system that reflects the actual stock in the retail store. The management will need a secure inventory, which is out of reach of unauthorized persons.

The other need is having a system, which is easy to use by the staff, as it should have minimal complications. After identifying the needs the next step will involve staffing the project team with the necessary human resources to implement the project. After staffing, the next activity will be making purchases of the equipment needed in the execution of the project. After acquiring the equipment, the next step will be to install a good system in the retail store. Once the system is in place, it is imperative to train the staff on how to use it. After training, the final activity will involve having an evaluation of the system to determine its effectiveness

The scope of the project

The project will be in JC Penny stores in the United States, which is in the process of instituting an electronic inventory management system. The following Gant chart reflects the activities involved in the implementation of the retail inventory system and the schedule of that project (Khosrow 2006).

Gant chart

Gant chart

Activities

  1. Recruitment
  2. Assessing the inventory needs of the retail store
  3. Purchasing the equipment
  4. Installing the equipment
  5. Training staff to use the system
  6. Evaluating the success of the project

Monitoring the project and assessing the success of the project

To make the project successful it must be in continual evaluation. There are several parameters used to evaluate this project. The first one involves conducting routine monthly tests of the software to ensure that the installations as well and the passwords are functioning well as intended without any technical problems, especially if there are no complaints from users of the system in the retail store (King 2005).

Other than the software, the hardware also needs assessment to ensure that the installation is orderly and has no technical problems. The other evaluation procedure is conducting an employee competency test on the use of retail inventory management in the company. The test enables the project manager to know whether the training was effective or not. Those who fail the test should go for another training to harness their competency in using the inventory system. If more than fifty percent of the employees fail the test, it will imply that the training was ineffective hence, the need to conduct another comprehensive employee training in the company on all personnel who are involved in inventory management of the retail store. The other aspect involves conducting a physical inventory of the stock (King 2005).

The physical evaluation should be regular to ascertain that the stock reflected in the Electronic Retail Inventory Management system is equivalent to the stock in the company. A successful inventory system should guide the management when making purchase orders such that at no time will there be a shortage of stock. It should identify products that have overstayed in the store for discounting so that they can move faster before the expiry date. The users should also easily understand the inventory, this is critical as complicated inventory management systems create loopholes that may lead to losses of stock. As part of the evaluation, there should be an evaluation of what the employees feel about the system as to whether the retail inventory management system has in any way simplified the work or not. This would help in assessing whether the system has succeeded (Brown 2003).

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Agreed budget

The following is the budget that will be used in the implementation of the inventory system in a retail store.

Particulars Quantity Amount
Computers 50 1,000, 000
Installation cables 50 200,000
IT technicians 20 600,000
Software 40 500,000
Installation of software 5 400,000
Inventory system software 10 1, 000,000
Networking of computers 10 400,000
Security antivirus 5 300,000
Training employees 10 300,000
Miscellaneous 200,000
Total 4,900,000

Specification of needed inventory system

The required inventory system is one that updates automatically without any manual input. The system must also be one that will be accurate in the counting of stock and therefore ensure that there is no loss of stock. In case of loss of stock, this system should be able to easily detect.

Communication to staff on changes

To: All staff of JC Penny Stores

From: Management

The staff members of JC Penny Stores are hereby informed that the management wishes and intends to change the inventory system from manual to electronic. This is meant to ensure efficiency and greater productivity.

Notices will also be posted and emails sent to notify all the stakeholders of the intended changes. Meetings will also be held to deliberate on the same issue.

Looking for Suppliers

Once the deliberations have been made on the matter, the next step will be to look for suppliers who can competitively provide the items required for the project. This will be based on the date, time, price, budget, delivery, and installation of the inventory and location of suppliers. Three suppliers will be selected after which quotes from the three will be selected. The quotes will be selected and factors such as price, location, and specification of the materials will be considered before deciding which supplier will be awarded the tender.

Placing a purchase order

This will involve filling out a form or could also involve sending letters and emails. Prices given by the selected supplier will be reconfirmed as well as the dates that the supplier will deliver the items and the specifications of those items. The invoice will also be checked as well as the dates of delivery against the stock. Payments will only be approved once it has been confirmed that the correct stock as specified has been delivered

Training

Once the systems have been set, then all the managers will be trained on how to use the electronic inventory systems. The training will be conducted at department levels so that every department will have a training session. The people to be trained at this stage are the department heads who are then expected to train their juniors on how to use the system. The training is expected to last two weeks.

Since this is a new system, the codes have to be afresh and this will be done by the information technology department. Training will take place after hours, two hours every day.

Monitoring

Monitoring Accuracy

It will be important to monitor the accuracy of these systems and this will be done during induction and or training. Some trial activities could be conducted to try and see if the system is accurate. The following are some of the activities to be carried out once the project is complete. The first one is to install the system with security features to prevent unauthorized persons from accessing the information contained in the retail inventory system. This may include installing the passwords on the computers and assigning the entire staff in the retail management system their computer to maintain. Other than passwords, the computer may use biometric security such as iris sensing or voice codes to secure it from unauthorized persons. The other aspect is that of testing the system to know its effectiveness by evaluating the current stock indicated by the Retail Inventory Management system, and the actual physical stock (Brown 2003).

After ensuring that the system is in place and test-driving it to assess its effectiveness. The next step will be drafting a well-prepared technical policy indicating the ethical and security guidelines governing the use of the inventory system. This ensures that disciplinary action is taken against those who breach the security and ethical code of conduct for the staff using the electronic retail systems of the company (King 2005).

The other step involves accounting for the resources used during the execution of the project. This involves reconciling the books of account and then auditing them to verify whether the project has exhausted or exceeded the estimated costs. This makes the project transparent thereby ensuring that all the finances invested are traceable (Brown 2003).

Because the software and the hardware are one-time sales to the organization, the vendor of the software and hardware must keep on checking the software to ensure that they are in good condition. The vendor should provide a repair of the machines or replace the software if there is any problem (King 2005).

Conclusion

For the success of the program, the managers of the retail stores must formulate a modern way of managing the inventory by instituting electronic systems to take care of the resources of the company. This ensures that they can be accounted for and there are proper records available all the time for reference to be made when the need arises. Besides, the retail management system is necessary for ensuring that there is accountability in the way the company handles its stock. It helps in saving time.

References

Brown, C 2003, ‘Managing the next wave of enterprise systems: leveraging lessons from IS,’ MIS Quarterly Executive, vol. 2 no.1, pp. 1.

Khosrow, M 2006, Emerging trends and challenges in information technology management, Idea Group Press, London.

King, W 2000, ‘Ensuring HRIS implementation success’, Information Systems Management, vol. 6 no. 2, pp. 3.

O’Brien, J 2011, Management information systems, McGraw-Hill, Irwin, New York.

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