Inventory Systems Summary
With the increasing demand to cut cost and increase revenues, developing the right inventory systems have become essential to compete in business. According to the Counselors to America’s Small Business, “Control of inventory, which typically represents 45% to 90% of all expenses for business, is needed to ensure that business has the right goods on hand to avoid product shortage and meet the consumer’s needs” (Counselors to America’s Small Business, p. 1). To ensure proper business practice Team A will evaluate four inventory systems and provide advantages and disadvantaged to ensure businesses can be cost-efficient, profitable, and provide for consumer’s needs. At the end of this report, a system will be suggested to meet the above criteria.
Adria System Retailers are consistently faced with the challenge of properly managing their inventory to maximize profit for the company. As the second largest retailer in the United States, Target Corporation has implemented successfully an inventory system that works well for their business. Target currently uses the RFID program, also known as the radio frequency identification program. With this program, small tags are attached to each carton or pallet of merchandise delivered to the stores. “Many regard RFID tags as the new barcode to help businesses track and trace goods through the supply chain” (2011). Once the merchandise arrives at the store, the entire carton or pallet is scanned and the inventory counts are updated in the system to account for the new product that has been delivered. As products are sold at the register, the inventory counts are automatically updated to show a deduction in merchandise. Once the on-hand count of any item falls below the given number allotted for that particular product, more inventory is shipped directly to the store, from the distribution