MPM CAPSTONE PROJECT

Inventory Management System

Inventory Management System

Table of Contents

1. Introduction / Executive Summary 3

1.1 Purpose & scope of study 3
1.2 Brief introduction of the proposed project 3
1.3 Brief description of problem/opportunity 4
1.4 Strategic alignment with organizational objective 5
2. Background/Problem Statement 5
2.1 Current situation, problems & constraints 6
2.2 Stakeholders & environmental factors 6
2.3 Risks & opportunities for improvement 7
2.4 Plan to overcome problems & constraints 8
3. Methodology 8
3.1 Method of Analysis for Feasibility Study 8
4. Overview Of Alternatives 9
5. Cost & Benefit Evaluation 9
5.1 CBA Techniques To Assess Financial Feasibility 9
5.2 Technological, Legal, Operational Aspects 10
6. Recommendations 11

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1. Introduction / Executive Summary

An effective inventory management system is critical for any business which usually

deals in purchase, storage of products or sale. The importance of this system can not be

overstated as the system will directly contribute to the success and long term profitability

of business.

In today’s fast paced business environment, companies must ensure that they have

accurate and real-time visibility of their inventory levels.

1.1 Purpose & Scope of Study

The primary purpose of the inventory management system of V8 digital solutions is to

meet customer needs. The company has observed that there are a lot of businesses that

are not using any inventory management software. It includes huge grocery marts,

clothing brands, etc. Also, another reason for creating this system is to differentiate

ourselves from our competitors, by developing the system it will help V8 Digital

Solutions to get the chance to expand into a new market/ new customer segment. Also the

company is adapting innovation through this. The system will greatly help us in

generating revenue.

1.2 Brief Introduction of the Proposed Project

The Inventory Management system is a web-based system that helps other businesses

manage and track all of their inventory within one single system. The system will help

our customer to manage optimal inventory

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Optimal inventory can be defined as how much inventory they have on hand and how

much they will be needing according to their estimate. And how can they maintain

optimal stock levels? One of the benefits of maintaining optimal inventory is there are

fewer chances of stockouts and overstocking, both of which can have an extremely

negative impact on business operations and profitability. Other than that, through an

inventory management system, The clients can get better order fulfillment, Increased

efficiency, and Reduction of costs, and customers will be able to gain better insights into

their inventory performance.

1.3 Brief Description of Problem/Opportunity

Problem/opportunity we observed that there is a certain number of business niches in

Pakistan that are manually tracking their inventory and the number is huge. We have

customers from the UAE who are not using any inventory management system and are

facing below mentioned problems:

1. Overstocking or stockouts: Without accurate inventory tracking, businesses are

not able to know when they need to reorder products, which is resulting in either

overstocking or stockouts. Overstocking ties up capital and results in product

spoilage, while stock outs lead to lost sales and dissatisfied customers.

2. Inefficient use of resources: Manual inventory management is time-consuming

and labor-intensive, taking valuable resources away from other critical business

operations.

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3. Inaccurate forecasting: Without access to real-time data and inventory analytics,

businesses are facing difficulty predicting future inventory needs, leading to

inaccurate forecasting, overstocking, or stockouts.

4. Multiple locations: If a business has multiple locations or warehouses, tracking

inventory across all locations manually is making it complicated and prone to errors.

5. Increased operational costs: Inefficient inventory management results in higher

operational costs due to additional labor, storage, and transportation expenses.

1.4 Strategic Alignment with Organizational Objectives

The mission and vision of V8 Digital solutions are to provide services to their customers,

The project will help us to achieve a better customer base, and better cash flows including

a positive brand reputation.

2. Background/Problem Statement

One of the major problems is inefficient inventory management for businesses that deal

with physical products. Without an effective and efficient system businesses are facing

significant challenges within their market.

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2.1 Current Situation, Problems & Constraints

Problem/opportunity we observed that There is a certain number of business niches that

are manually tracking their inventory and the number is huge.

There are several constraints and problems that businesses are facing such as

1. Manual Data Entry: Manual data entry can be time-consuming and prone to

human errors, which can lead to inaccurate inventory tracking.

2. Inadequate Reporting: There is a lack of detailed reporting such as inventory

turnover rate that is needed for effective decision-making.

2.2 Stakeholders & Environmental Factors

Environmental factors that can affect inventory management software projects:

1. Organizational Culture: The culture of the organization can impact how the

project team works together and how receptive the organization is new to the

software. For example, if the organization is resistant to change or values hierarchy

over collaboration, it may be difficult to implement new inventory management

software.

2. Market Competition: The competitive landscape can impact the project’s scope

and the time and resources required for its completion, especially if the software

needs to be innovative or offer unique features to stand out.

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3. Stakeholder involvement: The level of stakeholder involvement and collaboration

can impact the project’s success and ability to meet its objectives.

4. Regulatory compliance: Compliance with regulatory requirements, such as safety

standards or industry-specific regulations, can affect the project’s scope and the time

and resources required for its completion.

5. Technical complexity: The technical complexity of the project can impact its

progress and the ability of the team to develop the software.

2.3 Risks & Opportunities for Improvement

There are many risks & opportunities for improvement. Some of them are defined below.

1. Technical Risk: What if the resource which are involved with is not competent

enough this will affect the overall project performance.

2. Data security risk: Another critical risk would be servers being down because

the organization will be using the hosting of 3rd party services.

3. Communication breakdown: Communication is the key in any business, It

would be one of the general risks that happen when there is a lack of communication

between all the stakeholders.

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2.4 Plan to Overcome Problems & Constraints

To mitigate all the above-mentioned risks and constraints we will be dealing with for

Data security risk, to mitigate that we need to keep our data/information safe and secure

from any unauthorized access we will need to implement high-level security practices to

protect the data from any data breach. Another critical risk would be servers being down

because we will be using the hosting of 3rd party services. Communication breakdown

would be one of the general risks that happens when there is a lack of communication

between all the stakeholders to mitigate the need to improve stakeholder engagement.

3. Methodology

The methodology which we have followed to test the feasibility of this project is:

3.1 Method of Analysis for Feasibility Study

1. Cost Benefit Analysis: Technical complexity: the technical complexity of the

project can impact its progress and the ability of the team to develop the software.

2. Risk Analysis: Another method is the analysis of identifying the potential risk

associated with the system, such as technical risk, operation risk, and financial

risk

3. Operational Feasibility Analysis: This method involves evaluating whether

the project can be implemented using the existing processes and workflows

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including considering the impact on staff, training requirements and the need for

any changes to operational processes

4. Technical Feasibility: Another important methodology in which an

organization is evaluating whether the project can be technically implemented,

considering factors such as hardware and software requirements, compatibility

issues with the existing systems, and data migration of the existing manual

system.

4. Overview of Alternatives

The Inventory management system is a complete solution for all the huge shopping

marts, and V8 Digital did not assess other alternatives in comparison to this initiative.

5. Cost & Benefit Evaluation

5.1 CBA Techniques to Assess Financial Feasibility

Figure 5.1: NPV, IRR, DPB Calculation.

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Figure 5.1, defines the calculations, the payback period of our investment is 4 years and 3

months, which states that our return on investment will start after the 4th year. However,

in this time period, other than monetary benefits the company will be able to achieve

many other goals with this IMS, like the market share increase, and the customer base

would be stronger. Manual system makes things complicated so with the IMS the things

will get less complicated and more clear to everyone, and the most important reason is

that V8 Digital will be in competition with other few companies which are already

offering the IMS to their customers.

5.2 Technological, Legal, Operational Aspects

1. Technologies Aspects: Hardware and software requirements for example which

servers our system will be using, hosting, how many domains the company have

to buy, data migration requirements such as how the team convert manual data of

existing customers on our inventory management system

2. Legal Aspects: Data privacy & security, Intellectual property, Contract &

Licensing

3. Operational Aspects: Training and support, Workflow integration, Maintenance

and updates of inventory management software.

6. Recommendations

There are many reasons why our company must need inventory management software,

the first and most important reason is that it will increase the efficiency and productivity

of the company as a whole. It will make things less time-consuming and employees can

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use that time to do more effective tasks. The second reason is that the IMS will cost less

than manual inventory tracking and management which can reduce high operational

costs. The third reason to consider implementing IMS in the company is that it will lead

to improved inventory control as we can track inventory levels in real-time, monitor

inventory movements and set up automatic reorder points to help you avoid stockouts and

overstocking and reduce the risk of financial losses..

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