1.1 Introduction
Inventory management is the process of ordering, storing, tracking, and controlling a company’s inventory whether raw materials, components, or finished products (Stevenson, 2020). It plays a vital role in ensuring that an organization has the right products in the right quantity for sale, at the right time. Effective inventory management reduces the risk of stockouts and overstocking, minimizes storage costs, and enhances customer satisfaction. In today's fast-paced business environment, the need for accuracy, speed, and efficiency in inventory control has made computerized systems more valuable than ever. A computerized inventory system refers to a software application that automates the recording, monitoring, and management of inventory data (Eze & Okoye, 2019). It enables organizations to update stock levels in real-time, generate reports, detect discrepancies, and make informed decisions quickly. Unlike manual methods, which are prone to human error, data loss, and inefficiency, computerized systems offer better accuracy, improved accountability, and enhanced operational control.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitation of the study and Definition of technical terms.
1.2 Background of Study
Inventory management has remained a critical component of business operations, particularly in sectors that involve the supply, storage, and distribution of goods. It involves the systematic control and supervision of the flow of goods from manufacturers to warehouses and eventually to the point of sale. Efficient inventory control ensures business continuity, reduces waste, and improves customer satisfaction. According to Stevenson (2020), effective inventory management contributes significantly to the operational success of any business by ensuring that stock levels are adequately maintained to meet customer demands.
Oladimeji and Adebayo (2021) reported that organizations that rely solely on manual inventory systems often experience problems such as data redundancy, loss of inventory records, mismanagement of stock, and errors in stock valuation. These challenges not only reduce operational efficiency but also increase the risk of financial losses and customer dissatisfaction.
Eze and Okoye (2019) asserted that the adoption of computerized inventory systems has revolutionized how businesses handle their stock by improving accuracy, speed, and reliability in inventory tracking and reporting. These systems are designed to automate routine stock management processes such as stock entry, reordering, sales tracking, and report generation. They also help reduce human error and ensure better security of inventory data.
Akindele (2020) stated that the transition from manual to computerized inventory management systems is crucial for modern businesses, especially those dealing with large inventories and high transaction volumes. The manual system, though familiar to many, is often outdated, time-consuming, and unsuitable for real-time decision-making. In contrast, computerized inventory systems provide up-to-date stock information and support the overall strategic planning of an organization (Akindele, 2020).
Uzochukwu (2022) affirmed that many Nigerian businesses, particularly small and medium enterprises (SMEs), still struggle with manual inventory management due to limited awareness, cost implications, or resistance to change. This has contributed to poor record-keeping, frequent stock-outs, and an inability to meet customer demands effectively. As businesses expand and competition intensifies, the need for reliable and efficient inventory systems becomes even more pressing (Uzochukwu, 2022).
The challenges encountered that led to the execution of the research work is that, many businesses still rely on traditional inventory tracking techniques such as ledger books, spreadsheets, and manual stock counts (Akindele, 2020). As businesses scale and product demands increase, these problems become more pronounced and can significantly affect profitability and customer satisfaction. It is against the background that the developments of this software will also aid in reducing operational costs and improving customer satisfaction by minimizing stock-related errors.
1.3 Statement of Problem
Following the investigation, it was revealed that the traditional system implemented struggles with various challenges, several of which stand out as particularly critical:
- Lack of Real-Time Stock Tracking: Manual systems do not update inventory levels instantly, which causes delays in recognizing low stock or overstocking. The absence of instant data makes it difficult for management to respond quickly to inventory-related issues.
- Data Loss and Poor Record Security: Physical stock cards or spreadsheets stored on local devices can be damaged, lost, or altered without proper tracking. There is usually no backup mechanism, making data recovery difficult or impossible in the event of system failure or physical damage.
- Time-consuming and Labor-Intensive: Stocktaking, report generation, and record reconciliation require extensive human effort and time, slowing down processes and reducing overall productivity. As inventory volume grows, this inefficiency becomes even more pronounced.
- Lacks Transparency and Accountability: Without audit trails or user-specific access, it is hard to monitor who made changes to records, leading to poor internal control and a higher risk of fraud or manipulation.
- Limited Scalability: Manual systems are not equipped to handle the increased complexity that comes with business expansion. As product lines, locations, and staff increase, maintaining accurate and efficient manual records becomes impractical and unsustainable.
1.4 Aim and Objectives of the Study
The aim of the study is to develop and implement a computerized inventory system that improves the efficiency, accuracy, and reliability of inventory management. In achieving this aim, the following specific objectives were laid out as follows to develop an application software that will:
- Enable the management to get the information about stock levels of various items in the least possible time.
- Ensure that the quality information in (i) above is maintained
- Provides a kind of inventory system that can link to sales and accounting departments.
- Create an in-built learning system on re-order level to avoid expenses stock out.
- Implement a functional inventory management software solution and evaluate the effectiveness of the developed system in improving inventory control.
1.5 Significance of Study
The deployment of the proposed system will be beneficial to software developers and IT professionals will also benefit from this study as it will provide a blueprint for designing user-friendly and functional inventory management applications tailored to local business environments. It will serve as a guide in understanding the system requirements, structure, and implementation strategies needed for successful deployment.
Furthermore, academic researchers and students will find the implemented system and this study relevant to the body of knowledge in the field of computer science, business administration, and information technology. It will encourage further research and innovation in the area of inventory automation and enterprise resource planning.
1.6 Scope of Study
This study focuses on the design and implementation of a computerized inventory system for Pharmaceutical Company in Lagos State. The system is developed to automate the tracking, updating, and reporting of inventory within the ministry’s stores and supply department.
1.7 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this research work. There were lots of information needed from the staffs of this institution to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet).
1.8 Definition of Terms
Inventory:
Inventory refers to the raw materials, work-in-progress goods, and finished products that a business holds for the purpose of resale or production (Stevenson, 2020). It is the central element of inventory management.
Inventory Management System:
An inventory management system is a software tool used to track, manage, and organize inventory levels, orders, sales, and deliveries. According to Eze and Okoye (2019), it enhances efficiency by automating and simplifying stock handling.
Computerized System:
A computerized system is an integrated set of hardware and software designed to process and store data electronically. Oladimeji and Adebayo (2021) stated that such systems are essential for modern business operations.
Stock Control:
Stock control involves the regulation and supervision of the supply, storage, and accessibility of inventory to ensure an adequate supply without excessive oversupply. Akindele (2020) asserted that stock control is vital to avoid shortages or excess.
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