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Common Features of Applications in Business

A Stock Control System (including order processing)

Many shops now use stock control systems. The term 'stock control system' can be used to include various aspects of controlling the amount of stock on the shelves and in the stockroom and how reordering happens. Typical features include:

  • Ensuring that products are on the shelf in shops in just the right quantity.
  • Recognising when a customer has bought a product.
  • Automatically signalling when more products need to be put on the shelf from the stockroom.
  • Automatically reordering stock at the appropriate time from the main warehouse.
  • Automatically producing management information reports that could be used both by local managers and at Head office. These might detail what has sold, how quickly and at what price, for example. Reports could be used to predict when to stock up on extra products, for example, at Christmas or to make decisions about special offers, discontinuing products and so on.
  • Sending reordering information not only to the warehouse but also directly to the factory producing the products to enable them to optimise production.

Advantages and disadvantages

Stock control systems ensure that just the right amount of stock are on the shelves. If there is too much stock, it ties up a company's money, money that might be better spent on reducing the overdraft, on advertising the business or on paying for better facilities for customers, for example. Too much stock means that some perishable products might not sell and would have to be thrown away and this would reduce a company's profit. If there were not enough products on the shelf, they might run out. If this happens, they would lose business and again, profits would not be as good as they ought to be. Stock control systems save a lot of staff time. Savings may be possible by reducing the number of staff needed in the business thereby improving profits. A stock control system will not remove the necessity for checking what is on the shelves regularly - things get stolen and these won't be recorded. Stock control systems also mean that a business may have to close down while the system is changed from a manual one. They also involve a considerable investment in equipment and support. Stock control systems require training and some staff may find them difficult to use. They can also break down so a procedure needs to be in place so the business can continue to trade. This may involve further costs as well, perhaps in the purchase of back-up equipment or in the purchase of a support agreement. Usually, the benefits of a stock control system outweigh disadvantages.

An example

Imagine a shop that is part of a chain of shops. It has no computer systems. At the moment, the owner of the shop orders goods. This takes up her valuable time. She knows what to order by using her experience of how quickly things sell and by looking on the shelves and seeing what is there! She also has to produce regular reports about how the business is going for Head office. This again is very time-consuming. Headquarters decide to introduce a stock control system. One simple solution would involve getting: A method of scanning in products at the checkout.

  • A computer with a modem.
  • A phone line if they haven't already got one.
  • Some connections between the checkout and the computer and between the computer and the phone.
  • Software.
  • An ISP.
  • Computer systems set up at the warehouse, the factory and Head office.
  • Some training on how to use the system.
  • Some support for when things don't work.
  • Back-up systems in case the computer breaks down.

A point-of-sale system

The place where the customers take the things they want to buy is called the checkout. Another name for the place where money is exchanged for goods is the Point Of Sale (POS). We have already said that part of a computerised stock control system would involve scanning goods at the point of sale. A system that is part of a computerised stock control system is known as an Electronic Point Of Sale (EPOS). To set up an EPOS, you would need: •Coded information on each product, for example, bar codes.

  • A method of quickly getting codes from a product into the till. If you were using bar codes, you could scan them in using a laser.
  • Hardware and software that validates products as they are scanned and warns the checkout assistant if a product doesn't pass validation. Bar codes include a check digit for this purpose.
  • A method of allowing a product code to be entered manually, when the bar code is unreadable.
  • A method of sending the data from the product, via the EPOS, to the central stock control computer.
  • A method of getting information about the product, for example, a description and the price of the product, from the central computer to the EPOS. This can be used to generate and print out an itemised receipt.

Once a customer has had their goods scanned, a receipt is generated and payment is due. This could be in cash or by cheque but it is more common to pay by credit card. Not all EPOS systems can take credit card payments, but most can. If an EPOS can then it is known as an EFTPOS system, or Electronic Funds Transfer at Point Of Sale. In this system, a customer hands over their credit card (or other payment card). The magnetic stripe on the card is scanned and the information held on it is quickly sent to the credit card company. They check that it hasn't been reported stolen or the credit card limit hasn't been reached. They then send back to the checkout assistant an authorisation to accept payment. A credit card slip is printed out on two pieces of carbonated paper using a dot matrix printer. (This is just about one of the last major uses of the dot matrix printer). The customer signs the top copy (and indirectly, the bottom copy is also signed). They are then given a copy of the slip and can leave with the goods. The money is transferred electronically from the customer's bank account to the shop's bank account.

Marketing

Marketing is the term given to finding out or anticipating what a customer wants and then setting about attracting those customers by designing the right product and by directing customers to the product through advertising. We have already mentioned loyalty cards in passing and these are very important for marketing purposes. A supermarket, for example, can build up a profile of each customer's shopping habits. Every time a customer shops, the purchase details are recorded in a master file. Various details can be recorded in a transaction file, such as what the customer bought, how much they spent and when they shopped. The master file can be regularly updated using the transaction file and this builds up a profile of the customer. This information can be used to target promotions and advertising more accurately at individuals. This is important because advertising is one of the biggest expenses in most businesses. Computers can play a role in a wide range of other marketing functions. For example:

  • Special promotions (e.g. two for the price of one) can easily be done using the software provided as part of the stock control and EFTPOS systems.
  • Reports can be generated that show how well a product sells by area, by shop, over time or by promotion, for example. These reports can help the marketing department select the best promotion method for a particular product.
  • DTP software can be used to produce promotional literature.
  • Email can be used to market products directly at individuals. This could be done by sending out special promotion vouchers that the customer can print off or sending newsletters, for example.
  • Questionnaires can be produced and the results analysed and presented using spreadsheets, for example.

A payroll system

Consider a factory with a lot of workers. Each worker has a record that holds information like their name, address, what their hourly rate is, how much they have been paid so far this year, how much tax they have paid so far this year, their pension contributions and their National Insurance contributions. These details are held on a master file on computer. A master file is simply a file that stores the main data - the data doesn't change that often but can be updated when necessary. In this case, the master file is the file of employees. It doesn't change that often, possibly only once a week when everyone's pay is calculated or when someone tells them about a change of address.

Each day, the workers 'clock in'. Their ID number, the time they clock in and the time they clock out is recorded on a 'transaction file'. A transaction file is simply a file that records recent data. In this case, the file holds the details of who has worked what hours over the last week. At the end of the week, everyone's pay is calculated using both the master file and the transaction file. The master file and the transaction file are retrieved. Then a special payroll program is run that takes the master file and updates it using the information held in the transaction file. Not only is the master file updated, however, but pay slips are also printed out. The transaction file is wiped clean, ready for the following week's data.

Automatic Teller Machines (ATMs)

The same kind of system is used with ATMs (cash point machines). Everyone's bank account details are held on a master file at their bank's Head office. Every time a particular ATM is used, the details of the transaction are recorded in a transaction file. In the middle of the night, the ATM communicates with the Head office using a modem. It sends the Head office details of all of the transactions at that cash point in the last 24 hours, as recorded in the transaction file. This information is used to update the master file. The transaction file is then erased ready to store the next 24 hours of transactions.

A process control system

A process control system is a computer system that automatically monitors and reacts to changes in a system. We have seen an example of this type of system in the chapter on real-time systems. You should refer back to this chapter.

Computer Aided Design (CAD) and Computer Assisted Manufacturing (CAM)

CAD software is used to produce design drawings and diagrams on a computer. CAD software could be used to design a new chair, a football stadium, a microchip or a new wing mirror for a car. Traditionally, when something had to be designed, an engineer would sit down with some paper and produce a technical drawing. There are many advantages for the engineer and the company, however, in using CAD to produce the design.

  • Templates and old designs can be used to speed up the design process of new products.
  • Different designs can be relatively quickly tried out.
  • Colour, special effects, 3D views and animation of designs are possible to help everyone 'view' the design before it is built. This may be especially impressive when shown to the media or a customer.
  • It is possible to zoom in on particular areas of drawings.
  • CAD designs can be automatically linked to software that costs out the design, saving a lot of time in manual calculations and avoiding human error.
  • Designs can be stored on computer. Designs done on large pieces of paper have to be stored, archived and retrieved. This used to involve whole rooms and employing staff to look after storing drawings.
  • It is easier and takes up less space to back-up drawings if they are held on computer.
  • Designs can be emailed quickly to other departments anywhere in the world. This is useful because it removes delays created by the post and aids teamwork between members in different parts of the world.

When designs are done on computer using CAD software, some consideration should be given to the best hardware to use. For example, a large VDU will help to see more of a particular diagram and will allow better use to be made of higher resolution screens, a plotter will allow very large drawings to be produced to a high degree of accuracy and a graphics tablet may be useful because it allows the designer to draw in a more natural way. We have already said that one advantage of CAD designs is that they can be used to automatically cost out the design. It is possible, however, to link the design done on a computer using CAD software to the actual machines that produce the product! When a design is completed, details of the design can be converted into instructions for the machines that produce the product. The machines can then start producing the product without a human having to set them up. This saves time and reduces the number of staff needed in the manufacturing process. If any modifications are made in the design using CAD, these can simply be passed to the machines and the changes will be made automatically - the machines don't have to be stopped. This improves the number of products made and so improves efficiency. When production is linked to CAD as described above, it is known as Computer Assisted Manufacturing, or CAM. CAM is a term used not only to link the design process with the manufacturing process. It also encompasses the management of the supply of components needed to manufacture the products and the factory planning process, to ensure that production and output are maximised.


Systems | Business


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