VENDOR MANAGEMENT

THROUGH

VENDOR MANAGEMENT SYSTEM

BY

XXXXXXXXXXXX

A PROJECT REPORT

SUBMITTED

to

MUMBAI UNIVERSITY

In partial fulfillment of the requirements for the award

of the MASTER OF BUSINESS ADMINISTRATION

[APRIL 2019]
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 BONAFIDE CERTIFICATE

Certified that this project report titled Vendor Performance in Vendor Management Through

Vendor Management System is the bonafide work of Mr. XXXXXXX who carried out

the research under my supervision. Certified further, that to the best of my knowledge

the work reported herein does not form part of any other project report or dissertation

on the basis of which a degree or award was conferred on an earlier occasion on this

or any other candidate.

Place:-

Date:-

PROJECT GUIDE

XXXXXXXXXXXX

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 ABSTRACT

VMS (Vendor Management Services) is a fairly recent advancement in managing

contingent labor spend. VMS is an evolution of the Master Service Provider (MSP) / Vendor-On-

Premise (VOP) concept, which became more prevalent in the late-1980s to the mid-1990s when

larger enterprises began looking for ways to reduce outsourcing costs.

In this I decided to manage the suppliers of Chemist & Drug Store. For this I have

collected information on what criteria’s the firm choose their vendor. Among them I have also

found out which criteria is given maximum importance.

In this project I have visited fifty plus chemist store in different areas of Pune with

questionnaire. The questionnaire are filled by maximum of them and help us in collecting the

information. I learnt lots of things about managing the vendors and also about the different type

of companies.

The project helped us to get a insight knowledge of the vendor management in chemist

and Drug Store .I saw how the professionals use their experience and skills to bring business.

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 ACKNOWLEDGEMENT

I acknowledge the sincere assistance provided to me from several rather unexpected

quarters during the course of execution of this study. It would be a mammoth task to

place on record my gratitude to each and every one of them but a whole hearted attempt

would be made nevertheless, least I be branded ungrateful.

I am extremely thankful to XXXXXXXXX (H.O.D) for giving me such an esteemed

environment and proper guidance under which I have done my project.

Where the emotions are involved words cease to work.. I am deeply indebt to for her

encouragement, affections, valuable advice and guidance that helped me to complete this

project successfully.

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TABLE OF CONTENT

CHAPTER TITLE
NO
1 1.1) Introduction
1.2) Vendor Management System
1.3) Objective of the Project
1.4) History and Evolution of VMS
1.5) Vendor Selection
1.6) Strengthen Vendor Relations

2 2.1) Inventory
2.2) Concept & Importance of Inventory
2.3) Vendor Managed Inventory
3 3.1) The Need of Technology Advancement in
medical Software
3.2) Maharashtra State Druggists and Chemists
Association Objectives
3.3) Existing System in Market

4 4.1) Analysis of Data Collected

5 5.1) Findings
5.2) Drawback of Existing Systems
5.3) Conclusion & Suggestion

Annexure-1 Questionnaire
Annexure-2 References

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 CHAPTER- I
INTRODUCTION
Vendor Management System

A Vendor Management System (VMS) is an Internet-enabled, often Web-

based application that acts as a mechanism for business to manage and procure
staffing services – temporary, and, in some cases, permanent placement services –
as well as outside contract or contingent labor. Typical features of a VMS
application include order distribution, consolidated billing and significant
enhancements in reporting capability that outperforms manual systems and
processes

The contingent workforce is a provisional group of workers who work for an

organization on a non-permanent basis, also known as freelancers, independent
professionals, temporary contract workers, independent contractors or consultants.
VMS is a type of contingent workforce management. There are several other terms
associated with VMS which are all relevant to the contingent workforce, or staffing
industry.

A vendor is literally a person or organization that vends or sells contingent

labor. Specifically a vendor can be an independent consultant, a consulting
company, or staffing company (who can also be called a supplier – because they
supply the labor or expertise rather than selling it directly).

A VOP, or Vendor On Premise, is a vendor that sets up shop on the client's

premises. They are concerned with filling the labor needs and requirements of the
client. The VOP does this either by sourcing labor directly from themselves, or
from other suppliers, whom may be their competitors. Also, the VOP manages and
coordinates this labor for the client.

VMS is a tool, specifically a software program, that distributes job

requirements to staffing companies, recruiters, consulting companies, and other
vendors (i.e. Independent consultants). It facilitates the interview and hire process,
as well as labor time collection approval and payment.

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Objective of the Project

The purpose of my project are given below

1) To have insight knowledge of existing vendor management system.
2) To determine the drawback of existing system.
3) To provide the performance metrics for vendors, which can help firm for
choosing vendor for placing an order in order to gain maximum profit and
better service.

Methodology Adopted

For collecting an information about vendor management system, I decided to

adopt the best approach i.e Questionnaire. Proper questionnaire is made for
collecting relevant information.
I visited different medical store or Chemist and Drug Store and asked them
question from questionnaire. The question is asked them in such a way so that
maximum questions answer can be obtained.
It was seen that about 5-10 min is taken to complete one questionnaire. The best
time to visit Chemist and Drug Store is for 11:30 am to 2pm. Because in this time
slot, it is observed that frequency of customer is less and owner of the firm feel
comfortable to answer the question from questionnaire as they are in fresh mood.
After 2 pm it is seen that most of the Chemist shut down their store. The area
covered in our survey are Satara Road, Singhad Road, Deccan Gymkhana,
Dhayari, Dhankawadi, FC Road, Balaji Nager, Poona Hospital.

Primary Data:-

Primary data is that which are collected “afresh” and is supposed to be original in
Character. Primary data is gathered in such a way so that need of the
researcher can be fulfilled .On the basis of primary data researcher withdraw
some important conclusion and gives suggestion according. I have collected
my primary data in the form of questionnaire, Discussion, Interview with
medical store owner/worker.

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Random Sampling method:-

The sampling method used for collecting the data was Random sampling
method. As the study was restricted with the chemist & drug store, 41 chemist &
drug store are considered randomly and depending upon that study is conducted.

Secondary Data:-
Secondary Data is that data, which is, collected Prior to the Present Study
work. Any data that is available prior to the commencement of the research Project
is called Secondary data and therefore Secondary is also called as Historical data. I
have collected my secondary data from the Internets and website like google.com
etc.

Purpose of Questionnaire
 How long they are in this business ?

 Whether they are using automated system or not ?

 How they maintain inventories (Manually/Automated) ?

 Drawbacks of existing system ?

 Are they are satisfied from their Existing System or not ?

History and Evolution of VMS

VMS (Vendor Management Services) is a fairly recent advancement in
managing contingent labor spend. VMS is an evolution of the Master Service
Provider (MSP) / Vendor-On-Premise (VOP) concept, which became more
prevalent in the late-1980s to the mid-1990s when larger enterprises began looking
for ways to reduce outsourcing costs. An MSP or VOP was essentially a master
vendor who is responsible for on-site management of their customer’s temporary
help / contract worker needs. In keeping with the BPO (Business Process
Outsourcing) concept, the master vendor enters into subcontractor agreements with
approved staffing agencies.
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 It is noteworthy to mention that VMS really started to evolve around the
time Michael Hammer and James Champy's Reengineering the Corporation
became a bestseller. Large enterprises were looking for ways to compete in the
global economy. The main advantage for U.S. businesses during this time period
was that their purchasing departments were able to channel new contract personnel
requisitions to one source – the VOP – and, in turn, reduce procurement costs by
simplifying their payment process. In effect, they only had to write a check to one
vendor vis-à-vis hundreds of suppliers.

With the Internet came new ways of doing business, which included
electronic payment. According to Staffing Industry Analysts, Inc. the emergence of
eBusiness, B2B, E-Procurement et al. was the catalyst that began the VMS
industry.

As businesses began to integrate this e-business concept, online auctions

such as Covisint began to appear. The value proposition was, they claimed, that
they could reduce spend for purchasing office suppliers, industrial suppliers and
other commodities by putting these purchase requests out for bid via an online
auction.

Typical benefits included:

 Streamlined requisition approval workflow

 Reduced time-to-fill cycle times
 Bill rate standardization / management
 Optimization of supplier base
 Consolidated invoicing
 Improved security and asset management
 Availability of vendor performance metrics
 Visibility and cost control over maverick spend
 10-20% reduction in contingent labor spend

Contingent work, also sometimes known as casual work, is a neologism which

describes a type of employment relationship between an employer and employee.
There is no universally agreed consensus on what type of working arrangement

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constitutes contingent work, but it is generally considered to be any one or
combination of the following:

 Work which is temporary or lacks job security

 Work which is part time
 Work which is paid on a piece work basis

Whether a person who does contingent work can be described as 'having a job'
is debatable - however, contingent work is usually not considered to be a career, or
part of a career. One of the features of contingent work is that it usually offers little
or no opportunity for career development.

If a job is full time permanent, and either pays a regular salaryor a fixed wage
for regular hours, then it is usually not considered to be contingent work.

Contingent work is not an entirely neutral term, because commentators who use
the phrase generally consider it to be a social problem employment agencies and
classified advertising media are more likely to use the phrase casual work,
particularly to attract students who wish to earn money during the summer
vacation, but who aren't interested in a long term career. Whilst all casual work is
considered to be contingent work, not all contingent work is casual. In particular,
part time jobs, or jobs in organizations that have a high staff turnover, may be
considered contingent work, but aren't necessarily casual.

THE PROS AND CONS OF VENDOR MANAGEMENT

SYSTEMS (VMS)

For many companies, labor costs represent a significant part of operating costs.
In an effort to more intelligently manage labor costs and leverage relationships
with suppliers, organizations are searching for ways to accurately assess their
contingent workforce spending and to streamline the on-boarding and off-boarding
of this adaptive workforce.

A Vendor Management System (VMS) has typically been defined as any internet-
based procurement application that enables companies to manage the process of
outsourced procurement of temporary and permanent staff.

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The cost savings from VMS programs seem seductive – immediate reductions to
the bottom line and possibly a reduction in the number of intrusive sales calls from
vendors. However, the reality is often something quite different. The VMS
programs often treat people as a commodity – the lowest hourly bidder of
temporary labor gets the job. This creates a number of problems that are difficult
to quantify in any feasibility study.

- There is no VMS system today which asks the supplier of temp labor for the
contractor’s IQ. Therefore, an 80 IQ contractor is considered as good as a 130
IQ contractor. However, the 80 IQ contractor will get very little done in terms
of productivity in a technology that requires some mental horsepower.

- If a contractor must supply the lowest hourly rate to procure an assignment,

what does this do to the loyalty of the contractor and service supplied by the
agency? Will the temporary labor leave if a higher-paid position is available?
Does this affect productivity? The solution to this piece of the labor puzzle is
to pay market rate, not lowest rate. There are a number of detailed studies that
will provide good market rate data. If the temporary agency supplying the
labor has to endure cuts in rates, they will have to cut services. Most agencies
are forced to use very junior recruiters in order to meet the cost guidelines,
with no qualifying of the talent supplied.

If the VMS system is administered by a temp labor agency, the complications

increase exponentially.

- The “prime” temp labor agency will often charge the sub-contracting agency a
percentage of the sub-agencies’ profits, making it impractical for the subs to
continue providing labor. This reduces the amount of IT temp labor available
to the client. In fact, some of the sub temp labor agencies will then consider
the client to be a resource rather than a client.

- This evolves into a situation where the prime temp labor agency is the sole
supplier to the client, with a few small groups working out of their basements
with no G&A expenses and no services other than providing resumes (services
from quality agencies include QA departments, in-person interviews,
background checks, video email of interviews, and skill assessments).

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 - The prime labor supplier will also often limit access of labor suppliers to
project managers. This reduces the effectiveness of the temp labor
subcontractor since all information is never included on a written job
description – “is this a team environment, or a single person working alone? Is
there much travel involved? What is the end client environment like? What
are the deadlines? What other skills would be nice to have?” This will
increase cost since the hiring manager will end up interviewing candidates
who may fit the generic job description but not the true position.
- The prime temp labor supplier will also often hold the job description for
several weeks, hoping to fill the position themselves. The sub labor providers
therefore know that they are only getting the “extremely difficult” job orders to
work on.

So, what has the risks a client company faces with a VMS system?

- Limited access to the job market

- High turnover of their workers
- Less than satisfactory results from temporary labor
- Slowed delivery in realizing benefits from new systems
- Loss of key partners who have spent years learning the company and
developing valuable business relationships
- Disruption of the labor market supply chain

What’s the solution? How does a company assure quality access to a strong,
highly-qualified labor market?

The only way to attack this problem is to locate a good piece of vendor
management software and run the system independently of any of the vendors
using the system. This will assure equitable treatment for all vendors. Rates will
take care of themselves through a process of supply and demand. If you receive 3
resumes, all qualified, with a difference of $10 per hour, there is no reason not to
select the lower cost person so long as this person is at market rate.

This would also be the best way to assure that the VMS interfaces with the
company financial systems. Where does one begin? The steps in a company’s
successful use of a VMS have been itemized below:

1) Keep it Vendor neutral

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2) Keep the lines of communications open. This is key!
a. Vendors should be able to communicate with client management and
hiring managers.

b. Some of the VMS vendors evolve into mini-dictators. They mandate

that vendors cannot communicate with the end client.

c. Quarterly/twice a year vendor summit meetings are important. This

will provide valuable input from the vendor community.

2) Allow the cost savings to be a result in improved back office efficiencies

instead of using the VMS systems to drive down bill rates to unworkable
levels. You get what you pay for!

a. Resist the desire to establish multipliers and/or a rate card. Many of

the existing VMS systems were established by administrative staffing
companies. They have taken this business model and have tried to
make IT and Financial staffing fit within this model. The IT and
Financial staffing model is much different and requires more services
than the Administrative staffing model.

b. The fee for using the system should be in addition to the bill rate and
shouldn’t impact the vendor.

3) Don’t allow the system to overly reward quick submittals and the number
of submittals. Finding good people takes time and effort, and typically
the best candidate isn’t one of the first submitted. Anything else is just
pushing paper.

4) Put Service Level Agreements (SLA’s) in place with the hiring managers.
A common impression of VMS’s is that they are nothing but black holes.
Resumes are submitted and then feedback is never received. Managers
should be required to provide proper feedback within a specified time
period. Otherwise recruiters are reluctant to work on these openings.

5) Enter only real and thorough Job Orders.

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 a. They must be funded and ready to be filled.
b. Must contain details on what the person will be doing.
c. Must contain details on the required skill set and the desired skill set.
d. Must contain rate and duration.
e. Must be kept up-to-date. If you think you have enough submittals
then put the position on hold. Close the position once a candidate has
been identified.
6) Advertise your success and let the vendors know what happened with a
position.
a. Let the vendor community know how many positions have been filled
(weekly, monthly, quarterly)
b. Let the vendor community know how a position was closed (was it
filled by a vendor, was it filled internally, did the position go away …)

The foregoing comments identify a number of requirements for a successful VMS

implementation. Clearly, the implementation of a VMS can present the client
company with a number of risks, usually associated with interrupting the
company’s supply chain for contingent labor. A successful implementation must
be well managed not only during implementation, but on an on-going basis after
implementation in order to achieve the milestones detailed above.

Supply

The total amount of a good or service available for purchase; along with
demand, one of the two key determinants of price

Vendor
A vendor, or a supplier, is a supply chain management term meaning anyone
who provides goods or services to a company. A vendor often manufactures
inventorial items, and sells those items to a customer.

The term vendor originally represented property vendors. However, today it

means a supplier of any good or service. A vendor, or a supplier, is a supply chain
management term that means anyone who provides goods or services to a
company. A vendor often manufactures inventorial items, and sells those items to a
customer.

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 Typically vendors are tracked in either a finance system or a warehouse
management. Vendors are often managed with a vendor compliance checklist or
vendor quality audits. Purchase order are usually used as a contractual agreement
with vendors to buy goods or services.

Vendors may or may not function as distributer of goods. They may or may
not function as manufacturer of goods. If vendors are also manufacturers, they will
build stock rather than build to order.

Vendor is often a generic term, used for suppliers of industries from retail
sales to manufacturers to city organizations. Vendor generally applies only to the
immediate vendor, or the organization that is paid for the goods, rather than to the
original manufacturer or the organization performing the service if it is different
from the immediate or the organization performing the service if it is different from
the immediate

Vendor Selection - How to Select a Vendor

The vendor selection process is important no matter how small the part or
how simple the service. This page will guide you through the process in order to
select the right vendor for your company.
The Successful Vendor Selection Process

The vendor selection process can be a very confusing, complicated and

emotional undertaking if you don't know how to approach it from the very start.
Here are five straightforward steps to help you select the right vendor for your
business.

Step #1: Analyze Business Requirements

The toughest part of the vendor selection process is analyzing the business
requirements. This guide will show you how to accomplish this and gain consensus
across all the stakeholders before you begin the vendor selection process
Step #2: Vendor Search

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 The second part of the vendor selection process is to perform a
comprehensive vendor search and create a "short list" of vendors to pursue. Done
correctly, this will position your business to find the right vendor and create a
competitive atmosphere between competing vendors. This guide will show you
how.

Step #3: Request for Proposal (RFP) and Request for Quotation (RFQ)

The third part of the vendor selection process is to write a Request for
Proposal (RFP) or Request for Quotation (RFQ). A well written RFP or RFQ is the
critical success factor in the entire vendor selection process. This guide will show
you how to create a document that will detail the needs and expectations of your
company.

Step #4: Proposal Evaluation and Vendor Selection

In the vendor selection process, this is the most crucial step of all. Lack of
preparation and not paying attention to detail can lead your vendor selection team
to recommend the wrong vendor for your company. This guide will help you
organize your selection process and lead your team to a unified vendor selection
decision.

Step #5: Contract Negotiation Strategies

The final stage in the vendor selection process is developing a contract

negotiation strategy. Successful contract negotiation means that both sides will
gain from coming to an agreement. This guide will show you how to plan a
successful contract negotiation strategy.

Strategies to Strengthen Vendor Relations

Vendor management allows you to build a relationship with your suppliers

and service providers that will strengthen both businesses. Vendor management is
not negotiating the lowest price possible. Vendor management is constantly

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working with your vendors to come to agreements that will mutually benefit both
companies.

1. Share Information and Priorities

The most important success factor of vendor management is to share

information and priorities with your vendors. That does not mean that you throw
open the accounting books and give them user IDs and passwords to your systems.
Appropriate vendor management practices provide only the necessary information
at the right time that will allow a vendor to better service your needs. This may
include limited forecast information, new product launches, changes in design and
expansion or relocation changes, just to name a few

2. Balance Commitment and Competition

One of the goals in vendor management is to gain the commitment of your

vendors to assist and support the operations of your business. On-the-other-hand,
the vendor is expecting a certain level of commitment from you. This does not
mean that you should blindly accept the prices they provide. Always get
competitive bids.

3. Allow Key Vendors to Help You Strategize

If a vendor supplies a key part or service to your operation, invite that

vendor to strategic meetings that involve the product they work with. Remember,
you brought in the vendor because they could make the product or service better
and/or cheaper than you could. They are the experts in that area and you can tap
into that expertise in order to give you a competitive advantage.

4. Build Partnerships For The Long Term

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 Vendor management seeks long term relationships over short term gains and
marginal cost savings. Constantly changing vendors in order to save a penny here
or there will cost more money in the long run and will impact quality. Other
benefits of a long term relationship include trust, preferential treatment and access
to insider or expert knowledge.

5. Seek to Understand Your Vendor's Business Too

Remember, your vendor is in business to make money too. If you are

constantly leaning on them to cut costs, either quality will suffer or they will go out
of business. Part of vendor management is to contribute knowledge or resources
that may help the vendor better serve you. Asking questions of your vendors will
help you understand their side of the business and build a better relationship
between the two of you.

6. Negotiate to a Win-Win Agreement

Good vendor management dictates that negotiations are completed in good

faith. Look for negotiation points that can help both sides accomplish their goals. A
strong-arm negotiation tactic will only work for so long before one party walks
away from the deal.
7. Come Together on Value

Vendor management is more than getting the lowest price. Most often the
lowest price also brings the lowest quality. Vendor management will focus quality
for the money that is paid. In other words: value! You should be willing to pay
more in order to receive better quality. If the vendor is serious about the quality
they deliver, they won't have a problem specifying the quality details in the
contract.

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 CHAPTER – II
REVIEW OF LITERATURE
Inventory Definition
Inventory is the total amount of goods and/or materials contained in a store
or factory at any given time. Store owners need to know the precise number of
items on their shelves and storage areas in order to place orders or control losses.
Factory managers need to know how many units of their products are available for
customer orders. Restaurants need to order more food based on their current
supplies and menu needs. All of these business rely on an inventory count to
provide answers.

The word 'inventory' can refer to both the total amount of goods and the act
of counting them. Many companies take an inventory of their supplies on a regular
basis in order to avoid running out of popular items. Others take an inventory to
insure the number of items ordered matches the actual number of items counted
physically. Shortages or overages after an inventory can indicate a problem with
theft (called 'shrinkage' in retail circles) or inaccurate accounting practices.

Restaurants and other retail businesses which take frequent inventories may
use a 'par' system based on the results. The inventory itself may reveal 10 apples,
12 oranges and 8 bananas on the produce shelf, for example. The preferred number
of each item is listed on a 'par sheet', a master list of all the items in the restaurant.
If the par sheet calls for 20 apples, 15 oranges and 10 bananas, then the manager
knows to place an order for 10 apples, 3 oranges and 2 bananas to reach the par
number. This same principle holds true for any other retail business with a number
of different product lines.

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 Companies also take an inventory every quarter in order to generate numbers
for financial reports and tax records. Ideally, most companies want to have just
enough inventory to meet current orders. Having too many products languishing in
a warehouse can make a company look less appealing to investors and potential
customers. Quite often a company will offer significant discounts if the inventory
numbers are high and sales are low. This is commonly seen in new car dealerships
as the manufacturers release the next year's models before the current vehicles on
the lot have been sold. Furniture companies may also offer 'inventory reduction
sales' in order to clear out their showrooms for newer merchandise

Concept & Importance of Inventory

Inventory is defined as a usable resource which is physical & tangible such
as material. The term inventory is comprehensive. Though it is a usable resource, it
is idle resource also, unless it is managed efficiently & effectively. Inventory
management boils down to maintaining an adequate stock to meet expected
demand pattern subject to budgeting considerations. Inventory could be raw
material, work – in – progress (WIP), finished products or spare parts & many
other indirect materials. Effectiveness of production functions depend to a large
extent Annual Demand upon inventory management. Inventory turnover ratio is an
index of business Average Inventory performance. Sound management gives a
higher inventory turn over ratio.
Inventories have to be procured, stored & carried for a production system,
since a situation when they can be instantaneously available is difficult to assume
in business environment.
Inventories constitute the largest component of current assets in a production
organization. In a manufacturing unit, inability to supply an item from inventory
could bring production to halt and could adversely affect the business prospects of
the organization. On the other hand excessive inventory added carrying cost may
reduce the profit margin. Efficient inventory control can therefore significantly
contribute to the overall profit-position of the organization.
"Inventory" to many small business owners is one of the more visible and
tangible aspects of doing business. Raw materials, goods in process and finished
goods all represent various forms of inventory. Each type represents money

Purpose of inventory management

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 o how many units to order

o when to order

Nature of Inventory
 Two Fundamental Inventory Decisions
 Terminology of Inventories
 Independent Demand Inventory Systems
 Dependent Demand Inventory Systems
 Inventory Costs

Types of Inventory
 Raw materials

 Purchased parts and supplies

 Work-in-process (partially completed) products (WIP)

 Items being transported

 Tools and equipment

A physical resource that a firm holds in stock with the intent of selling it or
transforming it into a more valuable state.
• Raw Materials

• Works-in-Process

• Finished Goods

Finished Goods

 Essential in produce-to-stock positioning strategies

 Necessary in level aggregate capacity plans
 Products can be displayed to customers

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Work-in-Process

 Necessary in process-focused production

 May reduce material-handling & production costs
Raw Material

 Suppliers may produce/ship materials in batches

 Quantity discounts and freight/handling $$ savings

Reasons for Inventories

 Improve customer service

 Economies of purchasing

 Economies of production

 Transportation savings

 Hedge against future

 Unplanned shocks (labor strikes, natural disasters, surges in demand, etc.)

 To maintain independence of supply chain

Inventory and Value

 Remember this?

 Quality

 Speed

 Flexibility

 Cost

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Nature of Inventory: Adding Value through Inventory

 Quality - inventory can be a “buffer” against poor quality; conversely, low

inventory levels may force high quality

 Speed - location of inventory has gigantic effect on speed

 Flexibility - location, level of anticipatory inventory both have effects

 Cost - direct: purchasing, delivery, manufacturing

indirect: holding, stockout.

HR systems may promote this-3 year postings

Nature of Inventory:
Functional Roles of Inventory

 Transit

 Buffer

 Seasonal

 Decoupling

 Speculative

 Lot Sizing or Cycle

Why We Do Not Want to Hold Inventories

Certain costs increase such as

 carrying costs
 cost of customer responsiveness
 cost of coordinating production
 cost of diluted return on investment
 reduced-capacity costs
 large-lot quality cost

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  cost of production problems

Two Fundamental Inventory Decisions

How much to order of each material when orders are placed with either
outside suppliers or production departments within organizations

When to place the orders.

Inventory Costs
 Carrying cost

 cost of holding an item in inventory

 Ordering cost

 cost of replenishing inventory

 Shortage cost

 temporary or permanent loss of sales when demand cannot be met

Inventory Control Systems

 Continuous system (fixed-order-quantity)

 constant amount ordered when inventory declines to predetermined

level

 Periodic system (fixed-time-period)

 order placed for variable amount after fixed passage of time

 Inventory-A physical resource that a firm holds in stock with the intent of
selling it or transforming it into a more valuable state.

 Inventory System- A set of policies and controls that monitors levels of

inventory and determines what levels should be maintained, when stock
should be replenished, and how large orders should be

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 Inventory Management must be designed to meet the dictates of market place
and support the company’s Strategic Plan . The many changes in the market
demand , new opportunities due to worldwide marketing , global sourcing of
materials and new manufacturing technology means many companies need to
change their Inventory Management approach and change the process for
Inventory Control .

Inventory Management system provides information to efficiently manage the

flow of materials , effectively utilize people and equipment , coordinate internal
activities and communicate with customers . Inventory Management does not make
decisions or manage operations, they provide the information to managers who
make more accurate and timely decisions to manage their operations.

INVENTORY is defined as the blocked Working Capital of an organization in

the form of materials . As this is the blocked Working Capital of organization,
ideally it should be zero. But we are maintaining Inventory . This Inventory is
maintained to take care of fluctuations in demand and lead time. In some cases it is
maintained to take care of increasing price tendency of commodities or rebate in
bulk buying.

Traditional Supply Chain solutions such as Materials Requirement Planning ,

Inventory Control , typically focuses on implementing more rapid and efficient
systems to reduce the cost of communicating information between and across the
Inventory links in the SCM.COM focuses in optimizing the total investment of
materials cost and workload for every Inventory item throughout the chain from
procurement of raw materials to finished goods Inventory . Optimization means
providing a balance of supply to meet the demand at a minimum total cost ,
Inventory level and workload to meet customers service goal for each items in the
link of Inventory Chain .

It is strategic in the sense that top management sets goals . These include
deployment strategies ( Push versus Pull ) , control policies , the determination of
the optimal levels of order quantities and reorder points and setting safety stock

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levels . These levels are critical , since they are primary determinants of customer
service levels.

Keeping in view all concerns , the latest concept of Vendor Managed Inventory
is used to optimize the Inventory . We are entering into Vendor Managed Inventory
, Annual Rate Contracts with manufacturers or their authorized dealers , who
maintain Inventory on our behalf and supply the items as and when required .

VMI reduces stock-outs and optimize inventory in supply chain . Some features of
VMI include :

• Shortening of Supply Chain

• Centralized Forecasting
• Frequent communication of inventory, stock-outs and planned promotions
• Trucks are filled in a prioritized order , e.g. items that are expected to stock out
have top priority then items that are furthest below targeted stock levels then
advance shipments of promotional items

Despite the many changes that companies go through, the basic principles of
Inventory Management and Inventory Control remain the same. Some of the new
approaches and techniques are wrapped in new terminology, but the underlying
principles for accomplishing good Inventory Management and Inventory activities
have not changed.

The Inventory Management system and the Inventory Control Process

provides information to efficiently manage the flow of materials, effectively utilize
people and equipment, coordinate internal activities, and communicate with
customers. Inventory Management and the activities of Inventory Control do not
make decisions or manage operations; they provide the information to Managers
who make more accurate and timely decisions to manage their operations.

Inventory management is primarily about specifying the size and placement of

stocked goods. Inventory management is required at different locations within a
facility or within multiple locations of a supply network to protect the regular and

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planned course of production against the random disturbance of running out of
materials or goods. The scope of inventory management also concerns the fine
lines between replenishment lead time, carrying costs of inventory, asset
management, inventory forecasting, inventory valuation, inventory visibility, future
inventory price forecasting, physical inventory, available physical space for
inventory, quality management, replenishment, returns and defective goods and
demand forecasting.

Other definitions of inventory management from across the web:

 Involves a retailer seeking to acquire and maintain a proper merchandise

assortment while ordering, shipping, handling, and related costs are kept in
check.
 Systems and processes that identify inventory requirements, set targets,
provide replenishment techniques and report actual and projected inventory
status.
 Handles all functions related to the tracking and management of material.
This would include the monitoring of material moved into and out of
stockroom locations and the reconciling of the inventory balances. Also may
include ABC analysis, lot tracking, cycle counting support etc.
 Management of the inventories, with the primary objective of
determining.controlling stock levels within the physical distribution function
to balance the need for product availability against the need for minimizing
stock holding and handling costs.
 In business management, inventory consists of a list of goods and materials
held available in stock.
 An inventory can also be a self examination, a moral inventory.

INVENTORY MANAGEMENT must tie together the following objectives ,to

ensure that there is continuity between functions :

• Company’s Strategic Goals

• Sales Forecasting
• Sales & Operations Planning

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• Production & Materials Requirement Planning.

Functions that Inventory Performs

In any organization, inventories add an operating flexibility. Work-in-progress
inventories are a must for any production unit. Functions that are performed by
inventories are summarized as under: -

(a) Regular demand & supply – Stocking of raw material for future
anticipated consumption, more so to cater for the time period when supply
may become lean or non-existence is imperative. This is mostly applicable
for agricultural products which are available during harvest season.
Sugarcane, tobacco, rice industries or coal, metal ores which can not be
easily mined during rainy seasons etc. are some of the example.

(b) Economising purchases – If the product does not have sufficient demand
to sustain continuous production round the year, it is usually produced in
batches or lots, on intermittent basis. Inventory of raw material is created
accordingly. During the time when production is not taking place, sales are
made from the inventory of ready items which is accumulated while the
production is on.

(c) Allowing organizations to cope with perishable material -

Organizations selling canned & bottled food materials, especially fruits &
vegetables, operate at peak production capacity only for a few months each
year. They must procure adequate raw material during production season &
in turn create so mush ready stock so as to last them till such time next
production season starts.

(d) Inventory can store labour - This is primarily continuing with production
through out the year & create sufficient inventory of ready material to cater
for peak anticipated demand in season of maximum purchases by
customers. This is applicable in case of seasonal clothing, electrical
appliances etc.

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Benefits:

• Help reduce purchasing and inventory costs. Connect inventory control,

purchasing, and sales order processing with demand planning and help reduce
costs, improve cash flow, and help ensure that you have the right stock available
when you need it.

• Gain visibility into inventory processes. Effectively balance availability with

demand and track
items and their possible expiration dates throughout the supply chain to help
minimize on-hand inventory, optimize replenishment, and increase warehouse
efficiency.

• Improve customer satisfaction. Make more accurate order promises and

intelligent last-minute exceptions with access to up-to-date inventory information.
Respond quickly and knowledgably to customer queries for improved customer
service.

• Reduce time to market. With integrated order, inventory, and distribution

processes, as well as item tracking capabilities, your business can reduce manual
data entry and get your goods to market fast.

Vendor-managed inventory (VMI)

Vendor-managed inventory (VMI) is a family of business models in which the

buyer of a product provides certain information to a supplier of that product and
the supplier takes full responsibility for maintaining an agreed inventory of the
material, usually at the buyer's consumption location (usually a store). A third party
logistics provider can also be involved to make sure that the buyer has the required
level of inventory by adjusting the demand and supply gaps.

As a symbiotic relationship, VMI makes it less likely that a business will

unintentionally become out of stock of a good and reduces inventory in the supply
chain. Furthermore, vendor (supplier) representatives in a store benefit the vendor
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by ensuring the product is properly displayed and store staff are familiar with the
features of the product line, all the while helping to clean and organize their
product lines for the store.

One of the keys to making VMI work is shared risk. Often if the inventory does not
sell, the vendor (supplier) will repurchase the product from the buyer (retailer). In
other cases, the product may be in the possession of the retailer but is not owned by
the retailer until the sale takes place, meaning that the retailer simply houses (and
assists with the sale of) the product in exchange for a predetermined commission or
profit. A special form of this commission business is scan-based trading whereas
VMI is usually applied but not mandatory to be used.

This is one of the successful business models used by Wal-Mart and many other
big box retailers. Oil companies often use technology to manage the gasoline
inventories at the service stations that they supply (see Petrolsoft
Corporation).Home Depot uses the technique with larger suppliers of manufactured
goods (ie. Moen, Delta, RIDGID, Paulin). VMI helps foster a closer understanding
between the supplier and manufacturer by using Electronic Data Interchange
formats, EDI software and statistical methodologies to forecast and maintain
correct inventory in the supply chain.

Vendors benefit from more control of displays and more contact to impart
knowledge on employees; retailers benefit from reduced risk, better store staff
knowledge (which builds brand loyalty for both the vendor and the retailer), and
reduced display maintenance outlays

Consumers benefit from knowledgeable store staff who are in frequent and familiar
contact with manufacturer (vendor) representatives when parts or service are
required, store staff with good knowledge of most product lines offered by the
entire range of vendors and therefore the ability to help the customer choose
amongst competing products for items most suited to them, manufacturer-direct
selection and service support being offered by the store

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Successful Inventory Management

 Successful inventory management involves balancing the costs of inventory

with the benefits of inventory. Many small business owners fail to appreciate
fully the true costs of carrying inventory, which include not only direct costs
of storage, insurance and taxes, but also the cost of money tied up in
inventory. This fine line between keeping too much inventory and not
enough is not the manager's only concern. Others include:

 Maintaining a wide assortment of stock -- but not spreading the rapidly

moving ones too thin;

 Increasing inventory turnover -- but not sacrificing the service level;

 Keeping stock low -- but not sacrificing service or performance.

 Obtaining lower prices by making volume purchases -- but not ending up

with slow-moving inventory; and

 Having an adequate inventory on hand -- but not getting caught with

obsolete items.

 The degree of success in addressing these concerns is easier to gauge for

some than for others. For example, computing the inventory turnover ratio is
a simple measure of managerial performance. This value gives a rough
guideline by which managers can set goals and evaluate performance, but it
must be realized that the turnover rate varies with the function of inventory,
the type of business and how the ratio is calculated (whether on sales or cost
of goods sold). Average inventory turnover ratios for individual industries
can be obtained from trade associations.

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CONTROLLING YOUR INVENTORY

 To maintain an in-stock position of wanted items and to dispose of unwanted

items, it is necessary to establish adequate controls over inventory on order
and inventory in stock. There are several proven methods for inventory
control. They are listed below, from simplest to most complex.

 ! Visual control enables the manager to examine the inventory visually to

determine if additional inventory is required. In very small businesses where
this method is used, records may not be needed at all or only for slow
moving or expensive items.

 ! Tickler control enables the manager to physically count a small portion of

the inventory each day so that each segment of the inventory is counted
every so many days on a regular basis.
 ! Click sheet control enables the manager to record the item as it is used on a
sheet of paper. Such information is then used for reorder purposes.

 ! Stub control (used by retailers) enables the manager to retain a portion of

the price ticket when the item is sold. The manager can then use the stub to
record the item that was sold.

 As a business grows, it may find a need for a more sophisticated and

technical form of inventory control. Today, the use of computer systems to
control inventory is far more feasible for small business than ever before,
both through the widespread existence of computer service organizations
and the decreasing cost of small-sized computers. Often the justification for
such a computer-based system is enhanced by the fact that company
accounting and billing procedures can also be handled on the computer.

 ! Point-of-sale terminals relay information on each item used or sold. The

manager receives information printouts at regular intervals for review and
action.

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  ! Off-line point-of-sale terminals relay information directly to the supplier's
computer who uses the information to ship additional items automatically to
the buyer/inventory manager.

 The final method for inventory control is done by an outside agency. A

manufacturer's representative visits the large retailer on a scheduled basis,
takes the stock count and writes the reorder. Unwanted merchandise is
removed from stock and returned to the manufacturer through a
predetermined, authorized procedure.

Developments In Inventory Management

 In recent years, two approaches have had a major impact on inventory

management: Material Requirements Planning (MRP) and Just-In-Time (JIT
and Kanban). Their application is primarily within manufacturing but
suppliers might find new requirements placed on them and sometimes
buyers of manufactured items will experience a difference in delivery.

 Material requirements planning is basically an information system in which

sales are converted directly into loads on the facility by sub-unit and time
period. Materials are scheduled more closely, thereby reducing inventories,
and delivery times become shorter and more predictable. Its primary use is
with products composed of many components. MRP systems are practical
for smaller firms. The computer system is only one part of the total project
which is usually long-term, taking one to three years to develop.

 Just-in-time inventory management is an approach which works to eliminate

inventories rather than optimize them. The inventory of raw materials and
work-in-process falls to that needed in a single day. This is accomplished by
reducing set-up times and lead times so that small lots may be ordered.
Suppliers may have to make several deliveries a day or move close to the
user plants to support this plan.

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TIPS FOR BETTER INVENTORY MANAGEMENT

 At time of delivery

 Verify count -- Make sure you are receiving as many cartons as are listed on
the delivery receipt.

 Carefully examine each carton for visible damage -- If damage is visible,

note it on the delivery receipt and have the driver sign your copy.

 After delivery, immediately open all cartons and inspect for merchandise
damage.

 When damage is discovered

 Retain damaged items -- All damaged materials must be held at the point
received.

 Call carrier to report damage and request inspection.

 Confirm call in writing--This is not mandatory but it is one way to protect

yourself.

 Carrier inspection of damaged items

 Have all damaged items in the receiving area -- Make certain the damaged
items have not moved from the receiving area prior to inspection by carrier.

 After carrier/inspector prepares damage report, carefully read before

signing.

 After inspection

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Inventory Costs

There are four types of costs those are considered while calculating inventory size:
(a) Holding (carrying) cost – This relates to those costs which are incurred to
carry the inventory items in stock for a period of time. It is expressed as a
%age of rupee value per unit of time. An annual holding cost of 15% will
mean that it will cost Rs. 15 to hold Rs. 100 of inventory for a year. This
broadly includes costs for storage, handling, insurance, pilferage, breakage,
obsolescence, depreciation, taxes etc. & the opportunity cost of capital.
When items are carried in the inventory, the capital is tied up & is not free
to be invested in other things – a case of foregone opportunity for other
investments.

(b) Set up (production charge) – Production of different kinds of products

require procurement of necessary material, arrangement of specific
equipment set up, filing of required papers, charging time for material &
moving out previous stock of material.
When set up costs are heavy, there is economy in having large runs. Set up
time can be reduced by changes in production system & the product.
Though set cost is considered fixed, it can be changed by changing the
design & management of operations. When there is no cost in changing
from product to product, smaller lots are feasible, thus reducing inventory
costs
(c) Ordering cost – These are costs associated with the placement of an order.
This cost practically remains same, irrespective of the item ordered. These
costs include clerical cost or making an order, expediting it, tracking it,
receiving & the cost of transportation. Transportation cost, tracking the
order are also ordering cost.

(d) Stock out costs – There is an economic cost when a firm runs out of stock.
If customer has to wait for an item, there is loss of instant & future
business. It is an opportunity loss as well. When an item is not in stock, it
can not be sold to customer till such time stock is replenished. There is a
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 trade off between carrying cost to satisfy customer demand & costs
resulting from loss of business form customers.

CHAPTER – III
INDUSTRY PROFILE
The Need of Technology Advancement in medical Billing Software

The efficient operation / management of a crowded Chemist Shop which is

dealing with a huge number of prescriptions, depends on the factors like the
number of efficient staffs to handle the customers or the implementation of the
appropriate software technology. MARG conducted a survey across the Indian
Cities by its Senior Doctors & Chemists as a first step of preparing the software.
According to the survey their priorities are:
 Rapid Speed Billing & Best Crowd Handling / Rush Hour Handling
 Dump Stock Handling
 Report on Fast Moving Items & Slow Moving Items
 Report on Fruitful Investment on the Products
 Expiry Item Handling
 Who is Best Supplier?
 Best Cash Handling
 Best Prescription Handling
 Substitute Medicines
 Monitoring the Cash Handling & Stock Handling
 24 x 7 After Sales Service

Maharashtra State Druggists and Chemists Association Objectives

The Objects for which the association is established are :

 To aid and develop pharmaceutical education in all its branches and to co-
ordinate the functioning of all the district associations of Chemists &
Druggists in Maharashtra.
 To Promote the scientific study of all branches of drug trade industry and
allied trades and with a view there to establish, maintain or help in the
establishment or maintenance of medical and pharmaceutical organizations,
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 laboratories, research arrangements, seminars refresher courses and also
foundation and endowment of studentships or scholarships and to take over
the management of such associations formed for similar objective.
 To encourage and assist the drug trade, industry & allied trades in the
diffusion of useful knowledge by arrangement and provision of rooms
holding of exhibitions, meetings and conferences, lectures, printing and
publishing of news paper, periodicals, journals, bulletins, leaflets, books,
publishing house circulars etc.
 To collect and circulate statistics and all other such information relating to
the drug trade industry and allied trades.
 To establish and maintain or to help in the establishment or maintenance of
libraries and reading rooms for general use of the members of the
association and all those engaged in the drug trade, industry and allied
trades.
 To take necessary steps to safeguard the interest of the public in all possible
ways particularly against misbranded, sub-standard or spurious drugs and
medicines or help in the undertaking of legal action in such matter singly or
in co-operation with others.
to promote and protect the interests of drug trade and allied lines in
Maharashtra and of persons engaged therein.
 To promote the development of pharmaceutical trade.
To elect or nominate representatives to legislatures, public or private bodies,
committees etc.
 To subscribe to or become member of and co-operate with or amalgamate
either wholly or partially with All India Association of Pharmaceutical
and/or allied trade, wiz (AIOCD) whether incorporated or in part similar to
those of this association or to help them financially.
 To alter, extend or abridge any of the purposes mentioned in the
memorandum accept any other purposes as may think fit by the association.
 To develop and maintain friendly relations amongst its members and all
persons engaged in the pharmaceutical trade and allied trades and profession
and also government medical, mercantile or other public or private bodies
individuals.

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 To maintain and establish uniformity in rules, regulations usages of the trade
and the profession.
 To undertake or help in undertaking propaganda or publicity work in any
part in any way on behalf of the trade and also all merchandise, singly or
along with others.
 To form or constitute or take over any "chain of medical stores" or any
pharmaceutical marketing unit or co-operative trading and marketing
society.
 To acquire or purchase or buy exclusive marketing rights or marketing rights
of any pharmaceutical or healthcare product or products. (new additions)
o In order to achieve the above objects 'the association' shall have the
following powers.
o To acquire, purchase, lease, hire or otherwise, lands, buildings, and
other property movable or immovable to construct, maintain or alter
any house, buildings or lands or works necessary for the purpose of
the association as it might think necessary from time to time.
o To accept request, gifts, donations and subscriptions or provide funds
or endowment for the benefit of 'the association' or for any specific
purpose as it might think fit.
o To sell, let out, improve, develop, exchange, lease, mortgage or
dispose off or turn to account otherwise deal in or with property of
'the association'.
o To invest all monies not immediately required for the purposes of its
business upon such securities or in such manner as may from time to
time and to make donations as and when think fit by it.
 To organize extensive lectures, seminars, refresher courses by eminent
persons in the field of medicines, pharmacy and allied subjects and
specialized ailment diagnosis methods.
 To organize suitable medical relief in areas affected by malnutrition
epidemics and other natural calamities. (Tours for omitted)
o To borrow or raise money required for the purpose of 'the association'
upon such terms and in such manner and on such securities as may be
determined.

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 o To make, accept, endorse, execute issue and negotiate promissory
notes, bills of exchange debentures and other negotiable instruments.
o To raise money by subscription or otherwise and to grant right and
privileges to the members.
o To do all such other acts, as may be conducive to the objects stated in
the memorandum or to any one of them.

Existing System in the Market

 Dava Plus

 Marg

 Quick Soft

 Allied

Dava Plus Overview

DavaPlus software is a comprehensive solution designed to automate the
activities of Medical/Pharmaceutical Retailers, Distributors and C F Agents.
DavaPlus has the Capability to administer the total enterprise and efficiency and
manage information. It is designed with an easy-to-use user interface. DavaPlus is
an automated system for any large/medium Pharmaceutical Retailers, Distributors
and C F Agents. It covers Complete Customer Management, Inventory Reporting,
Cashier with integrated accounts, Product database etc. Thus this software is a
Complete MIS tool for pharmaceutical business management/medical stores-shops
management/pharmacy management/retail chemists & druggists management.

DavaPlus is developed in state of art technology. Listed are few of the

functionalities that DavaPlus caters to:

 Daily business functions are made easy.

 Purchase, Sales, Cash receipts/payments, Cheque receipts/payments.
 Stock, sales, Inventory and MIS Reports using crystal reports.
 Information list views for faster data location.
 Multi-user and Internet enabled, Comprehensive reporting.

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  Easy-to-use User friendly Graphical user interface.
 Stringent data security and easy recovery in case of a system failure.
 On line help has been provided for each and every screen.
 Faster accessing, accuracy, more efficiency, more security.
 Better service to customer Enhanced administration and control.
 Cost control and improved profitability.
 VAT Compatible software.

Technical Overview...

DavaPlus along with DavaNet is a product suite that caters to the need of
Pharma supply chain management.
DavaPlus, developed in Microsoft Visual Basic
Why Microsoft Visual Basic?

There are quite a number of reasons:

 VB is not only a language but also primarily an integrated, interactive

development environment ("IDE")
 The VB-IDE has been highly optimized to support rapid application
development ("RAD"). It is particularly easy to develop graphical user
interfaces and to connect them to handler functions provided by the
application.
 The graphical user interface of the VB-IDE provides intuitively
appealing views for the management of the program structure in the
large and the various types of entities (classes, modules, procedures,
forms...).
 VB provides a comprehensive interactive and context-sensitive online
help system.
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  When editing program texts the "IntelliSense" technology informs you
in a little popup window about the types of constructs that may be
entered at the current cursor location.
 VB is a component integration language, which is attuned to
Microsoft's Component Object Model ("COM").
 COM components can be written in different languages and then
integrated using VB.
 Interfaces of COM components can be easily called remotely via
Distributed COM ("DCOM"), which makes it easy to construct
distributed applications.
 COM components can be embedded in / linked to your application's
user interface and also in/to stored documents (Object Linking and
Embedding "OLE", "Compound Documents”).
 DavaPlus’s backbone is the very powerful SQL database. We utilize SQL
Server 2000, which supports hundreds and thousands of users or tens of
gigabytes of data. It also offers enterprise class reliability along with
dynamic backup and restore. It is the most popular relational database on
Microsoft Windows. It also has significant new security enhancements, by
not only offering the highest level of security available in the industry, but
by also making it much easier to achieve that level.
According to Microsoft, “SQL Server 2000 can give you over one million
transactions”

 DavaPlus also supports Microsoft Access database as back-end, which is

very handy for single-user or a small-scale user.

 DavaPlus incorporates Crystal Reports, an industry standard, that changes

the way you interact with your data. We have standard reports with unique
criteria for analysis and decision-making. Each report highlights the key
components of your business data and provides you with a bird’s eye view of
the direction your business is heading. Reports are broken in to parts of your
business, such as List, Sales, Purchase, Stocks, Accounts and Final Accounts
reports so it's easy for you to grab the report you need. Crystal Reports
provides more data connectivity and control options. You can integrate
Crystal Reports with your B2B or B2C applications via XML access or
export. You can also process reports faster and use network resources more
efficiently since Crystal Reports uses multi-threaded report processing

41 | P a g e
 capabilities. DavaPlus users have the opportunity to export reports formatted
the way they want. Export reports to popular formats, including:
· XML
· PDF
· Excel
· Word
· RTF
Our ReportManager uses your inventory’s data to create reports. One easy
glance shows you how much stock is currently on customer orders, on
vendor orders and the stock in hand to sale. The Sales Reports of Customer
and Products give you a strong business tool to further evaluate your
business processes and increase sales. Easily set the criteria for each report
generation. DavaPlus has reports that give you an in depth view of your
inventory, that assist you in the analysis of the data from your returns
department, alert you about product re-order levels, organize your customer
price lists and much more. A complete breakdown of you data enhances your
business’s capability in understanding the data flow.


DavaPlus also uses XML technology.
The use of XML—an open standard managed by the World Wide Web
Consortium (W3C)—removes barriers to data sharing and software
integration. XML makes it easy to exchange data, and our design technology
enables us to customize DavaPlus functionality by little changes in these
XML files. Though an external entity, these supporting XML files form the
basic support for DavaPlus.

System Requirements...

DavaPlus is a desktop application, which means if you the following

hardware and software set onto your desktop or laptop then you will be able to use
DavaPlus. Following is the list hardware and software that we recommend for you
to use DavaPlus efficiently:
Pentium IV 1GHz with at least 256MB of RAM
CD-ROM with 32-bit driver
The Regional Settings in the control panel, the short date format should be set to
DD/MM/YY format
Windows 98* SE, ME, 2000, 2003 or XP

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At least 256 color SVGA video
Minimum 800x600 resolution with normal fonts of 96 dpi
Any DMP printer, which supports draft mode printing
Multiple-user version, Network required

Medical Shop Management Software(Quick soft)

Over the years, you have been running retail business very successfully. The art
of retail management is not new to you, it is only the different way we look at it.
The following compelling facts will give you the missing dimension perhaps worth
giving attention to.
1. The Overall volume of your business has grown exponentially. The items
and the suppliers you have been dealing have grown in numbers. Day by day
it is becoming increasingly difficult to manage it with the current method of
running business.
2. All your business partners have joined the technology bandwagon and they
have changed their style of business. Even your customers are demanding
the speed with which you need to respond and deliver. Tomorrow they will
expect you to take orders on web and so on.
3. The use of Computers, Bar Code readers/printers/scanner enabled software
will only simplify your business needs and will help you sustain your current
leadership status.
4. Quicksoft Art-RM lets you computerized from day one without delay of keying in Bulky data and
moreover you don’t need to use separate software for accounting and inventory
purposes,making it a perfect point-of-sale solution

Key Features at a Glance:

1) Simple & Intuitive

2) Automated Entry:
You need not bother about which account has to be debited or credited since the system
automatically takes care of :
a) Debit & Credit Voucher
b) Journal Voucher(VJ)
c) TDS Voucher
d) Contra Entries & Transfer Voucher
e) Sales & Purchase

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 f) Debit Note &Credit Note
Also you need not worry about Accounting codes / Serial no of voucher etc.
since the system auto-generates the same.
3) No Limits:

The software enables you to work on multiple companies with a provision of

accounting for:

a) Multiple Location
b) Multiple Batches
c) Multiple Godown Per Location
d) Multiple Barcode handling
e) Multiple Units of Measurement
f) Attend Multiple Customers/Invoices
4) Day Books:

The system does online posting to respective account and thereby provides upto date
Accounts Receivable/Accounts Payable and Trial Balance every time.

5) Inventory:
a) Barcoding of your products in user defined format.Allows you to scan barcode of
different type(i.e. system generated,mrf. Barcode,product code etc.) and lets you
save on barcode printing for the products having manufacturer barcode.
b) Stock Ledger
c) Stock movement statement: Online stock information of selected products for
chosen warehouse and UOM. Lets you Track Inter Warehouse Stock Movement
d) Warehouse Management : Allows user to sale products for multiple Godown and
Auto Transfer goods from one warehouse to another.
e) Online stock status with P.O generation to preferred vendor for multiple items
f) Batch Management: The system takes care of different prices,expiry,barcode for
different batches.You always get up-to-date stock for different items with
different batches and their units of measurement lying at different shelf in
different warehouses.
g) Expiry Management: The system lets user enter the manufacturing and expiry
date for the product during entry of opening stock,stock-in(delivery
challen/GAN/GIRN) and sales transaction. The system also gives report showing
the list of products expiring after a specified no. of days. The system also doesn't
allow to sale the products already expired.

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 h) Sale in loose: The system allows to sale the products in loose form by
automatically converting product to least selling units of measurement. In the
sales invoice form, the stock avaliable in different UOM can be seen by toggling
for different UOMs.
i) Stock Taking :Allow you to tally your physical stock with computer stock and
lets you update your purchase/sale/stock data,intelligently and with ease.
6) Customer Relationship Management:

a) The software helps you to maintain customer master with personal details of the
customer.
b) Customer Analysis(their buying patterns)
c) Keep in touch with the customer's by wishing them on their important
dates,sending regular news letters etc.
d) Allows you to take orders on phone/through email.
7) Future Ready:

The system is barcode enabled,thereby allowing you to recall all your products with speed and
ease.It has an inbuilt browser for surfing.It supports many other input/output devices.

8) User Interface
a) Very Easy to Use
b) Soothing Graphical User Interface with Context Sensitive Help
c) Totally Menu Driven, with Keyboard Shortcuts for frequently used forms
d) Multi-User
e) Allows you to buy in bulk & sell in loose
f) All reports for specified period selected using calender
g) Simplified Edit / Delete using Mouse Right Button
h) Data view in tabular form to check the correctness of entries made
h) Zoom to Voucher Direct from Trial Balance just by Double clicking the mouse
button
i) Users manual with Online Support and email support
j) Updates available from website
k) Internet Surfing / Email / FTP from within the accounting software
9) Data Management
a) Data Import and Export Facility
b) Excellent Data Management
c) Simplified data back-up,auto back-up on daily basis.

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 d) Send / Receive Data of your branches spread across the Country
e) User level/Form level screen access for improved security
f) Scalable:available with MS-SQL Version
10) Reports
a) Excellent quality of output for Reports
b) All frequently used reports at the click of a button
c) All reports can be previewed, printed, exported to Excel/Word etc.,or can be
faxed or emailed
d) On Line Trial Balance and Balance sheet at the click of a button
e) On-line & Batch mode voucher & cheque printing
f) Bank Reconciliation report as per the book keeping rules
g) DOS/Fast Printing for Voucher, Invoice printing is available
h) Invoices at lightening speed. Also gives you the comfort of managing multiple
i) customers by allowing you to work on multiple invoices at the same time.
j) Multiple Printer selection from the network
k) Group Consolidation

About MARG Chemist Software

Only MARG Chemist Software which is designed to handle every needs of a
Chemist Shop / Pharmacy in most efficient way. MARG Medical Billing Software,
specially designed for the Chemist Shops, was launched in the market during 2000
(after obtaining quality certification from the Panel of Senior Chemists & Doctors
after thoroughly assessing the software) Since then MARG Chemist Software is
committed to provide the best supporting system for the Pharmacy / Chemist
Business upgrading itself from time to time according to the market needs. MARG
is an ISO 9001:2000 certified company since 1993. As a result of tireless
teamwork, MARG Medical Billing Software achieved the clientele of more than
25000 The incomparable After Sales Service and Training Support is the key
behind its success

Benefits of MARG Chemist Software

a) Complete Medical Inventory & Accounting Management

b) Control on Pilferage, Stocks, Expiry & Claims
c) Easy & Fast Medicine billing with Accuracy
d) Cross check of Purchase Rates, Disc. Deal & Cost
e) Online Sales Tax/NDPS/Drug Reporting
f) Effective Purchase Management to reduce costing

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g) Regular Patient Prescriptions & Reminders
h) Auto Order generation & Best suppliers planning
i) Auto Purchase feeding from Email/CD/Pending Order
j) Substitute/Salt/Location wise search
k) Zero Percent chance of Manual Mistake
l) Best Relations with Patient & Doctors
m) Customers Satisfaction & Business Improvement
n) Integrated Accounting "PAPERLESS CHEMIST SHOP

Allied Overview

Allied Softech Pvt Ltd is a software development house located in

Pune, India. Founded in 1997, The company provides software products for
various industries. We are specialized in providing software products to
Pharmaceutical Trading industry, among others.

We believe that great products come from talented and motivated teams.
And motivated teams are born, and can be nurtured in an environment
conducive to learning and capability building.

This is precisely why we focus our energies towards providing our teams
with abundant opportunities to enhance their technological skills and acquire
deeper knowledge and greater expertise.

With our range of professional development tools and a large library of up-
to-date resources, oursteams have a wealth of knowledge at their disposal.

Powered by superior technological skills acquired in a world-class learning

environment, it is only natural that our teams develop leading-edge products.

o) Excellence

A technology-driven company, committed to delivering value to

customers. We achieve our goals through innovation and by consistently
improving efficiency.

The future of our company depends squarely on the knowledge, imagination,

skills, teamwork and sincerity of our employees. We value these qualities
most highly.
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 We are committed to the highest standards of ethics and integrity.

We assure Quality. Quality of Products, Quality of Relationships, Quality of

our Promises, Quality of Services and Quality of Communications.
p) "Sound people + Cutting edge Technology = Quality Product"
q)
Excellent track record of on-time delivery of high-quality software.

Product Development Attitude and Culture - We effectively combine our

technological skills and deep domain knowledge to build cost-effective
solutions with a shorter lead-time.

Our sharp understanding of business process empowers us to build work

engagement models that deliver real and tangible value especially in
Pharmaceutical industry.

Having been in the technology field for many years, it goes without saying
that our teams possess a sharp understanding and in-depth knowledge of
numerous technological areas including Databases & Web Services.

After analyzing your specific requirements, our professionals leverage their

expertise to design and develop customized, sure-success solutions that
maximize benefits and reduce costs.

Experience

Being into software development business for so many years, we have

expertise in all major and modern technologies used today.

We have been working for pharmaceutical softwares for many years now.
Due to deep knowledge of pharmaceutical trading market, it's no wonder
that we are the leaders in this market.

We have experience of developing softwares in Hotel, Motel, Restaurant,

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 Lodge and Bar industry and we are the only company, which offers a unique
and modular product for this industry.

Our experience in providing softwares with complete Financial &

Accounting features makes us the leader in this kind of software
applications.

Vision

Allied has set a vision to become a premier software company providing

world leadership in software solutions, to be the preferred, trusted and
successful long-term partner to our clients, associates and our employees.

For this to happen we will stay viable and relevant through practical
innovation and a continuous focus on efficient and consistent execution.

We will strive to attain a leadership position in the markets we choose to

serve by creating innovative and differentiated IT and IT enabled solutions
that are delivered with impeccable quality.

CHAPTER – IV
DATA ANALYSIS & INTERPRETATION

Analysis of Data Collected

After collecting data with the help of questionnaire, the data is analyzed. The data

is analyzed in order to determine following point

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 1. Chemist store using automated and Non automated System.
2. Chemist Store use to track expiry medicine with help of automated system.
3. No. of firm satisfied with the current automated system.
4. Frequency of order placed to vendor by the firm.
5. Various criteria for selecting vendors.
6. Percentage of return on expiry Medicine by vendor to the firm.

Criteria For Selecting Vendor’s

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Medical Store using Automated System
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 Vertical axis=No. of Firms

Percentage of Return on Expiry Medicine by Vendor

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Frequency of order placed to Vendor

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 Horizontal axis=No. of shops
Vertical axis=Frequency

No. of Firms Satisfied with the Current Automated System

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Tracking of Expiry Date with the help of Automated System

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 CHAPTER – V
FINDINGS & CONCLUSION

Drawbacks of Existing System

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  Data Entry problem.

 No pop-up window is shown for expiry medicine/short medicine in main

window.

 No option for banned/un-prescribed medicine.

 No concentrated information at one place.

 No information about vendor performance metrics(i.e delivery time,

discount, availability).

 No option for analysis of sell/purchased medicine on yearly/monthly/weekly

basis.

 No segmentation of medicine in software according to molecules.

Findings

• 61% of the firm select Vendors on the basis of discount Percentage.

• 10% of the firm has left using automated system because of data entry
problem.

• Orders are placed daily mostly by all the firms.

• Mostly all medical store is associated with approximately 35-45 vendors.

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 • 35% of chemist store do not track expiry medicine with the help of
automated system because they feel more convenient in tracking expiry
medicine manually rather than maintaining data for expiry date .

• 51% of vendor are giving 70-80% percent of return in expiry medicine

• Almost all medical store segment there inventory in alphabetical order.

Conclusion & Suggestion

• Existing system are lacking behind in decision making. Various software

developer company should concentrate on adding this feature in the software
specially for vendor performance metric so that it could guide chemist for
placing order to particular vendor.

• Existing System are having no information about Molecule segmentation

and banned/un-prescribed medicine.

APPENDIX-1
QUESTIONNAIRE
Time in: Date

Time out:

1) Personal Details
a) Name of Concerned person:-
……………………………………………………………………………………..
b) Designation of Concerned Person:-
…………………………………………………………………………….
c) Your Qualification:-
…………………………………………………………………………………………
………….

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d) Name of Firm:-
…………………………………………………………………………………………
…………………
e) Address of Firm:-
…………………………………………………………………………………………
…………….
f) Contact No.:-
…………………………………………………………………………………………
……………………
g) E-Mail/Website (if any):-
…………………………………………………………………………………………
….
2) How long you are in this Business?
a) 1-3 years b) 4-9 years c) 10-15 years d) >15 years
3) What is your annual turnover?
a) 1-10 lakhs b) 11- 25 lakhs c) 26-50 lakhs d) >50 lakhs
4) Do you calculate annual/monthly growth rate or not? If yes pls mention…..................
5) Are you having PC in your firm? If yes then how
many………………………………………………
6) Do you maintain data for your inventories/vendors? If yes how
a) Manually (Maintain Register) b) Software(Pls Mention)
…………………………………

7) What is the expenditure of current system (for inventory/vendor)?

a) If software then pls mention installation and maintenance cost monthly/yearly
………………………………………………………………………………………
………………………………………………………………………………………
b) If manually then what is the expenditure in maintaining data for
inventory……………………………………………………………………………
……………………………………………….……………………………………..
8) Are you satisfied with your current system or not?
a) Yes(Mention Reason):-
………………………………………………………………………………………
….…………………………………………………………………………………..
b) No(Mention Reason):-
………………………………………………………………………………………
………………………………………………………………………………………
9) Does your current system provide you with vendor performance metrics or not?
a) Yes b) No
10) What type of reports are generated from current system? ..........................................
11) Are they willing to pay more for new software which will help in managing their
inventories/vendors?

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 a) Yes b) No
12) Is your vendor directly associated with manufacturer or not?
a) Yes b) No c) Some and Some are not…………..
13) Do you keep track of offers/discounts provided by your vendor?
a) Yes b) No
14) How frequent order is placed?
a)Daily b) Alternate c) Weekly d) Monthly
15) What are the criteria’s in which you choose to place an order to particular vendor?
…………………………………………………………………………………………
…………………………………………………………………………………………
……………………………………………………………………………….... ………
16) Vendor provides how much time for returning expiry medicine? How much percent
return on it?
a) Percentage:-
………………………………………………………………………………………
………………………………………………………………………………………
b) Time:-
………………………………………………………………………………………
………………………….
17) Are cutting are return or accepted by dealer after expiry?
a) Yes b) No

APPENDIX-2
BIBLIOGRAPHY

www.justdial.com

www.google.com

www.vendormanagedinventory.com

www.wikipedia.org

www.mindbank.com

Books and Papers

Material Management by K.Shridhar Bhat

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Total Quality Management by S.K.Mandal

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