Harold et al., International Journal of Advanced Engineering Research and Studies E-ISSN

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1 Research Paper INVENTORY MANAGEMENT IN THE OIL INDUSTRY (A CASE OF SHAMIE DREDGING COY. NIGERIA LIMITED) Godwin, Harold C *. and Umeozokwere, Anthony O. Address for Correspondence Department of Industrial and Production Engineering, Nnamdi Azikiwe University, Awka Nigeria ABSTRACT In any production or manufacturing enterprise or service delivery, inventory which is the act of stocktaking could make or mar the profitability of the enterprise. Consequent upon this, a result-oriented and purposefully policy on inventory management must be developed. As far as the implementation of such policy is dependent upon manual efforts, the system could never be free from inherent mistakes that could destroy business success. This research therefore is geared towards elimination of manual implementation of inventory management in the dredging industry, via computerization. In this case, application software CMSDI (Computer Management of Static and Dynamic Inventory) based on Microsoft Access has been developed to give solution. The software (CMSDI) is an interactive one that is easy to understand, network ready for both Local Area Network (LAN) and Website Area Network (WAN), compatible with other applications, easy to customize and accepts data from other databases developed with other applications, highly secured, possess ability to transmit data over the internet that would create the needed checks and balances as well as auditing needs of implementing an inventory management policy. However, from the investigations conducted, no dredging industry uses advanced database management system to operate an inventory system in order to sustain continuous production; this is the reason why many of these industries are out of production for a very long time once there is stock out or major problem is experienced. This is an undesirable situation in production for any industry to maintain its relevance to the society. KEYWORDS: Inventory, Dredging, Microsoft Access, Database. INTRODUCTION All over the world, managers are confronted with the complexities of simultaneously striving to maintain stable production operation, render quality and adequate services to customers and keep investment in stocks and equipment at reasonable levels. In order to keep the investment in stocks and equipment at optimum level, proper inventory management policy must be in place. In any manufacturing industry, there must be some inventory of raw materials, workin-process and finished products that are maintained in order to keep the factory running; and effective management of the inventories is crucial for growth and survival of such industry (Godwin and Onwurah, 2013a). According to Stevenson (2009), Adeyemi and Salami (2010), and Onwurah (2012), the overall goal of inventory management is to have what is needed, when it is needed and to minimize the number of times one is out of stock. As a company grows, two primary inventory problems arise. First, a wider variety of items are maintained in inventory making it difficult for manager to keep track of the inventory. A formal record keeping system will have to be evolved. Besides, as quantities in inventory grow, more space is required to do business and more capital is tied up in inventory. The transition from little or no recordkeeping to a formal inventory system that includes specific ordering policies and a formalized inventory record file is a difficult one for most companies to make. Faced with the increasingly local and global competition, a company that must survive in this competitive world must take effective management of its inventory seriously (Grossman, 2005; Azizul and Anton, 2009; Scott, 2007). Bearing the issue of survival and global competition in mind, will stir any effective management of any company to take a decision on if to continue with manual system of inventory control or use a computerized system that is more efficient in inventory management. Due to the global evolution of Information Technology, the use of computer for effective and efficient inventory management has become indispensable. Across the globe, almost every field has had a touch of computer application. In fact, computers have become indispensable in government, military, business, research and are now regarded as a powerful tool in design and manufacturing (Mukell et al, 1987). As a result, many application packages have been evolved in order to improve on the inventory system available in organizations, as reported by Taha, However, those that have been developed so far are not having enough safeguards as to tap fully the total benefits of a computerized inventory system. For example, Tora (Sybil, 1989) has no feature for security, it is a DOS based program that is difficult to understand, and it has no facility for data sharing on the network. As a result, its use in a large situation like in a dredging firm is not worthwhile. Also, computer software available to perform specific chores is costly and rarely meets specific needs of any setup especially when computer literacy is inadequate (Arshad et al., 2000). Tailor made programs often help; hence the development of this application (CMSDI). Epapala (2009) used A D-based III software to develop an application for managing of stock in Automobile Company in Nigeria. This work was however inconclusive as recommendation was made to design a system that would determine the optimum stocked materials. Godwin and Onwurah (2013b) developed a simplified computerized inventory control model/system using Microsoft Excel package. They emphasized that their model gives instant update of inventory status at any point in time. The system although efficient in updating inventory status, does not put into consideration inventory in transit. In the same capacity, various applications have been developed by various other institutions in Nigeria to manage stock but all are still embedded with the problem of slow in operation and inability to manage large volume of data. Hence, this study is aimed at development of application software that can be more efficient in operation and in management of large volume of data. This study employed Microsoft Access in development of application software - Computer Management of Static and Dynamic Inventory (CMSDI) that is more efficient in operation and in management of large volume of data in Dredging

2 Industries. CMSDI has the following advantages over and above similar packages that have until now been developed: (1) Ease of understanding (2) Possible to transmit data over the internet (3) Easy to customize (4) Highly secured database (5) Network Ready (Both LAN and WAN) (6) Compatibility with other applications (7) Acceptance of data from other databases developed in other applications etc. The significance of this study lies on the fact that CMSDI will help any company making use of it to have what it is needed, when it is needed and to minimize the number of times it is out of stock. Also, it will help to reduce the capital tied up in inventory. METHODOLOGY In this study, the first step taken was trying to understand the existing system, determining the nature of the problem and the system requirements. Then followed by design phase which involved the selection of software and hardware, design input and output forms. The last step involved development of computer program, testing of computer program with sample and real data. Microsoft Access as the Application Choice for the Database Design Microsoft Access is a collection of data and objects on a particular topic or purpose. A Microsoft Access may contain tables, queries, forms, reports, macros, modules and short cuts to data access pages. Some of the reasons that informed choice of Microsoft Access above other alternatives software for the design of this data base are under-listed: Microsoft Access is compatible with most windows based applications and it can run effectively on a number of operating systems like Linux, Vax, Unix, etc.it is therefore possible to export data from the database to applications like Excel, Lotus, words, word perfect, front page and so on. Microsoft Access as a member of the Microsoft office family is universally popular. With the universal trend in the field of information technology, it is necessary to develop applications that are universally acceptable and can be used everywhere. The application is network ready and can be easily driven on any operating system as stated above. All windows based applications are easy to use because of the graphical user interface nature i.e. the computer execute the macro internally without bothering the user to memorize these commands. The ease in customizing security features in Microsoft Access and assigning different user level permissions is a good feature that is not available in many packages Microsoft Access accepts data from other data bases without altering the structures of the table can accept query built on those data and can generate reports on those data. Design of the Software (CMSDI) Package The database is a collection of information relating to static and dynamic inventory of materials usually used in a dredging industry. The information relating to the database are collected from a variety of sources and stored on a computer from where they can be easily co-ordinate and organized. The database comprises: Tables, Queries, Forms, Reports, Modules, Macro etc. all performing specific functions to achieve the desired objective. Tables are used to collect data about specific topic, such as products, employees, stock location or suppliers. Using separate table for each topic enable the data to store that only once, this makes the database more efficient, and reduces data entry errors. Tables organize data into columns (called fields) and rows (called records).each field in the tables contains the same type of information for every item in the table such as product s name. Each record in the table contains all the information about one product, such as the Name, ID number, Units in stock, and so on. A common field relates two tables so that Microsoft Access can bring together the data from two tables for viewing, editing, or printing. In the products table for instance, the supplier s ID field is included so that when a new product is entered, entering that supplier s unique number can identify its supplier. In the suppliers table you enter a supplier ID, company name and so on for each supplier. Queries as used here are mainly to view, change and analyze data in different ways. They are also used as the source of records for forms, reports, and data access pages. Forms are used for a variety of reasons. Data entry forms are used to enter data into the tables. Switch board form is used to open other forms of reports. Report is an effective way to present data in a printed format. Because you have control over the size and appearance of everything on a report, you can display the information the way you want to see it. Most of the information in a report comes from an underlying table, query which is the source of the report s data. Other information in the report is stored in the report s design. The switch board report allows us to generate various reports from the database. These reports form the output of the database as they give a picture of the transactions taking place which can be printed out. Module is a collection of visual basic for applications declarations and procedures that stored together as a unit. Macro is a set of one or more action that each performs a particular operation, such as opening a form or printing a report. Macros can help to automate common tasks. A macro can be one macro composed of a sequence of actions, or it can be a macro group. System Requirements For reliable and effective performance of the system, it is recommended that this database be run on: Operating System: Windows 98 and any other higher fashion Office Application: Microsoft Office 2000 and other higher fashion Hardware Configuration: PII-300MHZ or its equivalent, 32MB Disk space of not less than 4MB. RESULTS AND DISCUSSION The Software (CMSDI) Computer Management of Static and Dynamic Inventory (CMSDI) is customized application software designed to manage, control and enhance the implementation of inventory activities in the oil industry with specific reference to dredging sector. It is primarily an application of operation research and is tailored to improve on the existing manual and inherently tedious method of managing inventory in

3 this sector. The application software is capable of tracking various categories of products by the unique identifier called primary key. The products are assigned reorder levels and their units on hand and units on order are generated automatically from the purchase order and inventory transaction forms that are filed on the computer. Other associated information that is monitored include: the mode of shipping, date of shipping, estimated arrival dates, employees involved in these transactions and so on. This enables the managers of this organization to have an idea of the position of these products and subsequently be able to plan and exert control in the management of such complex and large organizations. The package is also able to capture employee data since inventory of employees is also considered. A very crucial factor in maintaining employee inventory is that the products that are moved around and used in the course of operation are carried by men and is vital to know who moved what and who used what. This will definitely and effectively guard against waste, theft, and misuse. Another indispensable aspect of the programme is its ability to maintain information about the suppliers of all the product for which inventory is being carried out. All the supplier information like address, the products they supplied, the period of supply, the cost, and so on is maintained. This will help the organization to detect at any time defective products; those have prompt record of delivery, those that give products at lesser costs, those that have undersupplied their targets etc. More so, the programme has the ability to create categories that may hitherto not exist so that as new products are acquired they can be grouped easily. This has led to the creation of categories like lubricants (oil, grease, hydraulic etc), Fuel (diesel, kerosene, petrol etc), Dry plants (bulldozers, excavators, crane etc) and so on. With these categories created, it is easy to assign categories to every item that comes in and hence easy for information filtering. CMSDI Print out Forms Attached as appendix are the prints out form from CMSDI as inventory transactions are made. CMSDI begins with a page showing the main switchboard form where users can enter, view and modify different information in the database. Such information displayed on the main switchboard is basically command buttons that opens either forms or reports. Forms are used to enter data into the tables, open the other forms or reports, except user input and then carry out an action based on that input. A report is an effective way to present data in a printed format. The various forms available in the system include: Start up Form: This is the form that introduces the company (name, location etc.). This is shown in table 1 below. Table 1: Start up Form Main Switch Board Form: The main switch board is basically command button that opens either forms or reports through which user can view (the product categories. Products, supplier information, employee orders etc). This is shown in table 2 below. Table 2: Main Switch Board The Product Form: This is where particulars of the products such as product ID, name, supplier, category, quantity per unit, unit price, units in stock, units on order, re-order level and so on are recorded. This is shown in table 3 below.

4 Product(s) Category Form: This is used to define the various categories under which products can be categorized. Examples of such categories include: Cash, Chemical, food and drugs, spare parts, lubricants, machineries etc. This is shown in table 4. Employee Data Form: This keeps records of the employee of the inventory department. Information like the name, title, employee ID, hire date, phone number etc are displayed. This is shown in table 5. Employee Order Form: This keeps records of employee name, order details; product name etc. This is shown in table 6. Supplier Form: This gives the particulars of the supplier and also a space for notes on the supplier. Such information as supplier ID, company name, contact, address, city, region, title, phone number, country etc, are contained in the supplier form. This is shown in table 7. CONCLUSION From the investigations conducted, no dredging industry uses advanced database management system to operate an inventory system in order to sustain continuous production. This is the reason why many of these industries are out of production for a very long time once there is stock out or major problem is experienced. This is an undesirable situation in production for any industry to maintain relevance to the society. RECOMMENDATION It is recommended that the simulation designed here be made available to as many dredging outfits as possible to enable them improve on their existing mode of operation. REFERENCES Adeyemi, S.L. and Salami, A.O. (2010). Inventory Management: A Tool for Optimizing Resources in a Manufacturing Industry. A Case Study of Coca-cola Bottling Company, Ilorin Plant. Journal of Social Sciences, Vol. 23, No 2, Pp Arshad, S., Shoaib, M. and Khan, M.S. (2000). Computerized Inventory System- Program

5 Development and Execution. Intl Journal of Agriculture & Biology, Vol. 2, No 1-2. Azizul, B, A. K. Anton, A.K. (2009). Inventory Management Systems with Hazardous Items of Two- Parameter Exponential Distribution, Journal of Social Sciences, 5(2009) Epapala, O. L. (2009).Design of a Computer Software Package for Inventory Control in Automobile Workshops, Unpublished Thesis for FUT, Minna. Godwin, H.C. and Onwurah, U.O. (2013a). Optimal Production Inventory Policies for Operations: A Case Study of PVC Pipes Production. Journal of Advanced Materials Research. Godwin H.C. and Onwurah U.O. (2013b). Inventory Management: Pivotal in Effective and Efficient Organizations. A Case Study. Journal of Emerging Trends in Engineering and Applied Sciences, Vol. 4, No 1, Pp Grossmann, I.E. (2005). Enterprise-wide Optimization: A new Frontier in Process Systems Engineering. AIChE Journal, Vol. 51, Pp Onwurah, U.O. (2012). Analytical Study of Production Inventory in Louis Carter Industries Ltd, Nigeria. M.Eng Thesis Report, Nnamdi Azikiwe University, Awka Scott, G.E. (2007). Inventory Management and Its Effects on Customer Satisfaction. Journal of Business and Public Policy, Vol. 1, No. 3. Stevenson, W.J. (2009). Operations Management, 10 th ed., The McGraw-Hill Companies, New York. Sybil, H.D. (1989). Tora Software Application, McGraw-Hill Concise Encyclopedia of Science and Technology. Taha, H.D.(1993). An Introduction to Operation Research: Prentice Hall, New Delhi.