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Inventory Control

DIGITAL ECONOMY INVENTORY CONTROL
The Net has become an indispensable tool for businesses Inventory control is the implementation of management’s
small and large. In 2004 Professor D. T. Quah from the inventory policies in a manner that assures that the goals
University of London noted that “digital goods” take on of inventory management are met. Wise control of inven-
increased meaning in the global marketplaces. Companies tory is often a critical factor in the success of businesses in
must embrace the Net and take every advantage to grow which inventories are significant. The goal of inventory
their businesses and remain viable in the twenty-first cen- control is to be sure that optimum levels of inventories are
tury. “Embracing the Net” includes using all aspects: available, that there are minimal stockouts (i.e., running
Internet, intranet, and extranet. out of stock), and that inventory is maintained in a safe,
secure place and is always readily accessible to the proper
IMPLICATIONS AND IMPACT personnel.
Net access to information has already drastically altered Policies relate to what levels of inventories are to be
the way organizations communicate and conduct busi- maintained and which vendors will be supplying the
ness. An employee does not need to know if the connec- inventory. How and when inventories will be replenished,
tion is via the open Internet, the private intranet, or the how inventory records are created, managed, and ana-
shared extranet. Access by unauthorized individuals is, lyzed, and what aspects of inventory management will be
outsourced are also important components of proper
however, a continuing issue. Nevertheless, Robert Moon,
inventory management.
chief information officer of Micros Systems, said, “In less
than three years, we’ve gone from the Web being a novelty
to a critical application. It’s now our main focus” (Booker, IN THE BEGINNING
1999, p. 32). Indeed, the worldwide Net concept will Prior to the eighteenth century, possessing inventory was
continue to alter the way organizations function both considered a sign of wealth. Generally, the more inventory
internally and externally in the twenty-first century, and you had, the more prosperous you were. Inventory existed
in ways that could not be imagined in the twentieth cen- as stores of wheat, herds of cattle, and rooms full of pot-
tury. tery or other manufactured goods.
This phenomenon occurred for good reason. There
SEE ALSO Internet
were a number of concerns for businesspeople then. Com-
munication was difficult and unreliable, easily inter-
BIBLIOGRAPHY
rupted, and often took long periods of time to complete.
Booker, E. (1999, March 15). ERP’s next frontier. Internet Week,
Stocks were difficult to obtain, and supply was uncertain,
pp. 31–32.
erratic, and subject to a wide variety of pitfalls. Quality
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a purchase was not an option and a person had to pay for
Erlanger, L. (2004, January). Web conferencing: Take a meeting merchandise before taking possession of it. The financial
online. PC Magazine. Retrieved October 10, 2005, from
http://www.pcmag.com markets were not as complex or as willing to meet the
needs of business as they are today. In addition, the pace
Gibson, S. (1998, November 16). Extranets’ moment has come.
PC Week 133, pp. 31–32. of life was a lot slower. Because change occurred gradually,
it was relatively easy to forecast market needs, trends, and
Kallioranta, Sanna M., and Vlosky, Richard P. (2004). A model
of extranet implementation success effects on business per- desires. Businesses were able to maintain large quantities
of goods without fear of sudden shifts in the market, and
formance. Retrieved January 19, 2006, from
http://www.rnr.lsu.edu/lfpdc/publication/papers/wp66.pdf these inventories served as buffers in the supply line. Cus-
tomers had a sense of security, knowing that there was a
Online and corporate universities: Take learning to the head of
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from the T+D Web site: http://www.findarticles.com/p often helped to minimize hoarding.
/articles/mi_m0MNT/is_9_57/ai_107490423 In the eighteenth and early nineteenth centuries,
Quah, D. T. (2004) Digital goods and the new economy. markets were very specialized. There was often one sup-
Retrieved October 10, 2005, from the University of Lon- plier for each market in each area of business. Except for
don–Centre for Economic Policy Research Web site: the basic necessities of life, there was much local special-
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=410604
ization and distinct specialization by region. For example,
although there might be more than one grist-mill in a
Armand Seguin community, there would often be only one general store.
Cynthia Shelton (Anast) Seguin If customers were unhappy with their existing supplier,

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