A Minimum (Min) - Maximum (Max) level is also defined within this module and the Min-Max level is used to manage the sale and maintenance of stock levels within the store. For example, where a Min-Max level is set for Air Beds, the sale which reduces the stock of Air Beds to 48 therefore notifies the system that a re-order from the supplier is required to top up the stock level. All stock items that are replenished are linked to Inventory, which therefore manages the stock levels. The Inventory Numbers defined for the products are also linked to the Catalogue Numbers defined in the Argos Catalogue.
The Inventory module is also referenced when shoppers at Argos use the Product Check system to see the number of items for the product required is available in stock. Although the shoppers' key in the Catalogue Number onto the Product Checker, this Catalogue Number, linked to the Inventory Number, references the Inventory module to check on the stock level of the product required and then informs the customer accordingly. The Inventory module provides a nightly update of the changes in stock levels to the Purchasing module in order to enable the Purchasing module to act accordingly.
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Purchasing, and the name implies, is the module linked to the Inventory module which is responsible for making the all the purchases necessary for ensuring that Argos' stock levels are maintained for all the products stocked. Where Min-Max levels have been defined for stock items and there is also a need for the re-ordering of items sold, the Purchasing module is used to carry out this process. It is also here that the prices of the stock items are defined. The Buyers responsible for securing good buying prices for Argos would ensure that all these buying deals are defined within this module to ensure that the store takes advantage of the deals on offer. For example, a buyer might secure a deal with an Electronics Manufacturer that for every 1,000 radios ordered, a further percentage discount will apply. As a result of this deal, the module will be set up to ensure that Purchasing employees ordering the radios take advantage of this offer and cannot order the same radios from another manufacturer. Such relationships and deals established can be defined here.
The Argos store makes use of Purchase Numbers (POs) for all items purchased and these are always quoted on the deliveries from Suppliers for products ordered and also on invoices later forwarded by Suppliers for deliveries made. The Purchasing module receives a nightly update from Inventory for all the items which require to be purchased from Suppliers and Purchasing also supplies an update of all its purchases and deliveries to the Accounts Payable module.
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The Accounts Payable module, managed by the Accounts Payable team of Argos, are responsible for making the necessary payments based on the updates received from the Purchasing module. They tie in all invoices received from Suppliers to the PO Number from the purchases made and they also update their systems with commitments for new purchases, and for liabilities which have arisen as a result of deliveries from Suppliers which have receipted in the Warehouse. This therefore makes the value of the delivery to be accrued on their system pending them receiving the invoice from the Supplier for the delivery made.
All payments made to Suppliers either by cheque or BACS payments can be reconciled on the Accounts Payable module and the General Ledger module is updated of all payable activities on a nightly basis.
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The Accounts Receivable module, managed by the Accounts Receivable Team receive the nightly update of sales made from the Order Entry module, class the sales into higher category levels (e.g. using Classes) and then record the transactions received into a more summary level. This therefore provides the daily value of sales made in the store based on the way in which Argos would want to report their sales. For example, while all products on the Order Entry system can be individually described by catalogue number for example, on the Accounts Receivable system, the income generated from the product sales can be classed as e.g. "Home & Gardening", "Electronics" etc.
The Accounts Receivable module provides a total value of the monies banked in the bank account on a daily basis.
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The Cash Management module assists Argos in reconciling the credits made for all products sold from the Accounts Receivable module and all payments made to suppliers from the Accounts Payable module. The reconciliation is also used to update the General Ledger module.
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The General Ledger module is used by the Accountants of Argos to produce the financial statement of all its financial activities and relies on the updates received from the modules described above.
A graphical description shows the flow of data between each module, the processes carried out, the links between the process in the various modules and how these relate to the users within Argos and the outside world.
The definition of the symbols used is illustrated in Figure 1.1 and the Data Flow Diagram is illustrated in Section 4.
DEFINITION OF SYMBOLS USED
FIGURE 1.1
WALKTHROUGH OF THE SALES FUNCTION IN A TYPICAL ARGOS STORE
A walkthrough can be described as follows:
- A Customer enters Argos and goes to the section where the catalogues are displayed.
- The Customer on identifying the product required uses the Product Checker to check if the product required is in stock. Where the product/quantity required is not in stock, the customer identifies an alternative product in stock and fills out an Order Form and takes this to the cashier to make a payment.
- The Cashier, upon receipt of the order logs the necessary information onto the till system and this process references the Order Entry and Inventory systems for the Catalogue Number, Selling Price, Promotions, Discounts and the availability of the product ordered and completes the selling process.
- Upon completion of the selling process, the Collection Point workload is then referenced and the sale is then allocated to the next available Collection Point for the Customer to collect the item ordered.
- When the product bought has been delivered to the Collection Point, the Collection Information Screen is updated accordingly with the Collection Number for the order and this is announced and displayed on the screen.
- The Customer presents his receipt to the employee at the Collection Point and the products ordered are given to the Customer.
- All products sold that are removed from the Stock Room and delivered to the Collection Point are replenished on a nightly basis and when removed from the Stock Room, they are scanned. The scanning process updates the Inventory module and manages the stock levels accordingly.
- Also, all deliveries made to the Warehouse also update the stock levels accordingly and this should reconcile with the purchase orders made, invoices paid and payments for deliveries paid either by cheque or BACS.
- All cash collected at the Cash tills are collated on a daily basis and banked the following day. This should reconcile with the total amount recorded by Accounts Receivable and updated on the General Ledger module.
- The profit/loss of the Argos store should therefore be based on the information gathered by all the financial modules used by the store.
DATA FLOW DIAGRAM OF SALES FUNCTION IN ARGOS
5. REFERENCES
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Laudon K.C and Laudon J.P, Management Information Systems – Managing the Digital Firm, Prentice Hall, (2001).
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David James Oracle Financials Handbook, McGraw-Hill Publishing 2nd Edition (2001)
