Physical Stocktaking Recommendation And Conclusion Information Technology Essay

Introduction

Physical stocktaking and verification is becoming a challenge for todays organization.  The timing and costs are highly increasing as the entity become larger and larger as well as complying with Governance requirements. Organizations with Bar-coding system are facing challenges such as the time they spend to scan all assets and the cost allocated by those personnel executing the job. Overcoming these issues will require the use of an innovative technology available at the time of study such as the RFID as well as a field study taking United Arab Emirates Ministry of Interior (MOI) as an example.  This paper will be based on face-to-face interview as well as study of the technology available in the UAE market taking into consideration the time cost quality triangle aiming to reduce cost rising from the routine physical assets inventory. This paper will be a handy tool for the Ministry of Interior (MOI) and for other organizations or companies who have similar case.

About the ministry

Back in history, the establishment of UAE on 2nd December 1971 resulted in unifying all seven emirates and establishing unified authorities and ministriesto strengthen the country and emphasize its unity and will of development. Ministry of Interior was one of the first ministries to be established, as integrating full security and safety amongst seven emirates was one of the main objectives of the United Arab Emirates.

The ministry was led by many great leaders like the first Minister H.H. Sheikh Mubarak bin Mohammed Al Nahyan and later on by Homooda Bin Ali, in which during their lead the ministry witnessed massive developments and improvements in police and security systems that helped in unifying and spreading strength all over the emirates and provided decent stability of security and safety in all parts of the country. In 1993, H.E staff Lt.General Dr.Mohammed Saeed Al Badi as a Minister of MOI implemented new values and principles that helped the Ministry to improve its functionalities and fulfill its duties even more.

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As the vast and fast development the UAE is witnessing especially the recent years in all fields, MOI saw the need of improving its security system by implementing high-tech security systems and adopting new law as well as expanding its duties and responsibilities to keep up with the development pace and ensure that UAE is well protected by decreasing crime levels, and ensuring proper security and safety.

Ministry of Interior is one of the most important federal establishments in UAE. It has its own vision on how to achieve their goal in providing protection and keeping safety in order. Their vision is based on four factors:

Understanding the needs and necessities of the local society.

Principals and values which govern society.

Renewal and innovation.

Capability and efficiency.

MOI vision is supported by Islamic and cultural values to ensure its success as summarized in the following points:

Honesty, integrity and paying interest to the human rights.

Providing all society members with just and equal services.

Treating people with respect and kindness.

Encouraging the spirit of teamwork.

Endeavour to be excellent in all duties and responsibilities.

The Ministry of Interior has adopted a clear strategy to achieve its targets and to make

Moreover, its vision is coming true by executing the followings:

Exerting all efforts to provide security for all people living in the UAE.

Building confidence among all categories in society.

Improving performance and services quality.

Using resources to provide the best standard of value.

Developing the Ministry’s gifted employees to achieve the profession’s targets.

Enhancing the concepts of honesty, integrity and good manners.

Supplying equipment, systems buildings, installations and technology which help to introduce more effective Services.

In such short duration as 40 years from its establishment, the Ministry of Interior has achieved what other ministries in other countries haven’t achieved yet. It created a reliable security and safety system that is equipped with the latest technologies, and led by experienced and trained staff. It also applied new trusted methods and laws that have helped in achieving their vision proving the success of their strategy. (MINISTRY OF INTERIOR, 2010)

Current system in place

Ministry of Finance has implemented smart asset system to manage purchased assets andcontrol assets inventory counting cycles until they are either written off or sold.Asset being purchased by ministries are tagged with a barcode representing a full description of the asset (location, department, section room) before delivering the asset to its final destination, which can be scanned later by the asset counting team dispersed at the year-end. This system has been deployed on all ministries getting the financial support from MOF. (Ministry of Finance, 2010)

Asset and inventory audit (as is practice):

As per the UAE financial law, entities getting financial grants from Ministry of Finance are requiredto report their Financial Statement on the fiscal year. Asset and inventory count is part of the reporting process which is required to represent the current value of these assets in hand.

To understand the process currently used in MOI, an interview with Omar Al Hamar (designation to be added) was conducted. The as is process of assets and inventory count depends on physical count of assets and warehouses distributed on the seven Emirates in various locations in the emirate as a part of the yearly financial closing plan. This cover Immigration and Residence Affairs Department, Traffic Control Department as well as other departments in charge of providing protection and safety for the installations and properties. The total number of locations mentioned above and total number of assets and their classification leftundisclosed due to the sensitivity of the information to ministry.The plan starts by issuing a memo from the assets count committee to MOI departments and centers to propose the team that will participate in the assets count. The team consists of a mix of officers and soldiers from the department or center being audited. Once the committee receives the names, it will issue the guidelines and the deadlines the team will undertake to accomplish the task. Every team will be equipped with a bar-code scanner to scan the tags on each asset and a list of all assets to compare with. The tags being scanned will be stored on the scanner memory that has already been loaded with the original scanning database to give on spot report on any discrepancies. If any discrepancies found between the original database and the new scan, the team will report it back to the committee for further investigation.

Visionary leadership

To get more into the issue under discussion and understand more about the solution required, an interview was conducted with Major Abdulla Jumaa, the purchasing manager at the MOI headquarter. The MOI has recently revisited its strategy as per the UAE Government strategic alignments initiative in which they have updated their visions and values. “Our vision is to develop the most operationally effective safety and security services possible in one of the fastest growing and safest countries in the world which:

Is sensitive to the needs of our society

Has high ideals and integrity

Has well motivated and trained staff

Is a learning organization that encourages innovation

Is measurably effective, efficient and economical”

To make the vision a success, four basic factors were set as illustrated above out of which two are important to the Purchasing departmentRenewal and innovation, and capability and efficiency.

The current process of assets counting requires (1) a huge task force to be freed from their duties to complete the task. (2) Cost arising from completing this task is quite high when considering employee’s salaries, transportations, accommodations and other benefits. (3) Adding to that the time spent on the task has to be covered by other employees to maintain the service quality. Despite the fact that efficiency has increased since the department has decentralized the asset-counting task to other departments, minimal cost reduction were achieved.

Discipline (good to great summary)

Empowerment, decentralization and delegation) Drucker

Organizational learning (HBR December 2004 page 126)

Discussion

Barcode system is widely known and used by many shops and companies. It’s used to keep track of products and assets being bought, sold, moved or stored. They are even used in tracking employees’ attendance and quality. They for sure represent a great improvement over the manual way of tracking objects years ago. This explains the great step MOI has taken into implementing it in its departments. (Bonsor & Keener, 2010)

However this system has majordrawbacksas mentioned below:

1) The practice itself is time and effort consuming:

a) Forming teams from different departments to participate in count committee.

b) Each asset to be scanned physically by the team members.

c) Integrating each team findings and creating a unified report takes lots of time and effort and prone to errors.

2) The bar code technology uses read-only tags and within limited area which presents limitations in the technology such asupdating assets information if needed. (Bonsor & Keener, 2010)

Currently an alternative solution that uses smarter labeling technology has completely begun to replace the barcode system and overcomes its disadvantages.This solution called RFID (Radio Frequency Identification) and as its name implies it uses radio waves as communication means. RFID tags are intelligent bar codes that can talk to a wireless network in a wide area and track all your products and assets with less time and effort and a little use of manpower.It traces an object or a person without human interference, and provides an automated report of its finding. (Asif and Mandviwalla, 2005).

RFID system consists of three main components: an ID tag, a reader and a central processor unit. Within the area of communication, the tag gets activated and transmits data to its reader. Upon receiving the data, the reader relays the information to the CPU attached to it. (TechnovelgyLLC, 2010)

RFID tags are very tiny microchips that vary from basic to advanced tags based on their functionalities. For example, a basic tag maintains the product information while an advanced tagcan update productchangeable data like weight, temperature;location and others when needed. RFID tags can be categorized based on their list of functionalities or according to their power source.(Smith and Konsynski, 2003).

There are three main types of ID tags: Active, semi-passive and passive. Active and semi-passive are equipped with internal batteries to power their circuits. Active tag also uses its battery power to broadcast its data to the reader, whereas the semi-passive relies on the reader for its power supply to broadcast its data. Active and semi-passive tags are used for costly items usually since they cover wider range of areas (100 feet and can be increased to 300 feet). Passive tags rely completely on the RFID reader as their power source and cover up to 20 feet of area range. (Bonsor & Keener, 2010)

Typically, RFID system flow starts by attaching tags to objects that sends EPC (Electronic Product Code) when detecting a reader signal (Lai et al., 2005). RFID readers scan products as needed and update its system with information of the products data. As explained before, if the tag is active, the reader gets the information signal continually, whereas in the passive tag case, the reader sends a signal to the tag and waits for its answer. (Asif and Mandviwalla, 2005).After collecting needed data, the reader communicates with its backend system and updates its database accordingly. The information in the backend system can be accessed and utilized by different enterprise systems. (Lai et al., 2005). As it’s shown in its process, human interaction is very limited and is only needed to monitoring the process and access the findings.

RFID system offers many great advantages over Barcode system as explained below:

Efficient and accurate assets tracking and inventory control: RFID can determine the location of all assets in a supply chain all the time. Within RFID activation area, you can determine the location, design and history of the product in hand. It also gives an updated availability level which prevents running out of stock.

Better Security: RFID tags cannot be duplicated which means the possibility of theft is almost out of question.

Stronger Accountability: RFID tags are reliable and can withstand harsh environments which make it hard to be corrupted.

Less human interaction: No need to use human efforts for scanning each asset physically and compiling unified reports.

Real-time monitoring: The system takes care of providing up-to-date data and reports and offers better way of tracking products for stocking and marketing purposes.

Reusable tags: Data stored on FRID tag can be edited, changed, locked based on tag type.

Greater distance of access: RFID reader can pull information from tags up to 300 feet.

Faster scanning: RFID readers can read around forty tags per second whereas barcode readers usually take a half-second or more to successfully complete a read. (Sid Williams III, 2010)

Various RFID solutions are available in the market based on different companies needs. Once the suitable solution is chosen, implementing it doesn’t require a big IT team to configure its kits, and maintain them. However implementing it might be more costly due to its sophisticated system, yet looking at its many advantages, its worth every penny spent on it.

Recommendation and conclusion

RFID is with no doubt affecting the efficiency and effectiveness as well as product and service values in many business processes in the industrial world (Rappold, 2003).

RFID applications have been deployed in many government fields such as education, law and order, tourism, security, health care and many other fields. It’s used in many areas like airport baggage handling, electronic payment, parking, library systems and many others (Smith, 2005). In Singapore, for example, RFID has been used in public libraries and transport services, resulting in better performance and convenience for public. (RFID Innovation Platform Application Guide, RFID Innovation PlatformApplication Guide, 4 July 2008).

Because of the improvement RFID offering in inventory management and supply chain control, many giant industries are using this technology in their stock tracking such as Wal-Mart, Benetton, MacDonald, Philips, Morris, Coca Cola and many others.

Companies and industrial sectors that are currently using barcode system, can easily adopt RFID system as a new technology to use which will improve their productivity and enhance their employees experience and knowledge. A company that keeps up with new innovation and enhancements processes gives the employees the motivation and support to learn new technologies and support the company experience. (Chieh-Yu Lin, 2009)

In the past 2 years few RFID conferences were taken place in UAE (Arab RFID 2008 in Dubai, Oct 2008 and RFID Journal Conference in Abu Dhabi. Oct 2010) where RFID technology was introducedand presented its effectiveness by showing real case studies in Europe and Asia. (AMEInfo, 2008)

A recent implementation at the General Secretariat of the Executive Council in the Emirate of Abu Dhabi has recently implemented an RFID solution to manage its assets, which resulted in huge saving of time, cost and quality process.(Saeedi, 2010)

Being known for always being keen to adapt and improve its system, MOI is highly encouraged to study the best possibilities of replacing bar code system with RFID system.

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