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Advances in Social Science, Education and Humanities Research, volume 610
Proceedings of the 7th Annual International Conference on Social Science and
Contemporary Humanity Development (SSCHD 2021)
The Study of Just-in-time Inventory Management
Based on the Perspective of the Internet of Things
*
Fengfu Xu
School of Accounting, Shandong technology and Business University, China
*Corresponding author. Email:914946720@qq.com
ABSTRACT
Inventory management is an important basis for production management and cost control in manufacturing
enterprises. The timely management method of inventory timely system is the scientific and efficient inventory
management mode with remarkable advantages in inventory management. How to use The Internet of Things
technology to assist the effective implementation of inventory timely management is the main problem discussed in
this paper. IOT technology can assist enterprises to collect, analyze and process real-time data, thus providing
advanced technology support for enterprises to carry out scientific and efficient inventory management. This paper
systematically expounds how to use The Internet of Things technology to monitor and control the process of
delivering finished products to the buyer's location in real time, so as to better assist the smooth implementation of
inventory timely management methods. From the perspective of product distribution, we summarize the feasibility
and concrete implementation of the application of Internet of Things technology, so that enterprises to the product
distribution process to accurately detect and control, effectively make up for the inventory timely management
methods of defects, to avoid the occurrence of default liability.
Keywords: JIT inventory management, net of things, Intelligent detection and distribution system.
1. INTRODUCTION or various information through the Internet. Including
The goal of inventory management for enterprises perception, recognition and other technologies. The
should not only meet the needs of specific customers Internet of things mainly relies on Internet technology to
and groups, but also minimize the total cost under connect sensors, communicators and controllers in
established conditions. Therefore, enterprises should series to build the whole system of the Internet of
reasonably formulate various processes of inventory things, so as to realize the integration of the whole
management, so as to ensure the safety and stability of network and the interaction of information. The Internet
enterprise assets. From the current enterprise of things has a wide range of applications, good
development stage, the most efficient and ideal development prospects and outstanding characteristics,
inventory management method is undoubtedly inventory mainly in that it has the advantages of intelligent
timely management. At the same time, with the wide management, can carry out long-distance and all-round
application of Internet of things technology in the field perception and detection, and can automatically identify
of enterprise inventory management, enterprise some specific known and potential risks. At the same
inventory management will be more scientific and time, the Internet of things can send instructions to its
efficient. end customers, So as to carry out a series of automatic
operation procedures. The Internet of things also has the
2. OVERVIEW OF INTERNET OF THINGS function of remote control, which can provide a lot of
accurate information and data support for managers to
RELATED CONCEPTS change plans and decisions.
2.1. Concept of Internet of Things
The so-called Internet of things refers to the
transmission and exchange between two or more objects
Copyright © 2021 The Authors. Published by Atlantis Press SARL.
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Advances in Social Science, Education and Humanities Research, volume 610
2.2. Development Status of Internet of Things whole to realize the flexibility and complementary
Technology between these technologies. Therefore, in order to meet
the needs of modern enterprises for the functional
The science and technology involved in network advantages of the Internet of things, the communication
communication mainly includes signal transmission, technology of the Internet of things must pay attention
signal exchange, networking and gateway. The most to the development of big data processing and cloud
important technology of Internet of things is M2M computing technology.
technology, which can be effectively combined with
GPRS, GSM and so on. The communication process of 3. DEFINITION OF TIMELY INVENTORY
Internet of things mainly involves sensor network MANAGEMENT
communication and telecommunication transmission
network communication. Among them, sensor network 3.1. Concept of Inventory Just in Time
communication technologies mainly include RFID, Management
NFC, UWB, WiFi, etc. Telecommunication
transmission network communication technology Just in time (Jim) is a new method of inventory
mainly includes DH, all-optical network and mobile management. It mainly means that there is no need to
communication network. This technology is mainly to prepare storage space for various states of goods (raw
realize signal transmission and communication between materials, semi-finished products and finished
sensor network and transmission network. Among them, products), nor is there any intention to store them.
mobile communication network is now more mature Instead, all raw materials owned or purchased are
2G, 3G, 4G and 5g network which is developing at a invested in the production and operation process to
high speed. ensure that the production process is continuous until
At present, the Internet of things technology is in the the production is completed, Finally, the finished
fast lane of rapid development, and the development of products are directly transported to the location of the
other science and technology also provides inspiration customer who has signed the purchase contract with the
and technical support for reform and innovation. The enterprise. In short, it is to apply raw materials directly
Internet of things technology is absorbing the to the production process, so that there will be no
advantages of other science and technology to realize its "redundant" raw materials and finished products, make
continuous development and growth, and finally adapt full use of the production plan, and there will be no
to the actual needs of all walks of life in the new era, shortage and surplus of raw materials and finished
Continuously improve the frequency of information products, so that the production enterprise can formulate
exchange and the ability to analyze and process data, a reasonable production plan according to the product
and improve the level of intelligence, so as to better purchase and sales contract and ensure its accurate
serve the society and enterprises. implementation. This is obviously different from the
traditional concept of zero inventories. The core of just
2.3. Development Trend Analysis of Internet of in time inventory management concept is to reduce the
Things Technology quantity of inventory as much as possible and improve
the quality of inventory, so as to achieve zero inventory
In order to meet the needs and objectives of status, which will correspondingly reduce the
enterprises for the Internet of things, relevant scientific supervision cost of inventory.
researchers need to keep up with the pace of the The difference from the traditional inventory
development of the times, position the development management method is that the key goal of timely
objectives of the Internet of things on the actual needs inventory management is to eliminate inventory to
of different enterprises, and always adhere to reduce the total cost, so that both raw materials and
independent innovation and technological reform. The finished products can achieve the goal of "making the
needs of enterprises are the fundamental driving force best use of everything", which is neither too much nor
for the development and reform of Internet of things too little, reaching an equilibrium state, so as to avoid
technology. Nowadays, big data processing, cloud the problems of material shortage and overproduction.
computing and sharing economy have become the trend This method requires to comprehensively measure the
of the times, and have profoundly changed people's way requirements of purchase and sales contracts and
of life and work, making people's life and work more formulate reasonable and standardized production plans
convenient and efficient. Science and technology always when making plans. Therefore, enterprises should not
have something in common, which is based on the only examine the ordering cost, purchase cost, holding
experience summarized from several years of scientific cost and other indicators of inventory, but also consider
and technological development. Then we should make factors such as storage cost and shortage cost. The
full use of the common points and similarities of these timely inventory management method can effectively
technologies, integrate them, and make them an organic reduce the cost of inventory, simplify the product cost
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Advances in Social Science, Education and Humanities Research, volume 610
accounting process and improve the performance market demand trend for the product and consumer
evaluation indicators. preferences, the enterprise makes accurate predictions,
so as to assist the enterprise to formulate a production
3.2. Premise of Realizing Timely Inventory plan consistent with the market demand from the macro
Management level and the long-term production direction of the
enterprise, The ultimate goal is to reasonably avoid
To successfully implement zero inventory unnecessary waste of resources or product backlog. In
management and achieve the expected effect of timely order to realize the flexible and efficient application of
inventory management, two aspects must be fully the concept of timely inventory management, the
considered and properly solved. First, how can we following three main problems must be solved.
reduce the inventory quantity as much as possible and
even reach the ideal state of zero inventory? If the 4.1. How to Efficiently Meet Customer Needs
enterprise cannot reasonably and effectively reduce the
inventory level, the timely management cannot have the Under the timely inventory management mode,
prerequisite and practical basis. Second, under the reducing inventory cannot fundamentally solve the
condition of low or even zero inventories, how can we problem. Meeting customer needs is nothing more than
ensure the continuity of enterprise production, so as to timely delivery with quality and quantity guaranteed.
avoid unnecessary resource consumption and default Only in this way can the whole contract be implemented
cost? On the one hand, if the sufficient and smoothly and completely. However, during the period
uninterrupted supply of raw materials, work in progress between signing the purchase and sales contract and
and auxiliary materials cannot be guaranteed in the product delivery, there are many problems that need to
continuous production process of the enterprise, the be prepared by the production enterprise, including the
production process of the enterprise will be forced to be formulation of product production plan, the calculation
interrupted due to insufficient materials, resulting in of material quota and labor quota, the procurement of
production shutdown, resulting in the idle of enterprise raw materials, when the raw materials will be delivered
resources and many unnecessary expenses. On the other to the enterprise, when the product will be produced,
hand, if the qualified finished products cannot be and how to distribute after the production is completed.
delivered in time according to the time limit specified in This requires enterprises to comprehensively and
the sales contract, the enterprise will face the risk of reasonably plan the production process while signing
breach of contract and be in a disadvantageous position purchase and sales contracts with customers, strictly
of violating the sales contract. Then it may face the legal control each time point of product production, and do
consequences of compensating huge liquidated not allow any errors and faults. Of course, it can also be
damages, and it will directly affect the reputation and prevented and controlled through the enterprise's
credibility of the enterprise, so the benefits of alternative production line and alternative products. In
implementing the timely system will outweigh the any case, it is necessary to ensure on-time delivery,
losses. Therefore, in order to solve the two premise neither too early nor too late. Early delivery will lose the
problems of just in time management and ensure the significance of the timely system. When the buyer
reasonable and effective operation of just in time requires that it must be delivered on the same day as the
production system, we must establish a scientific and date specified in the contract, early delivery will
perfect just in time inventory management strategy inevitably lead to product backlog and eventually form
considering risk control and other aspects. the inventory of the enterprise. Late delivery will bear
the liability for breach of contract and estimated
4. DEFECTS AND COUNTERMEASURES liabilities. Therefore, the implementation of timely
OF ENTERPRISE INVENTORY TIMELY management requires enterprise managers to maintain a
MANAGEMENT high degree of concentration at all times and carry out
accurate data calculation procedures at any time, so as
On the one hand, the timely inventory management to sensitively respond to the changes of production
should make the production scale of the enterprise and environment and realize the ideal state without any
the consumption level of customers reach a relatively difference. In short, the only purpose is to ensure quality
balanced and stable state, and the supply and demand of and quantity and deliver on time. The specific measures
products are basically consistent. Second, the actual to solve this problem include expanding the scale of the
production amount is small, resulting in a situation of production line, reducing the preparation time of raw
supply exceeding demand, so as to reduce the inventory materials and equipment in the early stage of
of the enterprise as much as possible, avoid the excess production, ensuring the control ability of goods
production of the enterprise's products, or retain part of circulation procedures, etc.
the inventory for the possible price rise in the future.
That is, through accurate research and analysis of the
supply and demand of a product in the market, the
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Advances in Social Science, Education and Humanities Research, volume 610
4.2. How to Plan and Ensure the Continuity of enterprise inventory timely management method, it is
Production concluded that the most difficult and urgent problem to
be solved lies in the third aspect. The solutions to the
In case of production discontinuity, i.e. production first two defects are relatively easy to implement, as
shutdown, on the one hand, raw materials may not long as the product production process is completed
arrive at the enterprise in time before the start of regularly and quantitatively according to the plan, The
production, on the other hand, there may be failure of third problem must use the Internet of things
the required number of machines for production, and technology. By digitizing all these variable factors, we
there is no substitute machine for use. Machine failure can solve the potential problems in the process of goods
may also lead to defective products. Once there are transportation, reasonably avoid various controllable
large-scale defective products, production should be risks, minimize the emergence of some uncontrollable
stopped, because there is no point in continuing factors, and finally ensure the smooth progress of goods
production. If the product quality is not up to the circulation.
standard, continuing production will cause greater losses
to the enterprise and even uncontrollable situation. After 5. APPLICATION OF INTERNET OF
the machine failure and defective products, every THINGS TECHNOLOGY IN TIMELY
product produced by the enterprise is equivalent to INVENTORY MANAGEMENT
waste products. No buyer will choose products with
unqualified quality, otherwise it will not only affect the 5.1. Optimized Treatment of Problems in
reputation of the manufacturer, After the buyer sells the Inventory Timely Management by Internet of
goods, it will also have an adverse or even negative Things Technology
impact on the buyer's credit. Therefore, the defective
products can only be disposed of or destroyed. Even if It truly realizes the perfect connection between the
these defective products can be treated at a low price or market demand or customer demand and the production
reprocessed, the losses to the enterprise are huge. To quantity of the enterprise's products, directly from raw
deal with this situation, measures can be taken to materials to the enterprise's production workshop and
properly arrange and coordinate the delivery time of raw directly from finished products to the customer's
materials with the suppliers of production enterprises, location. Therefore, Internet of things technology can
increase the number of alternative production machines, run through the whole inventory management process.
ensure the number of necessary labor, and reasonably For manufacturing enterprises, Internet of things
plan and control the production time. technology can be used for accurate analysis, control,
4.3. How to Ensure That the Goods Are planning and decision-making from the procurement of
Delivered to the Buyer on Time raw materials, the production of target products to the
sales of final products.
The key point of the timely inventory management Applying Internet of things technology to just in
method is that the products must be delivered to the time inventory management is mainly to use the Internet
buyer's location on the day agreed in the purchase and of things to assist the smooth implementation of goods
sales contract. The product production process flow procedures. Because inventory just in time
mentioned above is only one link of the timely management is to eliminate the defects of enterprise
inventory management. Another link of the timely inventory to achieve the ideal "zero inventory" state,
inventory management involves the product distribution while Internet of things technology provides more
process, that is, the inventory must be directly accurate algorithm support for the time control of goods
transported to the buyer's enterprise after the completion arriving at the buyer, Internet of things technology must
of the product. This cargo transportation process is not be equal to the difference between the start and end time
completely smooth, and unexpected situations may interval of the order and the whole production time of
occur, such as deterioration and damage of goods during the enterprise (in the case of delivery on the order date
transportation, failure of transportation vehicles, sudden specified in the contract, it cannot be delivered in
change of weather conditions, insufficient remaining advance). Only in this way can the timely management
gasoline of vehicles to reach the destination, changes of procedure be finally realized. Using Internet of things
temperature and humidity in the compartment and many technology to track and monitor products and goods in
other complex factors. Moreover, these factors may real time not only solves various problems that may
change at any time. Therefore, it is particularly exist in the timely inventory management mode, but
important to reasonably and effectively control these also optimizes the ways and means to solve the
variable factors to make them at a relatively stable level. problems. Using the auxiliary function of Internet of
On the whole, after comparing and weighing the things technology for inventory, enterprises do not need
three aspects affecting the smooth implementation of the to consider the storage of materials or products, so as to
reduce the waste of enterprise resources caused by
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