I was watching TV on Chinese cable a long while back on a finance show, it was talking about clothing manufacturing and the elimination of China textile product quota after it joins the WTO. What caught me is they talked about how a company manage their inventory.

Each retail store is linked to the warehouse/distribution centre with computer system, which monitor each store's inventory level and dispatch a delivery when certain items is running low or out of stock. I don't know the details how it works, but as a s/w developer myself, I can imagine how it works; When customer bought a t-shirt, the cashier scans each item with the POS (Point Of Sale) system. For immediate purpose, the database is query for price and the total is display and money exchanged. (meanwhile, sales are tracked as well) On the same time, the store inventory is also update w/ each scan so a store-wise inventory for every items is tracked precisely. This information is report back to the warehouse, which can arrange restock for each store. Even on a higher level of integration, when the warehouse is running low on certain item, it triggers a order to the factory to ensure things are well stocked. This all happens automatically behind the scene.

I never really realize what all the bar code scanning do so much more than adding up items and print the bill. This system besides automating operation, must be providing a powerful system to report to management/marketing/product design how well their products sold and where/when it happens. Such a system must be very scalible and flexible.

In a modern business world, this is called supply chain management. I first heard the term in a IBM commercial but never pay attention to what it really is until now. It quietly crap up on us and now I realize it's reality and put of our world.

Further reading:
ABC of Supply Chain Management
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