Big project - anyone done a VMI before

[busy]

I have a potential client who would like me to build a vendor managed inventory system. (An automated system that manages customer inventory by placing orders automatically when inventory gets low) This is not a typical VMI, they're requesting some functionality that doesn't seem to exist anywhere else.

I've been researching this on my own, but if anyone has ever developed something like this before I could sure use some advice (or even a mentor) going into this.

Some questions I'm wondering about...

When a manufacturer takes an item from inventory to be used, is there an industry standard way that this consumption is recorded? Should this system provide a barcode scanner for this or should I look for ways to work with existing software?

I'm not used to pricing something this big. I hate hourly pricing, and I believe value based pricing is my best choice here. My research shows that successful systems like this typically take 2-2.5 years to fully develop, train everyone, work out the kinks, etc... with an overall cost between $200K-$500K in IT and training. I already know this will benefit the client with millions of dollars in sales if we're successful. I'm leaning towards $80K for a function prototype system and test deployment, with the expectation that there will be further development at that time to refine the system. I'm fairly confident in my price point, but wouldn't mind hearing if I'm GROSSLY under or over-charging. (Wow, it feels so weird talking about pricing on here...)

Also, any experience of things to watch out for, common problems, etc... with a project of this scope would be greatly appreciated.

Thanks!

[Sagewing]

How long do expect the project to take? How many members on the team? How much training will they need? Who is writing the requirements for the application? Who is managing the project on your end? their end? What environment will you be coding in? Who's servers? Who's configuring the servers? etc. etc.

[busy]

Those are all very good questions, and ones I have been trying to answer.

The requirements are going to be decided by collaboration between myself and the client, with input from one of their customers. We're hoping to make the software/equipment as usable as possible to minimize training costs, but there will be some involved. Coding environment is undecided at the moment, but I will be providing a dedicated server, (which my team will configure). Team size will depend on a lot of my questions I haven't answered yet. I'm not sure how long the project will take yet, but I will have a better idea after I meet with them later this week.

[TheRedDevil]

Creating a VMI application in itself is not that difficult.

The most important aspect is that its developed in such a way that you will not get missing stock etc. in the event something crash (transaction based).

Other than that it would depend on the excact requirements your client has.


You mentioned using one dedicated server. I would not setup such a system with less than two application servers and two database servers, there is several ways to set this up so Ill not go into that, the key beeing that in the event of one server going down everything will still be operational. Keep in mind that your client will most probably lose money in the event of a server downtime, depending on when the server goes down we might be taking about a substantial amount.


For the price point, you might want to wait with estimating the price until after wrapping up the requirements for the project. Nothing is worse than setting a premature price point.

[Sagewing]

That's good advice. Introduce an hourly rate or a set fee for the requirements gathering phase, with the end result being a deliverable that will be both a list of requirements and the basis for a contract between you and your client.

The more detailed the requirements, the better you'll do. If the client won't pay for some consulting time to generate the requirements, I'd consider passing on the job. Clear requirements are the difference between profit and chaos.

[mobyme]

Have a word with the people at Applied Wireless ID (AWID). We worked on a similar project and found the advice they gave us invaluable.

[mukulgupta]

Hello,

We worked on a similar system for a Canadian client. Here is what I can tell:

1. Vendor Creation and Management.

2. Purchase Order Management - Each order can have multiple items, items may be delivered in part only against a purchase order. So, out of 10 items 5 may be received at a time and 3 out of them can be rejected.

3. RMA

4. Inventory - The inventory of the products needs to be updated when a purchase order is filled and the goods arrive. The purchase manager will be able to see a list of purchase orders and select an option like “add to inventory” . This will confirm the details of the purchase order and the status of the order against which the item was ordered will change to “In Stock” which signifies that the order can be shipped now and waybill can be generated. Managers can also order excess quantity of parts and keep them in stock. In this case the running count of items in stock will be maintained and if any product is readily available then its status will automatically change to “In stock” when the purchase is made from the website or phone order is entered.

5. Special Associations - there will be preferred vendor for certain items and some items will have substitute products defined within the system as well.

6. Warehouses Management

These are just certain areas that you may consider. My advise on pricing is that you should not do a fix bid. You should prepare detailed use cases on T&M model and then do a fixed price for coding+testing+installation+training.