C-Sim+ Documentations

NATIONAL COLLEGE OF SCIENCE AND TECHNOLOGYAmafel Bldg. Aguinaldo Highway, Dasmariñas, Cavite 4116 PH

Computer Studies Department

Chapter 1

System Proposal

Introduction

In this age of information, almost all fields of endeavour such as

education, manufacturing, research, games, entertainment, and business treat

information systems as a need. Indeed, every activity in our daily life today

requires people to get involved in the use of information systems.

A typical example is the sales and inventory management system

containing a list of orders to be filled and then helps workers to pick the

necessary items, and provides them with packaging and shipping information.

Inventory control may also be used on sales order fulfilment process.

Computerization is the counterpart of human workers by technology. For optimal

sales and inventory management process, robust functionality is needed for

managing logistics facilities and distributions channels. It significantly improves

inventory turns, optimizes flow of goods. It also improves cash flows, visibility and

decision making providing efficient execution of tasks using this fast and reliable

computerized method.

Target Subject

SK Corporation is a SEC, DTI registered privately held distribution channel

and centre in the Philippines particularly in PEZA Rosario, Cavite. The company

has been operating since 2009 and has a parent company situated in Carmona



Cavite. SK Corporation is on the leading partners of EMS companies and OEM

or Original Electronics Manufacturer in Asia. It specializes in assembled items

used also in telecommunications, computer and networks, power supplies like

UPS or uninterruptible power supplies and other IT products like serve frames,

racks and netshelters. It is second to none and for this reason, the demand is

high and the company responds to the increasing demand by stabilizing supply

to strike a balance.

Figure 1. The organizational Chart of SK Corporation as of January 2015

Figure 1 shows the current functional organizational chart of SK

Corporation as of January 2015. The company possesses only two major



functional groups: the inventory and operations planning group and the shipping

and logistics group which is controlled by a managing head, the general

manager.

Problem and its background

SK Corporation is currently using the traditional paper and pen format to

maintain the inventory and to serve their customers through distribution. All the

stocking are done by writing reports via stock maintenance thru stock cards. This

way of keeping records become challenging as the business is growing as they

are acquiring more contracts from more OEM manufacturers and manufacturers

to serve, hence causing more work load on inventory management control and

DC sales operations.

Justifiable, the company has the problem of keeping adequate record of

goods transfer and since it is done manually, associated problems of insecurity,

high cost of operation and delay in supply arise.

The company wanted to resolve all the current problems introuducing a

computer-based solution. A sales and inventory management system was

considered as the viable solution for the problems. Using the available ERP

(enterprise resource planning) system software in the market would require a

very broad technical knowledge to handle. These available softwares in the

market are very hard to start with. In addition to the expenses of the related

software, hiring a new IT network and systems analyst to maintain the software



would be more costly. Most of these softwares at high market cost would not

exactly meet the company’s needs and requirements.

The recording of goods receiving is done manually on a logbook thus,

books are exposed to physical damage, and information can be lost or

altered by anybody.

The control system is time consuming, less accurate and less efficient,

and the environment is not user friendly.

Inaccuracies often result from human error due to communication issues

brought by absenteeism.

The manual system or the stock card system is quite tedious and can be

reduced or eliminated with the introduction of the proposed system.

Solutions

From manual writing of stocks directly coming from factory will be diverted

to computerized and system based encoding and report generations.

With the intervention of the proposed system, manual and time consuming

transactions will be process accordingly thus the proposed system would

be developed studying the company’s requirements likewise users would

be familiar about the system from the beginning of its development phase.



Manual stocks variance and inventory calculations shall be computed

integratedly using the proposed system.

The system can offer a paperless job environment and the usage of

thousands of stock cards can be reduced. The proposed system would

serve as the master data system for sales thru inventory valuation (in and

out transactions) and would also keep records of all transactions made

during the business and would provide data for future reference.

Proposed System Description and Specifications

The proposed system is a LAN based computerized system capable of

analysing on hand inventory, on hand inventory variances; generate sales report

by valuing inventory transactions happened on a particular period. The system

can generate sales in relation with its capability to capture real time inventory.

Users of the system can do query or search functions for familiarity of each

product and item lines encoded at the system. It can manage to store and

maintain multiple product lists and types, multiple customer and partners, a

bundled module for delivery and shipment receipt, and invoices as well as

product returns.



Data viewing after data encoding process is also an integral function of

the proposed system. On its ability to maintain multiple data, part of it is the

capability of running ad generating reports on the user’s preference and

specifications. The system can manage multiple users at a time, thus making it

flexible.

Architecture

Figure 2. The network structure and topology



Figure 2 shows the network structure and architecture (topology) of the

proposed system on which five licensed client personal computers which will do

the transaction process as well as one main file server which will serve as the

main repository or storage of data.

System Development Methodology

A system development methodology refers to the framework that is used

to structure, plan, and control the process of developing an information system. A

wide variety of such frameworks have evolved over the years, each with its own

recognized strengths and weaknesses.

One system development methodology is not necessarily suitable for use

by all projects. Each of the available methodologies is best suited to specific

kinds of projects, based on various technical, organizations, and project and

team considerations.



Figure 3. The waterfall diagram of the proposed system

Figure 3 shows the established waterfall diagram of the proposed

system. Conception as the first step covers the system concept to determine the

ultimate goal of the system. Analysis has been done to determine where the

problem is in an attempt to fix the system. This steps involves “breaking down”

the system in different pieces to analyse the situation, analysing project goals,

“breaking down” what needs to be created and attempting to engage users so

that definite requirements can be defined.

Next process is to determine the fitted software system requirements

based on the nature of the company’s problem considering the least effort and

available on hand resources. Third is designing on which design and functions as

well as the operations are described in detail, including screen layouts, business

rules, process and data flow diagrams and other documentations. The output of

this stage will describe the new system as a collection of modules or

subsystems. Final design of the proposed system will be based on the current

needs of the company especially the users of the system. Next process is coding



and testing on which programming code will be accomplished during this stage.

Unit testing and module testing are done on this stage. This stage is intermingled

with the next in that individual modules will need testing before integration to the

main project.

Last step is integration, testing and maintenance on which the code is

tested at various levels in software testing. Unit, system and user acceptance

testing are often performed. This is a grey area as many different opinions exist

as to what stages of testing are and how much if any iteration occurs. Iteration is

not generally part of the waterfall model, but usually some occur at this stage.

Research and System Objectives

Maintaining good inventory management will ensure the efficient and

timely delivery of high quality inventory data as one of the general objectives of

the system. Another general objective of the system is to achieve the business

goal of the company when it comes to sales and inventory management in a

more efficient way than in the existing system. Lastly, to achieve increase

revenue by elimination of inventory stock-outs, shortages and discrepancy or

inventory variance issues.

A clear inventory process so that key activities and resources can

be focused towards delivery deadlines and delivery quality.



Institutional arrangements to clearly defined roles and

responsibilities for delivering the inventory to specified time and quality

standards. A quality framework to ensure that the data is fit for purpose.

Maintaining sufficient quantities of goods on hand to meet

anticipated needs and demand.

Accuracy - The system accurately calculates the inventory that should

be left when all of the orders have been encoded at the system.

The manual system will be replaced by an automated system

capable of giving useful output.

Security - Each user has different access and is accompanied by a

certain password store on its utility and maintenance.

User-friendliness - The GUI (graphical user interface) of the system would most

likely be the face and asset of the system. Easy to remember

commands are designed to let users understand the function of

each.

Flexibility - The system can accommodate a certain amount of variation

regarding the requirements of the supported business process. The

system is capable of supporting simultaneous users and is

available anytime.



Reliability - Users and the administrators mutually understand the role of

the system and make efforts to realize it. The system does not

produce dangerous or costly failures when it is used in reasonable

manner, that is, in manner that a typical user expects in a normal.

Efficiency - It often allows for automation of many inventory-related

tasks. For example, software can automatically collect data,

conduct calculations, and create records. This is not only results in

time savings, but also increases business efficiency.

6 Business Strategic Objectives

Operational excellence

The system is capable of achieving excellence in business in operations

achiever higher profitability, The system for example requires help to decide

upon using a wide distribution network to get maximum reach to the customers

and exposure. The company may pursue a strategy of aggressive marketing and

mass production.

New products, services and business model



The system can help achieve growth strategy. A new product introduced

with a very fast growth potential provides a mean for steady growth business

turnover.

Customer Intimacy

As the system provides helpful information, relationships among business

partners can be built up. The system will help the company to their customer and

serves them well, ‘the way they want to be served’, the customers generally

responds by returning and buying from the firm . This raises revenues and profits

as well.

The system can provide the right information at the right information at the

right person, for making an informed decision. The system makes it possible for

the decision makers to use real-time data from the market place when making

informed decisions.

Competitive Advantage

As the company have countable competitors, through market research to

understand the market dynamics involving demand-supply.

Survival

The system can help just in time inventory thus making it possible to

adjust unnecessary fluctuation on demand.



Scope and Limitations

The two major applications used on the development of the proposed

system are the Microsoft Visual Basic 6.0 which serves as the graphical user

interface (GUI) and lastly the Microsoft Access as the back end which serves as

the storage of data encoded or entered into the interface.

The major scope of the proposed system is to improve the current sales

and inventory management process of the company thus eliminating the usage

of such manual process. The system can easily keep track of how much and

how many finished goods is on hand on real time. The system can also generate

report of the requested parameters or based on the users criteria. The system

can generate inventory with sales report. The scope of an inventory system

define which needs it addresses, including valuing the inventory, measuring the

change in inventory and planning for the future inventory levels. The value of the

inventory at the end of each period provides a basis for financial reporting on the

balance sheet. Measuring the change in inventory allows the company to

determine the cost of inventory sold during the period. Together, inventory values

and level changes allow the company to plan for future inventory needs.

One of the limitations of the proposed system is its incapability to hold

large amount of data thus may cause the system to slow down its process but



this can be resolved by increasing the capacity of the server used on the

development of the proposed system. And lastly, the proposed system may not

call for an alert or does not have the ability to call once inventory is below the

safety level or the inventory level.

Expected Benefits of the Proposed System

The beneficiaries of the proposed system are:

The company or the management can control and cut expenses on overall

inventory management operating costs in the areas of labor, facilities, and

logistics. As expected, the system can help reduce and even eliminate material

shortages and discrepancies on inventory buy up to 44.2% thus may add up to

sales revenue of the company by up to $ 162,565.00 annually. Expenses on the

usage of stock cards can be reduced by 73% as currently the company has 1:1

ratio of item to the stock card. Reduction of manpower especially inventory

controllers, thus reducing labor by $ 37,800 annually. Supply on time inventory

realization can be achieved thus can reduce monthly physical inventory into

semi-annually or quarterly.

The employee can be able to generate report easily and manage their

working time fairly as the manual system will be replaced by the proposed

computerized system.



Payback Analysis

Another common approach to measuring a project’s worth is the break-

even point. The break-even point (also called the payback method and analysis)

is defined as the number of years it takes a firm to recover its original investment

in the project from net cash flows or simply, refers to the period of time required

to recoup or recover the funds expended in an investment.

A. Development Cost



Table 1. Development Cost of the Proposed System

Table 1 shows the development cost that will be incurred upon the

development of the proposed system. Costs and expenses are divided into three

categories: Manpower expenses which includes all the specialists involved on

the process, the materials and machine expenses which has the largest expense

contribution on the development and lastly, the overhead or the operating

expense which includes power charges.

B. Operating Cost



Table 2. Operating Cost of the Proposed System

Table 2 shows the operating cost of the proposed system after the

development. These are cost incurred on the operation of the project or the

proposed system.

C. ROI (Return on Investment)

ROI = Development Cost – Operating Cost

Development Cost

ROI = Php 370, 258.65 – Php 88, 206.22

Php 370, 258.65

ROI = 76.18%

D. Savings

Savings = Development Cost – Operating Cost

= Php 370, 258.65 – Php 88, 206.22

= Php 282, 052.43

E. Payback Period



Payback Period = Development Cost

Savings

= Php 370, 258.65

Php 282, 052.43

= 1.31 or 1 year and 3 months

Chapter 2

Detailed System Study and Analysis

Existing System

A. Block Diagram



Figure 4. The Block Diagram of the existing system

Figure 4 shows the company’s existing process flow / system flow chart.

The existing stock card system has eight processes starting with goods receiving

note on which this document summarizes details of item receipt from the main

factory. It contains the item code, description, the sales order reference number,

the quantity to be stocked as well as the goods receiving note reference number.

On this process, the inventory controller received the document before receiving

the physical product or item.

Next process is to do the receiving of physical item and logging via

logbook. The controllers then input the inventory details / data into stock cards as

well as into the manual inventory monitoring using excel spreadsheet. Once

these are done, controllers then sign the GRN for closing and then forward to the



main factory care of finance. Last activity on this existing process is the

preparation of delivery receipt as well as the dispatching notice as the required

docs during shipment then issuance of these two docs to release the product.

Upon release of product, last process is for the inventory controllers to

immediately deduct the shipped quantity on stock card.

B. Process Modeling

B.1 Context Diagram

Figure 5. The Context Diagram of the Existing System



Figure 5 shows the context diagram of the existing system. The process

starts on the customer who issues a sales order or a product order. The main

factory which also represents the head office then confirms the order and

immediately starts to produce. The main factory then transports the finished

product to the distribution channel, SK Corporation thru goods receiving note for

storing purposes. Head office then calls for shipment and the DC prepares

dispatch notice for product preparation. DC then issues the delivery receipt to

customer who also receives the end product in return.

C. Decision Tree

Figure 6. The Decision Tree of the Existing System

Figure 6 shows the decision tree of the existing system. The decision only

falls into two major concerns: upon receipt of finished product or item from the



main factory or the head office, if parts are all found ok or within quality

specifications, inventory controller then receives the documents (goods receiving

note) together with the physical item, logs details on the logbook, input details to

stock card as well as input details on the manual excel monitoring. On the other

hand, if products are found reject, all of the delivered quantity under same lot and

batch will not be received and stored at hub thus are subject for return and

backloading.

Proposed System

A. Block Diagram



Figure 7. The Block Diagram of the Proposed System

Figure 7 shows the block diagram of the proposed system. From the

original eight manual steps, now it has been trimmed down into six processes.

The process still starts on the receipt of goods receiving note or the GRN, and

then follows actual verification and counting of products and items to be received.

The three old fashion inventories receiving from the existing process has been

consolidated into one step in the proposed system and that is receiving will be

done thru the use of the proposed system, C-SIM+. Closing and forwarding of the

GRN is still on the process. Before the actual shipment happens, preparation of

dispatch notice, delivery receipt and invoice is being done. Upon the preparation

of DR and Invoice, on hand inventory quantity on system automatically calculates

and refreshed for real time inventory capture purposes. Last process is the docs

issuance and actual shipment.

B. Process Modelling

B.1 Context Diagram



Figure 8. The Context Diagram of the Proposed System

Figure 8 shows the context diagram of the proposed system. Unlike the

process on the existing system, invoice is not yet incorporated on the proposed

system. The diagram still follows the existing process, some process were just

added like inventory adjustments and this is done when there are variances on

the on hand stocks and new inventory output report after adjustments as well as

product reject notice which can be done using the RMA ticket form of the

proposed system. RMA is being used when there is a customer order or sales

order return from the buyers or from the customers. This is mainly done to notify

the defect and rejects of the shipped product.

B.2 First Level Data Flow Diagram



Figure 9. First Level Data Flow Diagram of the Proposed System

Figure 9 shows the first level data flow diagram of the proposed system.

The process still starts on processing the customer order and ends on an output

report from the different transactions done. Major data at rest included on the

process are the Sales and Inventory Data file.

C. Data Modelling



Figure 10. The Entity Relationship Diagram (ERD) of the Proposed System

Figure 10 shows the entity relationship diagram of the proposed system.

Details of customer are listed as follows: customer name, the customer billing

and shipping address which includes the city, state if customer type is other than

local, zip code, country and contact or phone numbers including the fax number.

Currency is also added on the details. Item purchased also have details like the

product or item number or simply the item, the item type, item description and

then the unit cost or the selling price. Customer order or the purchase order

includes also the PO number as well as the details needed on billing and

shipping.

D. Decision Tree



Figure 11. The Decision Tree of the Proposed System

Figure 6 shows the decision tree of the proposed system same with the

decision tree of the existing process. The decision again only falls into two major

concerns: upon receipt of finished product or item from the main factory or the

head office, if parts are all found ok or within quality specifications, inventory

controller then receives the documents (goods receiving note) together with the

physical item, logs details on the logbook, input details to stock card as well as

input details on the manual excel monitoring. On the other hand, if products are

found reject, all of the delivered quantity under same lot and batch will not be

received and stored at hub thus are subject for return and backloading.



Chapter 4

Testing, Implementation and Maintenance

The chapter presents the evaluation strategy and procedures undertaken

by the researchers to determine the acceptability of the project made. This

chapter includes parallel run which shows the testing procedures done for the

security and function of the new system User testing that will elaborate the

requirements of the new system for the implementation and providing manual

guide for the users and the system maintenance that describes how the system

will be maintained, monitored and archived.



A. Parallel Run

Parallel run stage of the system development is very essential

process. This is being done to support the existing business process of the

system while migrating to the new process. This process will ensure that the

transactions of the existing system will not be interrupted and be updated real

time until such time that the new business process is already on use.

A.1 Security Testing

Security testing is also an important aspect and part of the

development. It is very important that each system have all the security

measures and capabilities. Each users of the system has a predefined authority,

access and responsibilities. A user may or may not able to access similar

functions of the system based on the authority level set during the parallel and

pilot run of the system.

B. Function Testing

Function testing involves the flexibility of the system in performing various

tasks on a predefined scenario. The existing system relies mostly on the human

intellect and skills using the manual tools like paper and pen. Various errors and



process variability can be encountered (ie, wrong calculations of stock). The

proposed system on the other hand, can reduce or even eliminate this numerous

errors that are always present during the entire business process.

On this process, all functionalities of the system are tested as per the

criteria set by the users. Might as well have the corresponding reports generated

upon doing various transactions on each of the forms of the system.

User Testing

User testing provides the explanation on how the system is to be operated

by the future users of the system. Accompanied by this is the availability of

usernames of each user who will navigate the entire functionalities of the system.

A. Newly Developed System

Having a new system is also accompanied by numerous schedules

of trainings on how to operate the system .Part of this is the system kick-off

meeting on which this will serve as the go signal to commence the usage of the

system. A presentation will also be prepared to visualize the new business

process using the new system.



B. User Manual

Upon the implementation of the system, a consolidated reference

manual or book is published as a future guide or system hand book of the future

end users of the system. The manual contains also the necessary information

about the operation of the system .Each application also shows a step by step

procedure which will serve as a guide for navigation enhancement. The manual

also lists down explanations on how the system is going to be troubleshoot when

errors arise.

System Maintenance

System maintenance includes system monitoring, database archiving and

back up. This will help the company maintain the accuracy an efficiency of the

system. Archiving and back up is needed when it is needed to ensure the

elimination of system failure.

A. System Monitoring

The system is monitored real time to lessen the errors and system

failures thus may help system administrators or database administrators to solve

and resolve errors before it became worst.



Chapter 5

Summary, Conclusions and Recommendations

The chapter presents the summary that briefly explains the researcher’s

project. It also includes the conclusion that state why the research project

considered and adapted. Recommendation are given in the latter part for the

enhancement of the study for reference future research

Summary

The researchers chose SK Company for the study and conducted an

interview about its current system and found out the problems of the company



regarding to the management of their inventory. The researchers have proposed

a LAN- based Computerized Sales and Inventory System in regards with the

problem noticed.

The proposed system will implement the use of the computer with its

operation. Thus, eliminating the use of so much manual process replacing it with

efficient flow of data with the help of information system.



The researchers have provided documentation with the comparison

between the proposed and the current system. The manual compare to the

computerized way of management of data.

The researchers proposed this system to resolved the problem

encountered by the company. In this system, company will be able to provide

the need of the customer better thus resulting to better service offered.

Conclusion

This section discuss the meaning of results beyond what the system mean

statistically; where the researchers interpret the findings and indicate what can

be concluded from them.

The researchers found out that the SK Corporation manually manage the

inventory flow of the company with paper and pen format. The use of this

method takes much time and costly operation. The time for writing in logbook and

stock card must have given to other important thing to be consider with regards

to the company operations.

Then, the researchers provided a proposal of a LAN- based computerized

sale and inventory management for the figured problems and inefficiency to be

resolved. The proposed system or the Computerized Sale and Inventory

Management System is a computer-based system for tracking inventory levels,

http://en.wikipedia.org/wiki/Inventory

http://en.wikipedia.org/wiki/Computer



orders, sales and deliveries.With this system, company can generate sales in

relation with its capability to capture real time inventory. It provides quality data

and reliable information for the inventory flow during the company operations.

Order and service management is also a benefit of this system. It aims to remove

the manual inventory management process of the SK Company which made its

operation costly, time consuming and problem prone way of managing the

inventory flow. This system will increase the efficiency of the company, better

way of warehouse organization, updated data, and more data security.

The researchers found out that the proposed system need software which

is the Microsoft Visual Basic 6.0 as front end and the

Microsoft Office Access as the back end. The development and operation of the

system takes cost and it takes 2-3 years for the company to recover the cost but

it is much worth the way than sticking with the original system.

Recommendations

With all the efforts and time spent with this system. The proposed LAN-

Based Computerized Sales and Inventory Management System has still more

room for improvement for efficiency. Future use of this study for improvement,

suggestions and recommendations are considered with research.

http://en.wikipedia.org/wiki/Sales

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