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Business Case for Donum Industrial Corp.

July 11, 2014

IMS (Inventory Management System)

1.0 Introduction/ Background


Donum Industrial Corporation (DIC) was incorporated and registered under the Securities
and Exchange Commission of the Republic of the Philippines in 2007. The company ventured in
the trading industry with a mission of providing local and imported quality products to its
esteemed clientele.
DIC provides solution to the diverse needs of industry lines like Aggregate, Cement,
Concrete, Mining, Oil, Food Production and Processing to name a few. To further boost its
presence; in 2009 the company has started on-site fabrication of Aggregate Batching and
Crushing Plants in Rizal and Pampanga provinces.
In 2011, DIC built its own fabrication shop in Antipolo, Rizal that manufactures high
quality woven wire screen, to cater to the increasing demand and further provide its clients
with the highest level of service in a timely manner. Today, DIC delivers high performance
woven wire screen units to clients, of any preferred specification.

2.0 Business Objective


DICs goal is to be one of the best producer and manufacturer of mining and food
processing equipments, also to capture a large market of buyers in its industry. The IMS (
inventory management system) will big factor of achieving this goal. The information
systems project will administer all types of data required for efficient and accurate
warehouse inventory management. This may include modules or fields for keeping track of
all items and locations, requisitions, back orders, required levels of inventory on hand,
reorder points, lead times, inventory error tracking, and more.

3.0 Current Situation and Problem/Opportunity Statement


DIC, being at its early stage, still struggles to have a stable income because of its capital
expenditures. Using excel only to account for its inventories and transactions, the in- house
IMS will provide a quality control in the businesses by handling its transactions and keeping
track of the inventor and it will help the company be stable in its industry.

4.0 Critical Assumptions and Constraints


The Fabrication Information System project shall be undertaken with the following
presumptions:

Cost - The project team will probably cost P380,000 for two months, 40 days of work
(Monday-Friday) *see exhibits.

Time Developing the IMS will require two months

5.0 Analysis of Options and Recommendation


There are several options in addressing this opportunity:

Develop the IMS

Do not develop the IMS and retain the use of Microsoft Excel to save the project cost of
P380,000 invest it to gain interest or buy a new equipment

Seeing the opportunities that the IMS will provide to DIC, the company will pursue to
develop the IMS considering it as a critical investment and as a tool for efficient inventory
management. The company is optimistic that it will gain stable profit and continuously
expand thus, we can say that IMS will play a significant role in the growth of the company
because of its provision of efficient control over the transactions of the business.

6.0 Preliminary requirements


The main features of manufacturing inventory software include the ability to:

Automatically generate bills of materials for new manufacturing jobs.

Convert customer sales orders into work orders.

Create work orders for a variety of jobs, including disassembly and maintenance.

Build manufacture orders to house multiple work orders and bills of materials.

Estimate final costs for products to help with pricing.

Print invoices and packing slips for fast delivery.

7.0 Budget Estimate and Financial Analysis


The budget allocation for the project is P380,000. This is based on the assumption that
the project team will work 40 hours per weekdays (Monday to Friday) for two months. A
daily cost of P3, 000 will be given for the project manager, P2, 500 for the systems analyst,
P2,500 user interface designer and P1,500 for the document analyst. After project is
completed an amount of P250,000 will be used for the maintenance and support services
for 5 years.
Benefits from the project will be in form of cost reduction and efficiency in business
operations. With the IMS, the company can monitor inventory levels in real time, manage
inventory in multiple warehouses, train employees to help with inventory management and
much more. All of these things help you keep costs down, spend your money wisely and
avoid making poor choices, like overstocking on slow-moving products.

8.0 Schedule Estimate


The estimated time for the making of the IMS is at least two months. The duration of this
period already includes system testing and implementation. Also, if ever there will be a system
malfunction, this period is to accommodate the treatment of an expected breakdown for the
system. *see exihibit 2.

9.0 Potential Risks


The following have been identified to be the most significant risks:

1. Failure to capture user requirements accurately resulting in a useless IMS


2. Mismanagement of the IMS that will lead to unwanted losses of the company.
3. Cost vs Benefit assumption. The benefits may be immaterial to cover the expenditures of
implementing the project
4. Vulnerability of the IMS to be hacked by the people to be used for fraudulent purposes.

10.0

Exhibits

10.1

Project manager
Systems analyst
User interface designer
Document analyst
TOTAL

ESTIMATED COST
Daily salary
Work time (Mon-Fri)
P3,000
40 days
2,500
40 days
2,500
40 days
1,500
40 days
P9,500
40 days

Total
P120,000
100,000
100,000
60,000
P380,000

10.2
Phases

Days

System planning

System analyzing

12

System designing

System implementation

12

System operation and support

total

40 days