A group report analyzing a local business to determine if the use of an ERP system would be best for his company.

1. Project Report
Group 4
Jon Cody
Jessicalind Ah Kit
Antonio Freyre

2. Table of Contents
Project Summary _______________________________________3
Introduction ___________________________________________3
A Brief History _________________________________________4
Store Organization_____________________________________ 6
Functional Areas ______________________________________7
The Sales Process_____________________________________ 8
Inventory Check-In Process _____________________________9
Shelving Process _____________________________________11
Current System Analysis ______________________________12
Problems __________________________________________15
Solutions __________________________________________17
Conclusion ________________________________________20
Works cited _______________________________________21
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3. Project Summary
In this report of the Music Mart Inc., you will be presented with information about the store’s
history as well as a detailed analysis of the store’s structure. We specifically looked at 3 different
systems within the store to come up with a better solution that would replace their current system and
greatly change the way the Music Mart is run for the better. The systems we choose to look at were the
Inventory Check-In System, The Shelving Process and The Sales Process of the store. In this report you
will find elaborate diagrams illustrating some of these systems as well as easy to read charts comparing
the various recommendations for a better system.
Introduction
The primary motivation that we had for this project was the opportunity to apply all the
concepts and procedures that we learned in class in a real life situation where our gathered knowledge
and thoughts could actually improve the performance of the company that we choose to work with. In
our careers most of the exposure that we get to real life scenarios is all textual and can sometimes be a
little abstract, making the learning process sometimes a little more difficult to understand. In contrast,
this project has been a very rewarding experience due to the fact that our opinions and solutions that
we presented to the store owner were actually taken into consideration for future practice.
Throughout the report we will present information regarding the company’s overall information,
such as history, general procedures and the position where they currently stand. We will then be
focusing mostly in the understanding of their current problems that represent the major drawbacks in
their operations so that we can later come up with the most appropriate solution that will maximize
their performance increase the most.
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4. A Brief History
After interviewing Tom Gallaghier of The Music Mart, Inc. on Beaver Ave. downtown, we
realized there was quite a history behind the store. The Music Mart wasn’t always in State
College. The store actually started approximately 60 years ago, in Bellefonte, PA. Five years
after its initial start up, the store relocated to its current location here in State College. Over the
years The Music Mart has had a total of 3 owners, each bringing in their own specialty to the
store in hopes of selling to the local community.
The first owner started the store mostly targeting the school band and orchestra
community. Selling and renting instruments such as the strings, marching percussion, and the
various horn instruments used in the schools, the store was the main provider in the
community to meet the musical needs of the various aged musicians in the state college area.
When the first owner retired and sold his business about 30 years after startup, a new
owner took over with a new interest that added more of the instruments we are used to seeing
today. Because of the owner’s interest in Bluegrass and country style music, guitars, banjos and
keyboard instruments soon made their way into The Music Mart. Today, these instruments
make up the majority of sales with-in the college community, and the selection of band
instruments for rent still provides for the grade school kids hoping to learn a new skill in their
school band.
After owning the store for only 12 years the second owner retired, and turned it over to
the 3rd and now current owner, Tom Gallaghier. His addition to the store was the addition of
the sound systems used in band performances. These include all the electronic components
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5. such as the speakers, the sound boards, cables, microphones and more. As electric guitars
became popular, they were also added as part of the inventory.
Currently Tom spends a lot of time in his business managing, keeping track of his
inventory, and also assisting customers in setting up their sound systems for various
performances on and off campus. He takes great pride in being able to provide a personal level
of service that the internet would not be able to provide, by assisting customers directly if an
instrument needs repairs, and helping them in finding the perfect product to satisfy their
needs.
Many of their customers are either those looking for their first instrument for the school
band, or the college community looking for their first guitar or a new keyboard. Although they
are in a college town, they also get their fair share of professional musicians as well, looking for
the professional service that Tom provides.
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6. Store Organization:
The organization of the company is rather simple. There is one Owner/ manager that
manages many part time employees in the store. There are music instructors that work in the
store in the two training rooms, but unlike many other stores, he chooses not to manage their
teaching schedules. He instead lets them work on their own with the understanding that they
will provide great service to his customers.
Part-Time
Employee
Part-Time
Employee
Owner
Part-Time
Employee
Part-Time
Employee
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7. Functional areas:
The functional areas found in The Music Mart are pretty much what you would expect in
any sort of retail store. There is the standard sales portion that includes buying and selling
inventory, as well as determining the proper price for each item. In addition to selling there is a
large part of the company that deals with rentals of the various band instruments and sound
systems to various customers. Another unique functional area comes because Tom doesn’t just
rent out his sound equipment, he also works on setting up the various equipment for customers
who need it, making an additional income for his time spent outside the shop. The other area
not directly managed by Tom, is the musical instruction rooms that are rented out by the
instructors.
One task in the store that creates a bit of extra work for the company is the accounting.
Currently they have it set up with an outside accountant that they hired, that they must
transfer all the data that they get from various sales and time clock punches from their DOS
based system, to another system called Peach Tree that the accounting firm will then use to
handle the financial needs such as pay checks and paying off bills. In reality, the accounting
firms should be able to use the system that the specific store has in place and not require the
owners to duplicate the data on to two different systems.
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8. The Sales Process
Receive
Establish what
Create and Product product and Determine
Demand products are
send purchase availability record price and
needed to
Forecast order to and delivery information in place product
meet monthly
manufacturer confirmation the inventory on display
demand
database
The first step when wanting to make an order is to create a demand forecast from previous
years in order to know how many products are expected to be sold during the year, this is only to have a
general idea of how many products from each product should sell each month and at the end of the
year. After having a slight idea of what the expected demand is the inventory must be checked to see
what is left from previous months in order to know the amount of products needed to cover demand.
Once the order quantity has been measured the next step is to go ahead and create the
purchase order that will be sent to the manufacturer via fax, who after receiving it will check the
availability of the products ordered and reply with an estimated shipping date. When the store receives
the shipment they have to go ahead and record in their inventory database the quantity and different
models of products received. The last step consists of establishing the selling price of the product, which
is estimated by comparing the prices of different websites plus the estimated shipping cost, and finally
the product is put into display in the store floors.
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9. Inventory Check-In
The functional processes of the checking in inventory are that the packing slip is found in the
box. Then the box is opened and the contents are checked against the packing slip and the person doing
the inventory notes down the discrepancies if there are any. Then the packing slip is stamped and the
information is filled out. It is then confirmed that the serial numbers are all correct. If the serial numbers
are not correct, the serial number is manually written on the packing slip next to the item. After that, or
if the serial number is correct, then the purchase order book is pulled out and the corresponding
purchase order is found. If it is not a special order, the order is priced for retail then rotated in the retail
area with older items rotated in the front and newer items in the front. Also, items that are similar are
not put on the same sales hook. If it is a special order, then the customers with special order items have
their names written on a piece of artists’ tape that is attached to that particular item that includes the
customer’s phone number and date of arrival. If it is a backorder, the purchase order is placed in the
book under the backorder section and the item is highlighted. Once done and If not a backorder,
customers with special orders are called. If the call is not answered, the person either documents voice
mail left or whether the phone is out of order/disconnected/voicemail is full. If the call is answered, the
person documents “message with _______”. If the received date is different from the call date, that
date is documented by the person. The person also documents what date the customer will be in to pick
up their special order. If purchase items have all items received, a “complete” message is written across
the purchase order and it is place in the completed section.
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10. -10-

11. Shelving process
In the shelving process, the items begin as having been priced for retail in the Checking In
Inventory process. Items dates are then checked to determine how old they are so they can be sorted
later on. It is then decided if items are to be put on special display hooks or are on regular shelving. If
they are put on special hooks, they are not put on the same hooks. If they are put on shelving or hooks,
they are sorted by date with the oldest first and the newest last. Items are then frequently rotated with
older items and the new items. The inputs for this process are the new stock and the outputs are the
rotation of items and shelving of items.
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12. Current Systems Analysis
Music Mart currently uses the AIMsi system from Tri-Tech solutions that is on a DOS based
system. AIMsi is an accounting management system and inventory management system. According to
the AIMsi’s website, AIMsi is, “a completely integrated POS and business software application that
operates in ‘real time’. All modules are interactive with each other and accounting is updated each time
a transaction is made. The various modules may be implemented at the same time or added on as you
are ready to implement them.” The Music Mart’s version of AIMsi is currently out of date and was
installed in 1997 for the Music Mart store. The owner finds that the current AIMsi system is tedious and
impairing his business. Some of the reasons are:
The current AIMsi DOS system was not built to be user-friendly. There is no in-house help menu
which can help in case of an error or a question about the system. AIMsi DOS is built to only do one
function at a time. Each time a user would like to make a new query where they want to find out a
certain item; they must click through a menu until they arrive at the desired screen. Once they arrive at
the desired screen or at any time in the process they wish to go back, they must click on the Esc key and
go back through every single step of the process until they are back at the starting AIMsi interface. A
graphic example of this using “Finding Units Sold of CD album” comparing the DOS version of AIMsi and
comparing the current version of AIMsi 7.0 is provided below.
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13. Comparison between AIMsi Dos System and
Windows Based System Processes
Finding Units Sold AIMsi DOS
of CD Album
Open AIMsi DOS
Hit Esc Key
system Main Page
If a person wishes to go back at any time in the
AIMsi DOS system they must click the esc key and
go to the previous screen. They cannot go to a Yes
new function
Open Inventory Go back to
Hit Esc Key
Page previous step
Yes No
Go back to
Open Music Titles
previous step
Hit Esc Key
No
Enter CD Album Yes
Title
Go back to
previous step
No
Click on Units Sold
Stay on Units Sold
Screen
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14. AIMsi Windows
Click on Cd Sales
Open AIMsi Click on Inventory Enter CD Album Units Sold appear
within Inventory
Windows interface tab Title on inventory tab
tab
If a person wishes to go back at
any time of the process for AIMsi
Windows, they can click on the
main interface tab or click on a
different tab for another function
Another issue with the AIMsi DOS system is that it is built to track inventory and accounting, but
is skim on extra features. AIMsi DOS does not match up a particular customer with their buying habits.
He is unable to track customers in order to attract business by targeting coupons or sales information to
buyers who regularly buy from the store.
Since the AIMsi system is out of date, every time there is an issue or error that needs customer
support, Music Mart must pay for customer service because specialized technical advice is needed since
most Tri-Tech Solutions customer service employees do not know the DOS system. The Music Mart
owner fears shortly that he will be forced into the AIMsi newest version (7.0) shortly because they will
eventually not support the DOS system. The current pay rate for customer service (as of December 5,
2007) is $115 pay-as-you-go per case basis or monthly support of $41.44 and $80.64 for standard and
premium service. These rates are only during standard business hours and if there is extra support
needed, a higher rate applies.
Since the accountant for Music Mart does not want to learn a new software system, the
accounting program, Peachtree, software system is run in the background of Music Mart computers.
Each night the store is operating, the inventory and accounting numbers from the AIMsi system must be
inputted into the Peachtree software.
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15. The Problems:
The main problem that Music Mart is facing with its information systems is that they are still
running a software program that is completely obsolete; this program is about ten years old and
they have been using it for this period of time, which gives them the upper hand of completely
understanding how it works. The owner of the store is the person in charge of making all the inputs
to the software and is the one who has the most experience with it. But since this is such an old
program, the providers of the software do not offer technical support for that version due to the
fact that they consider it archaic and they encourage customers to buy the latest version instead.
Therefore the only solution when coming across problems is to either to pay the provider extra for
personalized customer service or to contract a independent technician who will come to the store
and work to solve the problem which symbolizes a major cost for the store.
The latest version of the software was bought a couple of years ago from the same company,
which is considered to be one of the leaders in software solutions for music store management. But
because of the basic computer skills and knowledge that the owner has, he does not feel that he
would be able to use it properly and would not take advantage of all the extra features that this
latest version offers. Therefore implementing this software would involve him to undergo some sort
of training program that would teach him how to properly use the software and at the same time
bring to his attention what new features are available and how could these be used in order to
simplify some of the operations in the store. This not only ties him into having to spend more money
in training but also having to use some of his time that he has already devoted to the store in order
for things to run smoothly.
Another problem that comes in to play when implementing the software also involves the time
that involves doing so. In order to complete a successful transfer, all the store information must be
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16. completely up to date meaning that they would have to close the store for a couple of days in order
to complete an accurate inventory count. After completing the inventory count the information
obtained as well as other relevant information such as supplier information has to be uploaded to
the program in order for it to be able to manage the store.
When running a store in a college town most of the employees hired are students and have tight
schedules, limiting the amount of hours that they can commit to the store. When students leave
town for short or long term vacations, greater responsibility comes down on the owner and in most
cases forces him to fill those gaps of time left open by employees. The problem is not only that
these employees can only work for him only a limited amount of hours, but also that they will
eventually graduate and move on to some other location, taking away the possibility of investing in
training for these employees, with the purpose of being able to take some of the main responsibility
off the owner shoulders. This alternative would be something very expensive because he would
have to pay for training constantly and at the same time is very time consuming.
Currently the store is undergoing a constant money loss and at the same time the business
solutions that are being implemented are long out of date. They have decided to invest thousands of
dollars on a program that is just sitting in a drawer instead of being used to improve the business
operation. Also if they were to implement it today, they would no longer have the latest version, so
an additional investment would have to be made to purchase the update. At the same time they
have been paying customer support for the last couple of years, for a program that has not been
used once.
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17. Solutions:
After interviewing with Tom and discussing the issues faced with the current DOS based system
that he is currently using, we came up with a few ideas to improve his business. The first and probably
the best solution would be to use the ERP system he has purchased but not utilized. Another possibility
could be to keep his existing DOS based system, and just create a database with a program such as
ACCESS to eliminate much of the paperwork currently collected for the various transactions and
business details. The last solution would be to Purchase another ERP system such as Oracle to handle
most of the business processes found in most any retail store.
The first choice in our minds for a possible new system to integrate into the company would be
AIMsi by TRI-TECHNICAL SYSTEMS. AIMsi stands for “Accounting & Inventory Management Systems
Integration according to its website (https://www.aimsi.biz/default.aspx ). The main advantage to this
choice is that the system has already been purchased so spending money on new ideas Could be a
waste. Since AIMsi is an ERP system specifically designed for the music store industry and a few other
specialty shops, many other stores have already implemented this system and greatly benefit from its
use, saying things like "AIMsi saves us hundreds of dollars each month in inventory management time
and is the easiest POS system to teach staff that I have ever seen.- Beth Annon.” If this system is
implemented, Tom would be able to do his own accounting instead of wasting valuable time having to
reenter information into a separate program for his accountants to use. The large amounts of paper
work could also be drastically reduced as all information on customers, vendors, employees, as well as
the stores inventories and basic Sales and rental information, would be easily stored into the computer.
If this windows based system or a similar ERP system such as Oracle is implemented, Tom would
save much time and money keeping track of orders and updating accounting information as well as
inventory levels. No longer would he have to spend hours transferring data from sales invoices to other
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18. forms, or having to manually enter each item in the computer. The system updates in real time, so any
sales transactions would automatically go and adjust inventory levels and keep track of the financial
forms. The AIMsi system allows the use of bar code scanners to quickly update product information and
keep track of the constantly changing items in the store as well.
If another ERP system is chosen to be implemented, much of the same features would be
available to use and would still provide much of the same resources as the AIMsi system, but
implementation of the newer ERP systems would be much more complicated since you would have to
go through and manually enter most of the data from the DOS system. With the AIMsi System, since the
DOS version is made by the same company, it would be much easier and cheaper to stick with it since
the company has a special program to make it easy to convert the data. The other ERP systems
probably do not have the option to keep track of rentals either as they are more focused on basic retail
operations.
The other solution we came up with would use the current DOS based system but would
hopefully create less paper work within the company. With some programming, Microsoft Access would
be a cheap alternative to the ERP systems that would allow Tom to continue using the program he is
most familiar with. ACCESS could be set up to keep track of his sales orders and other data that has been
previously recorded in various notebooks. Instead of comparing multiple pages of information from his
binders, any new information can be searched for and compared automatically within the Access
Database.
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19. • PRO's
•Already purchased
•Easier intergration
•Greater control of inventory
AIMsi •Can keep own records
•Allows rentals
System •Create and update Barcodes
•Customer service
•CON's
•Hard to learn
•Will take some time set up
•Upgrades can be expensive
•PRO's
•Would eliminate much paper work
•Ability to search and update records
ACCESS •Can store large databases of information
•Would be easy to use once set up
•Cheaper than ERP system
Programing •CON's
•Would take time to program
•Would have to manually enter all information
•Data not updated real time
•PRO's
ERP •Well known and used
•Greater inventory control
System- •Customer service available
•Can run all business processies
•Customizable
Oracle •CON's
•Expensive to implement and buy
Retail Suite •No rental option
•Hard to learn/ set up
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20. Conclusion
Through this project, the team was able to apply class room knowledge in a real world setting through
actual business consulting. The team was able to communicate with the business owner the business
owner’s ideals, business constraints, and desire for advice from the team. The team went through the
business analysis processes of researching the business environment, taking into consideration the
business owner’s needs, using team planning to find business solutions, and making revisions if
necessary.
Achievements that were made during the project were: gaining practical knowledge of business
consulting and to actually work with a business owner to come up with alternative solutions for their
current business practices that actually might be implemented as a result of this project. Creating charts
of all the business processes was also important in contributing to this project.
Problems faced during this project included finding an adequate solution for the business owner
and how to make those solutions easier for the owner to implement. The business owner was already
set with pre-conceived notions of what they should implement, so convincing him that there were
alternate business solutions was difficult. There was a focus given by the team to help the business
owner to ease in his pre-determined solution since he was having difficulty implementing it in the first
place. A lesson was learned from this that helped the team understand real-world consulting in the
future. The issue that the owner was already wanting one particular solution even though he had failed
in implementation came as a barrier to the team. The team was able to learn while helping the business
owner realize that there were other options available than the one that he wanted to choose.
The team believes that the owner will implement the new AIMsi system soon in the future, as
he has stated that our meeting with him has helped him think of the benefits to the new system. He
stated that he has come to realize by this group project that he must hasten his upgrade to the new
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21. system before the AIMsi Company will no longer support his outdated version. He also was helped by
the team in coming up with solutions to implement the new AIMsi upgrade. Overall, the team was
successful in helping the Music Mart, Inc by fulfilling our goals to help a company improve a current
system that we set out to accomplish at the beginning of this project.
Works Cited
AIMsi: Accounting & Inventory Management System Integration. 15 Jun 2007. Tri-Tech Solutions. 3 Dec
2007 <http://www.aimsi.biz/>.
Music Mart. Music Mart Incorporated. 3 Dec 2007 <musicmartinc.com>.
Oracle. Oracle. 5 Dec 2007. <http://www.oracle.com/>.
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