3. 3
Executive Summary
Michael Wells
Inefficient Use of Resources
Our company currently is not realizing its full potential. At this time our company has multiple
stores spread throughout the country specifically for as the sales side of the business. Through
upgrading systems, we can regroup our resources and reallocate them more appropriately. The
Los Angeles, St. Louis, and Baltimore stores could be closed relieving 9 associate and 3
administrative positions. We advise to dissolve the sales department and for a PR department for
advertising. Those locations could be sold and would no longer need up kept, we then could
upgrade the Evansville facility to a corporate location. In this process we could downsize our
clerical staff tremendously with the new system taking care of invoices, order forms, and vendor
pings for inventory. Purchase orders would be instantly sent out by the system as soon as there
was payment confirmation. This all comes together and creates a smooth flowing system which
is easily expandable.
Expansion
The old system was extremely expensive to upscale with. Any expansion required hiring more
associates and/or buying a new location to put a sales office in. Any new expansion will only
require the production facility to be improved. The client/server system does not need upgraded
with increase in clients. However, all hardware will need upgraded as their models become
outdated- this cost hails in comparison to expanding the old system. The time needed to
implement these upgrades also are miniscule, and wouldn’t be needed except for on average
once every 5 years.
Evolution
Our company is already many years behind within the technology race. We can’t only think of
upgrading as getting larger, we need to break down our inefficient limbs of the company that are
just syphoning resources and rebuild an efficient engine to grow with. If this system is in place
there won’t need to be extensive planning for huge expansions, we could frequently create
patches and upgrade the system year round. This would make it extremely cheap to also chase
the consumers wants. The Loki System would be an online based on a local server in the
Evansville location. The system would take care of payment processing, invoices, sending the
pick list to the vendor, and depositing revenue with minimal oversight. An administrator would
do daily backups on an offline local server insuring little loss if the online server crashes.
4. 4
Downsize to Profit
Through closing the unneeded locations upon implementation the system would pay itself back
within the first year. The initial cost before the system would be $12,600 with a $1,000 recurring
monthly fee for T1-lines. The system however would take over up to 90% of clerical
responsibilities all-in-all estimating a maximum of 49 positions being relieved. This alone would
skyrocket corporate profits. We would need 2 people in HR for payroll per 250 employees.
Another team is working on implementing a direct deposit system however there would still need
to be manual interjections like overtime, time-off, raises and etc. All in all this low cost easily
upgradable system has great potential to snowball profit over the next coming years.
5. 5
System Alternatives
Current System
As stated previously the current system is outdated and hemorrhaging profits. It uses mail
delivery and depends on it which results in production delays and downtime. 4 people
generating purchase orders which then in turn have a total cost of $75 each to generate. We are
also unable to take advantage of invoice discount terms for quick payment due to the time
required to verify receipt of goods and the transfer of paperwork.
Pre-Packaged System
This choice almost always comes with license fees and will not be tailored exactly to our
company. A system not created explicitly for our use would mean some of the funds were
wasted by paying for parts of an application we wouldn’t use. The upfront cost will be a little
lower than the custom-design however. Both the pre-packaged and custom design system route
far outweigh staying with the current system.
Custom-Designed System
The system would take care of payment processing, invoices, sending the pick list to the vendor,
and depositing revenue with minimal oversight. Custom design works great with scalability
because you can start your system out with only what you currently need then add features or
upgrade it according to the companies growing needs. Our staff would understand it more
naturally as the software would solely pertain to the business. We also would not meet any
license fees going this route either.
6. 6
Recommendations
My recommendation would be upgrade into a custom designed system. The initial cost of
equipment would be $12,600 which would be made up almost instantly from the downsize. We
then would need to purchase the system.
Summary
With low impact cost for the initial startup and following maintenance of the system being
compared to the current cost of operations there seems to be no reason not to move in this
direction. This is the way of the future and this is the only way our company is going to succeed
in the future let alone stay relevant in the competition.
7. 7
System Structure Chart
Loki System
Customer
Orders
Administrator
Services
Order
from
Vendor
Email
Invoice
Update
Database
Add New
Book
Update
Inventory
9. 9
Context Diagram Narrative
Orders are entered by Customer or generated automatically. Invoices are verified by Accounting
after payment has been made and shipment information has been received and verified. Loki
System sends ticket to Warehouse, and Warehouse sends back when order has been completed.
Legend:
External Entity
Context Process
11. 11
Narrative:
The Customer enters information in Loki System. Loki System then verifies payment, updates
inventory and sends the picking list to the Warehouse. Accounting then updates payroll for
Employee payment.
Legend:
Data Flow
Data Store
Process
External
Entity
13. 13
Narrative
Like the DFD previous to this one you can see Process 2 and Process 3 have been exploded for
further detail.
Legend:
Data Flow
Data Store
Process
External
Entity
14. 14
Database Deisgn
Entity-RelationshipDiagram
Narrative
Each customer has a specific customer number along with other information. The order table
contains a specific number order, date of order and the customer number. The item table
contains all of the item numbers along with how much, cost and where it is located. The order
line table takes both the orders and item table and create a sale list for records. The warehouse
table is where the id of the buildings where we keep inventory is located. Department and
15. 15
employee tables each contain a list of attributes to define them. The deductions table is where
we store information on insurance deductions for employees.
Legend
Database Entity (Called a Datastore on a Data Flow
Diagram
One or more
One and only one
Zero or more
16. 16
Network Diagram
Narrative
The internet will be fed into the router. The router is going to split it into the workstations and a
switch. The switch will fuel the servers.
