DE LA SALLE UNIVERSITY

Ramon V. Del Rosario College of Business

Management and Organization Department
AN INFORMATION TECHNOLOGY STRATEGIC PLAN FOR
PHILIPPINE HARDWAREHOUSE COMPANY, INCORPORATED

In partial fulfillment of the course requirements in Information Management

Submitted by:
Adina, Charlene Gail
Ang, Charisse Jollins
Cruz, Angelo John Carlo
Ibasco, Alvin
Gonzales, Jonathan

Submitted to:
Prof. Roxas, Jeffrey
TABLE OF CONTENTS
I. Introduction of the Project ………………………………………………… 3
 II. Background of the Company …………………………………………….. 4
A. Mission ……………………………………………..………..……… 5
B. Vision ……………………………………………..………..……….. 5
C. Organizational Chart ……………………………………...……….. 5
D. Core Competencies ……………………………………...……….. 7
E. Business Line ……………………………………...…………..….. 9
F. Customers ……………………………………...…….………..….. 10
III. Analysis: Justification for the project …………………………………….. 11
A. Porter's Five Forces ……………………………...……………….. 12
B. Value chain analysis ……………………………...……………….. 13
C. Balanced Scorecard ……………………………...……………….. 14
D. SWOT Analysis ……………………………...…………………….. 15
IV. Importance of Information Technology
A. Statement of the Problem
V. Priority Projects …………………...…………………………...…….. 17
VI. Proposed System
VII. Financials ……………………………...…………………………...…….. 30
VIII. Implementation Plan ……………………………...…………...…….….. 37

I. Introduction of the Project

The project is all about supporting Philippine Hardware House Co.

Incorporated (PHCI) expansion plans and continuous growth. The

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implementation of this project will help PHCI to reduce operational bottlenecks in
the future, actualize the economies of scale and become efficient by deriving
value from information technology. With over 1000 hardware store customers, 91
product line and 2539 SKU’s and continuously growing company, these projects
would help every individual in the company to be more efficient and productive
and will help the top management make good and sound decision for future
development and plans.

The group proposed three (3) main project of the company to be

implemented early January 2018. These are Inventory Management System,
Retail POS System and Accounting Management System. These systems are
tiny parts from 3 modules of an Enterprise Resources Planning System. The 3
modules are Material Management Module, Financial Accounting and Controlling
(FICO) Module, and Sales and Distribution (SD) Module. The Inventory
Management System and Retail POS System which is an IT infrastructure is part
of the Material Management Module of an ERP. The Accounting Management
System is part of Financial Accounting and Controlling (FICO) Module.

The strategy of the group for this project to become more efficient in a way
that it will not create a bottleneck for them because of the cost that will incur by
the ERP system. Modular approach of the ERP system will be used. It will start
from the very important part of the business process that needs to be solved
immediately down to the least important. The proposed three (3) projects of the
group will be implemented and depending upon the performance and growth of
the company including the reliability and productivity of the system in the
company. The company will continuously implement additional functionality in the
module that is needed by the company in achieving their objectives. With this, It
will help the company from its future expansion plans and continuous growth
without having any difficulty in cost.
II. Background of the Company
Philippine HardwareHouse Co. Incorporated (PHCI) was issued with the
Certificate of Incorporation from Securities and Exchange Commission on

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February 6, 2003 with Registration no.: 200302777 under the incorporation of the
Ang family.
The company is an offspring of Shecom Industrial & Construction Supply
(Shecom ICS) established in 1990 and managed by its proprietor Jose S. Ang
together with his partner in life, Arlene Z. Ang. Shecom ICS’ primary objective is
to provide and deliver construction goods to its customers in the most cost-
effective and efficient way, ultimately providing the highest level of satisfaction to
its customers, making Shecom ICS a reputable and competitive company within
the Metropolitan Hardware industry. In 2003, Shecom ICS had spin-off its
wholesale operations to PHCI. Philippine HardwareHouse Co., Inc. (PHCI) was
established in order to exclusively handle the voluminous wholesale operations
of Shecom ICS while extending its services to more and bigger customers in-line
with the vision of its parent company. The management of both companies saw
the need for the parent company to concentrate its activities in the retail
business.
PHCI is currently managed by its active board of directors, consisting of
the President, Jose S. Ang; Vice President, Arlene Z. Ang and their offspring. It
currently employs 46 employees and has 27 delivery trucks including utility
vehicles. It has a warehouse located at 2713 Zamora Street Pasay City with a
total land area of 1,434 square meters. The company enjoys over 1,000
hardware store customers in the whole of metropolitan Manila area, the
provinces of Bulacan, Pampanga, Batangas, Rizal, Cavite and Laguna. It enjoys
the trust and support of its creditors, banks and suppliers.
In line with the company’s vision-mission, the management currently
expands its facilities in Pampanga with a 5-storey building holding the satellite
office and a warehouse. This expansion is meant to steer operations and have a
stronger market share in north of Luzon. Further market expansions are
envisioned in Visayas and Mindanao.
A. Mission
To provide competitive construction and hardware products in the market
and help build the country through public and private infrastructures.

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B. Vision
Philippine HardwareHouse Company Incorporated has a vision of an
urbanized country with developed infrastructures, well-built building
establishments and safe homes for every Filipino. It envisions itself to
become the prime supplier of construction materials and related goods in
all hardware stores throughout the country.

C. Organizational Chart
As a family corporation, the board of directors are composed of the
members of the Ang family. The head of the family, Jose S. Ang is the
President, while his partner, Arlene Z. Ang is the VP/General Manager
that also handles Treasury & Finance closely. While their 4 offsprings
assist in various areas of the business. The eldest, Merlin Ellery Ang, a
lawyer working in Court of Appeals also serves as the corporate lawyer of
the company. He offers legal consultation and services. The second son,
Marvin Daryl Ang, a Civil and Sanitary Engineer by profession offers
technical training to sales team and helped increase efficiency in different
processes of the company. He recently developed an MS Access for the
company. However it has incomplete portions especially for Accounting
functions. The daughter, Charisse Jollins Ang assists the VP/GM in
various areas of the business, developing controls and KPI’s. Recent
company activities required her special attention to Treasury & Finance.

Most of the managers and key personnels in the company are long-
time employees who have grown and proved loyalty with more than 10
years of tenure. Each key personnel closely seeks the president or vice
president’s approval especially for critical decision making. The top
management keeps an open-door policy where rank-and-file employees
may directly address his or her concern to the President or Vice president.
The below org chart depicts the relationship and functions of different
departments and positions.

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D. Core Competencies

Philippine HardwareHouse Company Inc. as a hardware and construction

goods distributor has the following core competencies that prove to be the
strengths of the company and adds perceived value to the customers:

1. Diversified Product Lines

Philippine HardwareHouse Company, Inc. (PHCI) purchases, sells

and distributes construction goods from manufacturers, other
distributors to retail hardware stores, public and private construction
projects. Currently, it holds 91 general product lines and 2,539

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SKU’s ranging from construction, hardware, electrical, plumbing
and chemical products.

The company retains a wide array of product lines in order to retain

customers and offset lower net profits per product. Low mark-up but
fast-moving items are bundled with products with slower turnovers
but with higher mark-ups. As a result, this averages lower mark-ups
with higher marked-up items. Also, this allows customer retention
as there is no need to source other materials from other vendors
since PHCI can offer all products needed for an entire construction
project.

2. Skilled and knowledgeable sales team

The employees of the company is knowledgeable with the best

uses of various construction products. They are able to provide
advice which products are most applicable according to the
customer’s/project’s needs.

The sales team also have a good grasp on various product lines’
wholesale market price changes and are able to utilize these for
win-win deals for the company and the clients.

3. Aggressive Expansions

In-line with the parent company, (Shecom ICS) and PHCI’s vision-
mission objectives, the management currently expand its facilities
in Pampanga with a building holding the north satellite office and a
3-storey warehouse. This expansion is meant to steer operations
and have a stronger market share in north of Luzon. Further market
expansions are envisioned for Visayas and Mindanao. With these
aggressive expansions, the company is able to reach and serve
further customers.

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 5. Utilizes credit lines from banks and suppliers for
expansion of facilities and customer acquisitions.

The company maintains several bank accounts and rotates cash

according to the decisions of PHCI’s VP-Finance. Several bank
accounts offers competitive loan programs which the company
utilizes to avail COD discounts from product suppliers, and
financing expansion projects.

The company also maximizes the long credit period that it enjoys
with its suppliers. The longer credit line allows the company to offer
the same days of credit period to their customers.

6. Own Construction Firms

Apart from supplying construction materials, other companies of the

Ang Family may offer extended services. Mr. Jose S. Ang and Mr.
Marvin Daryl Ang have construction firms which may contract for
the construction project of the client. They accept private projects
from renovations to a construction of the entire building. It sources
all its materials from PHCI and Shecom ICS, as it shares resources
like delivery trucks and work force from parent companies.

E. Business Processes

Sales Department

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 Under Sales Department, the process commences as soon as the
customer had placed an order either to the Sales Agents, Telemarketers
or to the Office Sales. The Sales team provides the details of customer’s
Purchase Order to the office who shall coordinate with the Warehouse
Manager of the product’s availability; and with Credit & Collection team, to
get the client’s clearance for new orders in order to verify if the new
transaction should be under C.O.D. or passable as a collectible. Once
Warehouse confirms availability of required items and Credit & Collection
approves new transaction with client, warehouse will prepare the
dispatching plan in coordination with the Logistics team to verify schedule
of loading to delivery trucks. Once the goods are set, the assigned driver
and helpers will deliver as planned.

Purchasing Department

For Purchases especially of regularly carried products, the

warehouse manager triggers the purchasing process. As soon as the
warehouse manager sees the need to purchase certain items according to
the sales team’s demand and his actual count of the inventory, he shall
inform Purchasing Manager to place order for those items. The
Purchasing Manager gets approval from the President or VP. As soon as
the approval was made, an order with the supplier is made as the
prepared check by the Finance team is signed to tender the approval. The
check is collected by the supplier or a bank deposit is made as a payment
to the supplier.

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 F. Product Lines

Philippine HardwareHouse Company, Inc. (PHCI) purchases, sells and

distributes construction goods from manufacturers, other distributors to
retail hardware stores, public and private construction projects. Currently,
it holds 91 general product lines and 2,539 SKU’s ranging from chemical,
electrical, plumbing and hardware products. The below table summarizes
major product lines from various suppliers categorized accordingly.

G. Customers

Though some customers are direct contractors or private individuals with

construction projects, majority of the customers of PHCI are retail Hardware
stores. For confidentiality purposes, customer names will not be provided for this
paper. However, the customers/accounts are handled per area by the company’s
Field Sales Agents. Company’s customers may be viewed according to
concentration of sales performance according to areas. The table below shows
per area sales performance between 2016 to 2017 ending month of October.
This provides insight on which customers according to area the company needs
to put more attention to. It also provides insight on the performance of the field
sales agent.

The table above shows that PHCI’s Manila customers composes the majority of
its sales. It also showed a big increase from 2016 to 2017. However, it is evident
that the PHCI’s market penetration in Samar and Cebu is still weak. Antipolo also

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shows a negative growth even though it’s just around the outskirts of Manila.
There is a general trend of growth for the sales of construction goods to the
Retail Hardware stores within the above listed locations.
III. Analysis: Justification for the project

Industry Analysis

The hardware store industry has been around since we could remember, it has
always been the backbone of home improvement for personal consumers and
infrastructure development of the nation. We could see several hardware stores
in an area sharing a slice of the pie, with most of them being profitable. With the
continuous growth of the Philippine economy and an increase in consumer
spending, the future of the hardware store industry looks very bright indeed.
Philippine Hardware House Co. Incorporated (PHCI) is reaping the benefits of
the increase in national economy and looks to further take advantage by opening
a 5-storey building holding the satellite office and a warehouse in Pampanga.
PHCI’s proposed investment on a I.T. system aims to capitalize the value it can
get from its expansion.
A. Porter's Five Forces

Competitors Bargaining power of Bargaining Power of

Buyer Supplier

● Highly competitive and ● The customers in this ● Suppliers generally

products are
commoditized due to
the number of players in
the industry
● Top competitors for
major product lines of
the PHCI hit the market ● There are several
with lower prices,
pulling down further
market price to product
costs
● Some major suppliers
also compete with
PHCI’s own customers
type of market usually dictate market price
chooses the supplier ● There are various
with best discount suppliers and is easy to
deals. Buyers can shift brands for same
have high bargaining product
power. ● The company however,
chooses to push quality
retail hardware stores products in the market
in the industry only
however. Volume ● Attractive incentives by
compensates for low Suppliers to its Dealers
mark-ups with some increase the power of
customers. suppliers over the
company, allowing them
to dictate quotas

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Threat of New Entrants Threat of Substitutes

● Moderate threat from New Entrants ● No evident threat of substitutes

● Warehousing and Market Share is ● Online purchasing for construction
key for Retailers to enter goods is not yet available
Wholesale Distribution
● Suppliers play an important role for
new dealers

B. Value Chain Analysis

PHCI’s value stream map is divided into five main parts: inventory management,
purchase order processing, picking and dispatching, delivery to customers, and
proof of delivery processing. The process is triggered when the sales agent
places an order from their clients to the office. The warehouse manager then
prepares the purchase order to trigger the picking and dispatching of the said
material order to the warehouse team. Logistics is then triggered when the PO is

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 received by warehouse to process the delivery. Proof of delivery is then
conducted with the customer.

C. Balanced ScoreCard

Perspectives Strategy

Goals Measure

Financial Increase in sales Overall sales and efficient

Increase profitability monitoring
Overall profits and efficient
monitoring

Customer Improve customer satisfaction Aggregate customer feedback

Increase customer confidence Percentage of repeat
customers

Internal Business Eliminate Dead Stocks Efficient Monitoring

Process Prevent product expiring
Eliminate out-of-stock figures
Improve efficiency in deliveries
Improve inventory management
Improve financial reporting
Efficient Monitoring/FIFO
Efficient Monitoring
Accomplishment rate
Key Performance Indicators
Key Performance Indicators

Learning & Growth Implement and adapt new I.T. system
Increase employee productivity
Improve Management decision
making skills
Efficiency index
Key Performance Indicators
Key Performance Indicators
supplemented by Information
Technology

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 D. SWOT Analysis
Strengths
● PHCI is a well established
company.
● PHCI have well experienced
top management in line with
hardware and construction
supply business
● PHCI has pool of talented
professionals especially their
sales force.
● PHCI is financially capable
● PHCI have diversified product
lines and assets
● Higher retention rate of
customers has been achieve
due to the fact that they offer
variety of products at a low
price.
Opportunities
● Booming International and
National Construction
Market.(ASEAN Free trade)
● The entrance of emerging
markets in the construction
supply industry.
● Due to slow technology
advancement in the Philippines,
It is an opportunity for the
technology companies to push
and create innovative ideas that
will support construction supply
industry in their day-to-day
operations, information
management systems or even
Weaknesses
● Poor Warehouse Management
that causes products to expire,
additional expenses because of
dead stocks storage costs (not
using FIFO method)
● Inefficient monitoring of the in
and out of products, which may
lead to theft, fraud, and decline
of profit for the company.
● In line with inefficient
monitoring, only items being
reported will be included to the
accounting system. Thus, may
not give management a clear
view of the company status for
decision making.
● Out of stock scenario is
rampant which causes delays
for deliveries. It might lead
customers to shift to other
companies.
● IT professional presence in the
business
Threats
● Construction Industry dramatic
change to better cater
environmental needs such as
the ever-dwindling supplies of
non-renewable resources like
the compelling cost-and-supply
arguments in favour of ‘greener’
alternatives
● Inflation rate that continuously
drive the prices of products
higher and higher.
● Increase of overhead costs due
to compliance with government
and lawmakers imposed
legislation in major driving
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 a more productive and efficient
equipment used to produce
different construction supplies.
sector of the industry such as
safety engineering of products,
employees rights and other
business management practice,
etc.

IV. Importance of Information Technology

It is no secret that technology is constantly evolving and rapidly changing the
landscape of many different industries. This ranges from increasing the efficiency
of day-to-day operations to manufacturing new and advanced high-tech products.
Typically, it’s the companies that have the ability to adapt and embrace
technological change that ultimately survive the competitive business climate.

Historically, the overall construction industry has been slow to integrate change
into their business models. However, early adopters understand the benefits of
embracing new technological advancements as they look to gain an edge on
their competition. In order to compete, companies should look to shift toward
technology that can be a strategic long term asset.

Technology is changing the industry and one key ways is to creat more efficient
day to day operations. (Electrical, JM. 2014)

With the continuous growth and future expansion plans of Philippine

HardwareHouse Co. Incorporated (PHCI), we can confidently say that investing
and implementing a stronger IT system for their business is the right track for the
company to take. With over 1000 hardware store customers, 91 product line and
2539 SKU’s, it would be very difficult for the company to keep track of all records
efficiently and maintain their existing customers without the help of an I.T.
system. The company currently holds a wide range of product from construction,
hardware, electrical, plumbing and chemical with over 2500 SKUs. The sheer

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volume of SKUs tells us that it cannot be efficiently maintained without the help of
an I.T. system. In relation to the high number of SKUs, PHCI should implement
an efficient system that would help keep track of operations and generate
detailed sales reports that could provide vital information for management
decision making. With the current size of the company and with the start of
expansion, It will come to time that their existing manual management system will
give the management difficulties in making relevant decision for the company.
Worst is if they ignore and just continue the current system they have now and
they continue to expand drastically, it may lead them to improper monitoring of its
assets and resources which may lead the company to loss.

The group thought that in this time of expansion and increasing Philippine
economy. This is the high time for the company to invest and implement an I.T.
system for the growth and sustainability of its business.

A.) Statement of the Problem

Coming from the analysis of the group for PHCI, the statement of the
problem is :

“What Information System should PHCI Top Management invest and

implement in the company that will support its growth, sustainability and
day to day efficiency?”

V. Priority Projects
1.) Inventory Management System

The Inventory Management System (IMS) manages different products,

quantities, prices, product history, products description, supplier's price, purchase
orders and other related documents. This system successfully organizes and
keeps track of the inventory of consumable supplies and materials.

It aims to provide a fast and easier way to monitor the movement of your stock of
goods. Its covers item entry, releasing of items, inventory adjustment,
transferring of goods from one warehouse to another.

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The following are the benefits of an IMS :

● Monitoring and Control - It monitors the movement of supplies and

materials from the time of delivery to the time of disposal or consumption.
This sets up parameters that will be used during transaction processing.
● Inquiries - Inquire specific information on a particular supply or material, its
status or location
● Reports - Previews on screen or print the reports that can be generated by
the system.
● Unlimited number of products with categories and subcategories, users for
the system, companies, positions and departments.
● Internal search engine of the company.
● Password Security & Level of Access - Protect the transactions in your
system. Users will be asked to enter their username and password before
given permission to access the system. It has levels of access where only
a specific module(s) is assigned and may be accessed by specific
employees.
● Tracking - Data can be accessed from other application systems like
Accounting System and others,if integrated.
● Recording - Records every transaction as assets are purchased, received,
paid for, transferred, rented and disposed.
● Complete reporting facility - Aside from the ready to use reports, company
specific reports can be customized as required depending on the
managers preference.

● Justification:
○ Two of the PHCI underlying weaknesses from the analysis are the
Poor Warehouse Management that causes products to expire,
additional expenses because of dead stocks storage costs and Out
of stock scenario leading to delays of deliveries. This is one reason

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 that the group wants to implement an IMS. This is to help PHCI
have a clear view of what is really happening in the warehouse in
real time and managing the in and out of products of the company.
This will help PHCI management in future decision most especially
that they are starting to expand. Also, it will help PHCI to become
more efficient when it comes to warehouse operation and
management and may lead to increase cash flow. It will help them
avoid dead stocks for additional storage costs, spoilage or
expiration, even theft or fraud.
2.) Retail POS System

A point-of-sale system is, at heart, a cash register — but because it’s based on a
PC, it opens up a new world of data about your business.

A point-of-sale (POS) terminal can be networked to other terminals, and to a

server in the back room or at another location. It can be expanded with handheld
devices wirelessly linked to the main system. You can use it to can track a
number of operations in useful ways and customize it as your needs change over
time.

The main advantage of a computerized POS system over a cash box or a cash
register is the sophisticated and detailed sales reports it provides. The software
lets you analyze sales in different ways, such as by SKU (item sold), time
periods, promotions, by store if you have more than one, or even by sales clerk.
It will help your inventory manager buy in the right number of cartons of tissue
paper with improved timing, and help your chef calculate how much cheese to
order for the coming week, taking into account an upcoming holiday. It can also
help reduce employee shrinkage.

● Two main benefits of a POS System are:

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 ● Accuracy: Scanning is more accurate than punching in numbers
from a sticker, or expecting the cashier to remember what each item
costs.
● Analysis: POS systems let you manage inventory, flag items for
reorder, and analyze sales patterns.

● Justification:
○ As of the moment, PHCI is only using MS access and manual
selling in their hardwares. Since they have wide variety of products
and starting expansion, the group is considering the retail POS, as
part of their expansion.
The retail POS will only supplement their Inventory Management
System since they have hardware stores that carry also the
products inside the warehouse. This will help them in properly
monitoring their products and to see what they have and what they
don’t have in the business. This will help them avoid delays in
deliveries to customers. Thus, productivity comes in.

3.) Accounting Management System

It offers tools that will allow you to effectively manage financial operations across
your business. vital financial data is collected, processed, stored, accessed and
presented to both internal and external users, in a way that is useful to optimize
the organization performance.

Here are the benefits of AMS:

1.) Align financial data standards across business units

2.) Provides control over how data is collected, organized and presented

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 3.) Instant access to accurate financial data across the entire enterprise
4.) Use the true data to know where to cut cost, increase sales and
profitability

● Justification:
○ In line with the Inventory Management System and the integration
retail POS the group is also considering the implementation of an
Accounting Management System. One reason for this is that the
company is already starting to expand their warehouse and
additional in Pampanga which may lead to additional employees,
increase in costs, etc. A good accounting system that is integrated
to IMSand retail POS will help the accounting department become
more efficient in creating reports for management decision.

4.) Customer Relationship Management System

Customer Relationship Management (CRM) is a strategy for managing all your

company's relationships and interactions with your customers and potential
customers. It helps you improve your profitability.

CRM a tool which helps with contact management, sales management, workflow
processes, productivity and more.

Customer Relationship Management enables you to focus on your organisation’s

relationships with individual people – whether those are customers, service
users, colleagues or suppliers.

Benefits of a CRM:

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 1.) Identify and categorise leads

it can help you to identify and add new leads easily and quickly and
categorise them accurately. You can create customised pitch documents
in less time, cutting down on response time and enabling sales teams to
move on to the next opportunity.

With complete, accurate, centrally held information about clients

and prospects, sales staff can focus their attention and energy on the right
clients and gain a competitive advantage.

2.) Increase referrals from existing customers

By understanding your customers better, cross-selling and up-

selling opportunities become clear – giving you the chance to win new
business from existing customers.

With better information you'll also be able to keep your customers

happy with better service. Happy customers are likely to become repeat
customers, and repeat customers spend more.

3.) Improve products and services

An often overlooked benefit of CRM software is that it will gather

information from a huge variety of sources across your business. This
gives you unprecedented insights into how your customers feel and what
they are saying about your organisation – so you can improve what you
offer, spot problems early and identify gaps.

● Justification:
○ From the analysis above, you can see that PHCI have more than
1000 returning hardware customers because ofthe fact that they
offer wide variety of products in the hardware and construction

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 supply industry with lower price. Having said that, the group also
considers implementing a Customer Relationship Management
system that includes database that monitor customer previous
orders, typical orders being bought, how frequent they bought this
particular product, credit line of customers, etc. which could help
management in determining different products to order in advance
from supplier in volume, further management strategy decision, and
may help PHCI to retain and attract more customers in the future.

V. Proposed System

● ERP System: Material Management Module, FInancial Accounting and

Controlling (FICO) Module, and Sales and Distribution (SD) Module:
○ Specifically:
1.) Inventory Management System
2.) Retail POS System
3.) Accounting Management System

Rationale

With expansion plans in the 3 year horizon for PHCI as part of their strategic
goal, it is identified that infrastructure must be capable of accommodating the
possible expansion on both the business and its operations.

Allocation of Resources

Resource allocation will be divided into key parts: People, Time, and budget for
the entire ERP system implementation.

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People

In terms of manpower allocation for the intended proposal, a project

management team will be setup in order to be the working team for the
implementation. This will be composed of the following roles:

PHCI Project Team

● Project Manager
● Functional Lead
● Warehouse Team Subject Matter Experts (SMEs)
● Supply Chain SMEs
● Logistic SMEs
● IT Change Lead
● Data Lead
● Business Process Manager
● Business Implementation Manager

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PHCI Steering Committee
● CIO
● CEO
● Project Sponsor
● Business Unit Heads

ERP Partner Vendor Team

● Project Manager
● Architect and Lead
● Supply Chain Functional Lead
● Inventory Management Functional Lead

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It is recommended that the project team will work full-time for the defined role in
the project rather than only be on a resource person capacity. This will result to a
focused and dedicated working group for the duration of the project. The
identified working group will also work on the project from kick-off to post
implementation ensuring that the group will function efficiently and will not need
to transfer knowledge as one member leaves the working group or a new
member joins the group.

Identification of Features and Functionality of Solutions

In addressing the gap based on the AS-IS and the intended TO-BE state of the
business processes of PHCI, material management and warehouse
management processes are the intended candidates for process automation.
The solution should address the following gaps:

● Shortage of materials
● Addressing gaps in the whole supply chain
● Procurement processes
○ Procurement for stock
○ Procurement for Consumption
○ Internal Procurement
○ External Procurement
● Raw material management process
● Work in progress management process
● Finished goods handling process
● Serial Number/Product Code identification

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 ● Material Planning
● Material Requirements Planning (MRP)
● Warehouse management
● Vendor valuation

The proposed system should capture the three main processes of PHCI -
resource extraction, order processing, and product design and manufacturing.
The proposed ERP system, when implemented, should streamline the process
and provide visibility throughout the whole value stream.

The finance and controlling processes on the other hand should address the
current manual processes of PHCI based on the following sub-modules of
available ERP FICO systems in the market:

● Fixed asset
● Accruals
● Cash journals
● Accounts receivable and payable
● Inventory
● Tax accounting
● General ledger
● Fast close functions
● Financial statements
● Parallel valuations
● Master data governance

The sales and distribution process also is a key component of the ERP
implementation plan intended by PHCI. The sales and distribution module must
address the following identified gaps based on the available modules:

● Customer and Vendor Master Data

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 ● Sales Support
● Shipping of Material
● Sales Activities
● Billing related
● Transportation of products
● Credit Management
● Contract Handling and Management
● Foreign Trade
● Information System

Sales and Distribution Cycle

Determine Best Available Product

Available systems that are specific to material management are the following:

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 ● SAP ERP - SAP MM Module, SAP FICO Module, SAP SD module
● Infor EAM - Enterprise Asset Management
● Oracle - PeopleSoft Enterprise Inventory and Fulfillment Management

The company could also consider open source systems (OSS) in their material
management processes. These are the available OSS solutions in the market:
● Netsuite Open Source Inventory Management System
● ABC Inventory
● Deliverd
● InFlow
● Odoo
● RightControl Lite

This will be evaluated further based on the vendor criteria that will be set by
management in determining the vendor to choose in implementing the material
management solution.
VI. Financials
● Inventory Management System

Description Price in Php

Back Office -POS

Warehouse Inventory Management
Back Office
Hardware and Software Package 60,000.00
Inclusions:
PC - Software

Sales module
● Sales Module
○ Cash
○ Credit Card
○ Debit Card
● Sales Report
● X / Z Reading
● Items Report
● Return / Exchanged Items

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Inventory System
● Items Profile
● Customer History
● Stock Balance
● Inventory Location
● Count Sheet
● Update Stock
● Purchase Order
● Delivery Receipt
● Issuance Receipt
Reports
● Inventory Report
● Inventory Dashboard
○ Quantity Sold
○ Quantity Not Sold
○ 50 % Quantity
● Supplier Report
● Count Sheet Report Variance
● Consignment Report
● Department Sales Report

● Retail POS System

Description Price in Php

RETAIL PRO POS PACKAGE

PRO POS RETAIL

Sales, Inventory, Reports
500-2000 Items only

TECHNICAL SPECIFICATIONS:
PC Terminal Minimium Specification Requirements: 68,000.00
Intel dual core processor,
4GB RAM, 500GB HD
15.6" LCD Monitor,
Keyboard & Mouse
500 Watts AVR,
Linear Barcode Scanner
CASH Drawer RJ 11,
Dot Matrix USB Receipt Printer
Service:6 month limited Warranty (carry in)

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 ● Accounting Management System

Description Price in Php

Accounting System

A. GL Windows: Accounting System for Windows

1. System Features and Description:

a. Define Accounts, Control Accounts Subsidiaries and

Cost
Centers 250,000

b. Entry and print facilities for Receipts, Disbursements,

Bank
Deposits, Journal Vouchers, etc.

c. Transaction Listing, Ledger Report, Trial Balance,

Cash
Receipts Book, Disbursement Book, General Journal
and other
Register Reports

d. Income Statement and supporting documents (other

Statements)

e. Balance Sheet and supporting documents

(Schedules)
f. Cash Position, Budget and Variance, and other
reports.

g. Define Fixed-Assets (Properties) for the generation of

depreciation report and posting of entries.

2. Integrated Billing, Accounts Receivables, Accounts

Payables

a. Customer (Receivables) and Suppliers (Payables)

Information
Table

30
b. Entry and print facilities for Invoicing, Delivery
Receipts,
Purchase Order, Purchase Vouchers, Receiving Report,
Sales
Returns and Purchase Returns.

c. Statement of Accounts, Aging of

Receivables/Payables, A/R and
A/P Schedules and Ledgers.
d. Sales Report, Sales and Purchase Registers

3. OTHER FEATURES:

a. Create special report templates and automatically

build them
through Microsoft Excel

b. Audit Trail and Transaction Locking Facilities

c. Multi-user (password-driven) security and network-

ready

4. EMPLOYEE

a. Employee Information Table (personal information,

education,
work experience, achievements and awards, etc.).

b. Customizable Entries for Income, Deduction,

Attendance,
Overtime, Employee Share, etc.

c. Customizable Computation for Taxable, Non-Taxable

Income,
Withholding Tax, SSS, Philhealth, etc.

d. Import Facility from Microsoft Excel data or Employee

Time-
Card Device

e. Set-Up different Payroll Types for payroll periods or

employee
groups.

f. Set-Up Employee Loans (SSS, HDM and other

Employee Loans)

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 5. Reports Include:

a. BIR Monthly Withholding Tax, Year-End Alpha List,

Year-End
2316 Form

b. SSS, Philhealth, HDM Monthly Reports

c. SSS, HDM and other Employee Loans

d. Employee Earnings Card

e. Payroll Register

f. Other Payroll Related Reports

6. Other Features:

a. Create special report templates and automatically

build them
through Microsoft Excel

b. Audit Trail and Transaction Locking Facilities

c. Multi-user (password-driven) security and network-

ready

7. SERVER

INTEL CORE I7 4790K 4.0 GHZ

60 GB SSD HARD DRIVE
500 GB HARD DISK DRIVE
16 GB RAM
DUAL GIGABIT LAN
TOWER SERVER CASING
MOUSE/KEYBOARD

VII. Implementation Plan

The group has decided to follow Kurt Lewin’s change model in making the
implementation plan for PHCI’s priority projects. The model includes three steps:

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Unfreeze, Change, and Refreeze; this ensures that the changes within the
company are introduced gradually, transition is made smoothly, and is stabilized
in the long term.

Year 1 - ERP System with Material Management module (IMS & POS)

On year 1, the group has decided to first introduce an ERP system in the
company and hire IT personnel since there’s currently no IT team in PHCI. Year
1 will focus on re-organizing PHCI’s warehouse in preparation for the use of
material management modules. The ERP system will be introduced but it will
focus mainly on inventory management and point of sale system. And since this
is the first year that a significant change will be introduced, the unfreeze stage is
longer because of the many discussions that will be held, together with
introducing the changes to the employees and evaluating their feedback.

Year 2 - ERP System with Sales and Distribution Module (Accounting)

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Considering that the implementation of IMS and POS is a success, year 2 will
now focus on a separate module which is sales and distribution. This will
primarily be the Accounting Management System of PHCI. Note that the
unfreezing stage is shorter but the change is still gradually introduced to the
employees, with the relevant evaluation of feedback. Additionally, given that the
company already has a vendor for the ERP system, there’s no need to select a
new one since the existing vendor will be the one to help implement the
accounting system.

Customer Relationship Management System

Once year 1 and 2 projects are a success, and IF the company is profitable and
liquid on the third year, the plan is to implement a CRM system. Note however
that this is subject to the company’s performance and will not necessarily be
implemented on year 3. However the group wanted to include the CRM
implementation on its priority projects to align with PHCI’s mission and vission.

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References:

JM Electrical (2014). The importance of technology in the construction.

https://www.americaninno.com/boston/the-importance-of-
technology-in-construction/

Other Websites:

http://enewsletters.constructionexec.com/techtrends/2013/03/aec-
information-technology-strategic-planning-step-by-step/

http://0-
www.portal.euromonitor.com.lib1000.dlsu.edu.ph/portal/statisticsevolution/index

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