Chapter 1,2,3 (Shanne)

CHAPTER I INTRODUCTION 1.1 BACKGROUND OF THE STUDY It was in mid-2004 when Mr. Norbert B. Pagaspas decided to venture into business in the flourishing herbal industry. He established and registered Shanne Herbal Products in Buenavista, Agusan del Norte to carry out the core intentions of the business enterprise. After finding a suitable temporary site for the laboratory, it was then renovated in accordance with Bureau of Food and Drugs (BFAD) requirements. With the release of the BFAD License to Operate (LTO) in November 30, 2004, business operations began with just a few workers helping out in the manufacturing process of the initial batches of Shanne Herb-plus capsules which were then distributed to a few and selected outlets/pharmacies in Agusan del Norte and Misamis Oriental. The business steadily followed an upward trend in its growth. More people were needed to run the operations in the three major departments: Administration, Production Department, and Marketing Department. In 2006, Shanne Herbal Oil and Shanne Herbal Soap were introduced to the market. The new products were readily accepted. There was a rise in the gross income on the same year that was mainly attributed to the opening of business operations in the Visayas area and the expansion of coverage in the Mindanao operations.

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Another factor is the favourable consumer feedback and patronage, and the management’s commitment to provide high quality herbal products and innovative marketing strategies. The business is expected to grow much further in the coming years, and the volume of the manufacturing process will be beyond the capacity of the present laboratory. With the advent of the government’s policy on Good Manufacturing Practices (GMP) for all food manufacturers, management realized that to renovate and refurbish the laboratory in strict compliance with GMP would be deemed impractical. Management decided to construct a new 3-storey laboratory building that will faithfully conform to GMP guidelines and BFAD requirements. With the establishment of the new laboratory building, management hopes to expand its product lines and will soon venture into cosmetics and pharmaceuticals. Currently, Shanne Herbal Products operates in 16 key areas in the Visayas and Mindanao. In Cagayan de Oro City, a Shanne Herbal office can be located in A&G Arcade, Lapasan Highway. They deliver products within Misamis Oriental, Camiguin province, and in the Lanao area.

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Mission of the Company Shanne Herbal Products is dedicated to produce high quality products manufactured in compliance with international safety and quality standards. Vision of the Company Shanne Herbal Products shall be the preferred company in herbal dietary supplements and pharmaceutical products offering superior quality, value, convenience and satisfaction to customers in the Philippines and abroad. Objectives of the Company The company aims to provide affordable products that are beneficial to the health of the people in the country and abroad. It perseveres to provide customer satisfaction with the highest quality of herbal ingredients. Furthermore, it promotes the use of natural ingredients in medicinal purposes. Organizational Chart

Branch Manager

Book Keeper

Sales Clerk

Sales Representative

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1.2 STATEMENT OF THE PROBLEM This part tackles the problem that leads to the development of the Sales System of Shanne Herbal Products. Specific problems are: 1.

Sales data are hard to locate.

2.

Up-to-date reports for the use of management are hard to generate.

3.

Records are not legibly written, thus causing to the unreliability of financial data.

1.3 OBJECTIVES OF THE STUDY The study aims to provide Shanne Herbal Products with an easier and more modern alternative in doing their sales. Specifically, it aims to: 1.

Provide real-time sales data.

2.

Develop a system that easily generates reports to user queries.

3.

Create a database that would organize necessary details pertaining to sales.

1.4 SIGNIFICANCE OF THE STUDY The findings of this study will be beneficial to the following: The Management of Shanne Herbal Products. Data and sales analysis can be performed with the access of real-time information. Thus, the management will be able to make better decisions and plan accordingly.

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The Clerk of Shanne Herbal Products. The over-all system is very advantageous in increasing the productivity of the clerk. He or she would not have to manually write them on paper. The system would ensure accuracy and speed in recording sales transactions. The Customers of Shanne Herbal Products. The system would also be beneficial to the customers since it makes reliable outputs of the calculation of their bills. Customers would be served better and faster by the clerk.

1.5 SCOPE AND LIMITATION OF THE STUDY The proposed study is limited to keeping track of sales of Shanne Herbal Products. It is concerned with reports relevant for the management to make timely decisions and justifiable assessment of the business. Reports which present labor auditing are not anymore within the scope of the study. The limitations of the study include not involving the probability that customers would carry out credit card transactions. Also, credit is not viable to customers who directly place orders in the center.

1.6 METHODOLOGY 1.6.1 SOURCES OF DATA The primary source of data came from an interview with Mrs. Rose Cabunoc, the book keeper and Ms. Jenny Cagatin, the sales clerk of Shanne Herbal Products, regarding the company’s background and its business activities related to sales. The researchers also reviewed some of their source documents

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which the management refers to in coming up with reports. Secondary sources and information were gathered further from academic books and the World Wide Web. 1.6.2 METHODS AND TECHNIQUES The researchers used the Unified Modeling Language or UML like the Class Diagram, Activity Diagram, Sequence Diagram and Use Case Diagram. 1.6.3 TOOLS The study aims to develop a Sales System using Microsoft Visual Basic 6.0 for the front-end and Microsoft Access for the back-end. 1.6.4 DEVELOPMENT PROCESS Requirements definition

System and software design

Implementation and unit testing

Integration and system testing

Operational Maintenance Figure 1. Waterfall Model

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CHAPTER II REVIEW OF LITERATURE AND STUDIES The following are reviews, which show significant learning to the study. They are grouped into the following headings: Point-of-Sale System Overview, Sales/Collection Process, and Database Management Software. Point-of-Sale System Overview In any business establishment, it’s important to keep records of all transactions. A Transaction Processing System (TPS) performs the essential role of collecting and processing the daily transactions of the organization (Lucy, 1997). One TPS is a sales order processing system, or order-entry system. It routinely records sales orders and also provides data to other systems that fill those orders, maintain inventory levels, and bill the customer (Schultheis et. al, 1998). Point-of-Sale (POS) Systems are another facet of the order-entry system. POS Systems capture data about orders at the point of sale and are frequently found in fast food chain stores, department stores, and grocery chain stores. POS Systems provide immediate updates to sales and inventory systems and allow firms to monitor sales trends minute by minute. They also allow firms to capture customer data and preferences and add the information to their data warehouses (Schultheis et. al, 1998). The POS System allows simple ordering through its features such as unlimited menus with pictures, on screen review for modification, automatic calculation of tax and tender, tracking of complete audit trails, and quick tender

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keys. Furthermore, it can offer automatic calculation of profit margin percentage, instant reports, built-in real-time data, and the ability to manage the register from a back office computer. The reports that can be generated are the following: Sales and Profits, Top Sellers and Worst Sellers, Shopping List, Sales by Category, End of Day Report, Daily Financial Summary, and Hourly Sales Report. Sales/Collection Process The objective of the sales/collection process is to sell and deliver goods and services to customers and collect payment. The finished goods and services from the conversion process are sold to customers (external entities) in exchange for their payment, usually in the form of cash (Haag et. al, 2005). The sales/collection business process is sometimes called the revenue transaction cycle or the order to cash mega-process; therefore, one must look past the labels an enterprise assigns to its various activities and examine the substance to identify the sales/collection process for a given enterprise. Information from the sales/collection process can provide decision-making support for many information customers (Dunn et. al, 2005). Database Management Software In order to carry out the system’s task, a database is necessary. A database is a file of data structured in such a way that it may serve a number of applications. The data structures and relationships require highly technical software – known as the Database Management Software (DBMS) – to deal with them. The DBMS is a complex software system which constructs, expands and

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maintains the database. It also provides the link, or interface, between the user and the data in the base (Lucy, 1997). Data collection begins with a transaction (e.g. taking a customer order) and results in data that serves as input to the TPS. The Product ID for each item is determined, and its price retrieved from the item database. The Point-of-Sale TPS uses the price data to determine the customer’s bill. The store’s inventory and purchase databases record the number of units of an item purchased the date, the time, and the price. The inventory database generates a management report notifying the store manager to reorder items that have fallen below the reorder quantity. The detailed purchases database can be used by the store or sold to marketing research firms or manufacturers for detailed sales analysis (Stair and Reynolds, 2008). The important of recording sales in the most accurate way could not be stressed more than enough. To Haag et. al (2005), sales are the life-blood of most companies. Without cash flows from sales, companies cannot remain in business very long. In a rapidly changing, ever more competitive Information Age economy, every organization that wants to grow must sooner or later develop an effective sales and inventory system.

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CHAPTER III REQUIREMENTS, ANALYSIS AND DESIGN 3.1 NARRATIVE DESCRIPTION OF THE CURRENT SYSTEM Shanne Herbal Products’ current system employs a manual way in conducting sale transactions. The steps indicated below comprise a summary of business activities undertaken to process the sales: 1. The clerk lists in an official receipt the customer’s orders, indicating the quantity and the amount of each product. 2. The customer pays the total amount indicated in the official receipt. 3. The clerk gives a copy of the official receipt to the customer, while another copy is left to files. 4. All official receipts collected by the clerk from the day are handed over to the book keeper for recording and preparing the daily sales report. 5. In a sales transaction involving delivery of products to different outlets, the process starts with a telephone notification by the outlet for delivery of ordered products. 6. A delivery receipt is prepared by the clerk, and sent to the ordering outlet together with the products. 7. The receiving clerk of the outlet acknowledges the delivery receipt and a copy of it is sent back to the center for recording of account receivables. 8. When payment is made by the outlet, the record is updated by the clerk and a copy of cash invoice is prepared to be sent to the outlet.

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3.2 NARRATIVE DESCRIPTION OF THE PROPOSED SYTSTEM The proposed system employs an electronic way of recording sale transactions where the clerk will only enter into the system the order placed by the customer. Below are the steps involved with the proposed system: 1.

Before the clerk conducts the sale transactions toward his

customers, he or she confirms the authority to do so by logging in his username and password to the system. 2.

The clerk enters the customer information, the purchase and the

payment details of the customer. 3.

An official receipt is then printed out for the customer.

4.

In a sales transaction involving delivery, the clerk enters the outlet

information into the system, including the ordered items. 5.

A delivery receipt is then printed out to be sent to the outlet

together with the ordered products. 6.

The clerk saves the total accounts receivable of that outlet for

future reference. 7.

When payment is made, the accounts receivable record of the

outlet is updated.

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3.3 ANALYSIS OF REQUIREMENTS Shanne Herbal Products Sales System offers financial reports and the necessary forms essential in monitoring and conducting sales transactions. INPUTS 

Customer Information



Order Information



Payment Information



Outlet Information



Sales Order Details



Outlet Payment Details PROCESSES During a sales transaction, the system records the customer’s information,

customer’s order and payment. On the other hand, when an outlet makes sales orders, the system records and saves the outlet information, the sales order details, and the payment details of the company when due. OUTPUTS 

Invoices



Rejected Sales Order Notice



Delivery Receipt



Accounts Receivable Information



Financial Report



Sales Report



Summary of Delivery

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3.4 SYSTEM DESIGN 3.4.1 CONTEXT DIAGRAM

Direct Customers

Outlets

0 Shanne Herbal Products Sales System

Management

Accounting

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3.4.2

USE-CASE DIAGRAM Logs to System

Add Customer Information

Add Customer Orders Check Discount Options Save Customer Payment

Print Invoice Sales Clerk Add Outlet Information

Add Outlet Orders

Save Account Receivable

Printer

Print Delivery Receipt

Check Outlet Record

Save Outlet Payment

Cancel Accounts Receivable

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Generate Reports

Manager

Update Records

3.4.3 ACTORS DESCRIPTION The actors in the system are the sales clerk and the manager. The supporting actor is the printer. Below are their descriptions: Sales Clerk – The sales clerk is an employee whose job is to administer sales transactions towards customers and outlets’ representatives. As the main person to conduct sales, he is given the authority to enter sales data into the system. He has the right to update records, to save pertinent data, and delete accounts. Manager – The manager monitors the financial status and the business activities of the company. Thus, he has the right to access the database and extract information from it through reports. He has also the authority to update, change, or delete any data and/or information regarding the products.

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