DEFINE

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Project Title : Improve implementation of IT inventory Management (Network IT Equipment) (jointly with OIST)

Project Code : OAFA-06-03/1W

Champion : Sunil Mitra Team Leader : Eric Cruel

Members : Mila Aquino Nestor Martin

Vic BautistaAnthony Esteras

2

DEFINE

PROJECT DESCRIPTION:

PROBLEM STATEMENT : Network IT equipment management has neither the database management and monitoring of transfer and relocation. No physical inventory has been undertaken by OIST to determine the actual inventory of Network IT equipment, different units have different IT equipment needs and requirements. Records of these Network IT equipment are inconsistent, not updated and some are not included in the ORACLE FA database.•Based on the Six Sigma Project: OAS 05-010, there were 36.72% discrepancies for USER IT equipment inventory from the 2004 IT equipment confirmation exercise, thus internal control and management is weak.

Project Charter

3

DEFINE


GOAL STATEMENT : Minimize future discrepancies of inventory to 0%. Clean-up and establish a complete and accurate record of Network IT equipment and staff accountability in the ORACLE Fixed Asset Register; Complete the physical inventory taking and reconciliation by last quarter of 2006; define responsibilities of OAS and OIST in Network IT equipment inventory management.

Project Charter

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DEFINEProject Charter


BUSINESS CASE : One of the themes of OAS to be more effective is accountable and responsive asset management – improve materials management accountability and record. An updated Network IT equipment database will minimize losses, physical inventory taking, database management and staff hours in tracking the equipment.

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DEFINEDEFINE

SOIST

OAFA-AP

OAIS_PC

Other depts / offices

IRITS

Computer Movement

Form

PO

RR

Contracts

Process

P OComplete and

accurate record of

accountability

Improve IT equipment inventory

management

Receive goods, Create RR

Inspect, Test and Acceptance

Process RR

Post in Database / Payments

Storage, Issues and Returns, Disposal

Maintenance of Oracle FA

Disposal (to Contractor)

CManagement

Users ADB wide

CTQs

Accurate Database of

IT equipment

Cost reduction

Increase efficiency

Supplier Input Output Customer

SIPOC MAP PROCESS

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High Level Process Map(PO)

DEFINE

Supplies and Equipment

PR

OC

UC

RE

MN

T

MA

T'L

S

MG

MT

CO

NT

RO

LL

ER

ST

RE

AS

UR

YM

MU

an

d

OIS

T

Create PO

Receive Goods,Create RR(Receiving)

Inspect, Testand

Acceptance

Process RR(Receiving)

Process PO

Post inDatabase

Payments

Maintenance of ORACLE INV and FA

STORAGE, ISSUES and RETURNS, DISPOSAL

Disposal(to

Contractor)

ORACLE PROCESS (OIST, OAIS-PC, OAFA-MS, CTL, TD)

Requestsuuplies andequipment

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DEFINE CTQCTQ

High Level Need Accurate Record of Network IT Equipment

Up to Third quarter of year 2006.

Project Y ( Little Y ) Measure

Specification Limits

The process starts with the review of Network IT equipment ORACLE FA database records, Network IT equipment monitoring and database administration and control.

Reduction of Network IT equipment record discrepancy in ORACLE FA database.

Unknown number of IT equipment; unknown degree of discrepancy; these will be reduced to 5% discrepancy

Target

Discrepancy of record (Wrong accountable staff, Wrong location. Lost item, Item not recorded in database)Defect

No. of Defect opportunities per unit.

Opportunities per unit – Staff accountability, location, Lost item, Wrong data details, No PCN/Tag No. attached, Unaccounted, Not recordedin database

C

T

Q

Output

After which a physical inventory will be conducted and reconciliation of physical inventory results with database records. Network IT equipment can enter HQ thru PO and contracts.

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STORAGE & DISTRIBUTION Process Flow Chart (PO)

Start

Receives/Inspects IT Equipment (Network IT)

Receiving Report (RR)

Accept?

No

Yes

Returns to OAFA-AP

Closes RR in Oracle

(OAFA-AP)

Store in DataCenter

(OIST)

Property Accountability

Receipts Signed RR Deploy?

Yes

No

End

Advises OAIS-PCabout findings toinform supplier toreplace defectivegoods (OAFA-AP)

Return goodsTo Suppliers(OAFA-AP)

End

Payment (CTL)

Property Control Number

(PCN)

Without Property

Control Number (PCN)

DEFINEDEFINE

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STORAGE & DISTRIBUTION Process Flow Chart (Contracts)

Start

Receives/Inspects IT Equipment (Network IT)

Accept?

No

Yes

Request for Payment

by END-USER

Store in DataCenter

(OIST)

Property Accountability

Receipts Deploy?

Yes

No

End

Return goodsTo Suppliers

End

Payment (CTL)

Property Control Number

(PCN)

DEFINEDEFINE

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Operational Process

Database Systems Mgt

Storage / Warehousing

Distribution

Receiving and Inspection

Organization Structure & Functions

Roles and Responsibilities

Policies & Procedures

Administrative Circulars

Administrative Orders

Transfer to RM

Disposal

Warehouse Location &

Layout

Database Mgmt per section

Assets Manageme

nt

Planning - Requisitioning

Procurement (PO or Contract)

Department’s Guidelines & Procedures

MEASUREMEASURE

Posting in databases

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MEASUREMEASURE

SUMMARY of INVENTORIED EQUIPMENT

Description Quantity

1 Modem 39

2 ServerCPU 204

3 Server tape storage device 46

4 ServerKeyboard and mouse (acc) 77

5 Server monitors 40

6 Printers 2

7 Switches/Sniffer 100

8 Telephone 9

9 PC CPU 35

10 PC CPU accessories 85

11 PC monitors 34

12 Other Equipment 15

TOTAL EQUIPMENT 686

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MEASUREMEASURE

IT equipment Inventoried in Datacenter

Count

Perc

ent

Item

Count 34 26Percent 29.7 14.6 12.4 11.2 6.7 5.8 5.7

2045.1 5.0 3.8

Cum % 29.7 44.3 56.7 67.9 74.6 80.5

100

86.2 91.3 96.2 100.0

85 77 46 40 39 35

700

600

500

400

300

200

100

0

100

80

60

40

20

0

Pareto Chart of Item

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MEASUREMEASURE

ORACLE FA Database Records

ITEMS in ORACLE FA database

Description Quantity

1 CPU under OIST in HQ 122

2 CPU under OIST in RM 26

3 CPU under other departments 12

4 OTHER IT equipment hardware under C_COMPUTER.SYS UNIT.NETSERVER 8

5 Upgrades under C_COMPUTER.SYS UNIT.NETSERVER 11

6 Accessories of Servers under C_COMPUTER.SYS UNIT.NETSERVER 5

7 Items for deletion/or for attachment 6

TOTAL 190

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MEASUREMEASURE

1 1015377 SERVER, ACER ALTOS 04900001M 11060-0005 HQ.2620 Lope M. Auxillos 010221 3,608.11

2 1015978 SERVER, ACER ALTOS 04900011M 11060-0004 HQ.2620 Lope M. Auxillos 010221 3,608.11

3 1040209 SERVER, ACER ALTOS P80701711 11060-0001 HQ.3463 None 980080 8,443.21

4 1039512 SERVER, ACER ALTOS P343030 11060-0002 HQ.3464 None 961484 14,428.82

5 1039528 SERVER, ACER ALTOS P343029 11060-0003 HQ.2153 Ederlinda M. Jacinto 961577 15,303.01

6 1038532 LOTUS NOTES SERVER, ACER ALTOS 7000 P206103 08817-0004 HQ.2521 Arlene Rose R. Lazaro-Reyes960619 10,571.02






12 1015366 SYSTEM UNIT, NETSERVER, HP SG93403254 09932-0013 HQ.8635 None --- 4,086.40

13 1015973 SYSTEM UNIT, NETSERVER, HP SG10905613 09932-0034 HQ.3463 None 6,880.85

14 1037875 NETSERVER, HP 4d/66 LM, MODEL 2000 3414S00840 07512-0001 HQ.2168 Eric Yunzal 940388 14,716.26



17 1037880 NETSERVER, HP 4d/66 LM, MODEL 2000 341 07512-0020 HQ.7CSTR None 940388 14,716.29

18 1039139 SYSTEM UNIT, NETSERVER, HP 09932-0001 HQ.2636 None 963515 41,891.28




22 1043784 SYSTEM UNIT, NETSERVER, HP SG92403149 09932-0009 HQ.2648 None 990647 21,542.76










32 1043777 SYSTEM UNIT, PAM REPORT SERVER, COMPAQ DESKPRO EP PII 6400 10210-0002 HQ.2636 None 990485 2,037.87

33 1037864 UNIX SERVER, HP 9000/800 G 07519-0001 HQ.1530 Lope M. Auxillos 940344 89,889.08

34 1038504 NETSCAPE PROXY SERVER - LATEST VERSION 08933-0001 HQ.2636 None 960251 5,933.82

35 1039042 SUN NETRA I 150 09054-0001 HQ.2636 None 960791 30,637.66

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QTY Asset No.Description Serial No. Location Acct Staff PO No. Amount Date in Service

7 1058645

Sun LX50 Linux Server (as per Seller's quotation dated 26 March 2003), inclusive - 7 units KRBB313A0019/23/22/17/18/21/41 HQ.2440 Pierre Passin 2229 43,833.11 31-May-03

3 1060080

Sun Fire V120 650Mz 512M 36G (As per Seller's quotation dated 6 May 2003); - 3 units FF32450053/FF32540012/FF32540015HQ.2440 Pierre Passin 2618 41,964.78 18-Oct-03

25 1063506

High Density Blade Servers-Destination charge for PO04-5796GDS-RLX System 300 EX 32044101174 HQ.2440 Pierre Passin 5796 57,728.67 31-Dec-04

25 1063591

High Density Blade Servers-Destination charge for PO04-5796GDS-RLX System 300 EX HQ.2440 Pierre Passin 5796 57,722.44 31-Dec-04

4 1063173

RetrievalWare Servers-HP Proliant DL380-G3 servers (4 units) HDMJLC134/HDMGLJC134/HBZWLJC133/HC01LJC133HQ.NONE Pierre Passin 5372 27,155.25 12-Oct-04

4 1055561

PORTAL INSTALLATION AND IMPLEMENTATION (10 units SunFire 280R/SunFire V210/Sun NETRA I) HQ.NONE None TRA 02-11-05187 655,501.04 31-Aug-05

10 1063832

IP Management Server (Sun Fire V120 Server), complete specifications in Seller's FF44520135/FF44520117 HQ.2640 Nimfa C. Ocampo 5933 11,064.90 14-Dec-04

2 1061810

PO04-4584 INTERPRISE STORAGE DMX 1000 (EMC SYMMETRIX DC0284/DC0285) HQ.NONE 4584 147,833.96 31-Aug-04

2 1058777

External Cisco Firewall Server. For complete specifications, please refer to "A BATCH NO 4500028076 HQ.2440 Pierre Passin 2592 18,982.71 22-Jul-03

12 1056861

COMPRE.LOAN ADM. & SERV. SYS_CONSOLIDATED ASSET LIABILITY MGMT. PROJ (CLASS)8 BL20p Blade servers, 3 DL580 G2 HQ.NONE 3168 143,715.00 01-Jun-06

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PO 03-3775 GDS-Sun Server for ACE/Server Secondary (as per Seller's quotation dated 19 November 2003) 3775 28,497.00 01-May-04

MEASUREMEASURE

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MEASUREMEASURE

Count

Perc

ent

Line ItemCount 87 35

Percent 71.3 28.7Cum % 71.3 100.0

Other ServersActive Server

120

100

80

60

40

20

0

100

80

60

40

20

0

Pareto Chart of Line Item

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MEASUREMEASURE

Count

Perc

ent

Network ITCount 76 11

Percent 87.4 12.6Cum % 87.4 100.0

Multiple unit described line itemSingle Unit described Line Item

90

80

70

60

50

40

30

20

10

0

100

80

60

40

20

0

Pareto Chart of Network IT

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Discrepancy Causes

1. Unrecorded in database

2. Not properly disposed of (No PCN)

3. Accountability not updated

4. Misplaced/Transferred to RM without record

5. Erroneous posting (provided by Supplier or wrong requisitioning by end-user)

6. Items replaced without proper documentation/ Traded-in without documentation

7. Others

ANALYZEANALYZE

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Discrepancy Causes

ANALYZEANALYZE

1. Unrecorded in ORACLE FA database• Failure to record in database due to procurement by

contract• Wrong requisition by requestor2. Not properly disposed of (no PCN)• Failure to record in database• Failure to affix PCN/barcode label3. Accountability not updated• Accuracy of Oracle System• Failutre to record in database• Erroneous posting of accountability• OIST / OAS unclear delineation of functions4. Misplaced/Transferred to RM

• Failure to record in database• Failure to affix PCN / barcode label• Detached PCN / barcode label• Gate Pass/Shipping documents

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Discrepancy Causes

ANALYZEANALYZE

5. Erroneous posting• IT equipment was lent or supplied by software

provider• Wrong requisitioning process i.e. use of 1 lot as

UOM6. Items replaced without documentation• No documentation for replacement or trade in7. Others• Failure to record in database• Accuracy of Oracle System• Storage / Warehousing

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ANALYZEANALYZE Cause & Effect Diagram for Inventory Management System of Network IT Equipment

Operational ProcessPolicies andProcedures

Organization Structureand Function

Date BaseManagement System

Software Requirements

Gate Pass

Physical Inventory

Administrative Orders/Circulars

RITS

Failure to record in database

(receipt, transfer, disposal, lost)

Erroneous posting of accountability

Failure to affix PCN/barcode label

Detached PCN/barcode label

Storage/Warehousing

Accuracy of Oracle System

Posting of Relocation/Disposal

Receiving Staff

Requestor/End user

OIST / OAS under delineation of functions

C

C

N

N

C

C

N

C

C

C

C

C

C

C

C

IT EquipmentInventory

Discrepancy

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ANALYZEANALYZE

Actual Network IT equipment = 204(CPU/Storage devices)

Matched Network IT equipment (CPU)Line Items = 87

Total Number of Matched Network IT equipment (CPU) Line Items = 149

Percentage of Matched items with = 73.04%

actual IT equipment

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ANALYZEANALYZE

TOTAL actual NETWORK IT Equipment = 204

TOTAL Network IT Equipment in ORACLE FA = 149

Total Network IT Equipement Discrepancy = 55

DPMO = 55/204 x 1,000,000 = 269607.84

Compute Z score : X = 269607.84

Z score = 2.161

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IMPROVEIMPROVE

Actions to be undertaken to improve Accuracy of Network IT equipment Inventory

OAFA-AP1.

Append NETWORK IT equipment not included in ORACLE FA

2.Retire old NETWORK IT equipment not physical active in OIST DATACENTER

3.

Inform OIST Datacenter personnel in charge of improved process flow for NETWORK IT equipment

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Results of Brainstorming of Proposed Solutions for Inventory Management System of Network IT Equipment (1)

IMPROVEIMPROVE

FACTORS ISSUES/CONCERNS PROPOSED SOLUTIONS TIME FRAME

SECTION RESPONSIBLE

Failure to record in data base – receipts, transfers, issues, disposal and losses.

Staff movement (transfer, promotion, etc) without the proper transfer of accountability

Incomplete disposal form (no PCN and serial nos.)

Undocumented receipt of Network IT equipment due to procurement by contract

OAFA-AP to request BPHR to provide list of staff movement on a monthly basis to be used as reference in updating staff accountability; use RITS for transfer of accountability to OIST staff

Require OIST to complete the details (i.e,., PCN, serial no, etc.) on Disposal Form prior to turn-over of equipment to MMU.

Require OAIS-PC to give contract documents to OAFA-AP for contract with server component

Done(w/ USER IT)

-ditto-

-ditto-

OAFA-AP

OIST

OAFA-AP

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Results of Brainstorming of Proposed Solutions for Inventory Management

System of User IT Equipment (1)

IMPROVEIMPROVE

FACTORS ISSUES/CONCERNS PROPOSED SOLUTIONS TIME FRAME

SECTION RESPONSIBLE

Erroneous posting of accountability

• Lax data entry and data control

• Strengthen data entry and data control procedures by re-emphasizing staff responsibility and accountability.

Third quarter 2006

USER IT working group

Failure to affix PCN/Barcode label

• OAFA-AP is not notified of purchase of IT equipment

• Promote awareness on end-user and buyer to place IT Equipment in ORACLE FA dataabase

Third quarter 2006


Physical Inventory

• No physical inventory conducted ever since datacenter was established

• Include Datacenter in regular physical inventory of IT equipment

2007 OAFA-AP

OAS/OIST under delineation of functions

• Identification of work by each department is vague

Include in TOR for USER IT equipment Reconciliation

Last quarter 2006


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Results of Brainstorming of Proposed Solutions for Inventory Management System of User It

Equipment (2)IMPROVEIMPROVE

FACTORS ISSUES/CONCERNS PROPOSED SOLUTIONSTIME FRAME

SECTION RESPONSIBLE

Requestor / IT equipment users

Non-confirmation of IT equipment accountability, Non-reporting of missing//lost IT equipment

Promote staff awareness on staff accountability

LAST Quarter 2006

MMU / OIST

OAS/OIST under delineation of functions

Identified as QUICK WIN

Accuracy of Oracle System

• Non-inclusion of IT equipment due to no information from end-user and procurement

Promote awareness on end-user and buyer to place IT Equipment in ORACLE FA dataabase

LAST Quarter 2006

OAFA-AP / OIST

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Risk Assessment for Improved Process for Inv. Mgnt. System of Network IT

Equipment

IMPROVEIMPROVE

Risk Item Probability Impact Risk Level Abatement

Failure to conduct regular Physical Inventory of IT

Computer Equipment2 2 9

OAS to take over inventory management

under IT equipment

working group

Failure of IT equipment user /OAIS-PC to comply

arrangement of procurement by contract

33

9On-going

discussions by IT equipment

working group

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Risk Assessment for Improved Process for Inv. Mgnt. System of Network IT

Equipment

IMPROVEIMPROVE

Risk Item Probability Impact Risk Level Abatement

Turning over IT equipment for disposal without PCN

3 1 3

All IT equipment will be entered in ORACL FA

Staff accountability and responsibility awareness

campaign was disregarded by staff.

N / A2 2 4

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Commitment Scale for Inventory Management

System of Network IT EquipmentIMPROVEIMPROVE

Steps: 1.Plot where departments currently are with regard to desired change (XX = current). 2. Plot where individuals need to be (√√= desired) in order to successfully accomplish desired change – identify gaps between current and desired.3.Indicate how individuals are linked to each other; draw lines to indicate an influence link

using an arrow ( ) to indicate who influences whom.

Stakeholder Analysis

Names Strongly AgainstModerately

Against NeutralModerately Supportive

Strongly Supportive

OAFA-AP XX√√OIST XX √√

OAIS-PC XX √√

CTL XX √√

OTHERS XX √√

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CONTROLCONTROL QUICK WINS

FACTORS ISSUES / CONCERNS ACTION TAKEN

Failure to affix PCN/Barcode label

• Immediate deployment of equipment to end-users (RMs/ROs)

• OAFA-AP issues temporary barcodes upon receipt of equipment.

• OIST provides OAFA-AP with the corresponding serial numbers of temporary issued asset numbers / barcodes

OAS/OIST delineation of functions

• Different sections of OIST are requestors that do not maintain monitoring database; OAFA-AP maintains one system: Oracle FA

•Functions are unclear

•On-going discussions between departments

Accuracy of Oracle System •Inconsistent records •OIST will inform OAFA-AP of IT equipment movements for posting in Oracle FA.

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Inventory Management System of Network IT Equipment

1. Physical Inventory of Datacenter

2. Other implicit cost (verification of PI results, retraining of ORACLE requisitioners, etc.)

3. Other explicit cost (cost in gathering data-PI, equipment (scanners), etc.)

Cost

33

Inventory Management System of Network IT Equipment

1. Accurate ORACLE FA records – accurate insurance cost, reduction in administrative cost in future physical inventory and inventory management activities like disposal/retirement.

Benefits

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Thank you

OAFA-06-03/1W

DEFINE

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