Supply Chain and Inventory Management

Question: Discuss about the Supply Chain and Inventory Management. Answer: Introduction This paper aims to address challenges faced by Brisbane Outdoor Power Centre Company factored by the laissez-faire approach employed by the management to control its purchasing and inventory processes. It evaluates on the efficient processes relevant for use to improve Brisbanes performance by fixing purchasing and inventory department. Upon proposing appropriate inventory processes, it also recommends on the best inventory processes and how they can apply to the company. Brisbane has a full scope in the market which is built on its relation and customer oriented strategies. It offers educative and informative solutions to customers who have problems on the products produced by the company or companies operating on similar commodities (Deshpande, 2012). The company has been enjoying market control advantage against its competitors, a benefit that has impacted positively on its general profit level. However, its operation system is not effectively framed to enable optimal performance and profitability. The current purchasing and inventory management processes used by Brisbane The company has been operating on a conservative system of management. This is evident by the static operation of purchasing and inventory policies implemented by the outgoing CEO. Use of Laissez-faire approach has decentralized responsibilities to different retail managers (Swink et al., 2011). Each retail manager performs management strategies without having a large scope of upward or downward communication between the executives and other relevant stakeholders of the company. This has delinked communication and other important business activities that require unison agreement on their implementation. Each retail center is performing purchase, advocate for willing suppliers and determine qualified supply mechanism on their own. A behavior promoted by sites of location upon which retail centers are based thus experience different customer needs and demand. The company has allowed managers to operate on freedom by doing their work on their own, as well as setting their deadlines. They are partially relevant to support the management on a willing basis with either resources or ideas though it is not a mandatory requirement from the management. Failure to have a collection of processes of different disciplines i.e. supply chain management, demand forecast control and reserve logistics has exposed the company to unbalanced stock maintenance, non-procedural supply chain and poor inventory turn-over (Swink et al., 2001). This is the reason behind the lack of stock in one retail center forces the managerial department to sort for products in other centers stock to maintain a continuous and steady supply. Effective and efficient purchase and inventory management incorporate rational management which puts a target on each departmental heads under CEO watch (Swink et al., 2011). Comparative advantages of the currently used processes by the company The processes used by the company in purchasing and inventory management have the following advantages: Self-motivation; freedom set environment of operation in an organization encourages and motivates individual who believes in themselves and value self-control as a contributor to success. This method unties employees from tied strict rules and guidelines which are always noted by supervisors in charge. It empowers employees who are self intrinsically oriented to perform on their mandate once work guidelines are defined. Such characters perform well by giving their all to the business expectation thus thriving business success 9Naude Weiss, 2011). The maximum satisfaction; laissez- faire approach ensures that one takes an initiative and regulate on it by completing roles or duties on time. Taking control of the tasks given hands a satisfaction ego and consequently, promotes ideological exhaustion. Employees always offer their best to the level of their knowledge and skills to complete such tasks, an action that they believe brings the best out of their understanding. Creation of dynamism; loosely connected organization on the supervisory role offers a dynamic problem solution ability. Employees get a chance to try out things contrary to defined problem-solving procedure. They expound on their thinking towards a situational or any other problems by trying various formulas to tackle the situation. Therefore, they become more productive and creative in ideologies. Disadvantages of used processes by the company Lack of effective cohesion; independent type of operation in the business improves individualism among the employees. It eliminates the ability of employees to operate together by having a point of references in case of a confusing idea. Individuals if left to operate independently, stick to their opinion hence no consensus can accrue in such organizations. Business suffers as a result of ideological differences failing to tally with expectations and objectives set Low-quality work; not all are good at independent operation; some people need leaders who can guide and offer consultations. Such people do not produce the best out of their knowledge and skills thus deter the general performance of business. The quality of the work they can offer while working as a team is better and of the benefit to an organization compared to their produce while working independently. Lack of teamwork; giving employees opportunity to make decisions, and take business initiative on their own develop a tendency of individual manpower where every employee scramble on to win an idea of lead. Consequently, they fail to concentrate on ideas contributed by co-workers in believing that they can tackle a situation of discussion on their own. However, laissez-faire approach has some advantages over other systems of operation; it curtails a long run objectivity of business thus no the best method to apply. Supply chain and inventory management concepts relevant to the efficiency and reductive investment of the company Supply chain and inventory management are interlinked in a way that if appropriately selected no business can experience a loss or management challenges. It is appropriate for Belinda Green to apply a supply chain and inventory processes that is critical in its scope of operation and able to formulate, analyze as well as manage the supply department (Janvier-James, 2012). Appropriate inventory process ensures the provision of security of the stock, efficient and accommodative costs of goods, time bound and continuous inventory turn-over, reliable customer management and a vendor system of the Directorate (Lambert, 2006). These activities enable the business to evaluate its operation costs on a fair cost through which profit margin can be equated to the expenses incurred (Swink et al., 2011). The demonstrated operations management promote a focus on improving processes in the company while supply chain management applies the use of theories, relevant materials, and tools to ensure productive business cohesion. Supply chain being an important infrastructure of production, and relevant process involved in the business process, its definition should incorporate all stakeholders i.e. suppliers, retailers, suppliers, and consumers under the watch of a transformative leadership (Lambert, 2006). Transformative management is a constituent of a rationalized system through which centralization system of decision making is promoted (Lambert, 2006). Centralization in this company can enhance incorporation of various economic agents. The corporation leads to a responsive system ready for any argent need either from consumers or economic environment (Van Weele, 2010). It avoids uncertainty on stock depletion, failure of deadline meetings on tasks and lack of commitment from departmental or retail managers. To improve the performance of Brisbane and create a dynamism system where consultation and a common pool of decision making on product flows, the new CEO must embrace a centralized system of management (Cousins et al., 2008). More often, the system allows upwards and downwards communication raised by juniors to seniors and role dissemination or instruction from the senior employees to juniors (Van Weele, 2010). The most networked supply chain and inventory management bring managers together to discuss on pricing terms which tally with consumers expenditure (Jacobs et al., 2009). Therefore, they end up sharing their personal objectives which may cover along maximization of profit, risks, and integration of conscious objectives targeting environmental factors. Many scholars agree on the facts that an objective inventory management focuses on the stock and how the stock is found and where it is found (Cousins et al., 2008). This is a cornerstone of eliminating wrong purchase orders and wrong items because procedural steps done by specialized as well as designed employees tame all the errors (Frank, 2005). However, in case such problems happen appropriate are remedies are channeled. Evidently, a business can curb supply problems that arise due to lack of enough stock in a given center of retail. A good inventory relevant for Green to implement should incorporate the following procedure; Inception; this a process of identifying the under-performing parameters by evaluating sales, productivity level, the rate of turn-over among others to know the scope of rationalization. After evaluation of the relevant areas related to performance a plan is developed on how failures noticed can be solved (White paper, 2012). Planning; is all about preparing the implantation plan where management, staff responsibility, and benefit measurement criteria are outlined. It enhances the initiation of rationalized management (Lysons Ferrington, 2006). Execution; This where relevant managers are required to sort out problems noticed in their respective departments. It incorporates all senior managers and the CEO authorization. Inventory values and market trends are considered to enable appropriate purchasing process (White paper, 2012). The above-illustrated steps once complied, the management should define roles and responsibility on the criteria of purchase. This is done through a good relation development with the reliable suppliers, analyze the requirements of the materials to be purchased, identify the minimum quantity of stock needed in the store, outline steps on receiving and inspecting supplies and recommend on the maintenance of inventory system. Lastly, there should be a monitoring system on the inventories (Winsner et al., 2009). Monitoring of inventory should be persistence and continuous by assigning a responsible department in charge. An employee in charge is therefore expected to take records of on inventory management by maintaining update record. Recommendations to MS Green on restructuring the purchasing and inventory functions of the company To effectively restructure the systems related to purchase and inventory, I would recommend Green to; strategize on the effective and productive implementation of rationalization system of management in the company. Therein follow the following steps; Reduce the lead time; reducing lead time enhances the faster process of obtaining the supplies hence the quantity of safety stock is reduced. By doing so, the company will tell the effect of each supplier on the holding cost of inventory safety. Improve forecasting accuracy; it is necessary to improve efficiency level of prediction as it benefits the retailer not to stock excess or out of date products to achieve optimum inventory level. Furthermore, it reduces sale loss by enhancing services offered to customers. Optimize on product availability; improving on the products available to consumers correlates positively with the revenue to the company. However, situational outcomes require evaluation on the costs involved in over-stocking. Improve coordination of information; it is important to improve the coordination of information due to transparency benefits realized in the status of stock, demand, and production thereby enable proper planning on emerging issues that can affect the performance of the business. It makes the supply chain reliable and avoids stock depletion. Decrease the minimum order quantity; it reduces the volume of total inventory in the business thereby reduces the costs incurred on the stock. Define and monitor regulatory on a daily basis; regular practice of those activities assist to the available, and accurate information on inventory within the supply chain. Rationalization of management, consistent contact with suppliers, the transformation of retail centers, effective integration of managers and inventory monitoring are appropriate for achieving maximum production of goods and services at affordable costs thereby maximizing customer satisfaction. References Cousins, P., Lamming, R., Lawson, B. Squire, B. (2008). Strategic Supply Management, Principles, Theories and Practices. Essex, England: Pearson Prentice-Hall. Deshpande, A. (2012). Supply chain management dimensions, supply chain performance and organizational performance: An integrated framework. International Journal of Business and Management, 7(8), 2. Frank Dooley (2005). Logistics, Inventory Control, and Supply Chain Management. A Publication of the American Agricultural Economics Association. Jacobs, F.R., Chase, R.B. Aquilano, N.J (2009). Operations and Supply Management. New York: McGraw Hill. Janvier-James, A. M. (2012). A new introduction to supply chains and supply chain management: Definitions and theories perspective. International Business Research, 5(1), 194. Lambert, D.M. (2006). Supply Chain Management: Processes, Partnerships, Performance (2nd Ed.). Saresota, FL: SUPPLY Chain Management Institute. Lysons, K. Farrington, B. (2006). Purchasing and Supply Chain Management (7th Ed.). Essex, England: Pearson Education. M.J. Naude J.A. Badenhorst-Weiss (2011). Supply chain management problems at South Africa automotive component manufacturers. Mellat-Parast, M. (2013). Supply chain quality management: An inter-organizational learning perspective. International Journal of Quality Reliability Management, 30(5), 511-529. Preckel, P., Gray, A., Boehlje, M., Kim, S. (2004). Risk and value chains: Participant sharing of risk and rewards. Journal on Chain and Network Science, 4(1), 25-32. SKU Rationalization: A Technique for Inventory Optimization in the Retail Sector. TATA Consultancy Services. White Paper. (2012). Swink, M., Melnyk, S.A., Cooper, M.B. Hartley, J.L. (2011). Managing Operations across the Supply Chain. New York: McGraw-Hill. Van Weele, A.J. (2010). Purchasing and Supply Chain Management (5th Ed.). Hampshire, UK: Cengage Learning. Wisner, J.D., Tan, K. Leong, G.R (2009). Principles of Supply Chain Management: A Balanced Approach (2nd Ed.). Mason, OH: South-Western Cengage Le