Purchasing and Inventory Management Brisbane Outdoors

Question: Purchasing and Inventory Management for Brisbane Outdoors. Answer: Introduction: Operations management provides the platform upon which the managers can design and control the process of production and reviewing the business processes. It focuses on the responsibility of ensuring an organization such as Brisbane Outdoor operate efficiently regarding the utilization of resources and meeting the customer needs. In the modern market, it is evident that fierce competition is inevitable. Conley-Tyler (2005) found that the introduction of the items with short life cycles and increasing expectations of customers are pressing the companies to pay attention to their supply chains. Indeed, the continued advances in transportation and communications technologies thus motivating the improvement of the supply chain as proved by Vrat (2014). In the supply chain, different stakeholders play distinct roles such the producers, shippers or transporters, intermediate storages and even procuring of the items. To this effect, the organizations such as Brisbane Outdoors should use an effective supply chain strategy by focusing on the interactions at different levels of the chain. The logistics network brings together suppliers, warehouses, manufacturing centres, retail outlets, and distribution centres. For an efficient supply chain, the organization should focus on the work-in-process inventory and flow of the product (Heizer, Render, Munson 2016). Brisbane Outdoors is suffering from a disjointed supply chain management and laissez-faire management approach where each manager operates distinct approach. Smith (2006) argues that the JIT process that the company is using seems to promote disjointed management approach that is creating disharmony in the management of the supply chain. The unconnected purchasing and inventory management systems were affecting the efficient of Brisbane Outdoors. Therefore, the rationalization of procurement and inventory management processes can lead to operational and financial gains. Comparative Advantages and Disadvantages of the Currently Processes Brisbane Outdoors seems to have mastered the act of Just-In-Time inventory management approach. Although the process may be against the stocking excess inventories, it involves managing with objectives. It appears that most of the managers in the company believe that maintaining inventory is expensive thus prefer the JIT program because of the following reasons (Prasad 1998). The JIT program serves the need of customers as it balances the goals of avoiding socking outs and minimizes inventory costs. With this system, it is possible for the firm to reduce inventory costs by reducing the holding space. The organization can thus invest the saved resources in the business growth. The strategy also ensures the company avoids wastages, especially for the slow moving stock. However, the JIT program requires significant coordination between suppliers and retailers within the distribution network (Cooper, Lambert, Pagh 1997). The coordination may prove involving and bears numerous risks. Supply-Chain and Inventory Management Concepts that can help the Company Brisbane Outdoors can improve its supply chain and by developing a highly structured supply chain management strategy. The approach will ensure the company exploits its competitive advantage and gain a market leadership position (Esper Waller 2014). Brisbane Outdoors should implement different strategies to increase efficiency and reduce investment and maintain the stock level. The plans would involve the following: Introduce few links in the supply chain The supply chain management is the only way to contribute to its success. For instance, the company can selectively purchase bulk merchandise that can transport it directly to the stores. However, eliminating the chains links would involve the supply chain innovation. For example, the company may directly engage with the manufacturers to minimize costs thus manage the supply chain efficiently. Kouvelis, Chambers, and Wang (2006) believed the Vendor Managed Inventory system would benefit the organization beyond the reproach. It is the only way that the firm can become responsible for managing stocks in its warehouses. The strategy will help Brisbane Outdoor fulfil its orders on merchandise. In fact, it will report low distribution costs thus becoming effective and efficient. Strategic vendor partnerships Brisbane Outdoors has to embark on strategic sourcing process so that it can identify products offered at the best prices for its suppliers. With strategic sourcing, the company will also determine the vendors who can help it meet the market demand (Heizer et al. 2016). To this effect, establishing strategic partnerships with its suppliers or vendors by offering them the high volume and long-term purchases as an exchange for the lowest offers on the products will be beneficial. Similarly, the company will become significant by streamlining its supply chain management as described by Mentzer et al. (2001). Besides, Brisbane Outdoors can construct communications and establish strong relationship networks with vendors so that it can improve the stock flow with the least inventories. Today, the network of global warehouses, suppliers, and retail stores seem to behave like one company. The collaboration will make the organization efficacious. Cross docking as inventory tactic In the modern business world, cross docking remains a logistic practice in replenishing the inventory efficiently. In fact, the direct transfer of stocks from outbound or inbound trucks and load the products directly into the outbound rail cars, trailers, or trucks, without considering the storage (Bregman 2014). The company needs suppliers to deliver products to its distribution centres. At these points or centres, the materials will get docked and delivered to the Brisbanes stores. Indeed, the cross docking technique will help the company to keep transportation and inventory costs down, eliminate inefficiencies, and reduce the transportation time. The company should purchase truck fleets to facilitate the delivery of the stock to its distribution centres, where the gods get stored and repackaged. The firm can thus use the trucks to distribute without storing in the inventory. As such, the stock would get loaded dock. With cross docking, the stocks get routed from vendors to warehou ses, then get shipped without time wastage. The strategy can significantly save costs and offer a highly competitive pricing. Technology Brisbane Outdoors needs to battle its competitors and come out a victor by pursuing low customer prices. The solution to this objective lies with the technology because the firm should embrace technology and become an inventor. Technology is the key driver of the supply chain as found by Esper and Waller (2014). To this effect, the company needs to invest in the information technology infrastructure. With the network design and the state-of-the-art technology, Brisbane Outdoors can accurately forecast demand, predict and track inventory levels, manage customer relationships, and create efficient transportation routes. The new technology will ensure the company achieves the best service response logistics. For example, by introducing Retail Link and Universal Product Code, it will be possible to collect and analyse information about the inventory levels. Bregman (2014) argues that the company can benefit from a global satellite system connected to its local links so that it can analys e the forecast vendor demands and network depending on the real-time sales and cash registers. The manufacturers and suppliers in the supply chain need to synchronize the demand projections based on forecasting and replenishment schemes, collaborative planning, and links in the chain through the technology. The firm can synchronize the systems through a central database, satellite network, and store-level point-of-sale systems as discussed by Wieland and Handfield (2013). In fact, the company can be innovative by sharing information with all its affiliate partners. The frequent informal cooperation among the suppliers, distribution centres, and stores creates a less centralized control. The firm will also benefit by tracking the customer demand and purchases thus allowing them to pull merchandise to stores thus compelling the company to push its goods onto the retail shelves. The organization can install the radio frequency identification tags that can facilitate the tracking of pallets of merchandise along with its supply chain. Since the suppliers and the company must handle the inventory, Brisbane Outdoors can encourage the vendors and suppliers to introduce the RFID technology. The smart tags ensure the employees can detect any item that requires replacement thus making the inventory or stock consistent. Recommendations Vendor managed inventory is one of the supply chain strategies that allows the supplier or vendor to have the responsibility to handle the customer stock. The supplier should have access to customers demand and inventory information to enhance the monitoring of inventory level. In fact, the vendor needs to have the responsibility and authority to replenish the stocks based on the jointly agreed inventory control objectives and principles as explained by Vrat (2011). In most cases, suppliers generate purchase orders based on the established inventory level plan, consumption data, shared forecast data, and historical sales information. Immediately the purchase order is completed, the vendor should provide the advance shipping notice to notify the buyer. The conventional business model will ensure the suppliers bill their customers based on the agreed payment conditions. The inventory management is essential in buffering the organization from the qualms in forecasting, vendor deliveries, and customer demand (Smaros, Lehtonen, Appelquist, Holmstrom 2003).Vendor managed inventory would be essential in dampening the valleys and peaks thus ensure the smaller buffers of inventory and capacity. To this effect, the vendor managed inventory would be vital in resolving the dilemma regarding the different performance measures. The approach is a partnering initiative will help the firm to improve its supply chain efficiency due to supplier-managed inventory and continuous replenishment. However, for Ketchen Jr. and Hult (2006), the Vendor managed inventory is a wrong idea that can ruin the multi-firm supply chain because it involves the coordination of stocks management outbound from distributors, manufacturer, retailer, or reseller. With the supplier-managed inventory, the vendor would allow for a smooth flow of raw materials inbound to the manufacturing process. The technology advancements seem good for the supply chain process as the stakeholders must integrate them in their relationships. For instance, Ms Green has an opportunity to introduce the shared point-of-sale data to facilitate the consignment selling contracts, especially in a situation where the vendor fails to sell a product to the client (Heizer et al. 2016). Undeniably, with the vendor managed inventory, it is possible to move the supply chain management to a higher level as the supplier finds a chance to align it to the functional performance of multiple companies. To this effect, it is possible to shift the functions to the lower-cost companies thus perform a cost trade-off across the boundaries of the firms. Vendor managed inventory suitability The vendor managed inventory remains a necessary coordination initiative. Ms Green can use the Vendor Managed Inventory as an initial step in a supply chain streamlining process between different players. Smaros et al. (2003) acknowledged that the supplier managed inventory relationship can prove difficult to create a relationship with the manufacturers with many customers. With the customer base involved in the process, the vendor should establish their clients to make non-vendor managed inventory customers efficiently. Monitoring inventory The system requires a continuous monitoring of inventory so that the supply chain strategy can benefit the organization. Ms Green should develop procedures to facilitate an ongoing control of the system. It should involve assigning the responsibility for this task thus ensures the vendors get covered by the system and maintain the management of inventory (Scott 2011). As part of the continuous monitoring process, the suppliers should conduct the physical counts. The organization requires a well-managed supply chain by establishing a system for inventory purchasing and maintenance. Importantly, the system requires proper planning and monitoring so that appropriate quantities of reagents and supplies thus avoid wastage. The implementation of the inventory management system requires assigning responsibility for the system by analysing the need of the firm Larson and Halldorsson (2004) held that the appropriate forms and logs would ensure Ms Green establish a procedure for receiving, storing, and inspecting supplies. Brisbane Outdoor should maintain an inventory system for the stocks. Therefore, proper management of the inventory would facilitate efficiency and effectiveness of the company as it offers an uninterrupted flow of stock. Action Plan The implementation of the proposed recommendations is possible as the move can restore the organization, and gives it a new lifeline. The company can achieve the objectives by using the following action plan. Recommendation Implementation Function Vendor-managed inventory strategy Create a shared-of-sale-point data Align functional performance of managers Create distribution centres Monitoring inventory and timely reporting Information sharing Technology Establish Retail Links databases Introduce RFID Monitor inventory Conclusion The operations management has proved to be a difficult task for the managers of Brisbane Outdoors thus affecting the companys efficiency and productivity. The challenge that has befallen the organization requires redress so that it can achieve an efficient and cost-effective supply chain. Since the company suffers from a disjointed management system where every manager plays different roles, the companys management must address the issue by instilling teamwork and collegiality among the major players. Technology will be essential in solving the inefficiencies affecting the firms supply chain. 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