Brisbane Operations Management

Purchase and Inventory Management Processes Used

Discuss about the Brisbane Operations Management.

In the current economic market, practicing one concept, however much it pays does not guarantee success. There is constant pressure in innovation that brings new means of production hence the need to change according to trends. According to Cachon, & Fisher, (2000), effective inventory management remains core to the excellence of management excellence. During the recession, it is vital to cut down costs by engaging in stock improvements and logistics plans. 

Currently, the firm uses traditional means of stock inventory as well as purchasing models. The company stores its inventories in a hired warehouse while the rest are in the shops for display. In case a customer places an order whose stock is in the store, it takes much time before a product can be transferred from the warehouse to the warehouse. The fact delays the processing time that keeps already excited customers waiting. At the same time, customers place orders manually on the telephone, mail, and the fax machine that has to be recorded and processed over time.

The stock inventory monitoring is manual with workers going round to count the goods one by one every day and recording the same in counter books. The process takes time and labor especially in the evening approaching to closure time. In the process, the goods on demand are determined, and buyers are made to purchase more stock. At times, goods arrive late forcing the firm to seek for a delivery request to the clients at a later time a problem in the omission of information technology (Kok, & Baets, 2016). The move discourages the customers in need of seeing and trying a product before purchase.

Furthermore, purchases are done depending on demand and the stock level observation where the manager places an order to have the goods delivered.The firm had to wait for at least two days since the products come from another city and depend on the hired trucks for delivery. Since the firm does not make bulk purchases, a certain level of orders must be attained before the goods are shipped to the facility. The firm makes agreements with the suppliers to have products delivered before payments are made. We bargain for discounts and competitive pricing for the goods delivered.  

The use of warehouses for storage guarantees large storage capacity and easier access to products for the market. The use of company truck to transport the commodities from one location to the other enables faster delivery and customer satisfaction. At the same time, making agreements with the suppliers is essential for the timely delivery of products as per the demand schedules. We have products delivered to the clients enabling value creation in the process.

Comparative Advantages and Disadvantages of the Currently Used Processes

However, the firm has challenges in the cases of bulk purchases, where we have to make instant orders which take a long time to arrive. In turn, customers lose trust in the business that remains a major stockist in the region. The manual inventory system takes the much time to compute and order for supplies sometimes running to over a week before orders are approved and sent to the respective stores. Goods pile up in the store coupled with the manual handling of cargos in the warehouse that slows action in the process. At the same time, serious injuries have been recorded over time due to the manual operations.

Lack of proper transportation system saw the firm incurs costs while hiring trucks to deliver and supply products to its business segment. The firm’s poor logistics plan increased the operating costs as the trucks traveled all the way empty to pick products for subsequent distribution (Wilkinson, 2013). The business spent a lot of funds in making impromptu purchases of products coming from a long distance taking up to a day before delivery. In this case, the traditional method of procurement and inventory management led to high costs of operation, passing the costs to the buyers. In the process, the firm lost potential clients due to the high costs of purchases despite the brand name created initially. Lack of proper policies to allow for cross-docking increased transportation and storage costs acting negatively to the profits of the firm.             

Supply chain management refers to the flow of goods and services from the supplier to the retailer. In the process, it involves movement, inventory works, and transportation of goods. Since the firm sells an assortment of products, it has to plan for its inventory needs. Timely delivery of goods for the customers is essential. In this case, the firm has to develop a proper logistics plan that shall serve the three outlets and construct or refurbish a modern warehouse to store its products (Stock, & Lambert, 2001). Secondly, it has to cease making limited orders and focus on bulk order based on the demand potential. Since the firm has a large customer base, it has to plan for a high rate of stock.

In maximizing profits and ensuring a continuous flow of the inventory, the firm has to embrace a strategic vendor partnership that enables a firm source products at competitive prices and have the same delivered adequately (Afik, Lowengart, & Yosef, 2015). With such a plan, Brisbane would have a long-term assurance of high volume of supply to its three stores. In linking the two, the firm has to improve its communication network with the supplier by providing direct access to its inventory system. An online inventory system would help the three stores interlink inventory information thus has products arrive right on time (Fitzsimmons & Fitzsimmons, 2013). At the same time, the online portal can assist the customers to track their goods on delivery, thereby adding value to the business.

Supply Chain Inventory Management Concepts

Cross-docking is a logistical strategy where goods are unloaded from a trailer directly to small trucks thereby limiting the storage charges and space (Apte, & Viswanathan, 2000). Storing products comes with a cost that translates to increased operating costs. In minimizing costs in logistics, goods on high demand can be packed directly and transported directly to the respective shops instead of storing and having them later space (Apte, & Viswanathan, 2000).

 At the same time, inventory plans have to interlink to allow for a one off pick and delivery to the three shops instead of doing it separately. In this case, Brisbane would be availing its products at considerably lower prices. With the shops located along the same route, there would be no cases of empty trips by the truck delivering items.

Technology is a critical factor in cost-cutting and increasing efficiency. Brisbane would benefit from the introduction of information technology management software that would allow an inventory share between the three stores, warehouse, and the suppliers. As opposed to the traditional means used in the manual counting of the stock records, the innovation would ensure a speedy reception of stock turnover thus advise the supplier on what and when to supply. Sharing an inventory with a supplier is a management strategy that enhances speedy delivery of products and availability of products. The firm should adopt the Retail Link System, which connects suppliers to the retailers promoting a faster movement of commodities (Ellram, La Londe, & Weber, 2013).

At the same time, it allows a retailer to track the progress of stock levels and determine which product to order more in supply occurs in the process as customers find products as and when they need (Kim, Cavusgil, & Cavusgil, 2013). Apart from creating value, the process helps in acquiring products at low costs thus passing the benefits to the buyers and subsequently remaining competitive in the industry. In adding value, Brisbane should start distributing equipment purchased to closer locations as part of winning the customers. Technology in the warehouse, characterized by moving belts, remains essential for a faster processing of the case or commercial orders. In this case, the firm needs to enhance the warehouse to have a speedy transfer of products ready for transportation.

The firm should purchase one more truck to supplement the van current in use with delivering supplies and collections from the warehouse. In enhancing efficiency, the company has to create a well-managed route determiner to save on fuel and reduce empty trips given the strategic location of the shops (Monczka, Handfield, Giunipero, & Patterson, 2015). The truck can drop customer’s goods while en route to picking more supplies from the store. In this case, there will be little operating costs registered

Strategic Vendor Partnership

Having taken over Brisbane, a performing firm in the region, Ms Green has a lot to do in maintaining a competitive advantage in the industry. First, it has to sell products at competitive prices and retain its profit potential having merged the three businesses operating in different locations. Purchases have to be made in large quantity to ensure low costs essential in determining selling prices.

In improving purchase practices, bulk buying creates opportunity for discount on process as well as after sale services for transportation. The bulk purchase allows for a good a possible partnership and trust levels where suppliers can deliver products and have them collect their dues later depending on the stock behavior. 

Technology is essential in growth and development as it eases operations leading to a speedy processing. In so doing, it has to initiate a Retail Link System to its stores and warehouse to have information sharing and inventory sharing (Baihaqi, & Sohal, 2013). At the warehouse, manual handling of goods has to be replaced with technologically enabled machines to speed the stocking process and packaging on the lorries (Kim, Cavusgil, & Cavusgil, 2013). The vehicles used for transport must be tracked to enable monitoring of its route activity. 

Ms Green has to incorporate an inventory system powered by the internet to allow for information sharing between the suppliers and Brisbane. The move would allow for a speedy processing of orders, based on the information on the inventory records, determining which products to supply in surplus according to the sales report (Stadtler, 2015). In this case, she can sit at one store and observe the occurrences and stock level in another outlet thereby staying in control of the operations.

Logistical strategies have to be planned to allow for cross-docking by availing the company’s truck at the time of product delivery from the suppliers. The move would allow products reach the here stores on time and reduce the costs of operation in the warehouse. The truck to truck delivery would also benefit the customers living across the route by having their products delivered for free or at discounted prices.

In aiding a proper logistics system, the firm has to purchase or lease a truck to aid in local transportation of the goods from one store to the other and the warehouse to guarantee speedy transfer of purchased stock. Owing to the high stock level anticipated for the three acquired stores, there is need to add a fleet to aid in distribution (Christopher, 2016). Routing software has to be developed to have the trucks move according to planned routes for safety and management reasons. The truck has to remain tracked to ensure it carries out activities of the company and uses the desired route for fuel efficiency. Distributing products to customers allows for value creation to the customers coupled with low operating costs.

Cross-Docking Strategy

The manager has to select a central location to locate its warehouse for effective logistical operations. The manual processes have to be transformed into the latest conveyor belts and machines that increase speed and timely loading (O’Byrne, 2011). By so doing, the firm shall enhance its effectiveness enabling product delivery and customer preference to the business. Owing to the increased stock levels expected in the new operations, a double storage facility would be suitable for the case.  

 The firm has to source for a competitive supplier with a high ability to supply goods according to demand. At the same time, a supplier has to adhere to the agreement and have payments done as products sale having access to its inventory system (Bowersox, Closs, & Cooper, 2002). Choosing the right supplier ensures ample supply chain encouraging repeat purchases.

The owner has to select competitively a supplier for a partnership deal that would see a collaborative structure to have the supplier granted access to the inventory records. The strategic partnership shall allow for a speedy processing of orders and a bulk purchase model promoting a high stock level at cheaper prices. In this case, the company shall have sufficient stock levels and spend less on transportation costs since the vendor shall deliver directly to its warehouse and have the company vehicles collects the same. Cheap products would lead to low operating costs and shall have the benefits passed to the rest of the shareholders.

Conclusion

Operations management is key to efficient production and profit making capability. Brisbane uses traditional means of operation management which increases its operating costs. The previous management did not care much on the modern means of operation that had to be restructured for success. The high disadvantages attest to the failure of the system thus a need for improvement. The strategies in operating management are therefore essential in offering the company a turnaround strategy. The manager can benefit more from implementing the operations in the newly acquired firm. An efficient operation management guarantees success in business ventures through reduced operating costs while passing the benefits to the customers.  

References

Afik, Z., Lowengart, O., & Yosef, R. (2015). Options as a Marketing Tool: Pricing a Promotional Scheme for a Product with a Secondary Market. Managerial and Decision Economics.

Apte, U. M., & Viswanathan, S. (2000). Effective cross docking for improving distribution efficiencies. International Journal of Logistics, 3(3), 291-302.

Baihaqi, I., & Sohal, A. S. (2013). The impact of information sharing in supply chains on organisational performance: an empirical study. Production Planning & Control, 24(8-9), 743-758.

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2002). Supply chain logistics management (Vol. 2). New York, NY: McGraw-Hill.

Cachon, G. P., & Fisher, M. (2000). Supply chain inventory management and the value of shared information. Management science, 46(8), 1032-1048.

Christopher, M. (2016). Logistics & supply chain management. Pearson Higher Ed.

Ellram, L. M., La Londe, B. J., & Weber, M. M. (2013). Retail logistics. International Journal of Physical Distribution & Logistics Management.

Fitzsimmons, J., & Fitzsimmons, M. (2013). Service management: Operations, strategy, information technology. McGraw-Hill Higher Education.

Kim, D., Cavusgil, S. T., & Cavusgil, E. (2013). Does IT alignment between supply chain partners enhance customer value creation? An empirical investigation. Industrial Marketing Management, 42(6), 880-889.

Kok, J. P., & Baets, W. (2016). The capacity of information technology for business model innovation and holistic value creation: a formulative study within the financial services sector in South Africa. International Journal of Complexity in Leadership and Management, 3(1-2), 22-84.

Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.

O’Byrne, R. (2011). 7 ways everyone can cut supply chain costs. Retrieved on 8^th September 2016 from https://www.supplychainquarterly.com/topics/Strategy/scq201102seven/ 

Stadtler, H. (2015). Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Stock, J. R., & Lambert, D. M. (2001). Strategic logistics management (Vol. 4). Boston, MA: McGraw-Hill/Irwin.