Discuss about the Operations Management for Supply Chain and Inventory.
The management of the inventory and purchasing in any organization is considered as the most tedious and time consuming task. The centralized approach among the firms and the coordinated aspects to exchange the views are considered on the highest priority. Similarly, Brisbane also holds the suitable inventory and the purchasing system in the well-defined manner. The Brisbane Outdoor Power location mainly operates from three main locations with the different holding authorities. The owner and the CEO of the organization was Donald Saxon. The three retail outlets are mentioned in three different years. In the year 1985, Mt.Gravatt centre (owned by Donald Saxon), Stratphine center in the year 2001 (owned by Belinda Green) and the Ipswich in the year 2004 (owned by Adam Conte). Being the CEO and major authority of the organization, Donald Saxon provides the authority for all the members to manage the major aspects related to the organization in the organized manner.
In managing the operational aspects, Donald Saxon adapted the Laissez fair technique of the leadership in which he provides the individual rights of the owners to manage the aspects related to the purchasing and inventory. Though the support and the coordination among the organization is maintained by exchanging the views and supplying the products required but, the management aspects of managing all the three centers are totally different from each other. In short, the operational aspects (i.e. purchasing and management of the inventory) are not coordinated in the stable and well-defined manner.
Apart from this, the other issue related to the purchasing and inventory management is also highlighted when Ms. Green takes over all the three subsidiaries of the Brisbane. She came up with the conclusion that no appropriate set of policies and procedures are followed by the CEO to manage the operational aspects and all things are going in vein by following the inappropriate system in the organization. In fact, the products related to the major brands are also available in the distorted manner. Some branches possess the other products and some holds the other type of varieties (Dominick, 2016). The execution of the process totally depends upon the trust and the satisfaction level of the customers. There is no integrated system identified for the development of the system in the organization and there is also a lack of concentration, introspection and coordination in the organization observed (Engel, 2011). In short, the inventory and purchasing system is not appropriate and all the aspects are unconnected with each other due to which the coordination is also lacking between all of them.
It is defined in the case study that the CEO of the organization doesn’t follow any specific type of leadership processes in managing all the retail outlets of the Brisbane. This will directly create some positive and some negative impact on the existing process. In fact, the process itself shows some advantages and disadvantages while completing the actual scenario. In the case study, the CEO of the company is quite simple and doesn’t follow any rules or the procedures to get success in the retail industry. This free nature and the different perspective of the CEO lead the company to both the negative and positive perspectives.
As a professional consultant, the advantage which is identified in the organization with respect to the operational management are defined below: –
Some of the disadvantages related to the process are also defined below in a suitable manner: –
By following all these advantages and disadvantages in the appropriate manner, the suitable aspects related to the inventory and purchasing can be identified appropriately.
The concept of supply chain management is changeable all the time and the appropriate aspects are required for the process of improvement. There are various theories and forecasting approaches that are identified in the supply chain and inventory management concept by which the improvement of the existing process in the organization can be done on the large scale (Gonzalez-Loureiro & Dabic, 2015). To manage the inventory, the suitable aspects related to the inventory control should be managed in the appropriate way so that, further aspects related to the inventory management can be improved in the progressive manner simultaneously. Firstly, the theories related to the inventory management are defined below which may help in increasing the efficiency and the financial aspects can also get improved with the help of these models (Ziukov, 2015).
The models are categorized into two major types which are named as the One Item Model and Multi Item Models. The sub sections of these models are also found out which are defined with the help of the diagram and on the basis of the diagram, further explanation is defined on the individual level (Bottani, 2016).
The One Item Models are considered as the innovative models which are further divided into the deterministic and stochastic type of model. The deterministic model is also divided into classical lot size, wagner within model and heuristic model. The Stochastic models have been divided to newsboy problem, the arrow harris marschak problem and hadley within the model. In this model, the stochastic model shows the indeterminate aspects related to the inventory and the purchasing aspect. But, the determinate or deterministic model will be helpful in improving the major aspects related to the appropriate and determinant constraint appropriately (Hadley & Whitin, 2007). By the help of this model, the ideas to manage the efficiency of an existing system can be increased on the wide level.
To maintain the adequate stock levels and to reduce the financial aspects related to the purchasing and inventory management in the organization, the most suitable model is the Multi Item model which is helpful in strengthening the financial aspects of the organization on the wide level. The sub models which are included in the Multi Item Model are the Flaccidities and the Multi Item Inventory Models which are helpful in providing the suitable strength to the financial aspects of the organization. The dixon model and the classical lot size model will be helpful in defining the suitable aspects related to the organization in all the possible ways (Mukharji, Israelit, & Faelli, 2011).
Apart from this, the forecasting and the prediction of the future aspects may be helpful in managing the financial aspects and the investment also reduces by using the forecasting model (Hyndman, 2016). The identification of the suitable forecasting model is defined below in an appropriate manner: –
(Dobrzykowski & Leuschner, 2015)
In the defined scenario, while there is the requirement of suitable changes in the organization, the methods of forecasting will be helpful in solving the tedious situation in a well-organized way. By the forecasting methods, the future demands can be identified easily and can try to be solved out in the appropriate manner. By this, the inventory can also be managed in the appropriate manner and the control on the forecasting can easily be done in the right way (Zizler, 2007).
Apart from this, the organization, i.e. Brisbane can also focus towards the other perspectives to increase the efficiency and reduce investment. The other aspects are the appropriate control and watch in the inventory management, controlling the excessive aspects related to the organization and the other processes is also controlled with the help of the stable process (McMann, 2011).
The restructuring of the existing structure is considered as a tedious task. The framing of the new structure is quite easy to form rather than changing the existing structure. For restructuring the inventory and the purchasing system in the organization, various aspects should also be taken into consideration (Addo-Tenkorang & Helo, 2011). The major steps in the restructuring are defined below: –
A suitable implementation of the supply chain management in the organization will be helpful in implementing the major growth aspects of the organization. In SCM, the suitable growth and strategic aspects are defined which are helpful in maintaining the sequence of the process. Due to the introduction of the SCM, the suitable products, services, finance and the appropriate information system can be developed. In the SCM process, the mapping, data gathering and categorization, analysis and validation, solution design and appropriate implementation plan can be introduced (Singla, 2008).
The second phase is identified as the restructuring of policies and the procedures which are already followed in the organization. The suitable policies which can be introduced in the organization are making of the suitable inventory system in the organization, formation of the appropriate purchasing policies, forecasting, management of the orders and setting of the stable requirement by which the appropriate aspects related to the organization can be solved (Florence, 2014).
Formation of the centralized system in managing the data in an appropriate way will be helpful in providing the assistance to the efficiency saving and the financial aspects of the organization. The solution to reduce investment and the requirement related to the space is identified. The appropriate performance level and the usage of the SCM level are helpful in providing the ERP packaging system on an appropriate level (Urabe & Tezuka, 2014).
By following this three step process, it becomes easier to reconstruct the existing structure of the organization.
To solve the major issues and problems related to the organization, the suitable action plan will be developed which will further help in improving the aspects related to the organization and the inventory & purchasing management aspects related to it. There are various steps defined in the action plan defined below: –
Step 1: The major cause and reason for the issues related to the inventory and purchasing management needs to be identified.
Step 2: The suitable strategy or planning for the restructuring of the existing structure can also be done, by which the modification can be prepared (Tan & Platts, 2005).
Step 3: The appropriate ideas and the brainstorming aspects may also be generated with the help of the stable process.
Step 4: The best solution for the appropriate modification are selected.
Step 5: Finally, the suitable evaluation of process is done, which is helpful in providing the appropriate results and feedback (Schell, 1991).
By using this action plan, the appropriate results can be generated easily.
References
Bottani, E. (2016). Supply Chain and Inventory Management. International Journal of Supply Chain and Inventory Management. Retrieved from https://www.inderscience.com/jhome.php?jcode=ijscim
Addo-Tenkorang, R., & Helo, P. (2011, October). Enterprise Resource Planning (ERP): A Review Literature Report. Journal Proceedings of the World Congress on Engineering and Computer Science, 2, 1-9. Retrieved from https://www.iaeng.org/publication/WCECS2011/WCECS2011_pp1126-1134.pdf
Aksoy, Y., & Erenguc, S. (1988). Multiâ€ÂItem Inventory Models with Coâ€Âordinated Replenishments: A Survey. International Journal of Operations & Production Management, 8(1), 63 – 73. Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/eb054814
Bottani, E. (2016). Supply Chain and Inventory Management. International Journal of Supply Chain and Inventory Management. Retrieved from https://www.inderscience.com/jhome.php?jcode=ijscim
Dobrzykowski, D., & Leuschner, R. (2015, October 01). Examining Absorptive Capacity in Supply Chains: Linking Responsive Strategy and Firm Performance. Journal of supply chain management, 51(4), 3-28. Retrieved from https://onlinelibrary.wiley.com/doi/10.1111/jscm.12085/full
Dominick, C. (2016). Purchasing & Inventory Management Hook Up! Purchasing & Inventory Management Hook Up! Retrieved from https://www.nextlevelpurchasing.com/articles/purchasing-and-inventory-management.php
Engel, B. (2011, March). 10 best practices you should be doing now. 10 best practices you should be doing now. Retrieved from https://www.supplychainquarterly.com/topics/Procurement/scq201101bestpractices/
Florence, N. (2014, June 03). How to Write an Action Plan to Achieve Success and Productivity. How to Write an Action Plan to Achieve Success and Productivity. Retrieved from https://blog.udemy.com/how-to-write-an-action-plan/
Gonzalez-Loureiro, M., & Dabic, M. (2015). Supply chain management as the key to a firm’s strategy in the global marketplace: Trends and research agenda. International Journal of Physical Distribution & Logistics Management, 45(1/2), 159 – 181. Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/IJPDLM-05-2013-0124?journalCode=ijpdlm
Hadley, G., & Whitin, T. (2007). A review of alternative approaches to inventory theory. RAND Corporation. Retrieved from https://www.rand.org/content/dam/rand/pubs/research_memoranda/2007/RM4185.pdf
Hamlett, K. (2015). The Advantages of Inventory Control. The Advantages of Inventory Control. Retrieved from https://smallbusiness.chron.com/advantages-inventory-control-2228.html
Hyndman, R. (2016). Forecasting. International Journal of Forecasting, 32(4), 1103-1402. Retrieved from https://www.journals.elsevier.com/international-journal-of-forecasting/
McMann, G. (2011, July). Supply Chain Restructuring: Considerations for Change. The journal of healthcare, 1(1). Retrieved from https://www.jhconline.com/supply-chain-restructuring-considerations-for-change.html
Mukharji, P., Israelit, S., & Faelli, F. (2011, July 06). Ten ways to improve inventory management. Ten ways to improve inventory management. Retrieved from https://www.bain.com/publications/articles/ten-ways-to-improve-your-inventory-management-wsj.aspx
Schell, C. (1991). Leadership & Organization Development . Leadership & Organization Development Journal, 12(1), 28 – 32. Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/01437739110139434
Singla, A. (2008). Impact of ERP systems on small and mid sized public centre enterprises. Journal of Theoretical and Applied Information Technology , 4(2), 1-13. Retrieved from https://www.jatit.org/volumes/research-papers/Vol4No2/Enterprise%20Resource%20Planning%20(ERP),%20ERP%20impact,%20ERP%20Design%20and%20Implementation,.pdf
Tan, K., & Platts, K. (2005). Business Process Management. Business Process Management Journal, 11(2), 137 – 157. Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/14637150510591147
Urabe, S., & Tezuka, M. (2014). Best Practice for Inventory Optimization based on a Restructuring of the Organization, its Functions, and its Information Systems. IIEOM. Retrieved from https://iieom.org/ieom2014/pdfs/369.pdf
Ziukov, S. (2015). A literature review on models of inventory management under uncertainty. Yurii Fedkovych Chernivtsi National University. Retrieved from https://www.mruni.eu/upload/iblock/019/VSE-15-5-1-03.pdf
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