Discuss about the Brisbane Outdoor Power for Purchasing and Inventory Management.
The purchasing and inventory management is an important part of the retail business and the importance for the system is paramount if there is more than one outlet like the business of the Brisbane outdoor. The report sheds light on the current purchasing and inventory management systems that are applied in the Strathpine branch. The purchasing manager does the purchasing in the branch and the different sources that are approached for supply differ and vary in case of the different items that are sold by the company (Sui, Gosavi, & Lin, 2010). The management of the sources that are the primary suppliers need to be managed but the concern for the business should be kept in the forefront of the purchase (Muller, 2003). Therefore, before the purchasing can occur, the quality management should be carried out to check if the merchandise that is being bought is up to the quality standards of the company. These are the basic concerns that are to be addressed before any source can become a permanent supplier in the business. There is also the checking of the capability of the supplier in terms of quick supply and ability supply in the amounts that is required by the store, which is a large one (Toomey, 2000).
The inventory management is also part of the procedure as like any retail store the supplies are depleted at various rates and the inventory management can streamline the process of checking the stock of an item and ordering it if it is below a certain quantity that is based on the rate the item is sold. This process if not managed properly can result in overstocking of an item that is not sold enough and depleted of the item that is in demand by the customers and even be out of stock in the worst-case scenario (Van Belle, 2015). For this reason, the management of the inventory should be linked with the purchasing and the whole of the process integrated into one unit that is focused on the factor of keeping the store stocked with all items in adequate amount and the factoring in of the time that takes the fresh stock to arrive. Therefore, the process is a complex one and the different retail stores or chains do it differently from one another. The report describes and analyses the process that is followed in the Strathpine store of the Brisbane outdoor power.
The current purchasing and inventory management in the retail store of Brisbane outdoor power is based on the push pull strategy and the item is ordered when there is low inventory and there is safety stock, which differs on the variation of the demand of different products. The fluctuation in demand is the main reason for keeping safety stock and the seasonal and other factors that affect the demand are considered in the purchasing. The location of the warehouse of the seller and the transportation are also factored in the purchasing decisions and the time delay in the arrival of the new stock is factored in the demand of the product and the remaining stock (Van Belle, 2015).
The inventory system is functional and the different choices offered are based on the brand and the capacity of the machine that is being sold. The choices are based on the price and the capacity of the power tool being sold. The various companies whose product is sold in the store are focused on the choices being offered by the competitor brands and the store if famous for their range of products and the different choices offered of the same product of the different brands (Wang, 2014). The inventory is based on the product type and the options offered which differs from time to time based on the demand of a product and the launching of new and better machines that offer better service (Weele, 2010).
The purchasing manager makes the purchasing decisions and the decisions differ on the contacts with the different sources and the preference that is based on the product quality the asking price and discounts offered. The other factors that might affect the purchasing decision are the availability of the product or the shipping time of the companies and the demand of the product at that time and the time, that is available before the safety stock runs out. The inventory process is disjointed and updated only at the end of the week although the computers are used to record the sales the product or the components that are in demand are done separately. The ordering process is not connected with the sales figures or the availability of replacement product that might be used to stem the demand of the specific product. The more important factor of the purchasing is that the new sources are tested for their service capability and time taken and the efficiency of the transport before they are taken as a regular sources. The service quality and efficiency and the price factors also play an important role in the sources being used for more than one product and the comparative benefits are taken into consideration while there are more than one source for a product (Mercado, 2008).
There are many advantages to the current system of purchasing and inventory management. There is the benefit that is offered by the purchasing decisions that consider the product type and the variation of the different brands and the unique benefits they offer is based on the demand of the product. This allows the store to keep a wide range of products and the customers get the chance to choose from different variations of the similar products sold by the different companies. This gives the store the unique identity that helps them in attracting more customers who are interested in the buying options they get (Jaber, 2009). There is a disadvantage to the system, as the company has to keep track of many items and the factor that does not consider the fact that the unavailability of one product might boost the sale of one comparable product or the profit margin offered by the different brands in the similarly priced products.
The disjointed purchasing that is not integrated with the inventory system does not offer the full functionality that could have been offered if the record of sales would have been used in the purchasing procedure. The real time information and the availability of the information stock at any given time and the current sales rates calculation all of these can be done by integrating the sales record that would calculate the inventory and time left before an order has to be made (Inventory management, 2005). The current procedure is disjointed and takes much more time and the inventory process has to be done separately when it could as easily have been done by the sales records in much less effort.
There is also the point to be considered that the purchasing manager makes the decision but the experienced staff are not used in the process and the different points that might affect the sales of one product over another is not taken into consideration (Inventory management, 2005). The customer preferences and the unique selling points of the products are not considered into the purchasing manager’s decision. As this is a routine activity, there are no meetings on the decisions and the customer perspective that might affect the sales rate of one product depending on the availability of other products is not taken into consideration.
The efficiency in the purchasing can be increased if it is integrated with the sales record management. This is the main suggestion in this aspect as the efficiency will increase tenfold if the sales records are used to automatically tally the numbers of products sold to create a list of the items remaining in stock. This can also be integrated with the time for the safety stock to last and the time before the store runs out of the product. This will help in the efficiency of the overall system, the job of the people involved in the process will become much easier, and the efficiency will increase (Eckerd, 2016).
The manager will also have a better insight into how the availability of one product can affect the sales rates of another if the employee opinion are taken as the sales staff will be more aware of the customer trends and the buying choices that will help make the purchasing decisions. Therefore, the meetings among the purchasing and inventory staff and the sales staff should be included in the routine activity that will discuss the different products and the factors that affect the customer choice (Dooley, 2016). These two methods will help raise the efficiency level of the purchasing and inventory management system that is currently employed in the store.
The integration of the sales record and the inventory management should be the first priority of the company as the benefits that are gained from the process are the most important and this action will have the most effect on the system and the efficiency of the process. This has to be done by an IT firm to make the software for the projection of the time remaining before stock runs out and help in the purchasing decisions (Chunawalla, 2008). The different factors that have to be taken into consideration are the factor that will note the current sales rates and the make projections on the fluctuations, which will help the store, meet the needs of the market better. The meeting between the sales and the inventory management staff will also need to be implemented by the store as it will also have significant impact on stocking decisions and purchasing decisions (Day, 2002).
|
Who |
What |
when |
how |
|
Contracted IT services |
The integration of the sales record management with the inventory management to make projections about the stock availability and predict the demand |
The time taken will depend on the resources of the firm and the cost of hiring them and their efficiency |
The designing of a sales recording software that will contain the inventory management options and predict the availability of the items and demands |
|
The purchasing manager and the sales staff |
Participate in regular meetings to make sure that the customer perspective is considered into the purchasing decisions of the firm |
Within one month |
Scheduling weekly meeting and the agenda that will be decided by the predictions of the combined sales record and inventory management. |
Conclusion
The report is concise and it points directly towards the issues in the current system and even makes suggestions on how to improve the efficiency of the system. This report is complete and independent of the other stores and based solely on the one store only but the overall integration of the all stores will also increase the efficiency even more (Baily, 1998).
References
Baily, P. (1998). Purchasing principles and management. London: Financial Times Pitman Pub.
Chunawalla, S. (2008). Materials and purchasing management. Mumbai [India]: Himalaya Pub. House.
Day, M. (2002). Gower handbook of purchasing management. Aldershot, Hants, England: Gower.
Dooley, K. (2016). Using manifest content analysis in purchasing and supply management research. Journal Of Purchasing And Supply Management. https://dx.doi.org/10.1016/j.pursup.2016.08.004
Eckerd, S. (2016). Experiments in purchasing and supply management research. Journal Of Purchasing And Supply Management. https://dx.doi.org/10.1016/j.pursup.2016.08.002
Inventory management. (2005). [Lenexa, KS].
Inventory Management. (2010). Vox Sanguinis, 98(3p1), e295-e363. https://dx.doi.org/10.1111/j.1423-0410.2009.01252.x
Jaber, M. (2009). Inventory management. Boca Raton: CRC Press.
Mercado, E. (2008). Hands-on inventory management. New York: Auerbach Publications.
Muller, M. (2003). Essentials of inventory management. New York: AMACOM.
Sui, Z., Gosavi, A., & Lin, L. (2010). A Reinforcement Learning Approach for Inventory Replenishment in Vendor-Managed Inventory Systems With Consignment Inventory. Engineering Management Journal, 22(4), 44-53. https://dx.doi.org/10.1080/10429247.2010.11431878
Toomey, J. (2000). Inventory management. Boston: Kluwer Academic Publishers.
Van Belle, D. (2015). Inventory Management©. Acta Hortic., (1085), 333-334. https://dx.doi.org/10.17660/actahortic.2015.1085.61
Wang, Y. (2014). Enterprise Inventory Management and Simulation. AMR, 933, 874-878. https://dx.doi.org/10.4028/www.scientific.net/amr.933.874
Weele, A. (2010). Purchasing & supply chain management. Andover: Cengage Learning.
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