Business Report Brisbane Outdoor Power Centre

Question: Discuss about the Business Report for Brisbane Outdoor Power Centre. Answer: Introduction The core aim of this report is to develop strategies which should be implemented at Strathpine to improve the management of purchasing and inventory by the department manager. Strathpine is one of the three branches of Brisbane Outdoor, purchased in 2001. The other two branches, Mt Gravatt and Ipswich were purchased in 1985 and 2004 respectively. After the founder of all the outdoor branches Donald Saxon retired, the new CEO, Belinda Green assumed the position. The former CEO had been working under laissez-faire leadership where employees worked without supervision (business dictionary, 2016). With the new leadership, accountability is to be implemented especially in the purchasing and inventory department. The CEO has therefore requested the department manager a report on how the current situation can be improved. The report will identify the challenges currently experiences and suggest possible recommendation. About this, the existing theories and models of purchasing and inventory management will be put into consideration to come up with the best practices. The report will also include an action plan to be used to implement the recommendation if accepted. Introduction to the Industry Strathpine is one of the three branches of Brisbane Outdoor, purchased in 2001 by Donald Saxon. The other two branches, Mt Gravatt and Ipswich were acquired in 1985 and 2004 respectively. Each of them has been operating under branch manager over the years with one overall CEO who is the founder. Donald Saxon managed Mt Gravatt, Ipswich branch by Adam Conte and Strathpine by Belinda Green. Being the overall CEO, Donald devoted most of his time at Mt Gravatt and so the other branches were just under their managers. After Donald retired, Belinda decided to become the CEO. Brisbane Outdoor has been known for offering quality supplies with experienced employees and excellent after sale services. The firm has been running a fairly loose, decentralized organization based on common-sense, goodwill and mutual cooperation and the branch managers had been trusted with putting first the interest of the firm. Belinda is however is not okay with this kind of leadership and has already identified a reas where improvements are required considering how she has seen the firm running for the past ten years and one of the department that needs improvement is the purchasing and inventory. During the previous management, the inventories have been managed poorly and as a retail establishment where there is a heavy investment in stock, a proper practice ought to be implemented. A central practice is required since the three branches are one thing or rather a connected purchasing and inventory management is required. Recent analysis shows that improvement in purchasing and inventory management can raise the productivity of the firm but this yet to be confirmed hence the reason for this report. Current purchasing and inventory management processes at Brisbane Outdoor Power Centre The three branches seems to acting independently like separate business though there are cooperation among them. As a retail shop which sells high quality merchandise every day, there is a high investment in stock purchase. For this reason, there should be level of documentation when it comes to purchasing and inventory. However, the firm acts contrary to what is expected. Each branch operates independently, and there is no integrated approach when it comes to transportation of stock between them. As a result of this, there have been cases where the major product brands differ from store to store. In addition to that, each branch has its own inventory manager who do their own sourcing and purchasing and have own inventory management systems. This means that the one cannot link what is happening in one store to another store and therefore there is no accountability. It is difficult to tell if the three branches are under the same management. This has therefore led to three purchasing and inventory management systems which are completely different and unconnected. As a result of this, the new CEO, Belinda has seen it appropriate that the current situation be changed into a newer way for better management of the firm. Success and drawbacks of the currently used processes The only advantage that can be realized in this current situation is the fact that stock can be increased at any time. It is not mandatory that individual branch waits for the central purchasing department to get a new stock since such does not exist. If any branch has a shortage in stock, then it can acquire them as soon as possible. This current system, however, has several disadvantages. First, there is the lack of accountability for equipment held. Equipment held in the firm's warehouse for being tagged for inventory and all the persons responsible be notified of their arrival (Sari, K., 2007). This is however not the case in Brisbane Outdoor as it is evident that there are times when the major product brand differs which can be linked to the fact that there is no efficient accountability and communication. Another disadvantage that may arise due to this system is that the shelves may be stocked inappropriately. This means the stock can either be under stocked or overstocked (Sramek B. Fugate B., 2007). Customers will not acquire the product they desire if under stocked or the companys money which can be used for other purposes like advertising will be wasted if the shelf is overstocked. In this scenario where each inventory manager performs independently, this is a possible drawback that may be experienced. Also, this system is likely to hinder property transfer (Cardenas L.E., 2007). Since Brisbane Outdoor is a three firms in one, there is likely to be a point in time when there may need to transfer equipment from one branch to another. With this system, however, this may be difficult to accomplish considering that there is no central department managing that. Supply-chain and inventory management concepts Resource based view (RBV). It lies on the firms valuable heterogeneous tangible and intangible resources at its disposal and act as a basis for comparative (Kozlenkova. I et.al, 2014). For this model to work, first, the manager has to identify the resources in the firm. Next, the identified resources should be examined to check if they fulfill the all the criteria, that is, they should be worthy, scarce, not easy to copy and non-replaceable. Lastly, the products should be cared for and protected to improve organizational performance. (Crook et al., 2008). Using this model, inventory manager should inspect all the firms holdings in all the branches and perform the required processes (Verma, 2006). The list of all the resources should then be kept to be used as evidence when a new order is to be added to the existing stock. The problem of having different major brand product will, therefore, be eliminated. Dynamic capabilities view. It focuses on competitive survival. This is close to the realities of contemporary business today. It is unrealistic to change the entire resource base to respond to external changes which can also not be ignored hence the model, dynamic capabilities (Ludwig, 2011). Since the branches are located in different locations, a customer may need a product which may be out of stock in one branch but is available in another branch. To facilitate this, the dynamic capability view is the answer to this. Economic order quantity (EOQ) is a quantity used to minimize total holding and ordering costs based on the Wilson EOQ Model and developed by Ford W. Harris in 1913 (Caplin Leahy 2010). It applies when a given product demand is constant for one year. For the effectiveness of this model, there must be a clear documentation of what comes inside the business and what goes out. With this effect, a central office must be in place to keep all these information from all the branches. Malakooti (2013) introduced another criterion called multi-criteria EOQ whose aim was to reduce the total cost of purchase, the quantity, and shortages. This means that, the company will be able to reduce the cost of purchasing its holding especially if all is done from a central point. Which this effect, the quantity of the holdings will also be increased and this will, in turn, increase customer traffic to all the branches. With uniform customers, the profits will be distributed equally and therefore all the branches are likely to have uniform growth. Recommendations First, Ms. Green should formulate and implement policies that govern the business operations as well as the inventory department. Since Brisbane has been operating without any written policy, this is to come up with them considering she is a believer in policies and procedures. Staff input should be done when coming up with them since they are the people to use them. They should be workable and everybody should be comfortable with them. Secondly, the CEO should consider unifying inventory and operations data. All business operations are interdependent and therefore the department data should be unified (Gasaway, 2016). This makes easier to track the business activities especially during auditing. It also encourages accountability from all sectors. Also, workers can follow the correct procedures in performing their tasks and therefore a more democratic leadership is likely to be established. Also, an inventory management system should be implemented. The system should be for all the branches of Brisbane Outdoor (Gasaway, 2016). Implementing a centralized inventory management solution as the best way to automate the inventory and operations. Ms. Green should consider having a computerized maintenance management system which will make it easier to track the inventory of the three branches for efficiency and optimization. Furthermore, the existing processes should be organized. Gasaway (2016), suggest that a stock organization be done in the firms current status. This is to ensure that peradventure the proposed recommendations do not work as was thought then the business could continue functioning in its initial state but a better way. Also, by organizing the processes, it may be realized that the problem was not actually on the processes but on the way they were being operated. The firm should also consider establishing optimized purchasing procedures to ensure there is adequate inventory control (Dowling, 2016). The procedures should align with actual sales for a period one year. This will ensure that there are no cases of under stocking the premises or overstocking them. The branches will also be having the stocks according to how they perform. In the long run, the branch managers will try extra hard to increase their sales for allocation of new stock hence increased profit. Lastly, an ABC analysis should be done. According to Chung (2010), this is an inventory categorization technique where items are divided according to the control they have. The first moving or best-selling products should be put on top of the inventory. These will form part of the major brands. During purchase, they should be given priority and should be distributed equally among the three branches. There should never be a point in time where the products are missing in of the branches since they also act as customer magnets. Conclusion Brisbane Outdoor as an old business should not fall due to poor management which can otherwise be changed. It is with this desire for change that this report seeks to bring out areas where improvement should be made. The recommendations provide those that had been applied elsewhere and proved positive. It is therefore the will of the researcher that they will be implemented and will also have positive influence as have been in other places. Before they are adopted, they should first be tested to come up with the most appropriate one. Before they are fully implemented, it is important that user input is considered. The employees, management as well as buyers from all the three branches should be consulted so that they are comfortable with the new processes. This is because it is the stakeholders who determine the success of a business and if the customers, for example, are not comfortable, they are likely to run away meaning the business will experience reduction in profit. References Beamon B.M. and Kotleba S.A. (2006), Inventory management support systems for emergency humanitarian relief operations in south Sudan, The International Journal of Logistics Management, Vol. 17 Business dictionary,2016 www.businessdictionary.com/definitio/laisserz-faire-leadership.html Caplin A. and Leahy J. (2010). Economic Theory and the World of Practice: A Celebration of the (S,s) Model. Journal of Economic Perspectives Cardenas L.E. (2007). Optimizing inventory decisions in a multià ¢Ã¢â€š ¬Ã‚ stage multià ¢Ã¢â€š ¬Ã‚ customer supply chain: a note. Transportation Research Part E. Vol. 43. Chang L. (2010). 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