Executive summary
The purpose of this report is to examine, analyse and critically review the purchasing and inventory management process in Brisbane Outdoor power with the aim of providing recommendation for improvement. Current, the company have three outlets which each having its own operation management
The finding of this report indicated that, Brisbane outdoor is current operating under a decentralised purchasing and inventory management system. While this system has a number of benefits to the company, it has huge drawback which is preventing the company from becoming more efficient in its operation. Some of the drawback with the system include high investment requirement since each of its three outlets must have its own purchasing and inventory system. Also under the current process, it becomes impossible to coordinate the effort of the organization the three outlets operate different and disconnect purchasing and Inventory management.
This paper recommends that in order for the company to improve it operation management, it must abandon the current decentralized approaches and adopt a centralized one. Secondly the company should establish a centralized warehouse instead of running three different warehouses> the paper also recommends that to improve efficiency, the company should adopt Material requirement Planning or warehouse management system.
Introduction
Improving operation management at Brisbane Outdoor
In very organization, the effectiveness and efficient of the operation management plays a significant role in determining the success of the organization. An organization with strong Operation management policies and system is more effective and efficient leading to higher performance. One Area of operation management that is important is the purchasing and inventory management. When handled well, the purchasing and inventory management can lead to a smooth operation, reduced cost of operation, improve quality of business offering, better relation with suppliers among others. On the other hand, poor purchasing and inventory management can lead to frequent operation disruption due to shortage of inventory, increased cost of operation, poor quality products, and unsatisfied customers among others. The purpose of this report is to review the purchasing and inventory management processes at Brisbane outdoor power centre with the aim of identifying any problems in the process and provide recommendation for improvement.
Current purchasing and inventory management processes at Brisbane Outdoor power centre
Under its current operation management arrangement, Brisbane outdoor power centre is running a decentralized Purchasing and inventory management. Schmitt, Sun, Synder and Shen 2015) define decentralized purchasing and inventory management as an operation arrangement whereby the various units/ departments of an organization purchases and manages their inventory independent of each other. Under the decentralized purchasing and inventory management, each department or unit in an organization make arrangement to purchase inventory they need from suppliers of their choice (Monczka, Handfield, Giunipero, Patterson, & Waters, 2010). This is the case in Brisbane outdoor power centre. The company has three retail outlets and each of them has its own purchasing and inventory mechanisms, although they cooperate in several other areas. The manager of each outlet is responsible for purchasing inventory and putting the necessary procedures, policies and systems in place to ensure the stock are well managed.
Advantages and disadvantages of the Current Process
As mentioned earlier, the purchasing and inventory management in Brisbane outdoor power centre is decentralized to each of it three outlet. This kind of an operation arrangement as far as purchasing and inventory management is concerned does have some advantages. To begin with, Decentralized purchasing and inventory management enables the organization to respond quickly to the needs and requirement of local clients (Schmitt, Sun, Snyder, & Shen, 2015). In relation to Brisbane outdoor power centre, running a decentralized purchasing and inventory management give the company an opportunity to understand and respond to the local clients’ needs in each of the three locations it operates and this have contributed to the positive reputation the company have.