Improving Customer Relations

Questions: 1. What are the current purchasing and inventory management processes being used by the company? 2.What are the comparative advantages and disadvantages of the currently used processes? 3. Chain and inventory management concepts would help the company increase efficiency and reduce investment whilst maintaining adequate stock levels? Answer: 1. Upon ownership of the new branch at Mt. Gravatt Belinda Greens did a thorough tour assessing the situation at all the branches of the Company. Green observed a lot of issues with the way the company was being managed. She noticed that Brisbane Outdoor had a very low stock for inventory and was in desperate need for a heavy investment. It was also vital that the investment be managed in an effective way. Donald Saxon had allowed the branch managers to function as they pleased because he believed in their expertise and their potential. The Strathpine and Ipswich branches were highly established and had an extremely experienced set of staff therefore Donald Saxon never felt the need to interfere with their work. However his un-involvement led to a number of malpractices in managing inventory and purchasing procedures. Every store operated on their own, each time there was a shortage in any branch, goods would be supplied within the branches without any communication among the branch managers. There seemed to be a lack of integration among the branches, goods that were of the same brands differed from store to store. Each branch manager operated independently with goods from sources of their own and purchases made without consulting each other. There was no communication between the branch managers in managing inventory or any given operation of any branch. The managers were operating on three completely different levels which were not connected to each other in any form whatsoever. The purchasing and inventory management systems were nowhere connected to each other. The advantage of the currently used processes is that the branches were doing very well on their own and had a high customer loyalty. Having a trained and highly skilled staff established the branches as a highly able organisation who had won the faith of the customers. Their excellent after sales service and superior quality merchandise was a bonus to the already existing experienced staff. They had built a pretty strong connection with the customers and customers would not mind paying a higher premium in order to purchase from Brisbane Outdoor Power Centre. Brisbane Outdoor was known for its excellence and was regarded as the best in the industry. 2. However even though on an external level Brisbane Outdoor was doing very well, internally they were an organisational failure. Their method of operation was inadequate and disorderly which had caused a management dysfunction and ended up in Green taking over the ownership. One of the major disadvantages of the firm was that the management did not interact with each other on the method of operation neither did they follow any structure in the purchasing or inventory management. In fact they did not even purchase their merchandise from the same merchant. This kind of dysfuntionality could cause further damage and discrepancies can easily creep in, resulting in failure. Goods were transported without any consultation with respective branch managers. As a result of lack of proper management interest to deal with these issues there was a shortage in stock. Lack of visits from Donald Saxon and no periodical meetings has mainly been the cause of inventory mismanagement. (The Economist, 2 007) 3. In order to increase efficiency and reduce investment following steps may be taken: Systematic Management: In order to increase the efficiency of the company and reduce investment while maintaining adequate stock levels the major shift that the company would be required to make is the method of dealing. There needs to be a systematic process of operation in the company that will integrate all three branches and work together for a common purpose. Single manufacturer: The Company should purchase inventory from one single merchant for all branches. In order to maintain the same standard of quality throughout all the branches products must be purchased from the same manufacturer and distributed to every branch. Bulk orders: The problem of low stock can be dealt with, by keeping a standard volume for stock every month. Moreover when merchandise is purchased in bulk the company gets entitled to bulk purchase discounts which can boost stock levels thereby bringing down the investment as well. Building a team: Setting apart a team of people who will handle the incoming merchandise and their storage before it is purchased by the customers would serve well for the Company to maintain proper information on the inventory as well as keep a track record of every activity. Code of Conduct: There needs to be an accurate procedure to manage inventory. Managers must consult one another in dealing with matters relating to the Companys dealers, manufacturers and its final delivery to the customers. (Accenture,2005) Reference The Economist. (2007) Improving Customer Relations: An Integrated Approach. Retrieved September 30, 2016, from https://graphics.eiu.com/upload/SAP_CRM.pdf Accenture. (2005) An overview of supply chain concepts and examples from the development sector. Agenda. Retrieved September 30, 2016, from https://smehro.files.wordpress.com/2008/11/supplychainpresentationundp-accenture.pdf Supply Chain Management - SCM. (n.d.). Retrieved September 30, 2016, from https://www.investopedia.com/terms/s/scm.asp