Describe about the Operation Management for Procedure of Production.
Operation management is an area of management that is concerned with designing as well as controlling the procedure of production. It is mainly concerned with planning as well as managing the contexts of production and manufacturing of services. There are two big terms that helps to describe operation management. The first term is supply chain management that helps to understand the international trend in order to meet the demand of the customers that is often decisive. On the other hand, the second term is logistics that helps to deal with careful use of resources (Silva Vieira, Beal and Stewart 2014). The report provides a brief introduction about Brisbane Outdoor Power Centre that function from three retail sites across the Queensland city of Brisbane. The three retail sites are almost identical to each other however; they offer diverse mixes of commodities that are designed to meet local demand. The owner of Brisbane Outdoor, Donald Saxon opened its first outlet in the year 1985 in Mt Gravatt. With the continuing concern, he purchased the Strathpine centre (Niknam, Golestaneh and Malekpour 2012).
Current purchasing and inventory management processes
GreenPlus Pty Ltd was incorporated by Belinda Green, who worked with the company for more than 10 years for the sole objective to purchase the business from the Saxon. According to Belinda, the product of the company are purchased by the customers at a larger quantity as the customers considers the product to be authentic as well as satisfactory. As a result, all the three branches of Brisbane Outdoor Power Centre are operating successfully. This had helped to build the reputation of the company, as the customers are very satisfied with the products. The retail customers are fascinated to Brisbane Outdoor as the firm has a strong status for well-informed staff as well as high quality products. The customers have the option with the help of which they can purchase reasonable products however; they consider Brisbane Outdoor, as a reputed company as far as quality is concerned. As a result, the current purchasing process of the company is excellent. Belinda is presently operating the company after the retirement of Donald and Louise. She in turn upholds the commodity demand and needs of the customers properly (Krajewski, Ritzman and Malhotra 2013).
An effective inventory management process is key to making sure that the business profitable. An inventory management can be designed by determining the requirements of the customers. The laissez-faire approach to trade by Saxon resulted in some odd purchasing and inventory management practices. Each store of Brisbane Outdoor operated separately and the various stock items were transported between stores when scarcity took place (Coyle et al. 2016). The Outdoor Power Centre produces several commodities for the customers in larger quantity and as a result, it is considered as one of the best manufacturing company in Brisbane. The products that are produced by the company include blowers, trimmers, bikes, edger, chippers, generators, brush cutters as well as mowers. In order to produce these products, the company upholds a good operational management. Each of the three inventory managers does their own sourcing as well as acquiring. The inventory management process of the company upholds the exact amount at a competitive price in the market. The business in Brisbane fulfils the requirements of the customers with the process of operational management (Christopher 2016).
Figure: Inventory Management
(Source: Created by Author)
The inventory procedure is mainly considered as monetary process of the company that benefits the outline of material in the company. The categorizing of the inventory management helps to operate the warehouse more smoothly. The inventory management should be organized in such a way that the products of the company experience the largest sell-through (Morton, Cambiaghi and Radcliffe 2015).
Comparative advantages and disadvantages
The comparative advantages of the inventory management process of the Outdoor Power Centre in Brisbane are as follows:
A good inventory management strategy improves the accurateness of inventory orders. It helps to figure out how much inventory one requires to have on hand (Ali et al. 2013).
It also helps to determine the level of finest inventory that indicates that the wastage of operational capital is reduced in the company.
A good inventory management also leads to a more organized warehouse. In other words, if the warehouse of the company is not organized it will become difficult for them to manage the inventory.
A good inventory management strategy also helps to save time and money by keeping track of the products that the customers have on–hand. It helps to save the money that would otherwise be wasted on sluggish commodities (Elsayed 2015).
It also helps to increase efficiency as well as productivity.
Similarly, several comparative disadvantages of the inventory management process of the Outdoor Power Centre in Brisbane are as follows:
Most of the inventory management software is costly and the price acts as an issue for small and medium sized business (de Waal and Kourtit 2013)
The company traditionally suffers from losses as inventory management upholds the overall three branches of the company in Brisbane.
To operate all the branches of the company, inventory management involves more time in the production process. As a result, the customers are not able to get the commodity at the specified time as per their requirements.
Green was also not convinced with the present approach and he considered it as effective or sustainable (Schönsleben 2016).
Supply-chain and inventory management
The efficiency of the company is mainly increased with the help of the supply chain process as it plays an important role in the company to generate goods as per the requirements of the company. The supply chain management involves the implementation of cross-functional processes within the company as well as integrating them with main members of the supply chain. The individuals who are dependent on the tools for a living found that dependability, performance and readily obtainable supplies and spare parts were essential elements of their supply chain. With the help of the supply chain management, the company had found it easier to seek optimization (Stadtler 2015). The overall monetary position of the company is reflected with the help of the supply chain. The company requires making some accomplishment as well as protection for the logistics phase that will help to increase the competence of the company. In order to increase the competence of the company, the concept of supply chain and inventory management is very much required. This will help the company to build a better relationship management with the customers. As a result, Brisbane Outdoor will be able to generate more goods as per the demand of the customers. With the purchase of the products, the supply chain will be able o augment the competence of the company (Monczka et al. 2015).
The investment of the company is likely to reduce as the company is operating in three branches in Brisbane. As a result, inventory management is required to diminish the cost of investment in the company. A good inventory management practice will help the company to add value in terms of having control over and sustaining lean inventory. However, the company should keep in mind that inventory should not be too much or too less. A good inventory system will also help a company will help the company to earn profit. The cost of investment will be reduced with the help of a good inventory management. The products that are produced by Brisbane Outdoor are diverse as the company manufactures the commodities that are mostly demanded by the customers. The low investment in the company is mainly due to the fact that the company produces different products in different branches. As a result, inventory management is mostly referred to as the decision-making tool that helps to reduce the rate of investment. This in turn helps to manage the overall strategic system properly as well as to put into practice the practical incorporation in the company (Rushton, Croucher and Baker 2014).
Maintain Level of Adequate Stock
Inventory management preserves most of the departmental tools that are primarily related to the production of commodities in diverse branches of Brisbane Outdoor. The sufficient stock level in the company in order to improve the performance of the company is maintained by Brisbane Outdoor. This is mainly because if the stock is not maintained, it will restrict the growth of the company. The company is examined to have the best supply chain as well as inventory management that in turn helps to maintain the stock of the company (Tirinato et al. 2014).
It is recommended that the company should relate their nature of their business as they have different branches across the country. The company desires to expand their amount of product, as their key motive is to make the customers happy. The performances of the company in all the three branches are mainly improved by Green to satisfy the demand of the customers.
It can be concluded that the individuals who are dependent on the tools for a living found that dependability, performance and readily obtainable supplies and spare parts were essential elements of their supply chain. It can also be concluded that a good inventory management also leads to a more organized warehouse. In other words, if the warehouse of the company is not organized it will become difficult for them to manage the inventory. The inventory management process of the company upholds the exact amount at a competitive price in the market.
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