Assignment 3

Alternative 2 Case study-based report

Executive Summary
TOC
Introduction
The presented business report aims at comprehensively analyzing the current
operations in a service industry organization, Brisbane Outdoor Power Centre. It also
identifies the operational problems within the organization and suggests a set of
recommendations that, when implemented, shall help in overcoming the identified
problems without creating new ones. These analyses as well as recommendations
shall be founded on the key organizational management principles, theories and
models. The report identifies, presents and assesses the competitive advantage and
disadvantages of the current purchasing and inventory management processes
being used by the company. Further, some recommendations based on the
fundamental supply chain and inventory management concepts that would help the
company increase efficiency and reduce investment whilst maintaining adequate
stock levels have been provided.
Current Situation
Brisbane Outdoor Power Centre performs its business of supplying almost every
garden power tool imaginable through three retail locations across the Queensland
city of Brisbane viz. Mt Gravatt, Strathpine and Ipswich. These three centres are
similar, but do offer different product mixes designed to meet local demands. The
Mt Gravatt outlet, been opened in 1985 and the Strathpine centre in 2001 and
Ipswich in 2004 were respectively managed by Donald Saxon, Belinda Green and
Adam Conte. Belinda has been working for the company for about ten years and as
the current owners, Donald and Louise Saxon plan to retire she has incorporated
GreenPlus Pty Ltd solely for the purpose of purchasing the business from them. She
has observed the business as it nurtured over the years from a straight forward, run
of the mill, retail lawnmower business to a thriving group of three retail outlets
supplying almost everything associated with garden power tools and is confident
about its future growth.
Moreover, the companys tools were known for their reliability, performance, after
sales service and readily obtainable supplies and spare parts. The company was
able to develop a brand image among both commercial and retail customers who
were attracted by companys strong reputation for knowledgeable staff, high quality
merchandise and excellent after sales service. It was considered among the best in
the industry and customers preferred its products even on the relatively cheaper
alternatives. Green believed in management by walking around methodology, and
she has always been a popular manager among staff. However, as she took over
the Mt Gravatt and Ipswich stores she discovered the lack of tightly defined
strategies, policies and procedures based on which the managers could define
priorities and make decisions.

While managing operations at Strathpine she was particular and tight, while she
found that Donald was fairly relaxed in the operation of Mt Gravatt store and she
was still unaware on how Ipswich was being operated. Being a retail establishment,
Brisbane Outdoor required a heavy investment in stock and an effective means of
managing this investment. However, various stock items were transported between
the stores when shortages occurred.

Key Issues
While Saxon was nominally the CEO of the whole group, most of his was devoted to
looking after the Mt Gravatt facility. Since both the other branches were functioning
well and were staffed with experienced personnel, he never felt the need to
interfere in their operations. This led to the three centres primarily operating as
independent businesses, based on common sense, goodwill and mutual
cooperation. Consequently, the firms operations as a whole were fairly loose and
decentralized. This might potentially lead to non-uniformity in processes and even
the quality and attributes of different product offerings (ref). There was no defined
procedure for purchasing and inventory management (ref). Saxons laissez-faire
approach to the business had resulted in some rather odd purchasing and inventory
management practices. Since the three stores were operating and managing their
purchasing processes autonomously, there wasnt an integrated approach towards
placing orders.
Each of the three store managers used to do their own sourcing and purchasing and
had their own way of inventory management. This has, in the long run, led to three
completely different and mutually exclusive purchasing and inventory management
systems. As a result, there could be some stock that would be surplus across all
three stores while at the same time some other items which fell short at each.

Further, the branch managers were blindly trusted on putting the firms interests
over their personal objectives (ref).
It seems like the change process was not properly managed and planned (ref). Even
after a week of touring all of the centres, consultations, thinking and introspection
Green
Recommendations
It is of utmost importance for any manufacturing business to uniformity
Rationalization of procurement and inventory management processes
Centralized inventory management system
Lean
Substantial and immediate financial and operational gains

An effective and sustainable approach that helps achieve a balance between the
benefits of centralization and decentralization
The growth that Brisbane Outdoor Power Centre has experienced over the
years is a plausible move and is an indicator of prudent leadership. The various
acquisitions and expansion strategies demonstrate the companys ambition and
vision. However, this expansionary strategy is unsustainable I the long run. The
companys management might have underestimated the companys growth in the
coming years and what its implications for its inventory. Therefore in order to ensure
that its dealership network continues to grow without compromising quality of
service delivery and profitability, the company should take bold measures to
restructure its purchase and inventory functions. First, it should centralize inventory
control to ensure synchronized decision-making and monitoring of orders. This can
only be possible if the company implements an enterprise resource planning tool to
ensure it can keep track of its operations from a centralized location and for efficient
communication with different dealerships and suppliers (Lee & Billington 1992, p.
71).
In addition to synchronized operations through an ERP tool, Brisbane Outdoor
Power Centre should also adopt formal planning for its growth and have an
expanding strategy in place that is consistent with the firms overall objectives and
company culture. Strategic planning offers a systematic procedure for identifying
future strategic issues and problems such as the ones the company is facing and
how to handle them (Adam & Swamidass 1989, p. 184). It also formalizes leadership
role and offers analytic tools and techniques for formulating strategy. Its growth
strategy should be anchored on inventory control techniques to ensure proper
management of its stocks at cost-efficient ways to ensure profitability and low cost
service delivery.

References List
Adam, E, & Swamidass, P 1989, Assessing operations management from a strategic
perspective, Journal of Management, vol. 15, no. 2, pp. 181-203.
Balachander, S, & Farquhar, P 1994, Gaining more by stocking less: a competitive
analysis of product availability, Marketing Science, vol. 13, no, 1, pp. 3-22.
Barnes, D 2008, Operations management: an international perspective, Cengage
Learning, Mason.
Cachon, G, & Fisher, M 2000, Supply chain inventory management and the value of
shared information, Management Science, vol. 46, no. 8, pp. 1032-1048.
Lee, H, & Billington, C 1992, Managing supply chain inventory; pitfalls and
opportunities, Sloan Management Review, vol. 33, no. 3, pp. 65-73.