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Austin Wood Products Organizational Purchasing Essay

1049 words - 4 pages

Before inventory productivity can be improved, one must take a careful and critical look at the specific business entity, which in this case is Austin Wood Products. In the case it stated that there is no way to know what is available in the storage room until you get there is a huge concern. There is usually a 50 percent chance of obtaining the needed lumber for a job, and this is interfering with productivity. In the area of inventory management, the purchasing professional should make explicit decisions. There are many things that the company must be aware of. Some things you must take into consideration are what to stock, how must to invest, and how much service to offer. In regards to what to stock, the purchasing professional, at the very minimum, must meet the requirements and needs of the manufacturer or distribution operation. Austin Wood Products failed to have any formal stock management technique in effect to take care of raw materials & done merchandise. The stock count is finished by hand & takes days. They weren't maintaining any stock record at all. The significance of demand conjointly was tough to foretell because it varied from year to successive. The metric was that the stock turnover that relates stock levels to the merchandise sales volume was turned numerous times every quarter. Austin Wood Products doesn't place a significant stress on maintaining correct inventory records. So, implementing an inventory control system can modernize the system. Once they develop and implement this inventory control system, inventory records are going to be upheld truthfully and that they will get the accurate standing of the inventory up-to-date. In order to maintain the steady continuous supply for production needs, appropriate records needed to be sustained and updates concerning withdrawals, supplies and existing inventory levels have to be made accessible for other departments in the smallest possible time. This would benefit the company in the long run. This should have been put in place a long time ago. In concern about the structure of the Austin Wood Products’ structure, I feel that there is a need to reorganize the entire arrangement of doing things. I feel that there should be a purchasing department all within itself. It should not be under the finance department. Since the company is operating in a make to order environment, there are variations in the demand and different types of materials are required to fulfill the order, where raw material supplies are based upon these production needs. I also believe that there is absolutely no need for there to be an information systems department. They are not delivering updates concerning inventory levels, sales, or the production needs. The company should follow the “Make to order” approach that would directly market the finished merchandise inventories to the customer and should not keep them in the warehouse. This can help facilitate Austin Wood Products to acquire...

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