Strategic Leadership and Inventory Management Challenges: A Report

This report provides a comprehensive analysis of the strategic leadership and inventory management challenges faced by A1 Cash and Carry, a food service wholesale business. The report identifies key issues such as inventory imbalances, cash flow problems, employee retention difficulties, and the lack of an e-commerce presence. It delves into the operating environment, outlining the company's suppliers, customers, and competitors. A root cause analysis attributes the inventory issues to inadequate forecasting and a failure to track customer demands accurately, while financial problems stem from overstocking and high overhead expenses. The report explores alternative solutions, including implementing robust inventory management strategies, automating data entry, and utilizing a centralized database. Recommendations include enhancing supply chain flexibility, using ABC analysis for inventory tracking, implementing customer management software, and improving the company's creditworthiness. An implementation plan is outlined, detailing steps such as establishing inventory management systems, launching e-commerce, and addressing employee turnover. The report emphasizes the need for continuous monitoring to ensure the effectiveness of implemented strategies and provides a foundation for improving the company's overall business planning and performance.

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MANAGING STRATEGY
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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................3
Issue Identification...........................................................................................................................3
Operating Environment...................................................................................................................3
Root Cause Analysis........................................................................................................................4
Alternatives or Options....................................................................................................................4
Recommendations............................................................................................................................5
Implementation Plan........................................................................................................................5
Monitor and Control........................................................................................................................6
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Executive summary
The purpose of this report is to focus on the strategic leadership of the business, it
demonstrate a brief understanding of the company’s strategy. It identifies the issues and
challenges faced by the business. It analyses the problems, and determines the root cause of the
challenges and issues faced by the business, it analyzes the alternatives and options to the
problems and recommends solutions to overcome the problems. It describes the implementation
plan for the organization and monitor and control the activities of the business to overcome the
issues faced by the organization.

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Introduction
The inventory management of every organization must highly focus on the items such as
frequently reviewing of the stocks, lowering the stocks levels, higher scale parameter and other.
It requires continuous monitoring of the stocks and analyzing the results. The inventory must be
managed from the considered from the perspective of the management’s strategy. The purpose of
this report is the identify the issues faced by A1 Cash and Carry, identify the root cause of the
issues that are faced by the company and recommend alternate options to overcome the issues
that are faced by the company, provide recommendations to counter the challenges faced by the
company. It provides description of the implementation plan for the company and monitor and
control the rising challenges and issues faced by the business organization.
 Issue Identification
The main issues that are faced by the business organization, is inventory issue, they face
difficulty is balancing the inventory of the company and meeting the demands and requirements
of the customers. Balancing the inventory with the customer demand without shorting the
products and supplies is one of the major difficulties that are faced by many organization, the
manufacturers continually face challenges in determining the amount of supply to manufacture.
Similarly the A1 Cash and Carry faced this issue. Failing to meet the demand with the supply
affects the entire manufacturing team in the organization (AO Dos Santos, Svensson & Padin,
2014). This issue might lead to several consequences such as increase in production costs, slow
moving stocks, inventory shortages and other issues. They face the problem of investments on
ERP to connect all the departments and monitor the inventory of the organization. The
organizations have failed to capture the input signals which are required to implement CPFR (A1
Cash and Carry. 2019). They face challenge managing the cash flow of the business and

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increase the terms of payment with the suppliers (Axsäter, 2015). The company faces high
overhead expenses, these expenses are an increasing issue for the organization as they are
persistent and this affects the cash flow of the company. Due to excess inventory in the company,
it affects the manufacturing process of the company and ends up holding the cash and thus
affects cash flow of the company. The company faces stiff competition from its competitors as
there is no e commences business for the organization. However, the company has been planning
to start e-commerce (Batocchio Ghezzi & Rangone, 2016). Moreover the company faces major
challenges relating to employee retention. Due to insufficient cash flow and increase in work
pressure among the employees, there are monetary dissatisfaction among the employees.
Retention of employees can also become a problem when the employees demands exceptionally
high salary. These are some of the issues that are identified in the organization.
 Operating Environment
A1 Cash and Carry; is a food service wholesale business. The business caters to various
restaurants, hotels and banquet hall. The operating environment of the whole sale business A1
Cash and Carry are its suppliers, the business organization get supplies of raw materials and
required components for the business. The business has reliable suppliers. The target customers
of the business are walk in customers, delivery customers. They are open only to the business
members and not the public. The company is opened in three locations and its serves around
1500 customers in the three locations. The competitors of the business affect the operations of
the business and have to adjust its strategies accordingly. The other interests groups of the
business include from the external environment, they can be users and non users of the business
products and services (A1 Cash and Carry. 2019).

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 Root Cause Analysis
The cause of inventory management issue faced by the company is its failure to track the
demands of the customers. The company faces high cost of inventory and consistent stock out,
which have led to low rate of inventory turnover. This inventory issues are caused due to
inadequate forecasting, the reports regarding the demand and supply trends, consumer behavior
have increased the problem of inefficient management of inventory (Chen, Pang & Pan, 2014).
The company is unable to track the customer demands accurately and mange its inventory
accordingly. Failure to track the stock movement accurately, leads to increase in costs for the
business and also holding the extra inventory also leads to hold of money. The company failed to
capture the input signals of ERP efficiently; therefore it faces problems in connecting all the
departments and monitoring the inventory (Chofreh, et al., 2016). The business have over stock
of inventory, seasonal demand and low profits, hence it faces cash flow problems and delay of
payments to the suppliers. Lack of cash flow and low salary structure of the company has
increased the issue of employee turnover. The business has over invested than its capacity.
Having too many stocks have tied up the cash flow. There are unpredictable changes in the
demand and cash flow of the company, which have increased the challenge of the business firms
(Feng, McVay & Skaife, 2014). Several internal and external changes such as machinery
breakdown increase in employee turnover rate, economic downturn, and legal changes, social
and technological changes have been some of the major issues faced by the organization. Decline
in profitability has lead to the company’s inability to increase business margin (Hyväri, 2016).
Due to lack of credit worthiness of the company, the company has failed to acquire new
investors or have lost the trust of the potential investors.

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 Alternatives or Options
Having a strong inventory management strategy, can help to company to achieve the
overcome the issues regarding the stock and inventory management. Having a holistic approach
to the inventory tracking and monitoring the inventory will enable to company to efficiently deal
with the stocks and reduce cost thereby (Lakshmi & Lakshmi, 2014). By automating the data
entry, will save time and reduce error in tracking the inventories. Implementation of automation
will also reduce the work load of the employees and reduce employee turnover. By using a
centralized, real time database and the company will be able to access the inventory and manage
them efficiently (Myers, 2013). The inventory looses value over time, and also holds money;
therefore proper estimation of the customer demands needs to be research. In other words,
environmental scanning can be done by the company to access the information regarding the
needs and demands of the customer.
 Recommendations
It is recommended to ensure flexibility and responsiveness of the supply chain. Efficient
forecast of the demands, having the estimates of the holding costs, the ordering costs will enable
the business to efficiently deal with the stocks and inventories. ABC analysis can be used by the
company as an inventory tracking system. This method is considered to classify the inventory
and by classification, the business can assess the most prioritized inventory (Sharda, Delen &
Turban, 2013). Further, it is recommended to continuously monitor the inventory in hand, and
ensure the information is accurate. Having efficient consumer response and continuous
replenishment program will help the business to enable efficiency in supply chain management
and establish relationship with the suppliers and customers. The business is recommended to
implement customer management software tool. Proper tuning with the inventories can be used

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to stock items for the shortest time. The company needs to focus on manufacturing products that
are of high priority to the company.
It is necessary for the business organization to provide credit worthiness of the
organization to the potential investors of the company. Investors are vital stakeholder for every
organization, as they provide the fuel to the business. With the help of the investors, the
company can increase its investment and allocate resources in an efficient manner. The company
needs to exploit the opportunity for improvement (Whimbey, Lochhead & Narode, 2013). The
company is recommended to use a third party to gather and analyze the data. The company must
focus on its business strategy that is providing enough product and service to the customers, so
that it becomes one stop shop. The business organizations must highly focus on the inventory
control systems and mange the demand plans and the constraints in the supply. The company
must implement a JIT (Just in Time). Further, the company must take initiatives to main high
level of cooperation and maintain supply chain relationships. The company must seek
partnership with the suppliers of the products and service, from whom they can buy high
volumes of supplies and have high complexity. This will enable the company to increase its
potential for innovations and reduce its cost structure. The business organizations must focus on
assets and cost efficiency, enhance customer service, increase its potential for market advantage,
enable profit growth and increase the business stability (Feng, McVay & Skaife, 2014).
Moreover, the company must be highly compactable with the corporate culture and the
management philosophies and techniques; it must have strong sense of mutuality between the
management and the employees of the organization. It is evident that having strong partnership
will ease coordination. The company must develop strategy to balance the demand with the
company’s capacity to improve the overall business planning.

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 Implementation Plan
Establish a minimum quantity on hand amount of inventory, establish a system to manage
inventory. Implementing inventory management software will enable the company to generate
reports and details of the supplies and inventory. Establishing re-order points for every item in
the inventory, it will improve efficiency and save costs. Establishing inventory prices for every
item will help to company to get an estimate (Lakshmi & Lakshmi, 2014). Take initiate the start
the e-commerce business, and thereby increasing its business margin. Implement software and
automation, this will reduce workload of employee and providing high salary to reduce the
problem of employee turnover in the business. Implementation needs to begin with support at
the highest levels of both the trading partners and must include security parameters which would
ensure that competitors are not able to access the company’s data. The company must encourage
regular meeting to monitor the performance metrics. Also the management must influence both
customer relationships and inventory flow. The business organization is in need of investments
in order to grow and reduce failure. Environmental scanning is to be done to access information
about the customer demands and requirements from the business and handling the business
inventories efficiently (Myers, 2013). Setting up protocol for unpacking the stock items and
process the inventory invoices. Assigning employees to list the inventory purchases and its cost
and ensure that the items and updated as per the increase or decrease in price. The company
needs to access the customer needs and requirements effectively and efficiently and avoid
overproduction. The company must reduce the lead time of orders and focus on the flow of
products and avoid over storage of products and supplies. By using the actual consumption data
and forecasts, the company can take decisions to pace up its manufacturing process and its flows

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of distribution. The company must create a culture of solving problems, the company has to fix
issues and problems at the root cause.
The company must create a joint business plan for the business and create sales forecasts;
it must implement a demand plan to analyze the change in the sales with the use of forecasts. The
forecasts must include market intelligence. This will enable the company to resolve and
collaborate on the exceptions to the changes in sales and demand. Further impacts of the
organizations must be identified by the business organization. The implementation plan must
include the support of the trading partners (Wilson, Novak & Joanny, 2013). It must also include
the security parameters which will enable the business organization to ensure that the
competitors are not able to access the company’s data. There must be a follow up of the
performance metrics of the organization. There must be a joint management to analyze the
customer relationship with the organization and the inventory flow of the organization. The
planning must be implemented in such a way that the business will have necessary savings to
justify the costs. It is necessary that the implementation plan gains the full support of the senior
management.
 Monitor and Control
Assessing the inventory management tools and techniques such as ERP, provides an
insight into the inventory warehouse, purchasing, consumer behavior and marketing, which in
turn would help the business to monitor the inventories and stock in the company and control
them efficiently and effectively (Chen, Pang & Pan, 2014). The works and operations of the
management are monitored with the help of forecasts including analytics and strategies of the
business. This helps the company to monitor and control the inventories efficiently. By
comparing the performance metrics with the set standards the company can monitor can control

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its inventory efficiently. Establishing baselines might help the company to determine drivers of
competitiveness for the business organization. This would enable the business organization to
measure the change management (Sharda, Delen & Turban, 2013). Moreover comparing the
performance metrics with the other countries helps to identify direct competition with its
competitors. It helps to improve its business position and focus on the priorities of the business.
The business organization needs to ensure that the productions are done in the right quantity and
right quality.
The company must forecasts from the use of analytics, strategic view and discernment.
The type of forecast has to be determined and the items to be forecasted have to be identified
such as anticipated demand for the products and service within the established time. The
company must measure its return on investment and act accordingly. The business must
communicate its results of forecasts in all the levels of the organizations. It must continuously
develop and improve its business trend and work on its ability to enhance its decision making for
demand planning and other activities of the business. This will enable the business organization
to influence profit maximization. The business organization need to have at least two quarter of
forecasts accuracy, this will enable the organization to recognize the business decisions and
impact the pattern of demand for the company’s product and service.
Conclusion
Therefore from the above analysis, it can be concluded that the company faces various
issues and challenges with its operations and managing inventory. The issues and challenges are
identifies. The environment in which the business operates has been discussed. It has been
analyzed that the company is facing high inventory costs and accumulation of inventory which is

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holding back cash. The company has been facing, it faces problems with investment in ERP
systems, employee retention problem. The report has analyzed the root cause of the issues and
challenges that are being faced by the company. it report has further, identified the alternate
options which will help the company to overcome the issues and challenges and accurately
forecasts the demand and supply chain. Further, it recommends various solutions to the arising
problems and challenges. The report has provided an implementation plan and monitoring and
controlling of the issues.
References
A1 Cash and Carry. 2019. Retrieved from https://www.a1cashandcarry.com/