LSCM803 Assessment 1: Inventory and Procurement Management Strategies

This report evaluates inventory and procurement management strategies for Hallenstein Brothers, a New Zealand clothing retailer. It examines three inventory management strategies: postponement, JIT inventory management, and safety stock inventory, detailing their benefits and implementation considerations. The report also analyzes two procurement strategies: supplier optimization and vendor development, explaining how these strategies can improve the supply chain efficiency and control costs. The report highlights the link between these strategies and other areas of the logistics system, providing a comprehensive overview of inventory and procurement management within the context of a clothing retail business. The analysis includes relevant examples, realistic assumptions, and references to academic literature to support the findings.

Running head: INVENTORY AND PROCUREMENT MANAGEMENT
Inventory and Procurement Management
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Inventory Management Strategies..............................................................................................2
Procurement Strategies...............................................................................................................4
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7

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Introduction
Inventory management is one of the most important aspect that is related to the
betterment of the organization (Elsayed, 2015). It is one of the most important aspect that has
contributed to the betterment of the organization. Strategies that must be incorporated by
Hallenstein Brothers is stated in the study. Strategies related to procurement is similarly
important as it contributes to the improvement of the organization (Lonsdale et al., 2019). It
is associated with providing the better solution to the operations and this has been one of the
most important aspect that has contributed to the betterment of the organization. Hallenstein
Brothers are one of the organization that is associated with dealing in the clothing in New
Zealand. The study will be stating about the aspects related to inventory management and
procurement strategies of the company.
Inventory Management Strategies
1. Postponement: It is the strategy to increase the possibility of the benefits that will be
contributing to the betterment of the organisation. This is one of the process that can delay
the present investment into a product until there is demand for that particular product.
Hallenstein Brothers being one of the clothing retailers does incorporates the strategies that
are related to the postponement. There are activities that are associated with the
postponement such as labelling, packaging, assembly, manufacturing and postponements that
are related to time (Carbonara & Pellegrino, 2018). This is one of the strategies that can
contribute to the betterment of the organization by minimizing the production costs. This
strategy can also help the organization in stocking of the cloths that will be contributing to the
enhancement of the organization (Simão, Gonçalves & Rodriguez, 2016). This technique help
the company to modify their products at the very last moments to incorporate the much
needed changes. This is operation can impact the changes in the customer demand and this

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can incorporate the changes according to the demand of the customer. Incorporating this
strategy influences the activities to reduce the costs and increases the time
2. JIT inventory management: This is one of the strategies that can contribute to minimizing
the stock holding time. This is the option that will be contributing to the betterment of the
organization (Wild, 2017). This inventory system for Hallenstein Brothers helps in operating
the inventory in a very low level. This will be helpful in minimizing the stocking cost (Shin,
Ennis & Spurlin, 2015). This is one of the easiest way for Hallenstein Brothers to incorporate
the aspects that will be contributing to enhancing the inventory management models. JIT can
help in enhancing the delivery systems. This is one of the most important aspect that can
contribute to the company while they are using the regional distribution centres for their
distribution of the clothing products. This can minimize the costs and incorporate the aspects
that will be contributing to the betterment of the organization (Elsayed & Wahba, 2016). This
is one of the most efficient ways that can be used by Hallenstein Brothers for their
distribution. This is one of the aspect that will be contributing to the enhancement of the
organization that can contribute to the betterment of the process of distribution of the
organization by minimizing the stock waiting time and reducing the costs related to the
distribution of the cloths. However, it is important to consider the levels of stock as the risk
of getting out of stock is one of the most important aspect that is associated with Just in Time
inventory management. It is important for Hallenstein Brothers to consider the dangers that
are associated with JIT as it requires heavily efficient planning to implement. Hallenstein
Brothers can be involved in the process of developing an inventory system that requires less
space. JIT inventory system can be financially beneficial as well because it is one of the most
important aspect that is related to the operations of the retailer.
3. Safety stock inventory: Safety stock is the additional stock that has been kept for reducing
the risk of out of stock. This helps in providing a buffer stock to manage the inventory

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efficiently by keeping adequate amount of stock for the organization that will be contributing
to enhance the delivery and maintain the customer loyalty (Yadollahi, Aghezzaf & Raa,
2017). Customers are the major factor that influences the organisation to support the inflow
of the cash. Hallenstein Brothers associated with retailing in the sector of clothing can be
influenced by the risk of getting out of stock. Safety stock inventory can help the company to
keep the adequate amount of stock until the replenishment of the inventory (Guerriero,
Miglionico & Olivito, 2019). This is one of the major aspects that are related to the
improvement of the processes that are related to the distribution of the inventory. It is one of
the most important aspects that have contributed in providing a support to the inventory of
Hallenstein Brothers. This method helps the organization in indulging into the activities that
are associated with the progress of managing the inventory with the buffer to safeguard the
inventory from the problem of getting out of stock (Radasanu, 2016). Incorporating this
method Hallenstein Brothers can have an advantage in the unforeseen events of the
organization. This is one of the most important aspect that has contributed to the safety of the
organization from the unpredicted variation in the demand and supply of the market for
Hallenstein Brothers. Hallenstein Brothers can incorporate the strategy to compensate the
variation in the forecast of the market demand. However, this process can contribute in
increasing the period that is associated with stockholding time of the retailer.
Procurement Strategies
1. Supplier Optimisation: Hallenstein Brothers being one of the retailers associated with
clothing, does have to rely on the suppliers. Suppliers are one of the major factor that are
contributing to the enhancement of the procurement process (Trivedi et al., 2017).
Supplier optimization projects the philosophy of determining the aspects that are
contributing to the rationalization of the suppliers. It is one of the most influential factor
that is concerning with leaning the supply chain by reducing the static processes (Trivedi

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et al., 2017). The suppliers that are capable and meets the required standards are one of
the most desirable state for the organization. Hallenstein being one of the most important
organizations that are associated with retailing it becomes important to consider the
strategies to incorporate the factors that will be contributing to the enhancement of the
procurement. Procurement being one of the major functions of the supply chain it is one
of the important part for the company to deal with suppliers and indulge into a
professional relationship (Trivedi et al., 2017). It is important to maintain a relationship
with the suppliers as it makes the process of the procurement easy and smooth.
Hallenstein Brothers can help in maintaining such relations by incorporating the
optimizations and maintaining the relationship with the suppliers. This has enabled in
controlling the quality of the goods for the retailers. Optimization of the suppliers enables
the company to have a control over the costs that is associated with the procurement of
the materials. However, there are difficulties associated with this model of procurement
such as, excessive regulation for the suppliers. Still this is one of the most important
aspect that is related to the procurement of the materials. Optimizing the suppliers, effects
the supply chain management to be increase the efficiency that will be contributing to
efficient supply chain.
2. Vendor Development: This is one of the major operations that can help Hallenstein
Brothers in maintaining the sourcing strategic. This helps to improve the value received
from the vendor. Hallenstein Brothers are one of the retailer that are associated with
retailer to get involved in the process of improving the performance of the suppliers
(Dalvi & Kant, 2016). This is one of the activities that are associated with encouraging
the suppliers by offering incentives. Hallenstein Brothers can incorporate the plans that
are associated with developing the aspects to encourage the vendors for enhancing their
performance. This will ultimately contribute to enhancing the process of procurement.

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The development of the plan can help the organization getting indulged in the process of
developing an efficient vendor network (Dalvi & Kant, 2016). This procedure to enhance
the process of procurement can help the organization in having a competitive advantage
in the market. Vendor development can benefit the collaboration between the customer
and the supplier. This process can help the organization in getting involved in developing
efficient vendors by utilizing activities that are required to meet the standards. The
development of the vendors can benefit the organization by indulging the vendors in a
fierce competition. Vendor development can affect the suppliers to be more responsive
(Dalvi & Kant, 2016). This can enable the operations to be more efficient for Hallenstein
Brothers. This can help the organization to incorporate the vendors to be more precise
along with contributing to improved quality and reliability of the materials. This is one of
the process that can help the procurement to be incorporated with lesser lead time. This is
one of the activities that can contribute to reducing the sourcing related activities.
Teaching the vendors’ team along with providing them with incentives as well as rewards
enables the situation to be more favorable for the Hallenstein Brothers.
Conclusion
To summarize the study it can be stated that managing the inventory and procurement
is an important part for the supply chain of the organization. It enables the organization to be
more efficient along with providing them with the competitive advantage.

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Reference
Carbonara, N., & Pellegrino, R. (2018). Real options approach to evaluate postponement as
supply chain disruptions mitigation strategy. International Journal of Production
Research, 56(15), 5249-5271.
Dalvi, M. V., & Kant, R. (2016). Development of an instrument/questionnaire to assess
supplier development benefits, criteria and activities. International Journal of
Procurement Management, 9(6), 637-658.
Elsayed, K. (2015). Corporate social responsibility: does inventory management
matter?. International Journal of Supply Chain and Operations Resilience, 1(2), 139-
156.
Elsayed, K., & Wahba, H. (2016). Reexamining the relationship between inventory
management and firm performance: An organizational life cycle perspective. Future
Business Journal, 2(1), 65-80.
Guerriero, F., Miglionico, G., & Olivito, F. (2019). Inventory management strategies for the
Calabrian hospitals system.
Lonsdale, C., Sanderson, J., Watson, G., & Peng, F. (2016). Beyond intentional trust: supplier
opportunism and management control mechanisms in public sector procurement and
contracting. Policy & Politics, 44(2), 289-311.
Radasanu, A. C. (2016). Inventory management, service level and safety stock. Journal of
Public Administration, Finance and Law, (9), 145-153.
Shin, S., Ennis, K. L., & Spurlin, W. P. (2015). EFFECT OF INVENTORY
MANAGEMENT EFFICIENCY ON PROFITABILITY: CURRENT EVIDENCE
FROM THE US MANUFACTURING INDUSTRY. Journal of Economics &
Economic Education Research, 16(1).

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Simão, L. E., Gonçalves, M. B., & Rodriguez, C. M. T. (2016). An approach to assess
logistics and ecological supply chain performance using postponement
strategies. Ecological indicators, 63, 398-408.
Trivedi, A., Chauhan, A., Singh, S. P., & Kaur, H. (2017). A multi-objective integer linear
program to integrate supplier selection and order allocation with market demand in a
supply chain. International Journal of Procurement Management, 10(3), 335-359.
Wild, T. (2017). Best practice in inventory management. Routledge.
Yadollahi, E., Aghezzaf, E. H., & Raa, B. (2017). Managing inventory and service levels in a
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Stochastic Models in Business and Industry, 33(4), 369-381.