Laurel is a large listed company, based here in Australia. We manufacture car parts for several major car brands, and ship these parts to manufacturers and retailers in
Australia and around the world. A majority of our inventory is sourced here in Australiaalthough a small number of components needs to be imported. I notice that ourinventory costs have been slowly increasing which concerns me. Maybe this is due tochanges in the exchange rate? Our headquarters and admin offices are located in Brisbane, Queensland. Our processing plant where all of our production, shipping and receiving is conducted is located innorthern New South Wales.
Our processing plant has 5 Department Heads who are responsible for all inventory
purchases. When they think required inventory is getting low, they raise a purchase
requisition (PR), which the system sends it through to the purchasing team in our
The Purchasing team consists of 2 full time and 2 part time purchasing clerks (clerk). When a PR is received, it is logged into a queue and auctioned by the next available clerk. Upon receiving a PR, the clerk is expected to review the contents of the PR to check that the request details are reasonable and that it has come from one of the Department Heads. Once they have reviewed the PR, the clerk selects a supplier based on who the items was last ordered from and raises a purchase order (PO). The system emails the PO to three locations:
1. the clerk who raised the PO. The clerk then emails the PO to the supplier.
2. the Department Head who raised the PR.
3. the receiving team. This lets them know what they should expect to receive and
makes their process easier, especially when they are really busy.
At the end of every week, the purchasing team have three oversight functions. They are responsible for:
1. Reviewing any POs which have been outstanding for more than 2 weeks to
determine why they are still outstanding. I have been informed by the team that this is sometimes due to errors by others in the team.
2. Reviewing any discrepancies highlighted by the system as a result of differences
between the inventory received and inventory ordered based on the PO and the
receiving report (see receiving department details below).
3. Reviewing any discrepancies between the supplier invoice, the PO and the receiving report (see accounts payable notes below).
Sometimes there is an overlap between processes 2 and 3, as a supplier may have sent us an invoice before one of the clerks has had a chance to follow up discrepancies between the PO and the receiving report. This only occurs when we are really busy and has only inconvenienced a couple of suppliers.