Introduction about Lennox Wholesale Group

Case study questions

Any Questions?
 in 1988 George Lennox started a distribution center as George lennox's company.

Brisbane, Queensland, Australia.

pharmaceuticals and related products.

in the beginning, they supplied to retail pharmacies, hospitals,

dispensing doctors, and a few other outlets.

order taking and processing.

stock holding and control.
delivery to customers.
George Lennox’s company has grown into the Lennox Wholesale Group.
It is now classified as a medium-sized private company
How well do you think the existing inventory control
system works? What are its weaknesses?

How could you improve the system

George Lennox is keen to make progress in this

area. What would you advise him to do next?
 How well do you think the existing inventory control
system works? What are its weaknesses?
• The current Stock control system
￭ works on the standard software provided by
CyborgExceler.
• Continuously improving
￭ the current Stock control system had been updated and
expanded several times, and it seemed to work well.
• current Stock control system
￭ minimizes the inventory costa
￭ maintain the demand of the customer.
How well do you think the existing inventory control
system works? What are its weaknesses?
• What customers reserving from LWG
￭ Deliver the order during the next working day after
placing an order from the company.
• Safety stock
￭ they maintain two weeks' demand in stock, and
sometimes it may be drifting up to three week
 What are its weaknesses?
• Bad forecastings and forecasting methods
￭ this is the reason behind the stock levels drifting upward for some time.
• Bad store management
￭ causes inefficiencies because employees are unaware of their exact
stock levels.
• Poor Performance evaluating
￭ Doesn't monitor and evaluate the distribution system's performance.
• Not reviving the efficiency of the system
￭ There are various items, but they don’t review the system's efficiency.
 How could you improve the system?
• Using distribution Requirement Planning (DRP)
￭ LWG can prevent having excess inventory or risking product shortages.
￭ provide high service while maintaining a small inventory.
• Using Enterprise resource planning (ERP)
￭ management can manage the store well
￭ keep not running out of stock and not let down customers.
• Improve inventory control by developing better relationships and good information
flow with its vendors.
￭ Can enhance operations
￭ streamline the supply chain
￭ keep costs down
￭ enhance customer service.
 How could you improve the system?
• Calculate the cost of stock holding or purchasing cost
￭ can use EOQ to find out how much they should order from Each item.
￭ Periodic review system to find out when they should order placed.
• JIT inventory management system
￭ reduces uncertainty.
￭ provide the fewest number of stores possible
￭ cost of inventory reduces
￭ increase productivity
￭ decrease waste during distribution.
 George Lennox is keen to make progress in this area. What
would you advise him to do next?
• develop a sustainable inventory management system through
the improvement of forecasting development.
• must pay closer attention to the pharmaceutical products they
distribute.
• They offer expensive items, ordinary items, and cheap items.
Therefore, they can use ABC analysis to control their inventory.
• forecast level much closer to the customers. They can use
advanced analytical tools and methods like exponential
smoothing.
• Make use of inventory optimization tools.
Don't hesitate to ask
any questions!