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Harvey Industries: Key and Underlying Issues

Introduction

A competent approach to workload planning and allocation of resources can have a significant role in the functioning of a particular company and its competitiveness in the market. The problems of Harvey Industries are caused mostly by the unreasonable allocation of resources and insufficiently rational measures used to determine a strategically correct development of the company. To improve the situation and achieve high profits, it is necessary to analyze the main mistakes in the process of work and identify the measures that can be taken to return the company to its previous level.

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Key and Underlying Issues

The key issues faced by the management of Harvey Industries relate to the recent financial losses experienced by the company, as well as to the quality of inventory management. The death of the former owner of the enterprise may have had the significant effect on the work of the company. Nevertheless, some specific problems arose before, resulting in the underlying issues such as the sale of cheap consumables and lack of accounting records that led to the troubles that Harvey Industries had experienced lately. For example, the sale of cheap consumables can be considered one of the possible reasons why the company could not have sufficient profit. Lack of accounting records could influence the problem with the customers who had to wait until the stock is replenished. If the enterprise’s management had organized a more advanced distribution system and paid more attention to the accounting work, it is possible that the profit indicators would have been more significant than the current ones. According to Kumar, Anzil, Ashik, James, & Ashok (2017), any organization can successfully work if it is able to keep its cost to a minimum. Therefore, the imperfect system of sales and accounting can be an essential fundamental issue.

Evidence of Problems

According to the company’s statistics, $ 314,673 was earned on the sale of different details last year. However, a significant part of this amount equal to $ 220,684 was obtained for only 179 part numbers. This means that the profit from the sale was very insignificant. As Bruccoleri, Cannella, & La Porta (2014) note, price variations together with inventory rationing are indispensable conditions of the successful business model. Consequently, if specific measures concerning the price policy and resource distribution had been taken, the company probably would not experience problems today.

Also, the sale of excess vacant land is the clear evidence of the enterprise’s problems. To partially solve the issue of current losses, the management of Harvey Industries had to take this measure, which was partly a reasonable decision as they definitely needed money. According to Kumar et al. (2017), many organizations “are facing problems of survival because of acute competition” (p. 152). Therefore, the company’s leadership had to take extreme measures to allow another object of trade to take over Harvey Industries’ earlier place and thereby recognize the company’s difficulties.

Tentative Solution to the Problem

According to the information about the Harvey Industries company, it is possible to assume that the best way out of the crisis is to improve the inventory system and organize the workload better. The previous experience of the company proves that it is quite successful in selling various details and repair parts for washer systems. Thus, the company management should improve the supply system in order to avoid downtime costs caused by the lack of details in the stockroom. The improvement of inventory management might be achieved by using up-to-date accounting data. Accurate records of the amount of details and spare parts may be useful for managing inventory. It is also desirable to pay attention to the price policy through changing some vendors or to use the automated decision support system. According to Wang, Wallace, Shen, & Choi (2015), the work with supply chains requires increased monitoring by responsible parties. Thus, inventory management should pay more attention to paper work and accounting, as well as to physical counting of inventory as it might be lost because of theft or waste. As Bruccoleri et al. (2014) claim, inventory and supply chain management is regarded to be the most studied part of the behavioral operations management. Therefore, it is crucial to use the provided knowledge to organize the appropriate flows of supplies and sales and control the entire process in order to avoid money and inventory loss at any of the stages.

Contingency Plans

Rational planning with the use of modern computer systems for accounting can be considered as a possible algorithm of actions. In case of any emergencies, it is necessary for management to use the help of the staff and collectively solve a particular essential issue. To ensure that the management is aware of the effectiveness of the proposed solution, it is advisable to trace the current level of income and compare it to the income for the past few months and the past year through the accounting reports.

Conclusion

Thus, to improve the situation in the Harvey Industries company and achieve high profits, it is necessary to analyze all the crucial mistakes and determine the appropriate strategy to return the enterprise to its previous level. In the process of work, such techniques as the improvement of the company’s inventory system and the introduction of decision support system and accounting records might be implemented.

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References

Bruccoleri, M., Cannella, S., & La Porta, G. (2014). Inventory record inaccuracy in supply chains: The role of workers’ behavior. International Journal of Physical Distribution & Logistics Management, 44(10), 796-819.

Kumar, G. A., Anzil, A., Ashik, K., James, A. T., & Ashok, J. K. (2017). Effective inventory management system through selective inventory control. Imperial Journal of Interdisciplinary Research, 3(6), 152-156.

Wang, Y., Wallace, S. W., Shen, B., & Choi, T. M. (2015). Service supply chain management: A review of operational models. European Journal of Operational Research, 247(3), 685-698.

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StudyCorgi. (2021, December 26). Harvey Industries: Key and Underlying Issues. Retrieved from https://studycorgi.com/harvey-industries-key-and-underlying-issues/

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StudyCorgi. (2021, December 26). Harvey Industries: Key and Underlying Issues. https://studycorgi.com/harvey-industries-key-and-underlying-issues/

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1. StudyCorgi. "Harvey Industries: Key and Underlying Issues." December 26, 2021. https://studycorgi.com/harvey-industries-key-and-underlying-issues/.


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