Analysis of Procurement of Alden, Inc - Case Study Example

The lack of a mechanism to forecast sales and only depend on the monthly physical count may result in losses when demand increases within a certain period and may be taken advantage of by the employees for lack of confirmation of the usage of the materials.

Presenting a receiving report to the supplies is important I an organization to acknowledge receipt of the materials to avoid challenges with supply. b. Control procedures for the weaknesses The control procedures for the above problems include passing a policy for the removal of materials from the storeroom only under written authorization and recording the amount and value of the materials retrieved. Keeping a perpetual inventory system is the other procedure to solve the problems at Alden.

This will allow tracking o material usage at Alden for the company to forecast sales and make demand forecasts to avoid losses from shortages and reduce theft. Sending receipt reports to the supplies and checking on quantity and quality needs to ensure the supplies meet the specification of the company. c. Implementation of the procedures in an integrated ERP system An Integrated Enterprise Resource Planning system can be used to solve the above weaknesses through the development of a bill of materials by the ERP system when supplies are made, developing a perpetual inventory system in the ERP system through entering inventory levels, addition, and withdrawals from the store to get the inventory at a given time (Hamilton, 2003).

This will allow the ERP system to make forecasts on the usage of the materials and ensure the ERP system requires the consent of authorized staff to make withdrawals from the store. The ERP system can also be used to make vouchering, matching, and payment of the supplies. An ERP system will also track order processing in terms of order entry, credit checking, inventory, shipping analysis, pricing among different supplies to get the best bargain, supplier scheduling, and warehousing (Hamilton, 2003).