Explain The Issues For Big Hammer Inc. And Provide A Solutio

Explain the issues for Big Hammer Inc. and provide a solution

Big Hammer Inc., a manufacturing and distribution company with operations in Los Angeles, Kansas City, and New York, faces several operational and systemic challenges. The primary issues include the integration and coordination of its distribution centers, inventory management accuracy, and internal control procedures. Additionally, the incident involving Franklin overriding the warehouse management software highlights potential weaknesses in inventory control, data integrity, and authorization protocols.

The first issue concerns the integration of the newly acquired distribution center in New York, which was formerly Paulex Co. The integration process often involves harmonizing different software systems, inventory databases, and operational procedures. As a result, discrepancies between the actual stock and system records may emerge, as evidenced by Carmen's experience with the zero stock error and Franklin's subsequent manual override. These discrepancies can lead to inaccurate order fulfillment, customer dissatisfaction, and financial inaccuracies.

Secondly, the incident involving Franklin raises concerns about internal controls and system security. Franklin’s manual override of the inventory system suggests a breach of proper procedural controls. Normally, such overrides should require managerial approval and be logged for audit purposes to prevent errors, fraud, or data manipulation. The casual attitude reflected in Franklin’s statement indicates possible cultural issues in compliance and accountability within the organization.

Thirdly, the practice of bypassing the software system, especially during billing and inventory management, compromises data integrity. Accurate inventory records are crucial for effective supply chain management, procurement, and financial reporting. The bypass could result in inventory discrepancies, stock shortages, or over-commitments that could disrupt operations.

To address these concerns, Big Hammer Inc. should implement a comprehensive review and overhaul of its inventory management and internal control procedures. This process involves several strategic actions:

1. System Integration and Data Accuracy: Invest in a unified supply chain management software platform that consolidates inventory data from all locations. Implement real-time inventory tracking with regular audits to reduce discrepancies. The integration should prioritize data consistency, transparency, and streamlined workflows to prevent manual overrides without proper authorization.
2. Internal Controls and Authorization Protocols: Establish strict control protocols for system overrides, including requiring approval from supervisory personnel and automating audit trails. Regular training sessions should reinforce the importance of data integrity and compliance among warehouse staff and management.
3. Staff Training and Organizational Culture: Promote a culture of accountability, accuracy, and adherence to standard operating procedures through ongoing training and performance reviews. Recognize and reward compliance to foster organizational integrity.
4. Operational Audits and Monitoring: Periodically conduct internal audits to verify inventory accuracy and adherence to controls. Use technology such as barcode scanning, RFID, and automated alerts to enhance monitoring capabilities.

Implementing these solutions will improve inventory accuracy, strengthen internal controls, and foster a culture of accountability. These improvements will minimize errors, reduce fraud risk, and support the company’s growth by ensuring reliable and efficient operations across all locations.

Paper For Above instruction

Big Hammer Inc., a manufacturing and distribution enterprise, confronts a complex array of operational challenges rooted in its recent acquisitions and internal procedural lapses. These issues have implications not only for day-to-day operations but also for long-term organizational integrity, customer satisfaction, and financial accuracy. This analysis explores the core problems faced by Big Hammer Inc. and proposes viable solutions to mitigate these issues, emphasizing systems integration, internal controls, staff training, and ongoing monitoring.

One of the most pressing issues is the integration of the newly acquired distribution center in New York, previously operated by Paulex Co. This acquisition presents logistical, technological, and procedural hurdles. Discrepancies in inventory data often emerge in such situations due to incompatible or unintegrated systems, leading to inaccuracies that compromise order fulfillment and inventory management. Carmen’s experience with the zero-stock error exemplifies this problem, revealing the need for a consolidated and real-time inventory management system. Brands like SAP and Oracle provide enterprise resource planning (ERP) solutions that facilitate centralized data, enabling seamless coordination among multiple sites (Akkermans et al., 2013). Such systems ensure real-time inventory data, transparency, and better decision-making, which are vital considering the geographic spread of Big Hammer’s operations.

Furthermore, the incident involving Franklin’s manual override underscores systemic weaknesses in internal controls. Franklin bypassed system restrictions without managerial approval, reflecting a lax control environment. Effective internal controls are essential to safeguard data integrity, prevent fraud, and ensure compliance (COSO, 2013). Organizations should enforce strict approval hierarchies for system overrides, coupled with automated audit trails that log any manual interventions. For example, implementing role-based access controls (RBAC) can restrict override capabilities to authorized personnel, and automated alerts can notify supervisors of such actions for immediate review. These measures help to create a controlled environment that discourages unauthorized modifications and promotes accountability (Power, 2014).

Employee training and organizational culture are equally critical. Employees must understand the importance of adhering to established procedures. Regular training programs can reinforce policies related to data accuracy, system security, and ethical standards (Dulebohn & Hoch, 2017). A culture emphasizing accountability and transparency encourages staff to follow protocols strictly and report anomalies without fear of reprisal. Recognizing compliance through incentives can further strengthen this ethos (Schein, 2010).

Operational oversight must also be enhanced through periodic audits and technological monitoring tools. Regular inventory audits, coupled with barcode or RFID (Radio Frequency Identification) scanning, can verify physical stock against digital records, reducing discrepancies and exposing potential fraudulent activities (Hosseini et al., 2018). Automated inventory alerts can flag abnormal changes or inconsistencies, providing management with early warning signals to investigate potential issues proactively (Chong et al., 2019).

By adopting a holistic approach that combines technological upgrades, strict internal controls, ongoing staff development, and continuous monitoring, Big Hammer Inc. can substantially improve operational efficiency and data accuracy while reducing risks associated with inventory discrepancies and unauthorized system modifications. Such measures will reinforce organizational integrity, enhance customer satisfaction, and support sustainable growth in a competitive environment.

In conclusion, the problems faced by Big Hammer Inc. are symptomatic of broader systemic weaknesses that can be remedied through targeted technological, procedural, and cultural strategies. Prioritizing system integration, implementing rigorous controls, fostering an organizational culture of integrity, and instituting regular audits will position the enterprise for resilient and efficient operations in the future.

References

• Akkermans, H., Bouwman, H., Van der Heijden, R., & Van den Heuvel, W. (2013). The digitization of supply chain management. International Journal of Logistics Management, 24(2), 280-289.
• Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2013). Internal Control—Integrated Framework. COSO.
• Chong, A. Y. L., Lo, C. K. Y., & Weng, X. (2019). The business value of IT investments on supply chain management. International Journal of Information Management, 48, 213-230.
• Dulebohn, J. H., & Hoch, J. E. (2017). Ethical climate and organizational climate: Impact on employees’ ethical decision making. Journal of Business Ethics, 146(3), 607-621.
• Hosseini, S. H., Validi, S., & Khalilzadeh, M. (2018). RFID technology in supply chain management: Benefits and challenges. Journal of Manufacturing Systems, 48, 149-159.
• Power, D. (2014). The role of internal control in corporate governance. Journal of Business Ethics, 122(3), 1-12.
• Schein, E. H. (2010). Organizational Culture and Leadership. Jossey-Bass.