Organization History and Inventory Management of Better Bee

Company Background

Established in 2013, Better Bee supplies and services Ltd (BBSS) is a small business that prides itself in producing real Jamaican honey and honey related products. Better Bee Supplies and services is owned and operated by Neville Duncan and is located on Irish Town road, St. Andrew. Finished goods and raw material are the two types of inventory that are handles and stored at this facility. This business is staffed by contracted workers and a part- time manager who oversees all aspect of the business in office and in the field

Analysis

Assets add value to every business, and a business of this nature requires assets to carry out its honey related activities. These assets are transportation (for honey extraction and delivery), extractor(s) buckets, bottles and caps, gloves, bee suits (protective wear), hive tools, smokers, bee brushes, hive bodies, hive covers, bottom boards frames are needed to operate. It has been noted that Better and services Bee supplies and Services does own assets that bring value to the business, however there is no proper accountability of the business’s assets. Though the assets are accounted for, accountability is mostly informal in nature and would present a challenge if the information is requested without advance notice.

There are various procedures that guide inventory management while some procedures were observed there was a noticeable lack as well. The lack of procedures is largely due to the small nature of the business. Goods are purchased both locally and internationally for the business by the manager who also plays the role of inspecting the good received. Both roles are carried out by the business manager as she oversees the entire operation which requires the monitoring of inventory and meeting the needs as they arise. Goods and services required by this company are out sourced for the most part hence a dollar figure is assigned initially which enables the ease of valuation. Stock taking takes the form of estimating what goods are needed and then making the required purchases. While this approach has worked a cycle count should be implemented which would accurately capture the need for inventory and provide a timeline for making the required purchases.

Record keeping is essential to any organisation and plays a vital role in the all areas as well as inventory management. Whether they are large or small all business require record keeping and BBSS has been operating with the use of record keeping. All items acquired by the company are recorded, files for the various customers are created and labelled, invoices are generated, with the original retained by the customer and the copy kept by the company. According to (Price & Harrison 2015) “inventory documentation is vital and individual organisations develop them to meet their own unique needs” This was readily identified as apiary reports were designed to for the business to capture key characteristics of the apiary in its entirety as well as each individual box,but most importantly it states the number of hives when each apiary was established and the current number of hives at the time of the visit (Appendix 1) These apiary reports are completed and submitted after an apiary visit, thus provides feedback and updated inventory for all locations (their current status at the time of the visit).

Maintenance for a bee business is minimal and takes the form of servicing the company vehicle as scheduled, servicing the extractor used to extract honey (twice per year), and the cleaning of protective gear (after each use), cleaning and organisation of the facilities during its day to day operations. With the exception of cleaning the protective gears there should be documentation of the servicing of the company extractor. Maintenance of the apiaries is mainly confined to the time period of the year called dirt season where the bees are no longer foraging and require feeding to keep each hive alive and strong. This information is documented on apiary reports during the appropriate period. The issuance of supplies does occur to enable the daily operations and continuity of the business, unlike a large distribution company that may have an office or department which provide and supervise this function at Better Bee Supplies and Services issuance is carried out, monitored and controlled by the company manager. Though issuance is carried out by the company manager a issuance form should be created and implemented as this would give timeline for the purchasing of supplies thus monitoring the use of company supplies.

The need for disposal of inventory is almost none existence as the wax which is usually remove from bee boxes is not disposed of nor destroyed but is boiled and stored, milled when necessary and replaced is each box prior to beginning of the honey season. The only inventory that would require disposal is the bottles that are purchased to store honey in for sale. Though loss is minimal, any loss experienced is of value therefore these bottles should be counted and recorded. Disposal of Management however a new initiative has been implemented and going forward all defected bottles will be recycled. bottle usually takes the form of being bagged for the disposal by the National Solid Waste. Upon request it was revealed that fixed assets for this business are not properly accounted for similarly to the company assets if they were requested at any point without advance notice this would pose a challenge.

This main commodity that is produced by this company is honey and honey is an end product which require no processing except for straining which is followed by bottling. In essence two main items are needed at all time and those are bottles and honey. Accurate inventory records are kept and updated regularly for honey. Initial records for the honey inventory captures when the honey is reaped, dates and location. Once the honey is reaped it is strained to remove bees and wax then measured by buckets (5 gallon) and or drums to ascertain the exact volume, labelled then stored. As for the bottles and other inventory items they are purchased as needed when stock level is low. All inventory acquired by the company is stored in appropriate facilities to ensure there safe keeping.

The commodity acquired is either stored in the workshop or in the honey house. Bottles that are not washed and sanitized are stored in sealed drums located in the workshops where items such as hive body and frames are stored while washed and sanitized bottles are stored in sealed drums in the honey house along with the honey and other items such as hand towel. Both the workshop and honey house are well ventilated and all inventory are stored on pallets off the ground and away from the wall. All honey (whether stored in buckets or drums) are properly labelled with labels indicating the date of reaping and the location. This information is used to maintain the first in first out (FIFO) principle implemented. All inventory inclusive of honey is stored at the appropriate temperature which is room temperature.

Accurate inventory records are kept for honey and though other inventory items are not the main commodity produced they play an important role directly or indirectly in the production process, and proper records should be kept and updated as well.

Quality control is important to any size business and quality control process has been observed in the processing and bottling of honey. All bottles and washed, sanitized and air dried prior to bottling. The quality control process for honey involves straining the honey prior to storage and straining said honey several time using various size strainers to remove all particulates prior to bottling. The level of moisture found in honey influences the shelf life, therefore this level is measured as well.

All transaction made for the business are recorded. The company manager is authorized to purchase goods and services as the need arises. Items such as hand towel are usually purchase in bulk because of the high usage and also minimizes the need to purchase frequently and the need for procedures prior to purchasing.

Once good or services are purchased each receipt/invoice is filed in a monthly expenditure file created. She also conduct delivers and the collection cheques which are lodged by her to the company account. Deliveries are also performed by her in whole or in part and all delivers are done through invoices where are filed in files created for each client. The acquisition of new stock are not documented apart for the receipts that accompany the goods. New stock/material/equipment is usually integrated with the existing stock without any records of the existing count of remaining goods. The small nature of the company eliminates the need for the use of a purchase order which is usual used to initiate the purchasing process. Classification and labelling of stock is not observed and all goods are valued at the acquisition cost.

The company manager overseas all aspects of the business which includes the issuance of equipment/material. She also records any loss of inventory which is reported to the owner of the business along with the circumstance surrounding the loss. Because she is heavily involved in all aspects of the business the issuance of all supplies to staff and the return of supplies is carried out by her. This also occurs in t field work as she is also present for these field trip as well and oversees all activities and the use of supplies.

Handover and return of company procedure was noted as activates that require such a procedure are carries out on field trips and these trip are supervised by the company manager who ensures that all supplies are returned in appropriate condition.

Recommendations

• Better Bee Supplies and Services is a small entity with its own set of needs and procedures that are unique to the nature of this business, however aspects of inventory management has been observed and the absence noted as well. While this company has noticeable value there is a lack of formal documentation that provides an accounts of the company’s assets. This was immediately brought to the attention of the owner of the business who has given the instructions to begin the process of both documenting all company assets and ascertain there value as well.
• A major role of inventory management is to eliminate guesswork, however this is the approached is used for stock taking. The creation of a supply request form was suggested which will provide an accurate record of the goods needed but will have be influenced by an actual assessment of current inventory. (Appendix)
• Though maintenance is mainly conducted in the dirt season and accurate records are kept the same should be implemented for the servicing of the company extractor for the reason that when this piece of equipment is not in use seizure within the mechanism. It was also suggest that servicing of this piece of equipment should be increased to four time per year Though the company manager arranges and participates in field trips it was suggested that a book be provided for the documentation of the supplies that taken to conduct field. It is physical impossible for the company manager to be a part of every field trip as is the case in the past.
• Supplies are provided in an informal manner and this can be counteracted with the creation of an issuance form or the inclusion a section on the supply form the indicted when would indicate when supplies are provided and the date.
• Though there is very little inventory to dispose of, the fact that it does happen means that the company does experience loss and it is for this reason that all disposals should be recorded to ascertain the value of the loss experienced.
• No handover procedures were observed with the exception of petty cash when the company manager goes on leave. This deficiency could impact the continuity of the business in her absence therefore handing over procedures were implemented. These procedures will include a status report that will be generated and given to the company owner prior to her temporary departure.
• Though quality control is observed in the bottling of honey improvements were suggested as it relates to handling the bottles. It was recommended that bottles should be examined once delivered to identify bottles that are deformed and should be handled in a manner to prevent any damage. It was also suggested that contact should be made with the company that bottles are purchased from to ascertain a return policy for damaged good.
• The first in first out principle is applied to the honey inventory and was also recommended for the other inventory that are acquired by this business. This will ensure that inventory is used in the same chronological order in which they were purchased and ensure goods are used before the expiry date.
• Cycle count was recommend to improve the accuracy of the company inventory. Based on the inventory needed and the frequency of purchasing cycle count was recommend monthly.
• While some amount of record keeping was observed, the suggestion to document the company assets and the creation of a supply request form highlights the lack of record keeping and the suggestions were made to correct the deficiency

Though the business is small in nature inventory management principles/guidelines whether adopted in whole or in part will significantly improve accuracy and efficiency.