Impact Of Effective Stock Control In A Manufacturing Company
Effective stock control in a manufacturing company significantly influences its operational efficiency, profitability, and customer satisfaction. By meticulously managing inventory levels, optimizing procurement processes, and implementing just-in-time practices, a company can minimize excess stock, reduce carrying costs, and enhance cash flow. This, in turn, leads to improved resource allocation, streamlined production schedules, and decreased lead times, thus enabling the company to meet customer demands promptly while minimizing stockouts. Moreover, efficient stock control mitigates the risk of obsolete inventory, enhances forecasting accuracy, and fosters better supplier relationships through timely reordering and strategic inventory management. Ultimately, by maximizing the utilization of resources, minimizing wastage, and aligning stock levels with demand fluctuations, effective stock control plays a pivotal role in driving competitiveness and sustainable growth in manufacturing companies.
It was difficult to monitor the developments which are currently happening in most management discipline especially in purchasing and supply management.
In an organization where purchasing and supply is given full attention inventory controls stands to be the hallmark in which such organization base to know the direction of its success.
People with limited understanding of what inventory control is has given it interpretation as just keeping and holding stock used in production but they fail to understand that purchasing and supply management has more to it such is optimizing some predetermined management criteria further findings reviews that, insufficient inventory can disrupt production and distribution cycle.
In the same regards, there should be a level of inventory taking because excessive inventory can easily cripple the firm’s cash flow and thus endanger its liquidity ratio.
I. Title page
ii. Approval page
iii. Dedication
iv. Acknowledgement
v. Abstract
vi. Table of content.
Chapter 1 introduction
Chapter 2 literature review
Chapter 3 research design and methodology
Chapter 4 presentation and analysis of data
Chapter 5 Summary, conclusion and recommendation.
CHAPTER ONE.
1.0 introduction
1.1 background of the study
1.2 statement of the study
1.3 objective of the study
1.4 research question
1.5 Significant of the study
1.6 scope of the study
1.7 limitation of the study
1.8 definitions of terms
CHAPTER TWO
2.0 Literature review
2.1 introductions
2.2 meaning of stock control
2.3 The assemblies and manufacture parts
2.4 The need for stock co9ntrol
2.5 stock control ordering system buffer stock
2.6 standard system of stock control
CHAPTER THREE
3.0 Research design and methodology
3.1 introductions
3.2 research design
3.4 population and sample size
3.5 sample techniques
3.6 method of data analysis
CHAPTER FOUR
4.0 Presentation and analysis of data
4.1 introductions
4.2 presentations of data
4.3 analyses of data
4.4 interpretation of result (s)
CHAPTER FIVE
5.0 Summary, conclusion and recommendation
5.1 introductions
5.2 summaries of findings
5.3 conclusions
5.4 recommendations
References
Appendix
1.0 Introduction
1.1 Background of the study
Stock control is an important and expensive activity, which is often placected and understated in many organizations both in the public and private sector. It is an area where modern stores management techniques could be used to advantage in reducing costs and ensuring increased profitability of an organization.
In modern supply management, stock control is the real control function; it encompasses all the basic aims of the store operation. The basic concept of stock control is quite simple, the right material, in the right quantity of the quality, at the right time and place. Carter (1982) defined stock control held by the organization is supplied to these parts of the operation that required item (example, production, distribution, sale, engineering EST.). Material of the correct quantity and quality is made available and when required, with due regards to economy in storage and costs, purchasing price and working capital.
It is the responsible of the stores to ensure that the process of stock control is performed within the stores section. Stock control is the operation of continuously arranging the receipts and issues to ensure that stock balance are adequate to support the current rate of consumption with due regards to economy. The store officers must ensure that the basic arms of stock control are achieved. Stores must analysis the information concerning production; sale and distribution needed maintain the stock control system
1.2 STATEMENT OF THE PROBLEM
Since stock control is a feature of almost every modern industries, institution est. there are some problems uncounted in controlling stock. Stock control is all about the handling of materials, to be profitable to the body involved and when insufficient capital to acquiring stock, the system will definitely go down.
Where there are unqualified storekeepers with the responsibility of controlling stock, a lot of thing will go wrong because when unqualified store keeper are into system, they will even issue material when the order was not given and this will bring system down the more because store is like a ware house to distribution when issuing material without order will run the whole system.
Some operation taken in controlling of stock held in running the system, when the system of operation used in controlling the stock is not in order, it will handle the achievement of the basic aim of stock control.
1.3 OBJECTIVE OF THE STUDY
The objectives of the study involved are;
Identifying the importance of stock control system in a manufacturing company.
Knowing the activity of stock control in any organization or manufacturing company
The commending adequate and proper stock control of material or items in manufacturing company
To find out the information and advantage of stock control in the manufacturing company
Suggesting the manufacturing company to maintain stock control in the company, as it is important in the company, for adequate control of material.
1.4 RESEARCH QUESTION
1. Is there any co-ordination between the various material oriented departments?
2. Are the personnel heading the various departments professionally qualified?
3. What method of controlling stock is adopted?
4. Are this method effective?
5. Does a manufacturer consider the unit price in the course of placing an order?
6. Have you had an interruption pf service of abnormal business transaction due to stock out?
1.5 SIGNIFICANT OF THE STUDY.
The need for a stock control in the contribution of manufacturing company can not be overemphasized.
As mentioned earlier, stock comprises of raw material components for assemble, consumable stores, general stores, maintenance material ands spares, work in progress and finished or saleable products, all these items are covered and managed effectively through the use of stock control as system. This therefore raises some very important problem that this work is intended to peer into.
The problems include identifying the essential issues involves in stock control, how stock control can be made to work out well in a manufacturing company, what the monetary contribution of stock control really is, how to avoid an absolute, redundant and surplus stock even stock out, and them how it could be used as stock control system in a manufacturing company. These issues are many more other issues are what the research intends to find solution to during the course of the study, these might be categories:
MAINTENANCE PROBLEM: What are the things needed to make stock control won out? What and which for a particular industry?
INEFFICIENT PROBLEM: How can absolution, redundant and surplus stock be avoided? If they have, can they be dealt with? Other problems that might arise for excessive stock include:
Absorption of capital which would have been utilized in other ventures.
Taking up the whole space in the warehouse or stores
Deterioration and obsolescence
Interruption in production and sales.
1.6 SCOPE OFN THE STUDY.
Stock control, which is the procedure for meeting the control goals in the industry, is a vest area of study. As a result, this paper will cover only the effective impact of controlling stock. In an organization, the need for controlling stock.
1.7 LIMITATION OF THE STUDY.
During the course of carry out this research work the researcher encountered some problems difficulties which could hamper the accuracy of the findings/result.
The problems are hereunder:
There is little or not time to carry out effective research work, due to academic duties and responsibility. There is no much time to be allocated to the progress of this research.
Another problem is finance, which is needed for running around to secure for materials, collect questionnaires and the rest
Due to lack of time, the researcher could only use secondary data instead for primary data in analysis of the study.
During the course of data collection from the case study organization, the researcher was faced with the willingness of the respondents to give relevant information concerning its operation and stock control.
1.8 DEFINITION OF TERMS.
1. STOCK CONTROL: Is the process of maintaining balanced stock that is adequate to feed the current consumption rate that will ensure un-interruption production with due regard to minimum inventory investment.
2. DISTRIBUTION. It represents the flow of little of goods and services as they moved along the changed of distribution from point of product to point consumption.
3. PURCHASING. Is one concept that is very different to define because it has different managerial process that goes far beyond simply buying material?
4. SUPPLY MANAGEMENT. Often is used to refer to the purchasing department’s effort to refer better and more responsive supplies.
5. STOCK KEEPER: The act of recording transaction in the store, so that at any given time the stock record will show the true positive of stock.
6. PURCHASING/ENGIEERING: Have many natural problems, the activities of design engineering greatly influence purchasing activities.
7. ORGANISATION: May be described as being concerned with way of establishing responsibities authorities and control within a company in such a way that may achieve its objectives and basic purposes
8. PURCHASING/PRODUCTION: Have the common goal of effective and profitable operation.
SHARE PROJECT MATERIALS ON:
Impact Of Effective Stock Control In A Manufacturing Company:
Effective stock control in a manufacturing company can have a significant impact on various aspects of the business, ranging from cost management to customer satisfaction. Here are some key ways in which it can influence a manufacturing company:
Cost Reduction:
Reduced Holding Costs: Efficient stock control helps in minimizing excess inventory, which reduces holding costs such as storage, insurance, and depreciation.
Lower Obsolescence Costs: Proper control ensures that obsolete or expired items are minimized, reducing the financial impact of unsellable inventory.
Decreased Stockouts: Avoiding stockouts through effective control prevents production delays and the associated costs.
Working Capital Management:
Improved Cash Flow: By optimizing inventory levels, the company can free up cash that would otherwise be tied up in excess stock, which can be used for other investments or operational needs.
Production Efficiency:
Better Production Planning: Stock control ensures that raw materials and components are available when needed, minimizing production disruptions and downtime.
Reduced Lead Times: Maintaining the right stock levels can lead to shorter lead times and faster response to customer demand.
Customer Satisfaction:
On-Time Deliveries: Effective stock control helps in meeting customer orders on time, which enhances customer satisfaction and retention.
Consistency in Product Availability: Customers can rely on the company to consistently provide the products they need.
Inventory Accuracy:
Minimized Errors: Proper stock control reduces the likelihood of errors in inventory records, which can result in misplaced or missing items.
Cost of Goods Sold (COGS):
Improved Profit Margins: Controlling stock levels can help in optimizing the cost of goods sold, potentially increasing profit margins.
Strategic Decision-Making:
Data for Decision-Making: Effective stock control generates data that can be used for strategic decision-making, such as identifying slow-moving items, discontinuing unprofitable products, or negotiating better supplier terms.
Compliance and Quality:
Ensuring Compliance: In some industries, regulatory compliance requires strict control over inventory, particularly in the case of perishable or hazardous materials.
Quality Control: Maintaining proper stock levels ensures that raw materials and components meet quality standards, preventing defects in the final product.
Supplier Relationships:
Negotiating Power: Effective stock control can improve the company’s negotiating power with suppliers, potentially leading to better pricing and terms.
Risk Mitigation:
Minimizing Supply Chain Risks: By having better control over stock, a manufacturing company can reduce vulnerability to supply chain disruptions and fluctuations in demand.
In summary, effective stock control in a manufacturing company plays a pivotal role in cost management, production efficiency, customer satisfaction, and overall business success. It allows a company to strike a balance between having enough inventory to meet demand without excessive carrying costs, resulting in improved financial performance and competitiveness in the market.