Impact Of Effective Stock Keeping And Control In An Organization
(A Case Study Of Rokana Industries Plc Nekede Owerri Imo State)
Effective stock keeping and control in an organization play a crucial role in optimizing operational efficiency, minimizing costs, and maximizing profitability. By implementing robust stock management practices, companies can ensure adequate inventory levels to meet customer demand while avoiding excess stock that ties up capital and storage space. Efficient stock control involves meticulous tracking of inventory movements, accurate forecasting, and timely replenishment strategies, thereby reducing stockouts and backorders. Moreover, streamlined stock management enhances resource utilization, reduces wastage, and fosters better supplier relationships through optimized ordering processes. Ultimately, the implementation of effective stock keeping and control fosters a lean and agile operational environment, enabling organizations to respond swiftly to market fluctuations and gain a competitive edge in their industry.
The effect of stock control in an organization is so vital in both large and small firm whether in the public or private sector. Serious operational and financial breakdowns can result if a good stock control system is not operated by the stores. Every stock control system must be designed to meet the particular needs of the organization. Stock control is set up in any organization to assists in the production of goods and service and no substantial size can be efficiently manage without it. The basic aim of every efficient manager is to reduce time and labour involved in each operation to the absolute minimum consistent with maintaining required quality.
Title Page:
Approval Page:
Dedication:
Acknowledgement:
Abstract:
Table of Content
Chapter One:
1.0 Introduction
1.1 Background of the study
1.2 Statement of the problem
1.3 Objectives of the study
1.4 Research questions
1.5 Significance of study
1.6 Scope of the study
1.7 Limitation of study
1.8 Definition of terms
Chapter Two:
Literature Review
2.0 Introduction
2.1 The meaning of stores and stock control
2.2 Basic Process of stock control
2.3 Objective of stock control
2.4 Reasons why organization hold stock
2.5 What should be stocked
2.6 Cost implication in Holing stock
2.7 Factors affecting the level of stock held by an organization
2.8 Method of stock control
2.9 The need of stock control in an organization
Chapter Three:
Research Design and Methodology
3.0 Introduction
3.1 Research methodology
3.2 Questionnaire design
3.3 Sources/methods of data collection
3.4 Population and sample size
3.5 Sample technique
3.6 Validity and Reliability
3.7 Method of data analysis
Chapter Four:
Presentation analysis of data
4.0 Introduction
4.1 Data presentation
4.2 Analysis of data
4.3 Interpretation of result
Chapter Five:
Summary, conclusion and recommendation
5.1 Introduction
5.2 Summary
5.3 Conclusion
5.4 Recommendation
References
Appendix
INTRODUCTION
1.1 BACKGROUND OF STUDY
For an organization to be successful, it depends on the efficient control of stock in that organization. Therefore, for the study of purchasing and supply to be successful or complete, there must be efficient control of stock. Store management is very closely liked with product and distribution and is much neglected area of business study. Yet stock control is a vital part of all industrial organization and it must be design to suit the particular needs of the organization. Stock control is set up in any organization to assist in the production of goods and services and no substantial size can be efficiently manage with out it. The basic aim of every manager is to reduce the time and labour involved in each operation to the absolute minimum consistent with maintaining the required quality. (Bin, 1952).
According to (Bim, 1952) stock control represents the clerical control of materials into and out of the stores, and all the level of stocks in the stores with due regard to the economy in storage as well as ordering cost, purchase price to agreed, and the level of organization working capital. The stock control process focuses attention on factors related to time utility location, quality and quality of materials used by the operations of the organization.
1.1 BACKGROUND OF THE STUDY
ROKANA INDUSTRY OWERRI
Rokana Industry Owerri was established in the year 1998 by the former Manufacturing Association of Nigeria (MAN) President Engr Charles Ugwuh. The company is into manufacturing and production of goods and services. Its corporate headquarter is situated as t Victoria Island Land with manufacturing situated at different parts of the country which includes Owerri, Port Harcourt, Onitsha and recently Enugu. They produce good quality beverages and confectionaries for daily consumption. They produce quality post-boards companies adverts post boards, posters etc. Also they are into plastic/polymer production. The number of Rokana Products sent to the market, in no doubt has made tremendous impact on the reduction of the micro economic variables problems in this country through generating to our economy, creation of job opportunities etc. Efficient stock keeping has significantly improved profitability and productivity of Rokana Industry.
1.2 STATEMENT OF THE PROBLEM
The efficient of stock control in an organization is so vital in both large and small firm upon the efficient of stock control. The researcher in carrying out this research work were able to identify some problems that hinder the progress of smooth control of stock in an organization. Some of the these problems are identified below:
a. The method of sources of information used in the organization in terms of checking the control of stock is not encourage able in the sense it was done without considering if the individual has the capacity.
b. Professional were not employed in the purchasing departments and this makes the strategies involved in the efficient control of stock not to the work or job were not well trained.
C. The efficient stock control records are not properly kept and this makes managers/keeper to be very active.
d. Another problem which hinders the progress of stock control in an organization is the type of materials purchased by the procurement manager. This implies that the material might be in a bad shape, thereby stops the smooth running of the organization.
e. Finally, the stock held in store for so long can cause a problem, in controlling the stock in an organization. This means, the stocks are not supposed to be kept in the stores for so long before they are dispatched to be they are needed.
1.3 OBJECTIVE OF THE STUDY
Obviously, every organization according to Carter (1982:31) has its own needs and requirements which have to be met by its stock control system. However, if we look at the stock control in terms of average medium size production and distribution organization we will obtain a complete in selecting and operating stock control methods, control of level of stocks, the stock controller of the organization is seeking to achieve the following fundamental objectives:
1. To stress on the importance of stock control in an organization, thereby motivating the management to develop interest on the stock control function.
2. To highlight on the need of employing young and energetic employees for the purpose of stock control operations.
3. To lay emphasis on the importance of employing a workers of technical know-how on the current advancement of technology example computer.
4. Employing people with business experience knowledge for the purpose of transacting effective with suppliers and other department in another objectives.
5. To ensure there is efficient and effective stock control in the organization.
6. To control the inflow and outflow of the materials held in the organization.
1.4 RELEVANCE OF THE STUDY
The relevance of stock control in an organization to know the various ways of controlling the stock held there firm/organization.
Stock control is an important aspect of business management and must not be neglected by management. This is so because any management that neglects it control of stock will generally reduce its profit potential or even the level of service provided, shortage in inventory an as well as tools, for instance, will interrupt production, rendering machines and labour force idle and will further lead to losses in sales buying and over stocking of materials in inventory, the organizations fund will be tied up in stock and will represent cash that would have been used for other purpose.
1.5 RESEARCH QUESTION
In other to a make a complete investigation of subject matter, the researcher has to come up with the following questions thus:
Question one: Does the store department have adequate number of staff?
Question two: Does you organization adopt and method to supply requirements of materials without holding stock?
Question three: Do you find out reason why customer waste much time in you company?
Question Four: Does your organization control there stock?
Question Five: What are the tools for stock and material control
Question Six: What are the process and procedures for stock control?
1.6 THE SCOPE OF THE STUDY
In industries as well as in the public sector organization, the “stores” has remained as one of the production department and the storage, whether of raw materials, partly processed work or finished goods or products. In part of the sequences of operations both clerical and physical which starts as soon as the customer’s order or management decision to manufacture and is completed by the dispatch of a finished product. The major aim of every efficient manager is to reduce the rime and labour involved in each operation to the absolute minimum consistent with maintaining the required quality so as to achieve minimum output and reduce manufacturing cost.
In treating the stock control as an operation, the manager must have similar objects in mind, his aim in this regards is to ensure that every piece of material, whether raw or worked, coming into and store shall therefore be as short a time as possible before moving either out of the factory to be processed, or, in the case of such things spares, tools or building materials, into use. The essential qualifying condition here is that stock must be maintained just high enough for a constant supply of materials or components to be available when required.
1.7 THE LIMITATION OF THE TERMS OF STUDY
An investigation of this kind is confronted with several limitation, its limitation are as follows:
a. Financial Problem: Financing this project has been a trying experience, because of the prevailing economic condition in the society, so the researcher is unable to travel and cover many places of interest in order to gather comparable data of information for the research work.
b. Limited time factor: Due to the schedule of academic activities for every final year students both in National Diploma of the polytechnic is lactic, the researcher needs to attend classes, read other courses that is related to her course of study, collect data/information from to the polytechnic which she would have loved to do but due to limited time factor, the researcher was unable to do so.
c. Natural factor: This also act as a hindrance to the study, this project work is disturbed from effects of regular rainfalls and hot whether, wind thereby, hinders the researcher’s movement in bid to collect data/information and distribution of questionnaires to respondents.
d. Transportation problem: The researcher was also confronted with transportation problems, he wasted so much time on the road or on the vehicle boarded, and thereby making her to reach her place of choice of information from the school libraries.
1.8 DEFINITION OF TERM
For the purpose of enhancing the understanding key terms and concepts used in this researcher, here are the definition of terms and concepts used in the context and the meaning assigned to them for the purpose of this study. They include:
Efficient: This study means performing or functioning in the best possible manner with the least waste of material, time and effort; having and using requisite knowledge, skill and industry.
Store keeping: This is a process of ensuring stock held by the organization is supplied to those parts of the organization that needs them.
Organization: Refers to the combination of people or individuals efforts working in pursuit of certain common purpose.
Impact Of Effective Stock Keeping And Control In An Organization:
Effective stock keeping and control play a crucial role in the overall success and efficiency of an organization, regardless of its size or industry. Properly managed inventory can have a significant impact in various aspects of the organization, including:
Cost Reduction:
Reduced Holding Costs: Effective stock control helps in minimizing excess inventory, which in turn reduces costs associated with storage, insurance, and depreciation.
Lower Carrying Costs: Efficient stock management ensures that products move quickly through the inventory cycle, reducing carrying costs associated with holding onto products for extended periods.
Cash Flow Management:
Improved Cash Flow: By optimizing stock levels, an organization can free up capital that would otherwise be tied up in excess inventory. This can be reinvested in other areas of the business or used for growth and expansion.
Customer Satisfaction:
Enhanced Service Levels: Organizations that maintain accurate stock levels are better equipped to meet customer demand promptly and avoid stockouts. This leads to higher customer satisfaction and loyalty.
Reduced Lead Times: Efficient stock management can reduce lead times for order fulfillment, ensuring that customers receive their orders in a timely manner.
Minimized Stockouts and Overstock:
Avoid Stockouts: Effective stock control helps in preventing stockouts by ensuring that reorder points are set appropriately based on demand forecasts.
Prevent Overstock: Organizations can avoid overstock situations by closely monitoring inventory turnover rates and adjusting order quantities accordingly.
Increased Productivity:
Streamlined Operations: Proper stock control leads to smoother operations as employees can easily locate and manage inventory. This reduces the time wasted searching for items or dealing with discrepancies.
Efficient Reordering: Automated stock control systems can streamline the reordering process, saving time and effort compared to manual methods.
Cost of Goods Sold (COGS) Optimization:
Lower COGS: Effective stock management can lead to lower COGS by reducing the amount spent on purchasing and storing inventory. This, in turn, can increase profit margins.
Financial Reporting Accuracy:
Accurate Financial Statements: Proper stock control ensures that inventory values are accurately reflected on financial statements, helping the organization make informed financial decisions.
Risk Mitigation:
Fraud Prevention: Effective stock control can help prevent theft and internal fraud by monitoring inventory movements and identifying discrepancies.
Compliance: In regulated industries, proper stock control ensures compliance with legal and industry-specific requirements.
Strategic Decision-Making:
Data-driven Insights: Well-maintained stock data can provide valuable insights into demand patterns, allowing the organization to make informed decisions regarding product lines, suppliers, and pricing strategies.
In summary, effective stock keeping and control in an organization can lead to cost savings, improved cash flow, increased customer satisfaction, streamlined operations, and better decision-making. It is a critical component of overall supply chain management and contributes significantly to an organization’s competitiveness and profitability.