Impact Of Stores Function In Profitability Of An Organization
(A Case Study Of Rokana Industries Nekede)
The role of the stores function within an organization significantly influences its profitability, serving as a critical nexus between procurement, inventory management, and operational efficiency. Efficient stores management optimizes inventory levels, minimizes stockouts, and reduces holding costs, thereby enhancing cost-effectiveness and streamlining cash flow. Through effective demand forecasting and inventory control, the stores function mitigates risks associated with overstocking or understocking, ensuring timely availability of goods while avoiding unnecessary tie-up of capital. Moreover, strategic sourcing initiatives and supplier relationship management fostered by the stores function can lead to cost savings through negotiated contracts, volume discounts, and improved supplier performance. Furthermore, the stores function plays a pivotal role in maintaining product quality and integrity, safeguarding against losses due to damage, theft, or obsolescence. By leveraging technological advancements such as inventory management systems and RFID tracking, organizations can enhance the accuracy and visibility of their inventory, enabling proactive decision-making and cost optimization. In essence, the efficient operation of the stores function is indispensable to the profitability and competitiveness of modern organizations, exerting a profound impact on their financial performance and market position.
Stores function is one of the responsibilities any organization. Thereby facilitating the organizational activities.
Presently, it has been given status of a department in order to enable it achieve her numerous objectives.
Store functions are major functions for the successful implementation of organization goods. This their perceptions as to the effective and future development of stores functions in the Rokana Industry Nekede.
The study therefore to investigate the prospects and problem of stores functions (A case study of Rookana industry Nekede).
The researcher looked into the proportion of the personnel with appropriate knowledge of the practical stores management philosophy and objective in an organization the stores functions policies and procedures surrounding stores functions management, and the general expectations of prospects of store function management in the Rokana industry.
Questionnaires was contributed and distributed to the relevant staff of the Rokana industry Nekede. The data collected was analyzed and the result should that:
(1) A supplicant number of the staff demonstrated ignorance of the store function in an organization.
(2) Most of them are inexperienced in the discipline.
(3) Most of the staff are interested in st0oring without every belonging to any of the stores function professional bodies to be trained in the job.
Based on the above mentioned discoveries, are following recommendations were suggested.
(i) In-service training, retraining workshops refresher course and seminars should be organized for the staff of the department.
(ii) Adequate financial assistance be given to the department
(iii) Stores functions responsibility should be fixed with an single department head.
(iv) Experienced qualified staff should be employed
(v) Storing policies for Rokana Industry Nekede should be made and pass into law under close supervisions.
Title Page
Approval Page
Dedication
Acknowledgement
Abstract
Table of Content
CHAPTER ONE
1.0 Introduction
1.1 Background of Study
1.2 Statement of the Problem
1.3 Objectives of the study
1.4 Scope of the study
1.5 Relevance of study
1.6 limitation of the study
1.8 Definition of terms
CHAPTER TWO
2.0 Literature Review
2.1 The revelation of the stores department
2.2 Definition and concept of stores function
2.3 Function of the stores department
2.4 Major problems of the store department
2.5 The prospective impact of the store department
CHAPTER THREE
3.0 Research Methodology
3.1 Method of data collection
3.2 Method of data analysis
3.3 The use of primary and secondary sources of data
CHAPTER FOUR
4.0 Data presentation and analysis
4.1 general discussion on findings
CHAPTER FIVE
5.1 Conclusion
5.2 Recommendation
Bibliography
1.0 INTRODUCTION
In most industries, the activities covering the stores function are spread throughout all in organization. And may also speed to suppliers, customers and the distribution chain. Stores functions on is also a vital part of all industrial organization, public and private utility organization and armed services. It is s function that is set up in any concern to assist in the production of goods and services and no industrial unit or public undertaking of substantial size can be effective9ly managed without it. The store which can be universally applied to all organizations as their needs vary, but in the course of time, certain principles and practices of more or less general application have been evolved.
The store which is mostly an organization where all types of material needed for production distribution maintenance, packaging etc. are received stored and issued.
The store functions is actually concerned with holding stocks.
1.1 BACKGROUND OF THE STUDY
According to the proprietor of Rokana industries limited Engr. Ugwu when contacted said that the first idea to start that business came into his mind in 1978. he went further by saying that he was battling on how to start off in terms 0of raising fund. He did mention of vicious cycle of poverty which means that an entrepreneur may have idea of a particular business to embark upon but the problem becomes inadequate initial capital to take off.
According to engr. Ugwu, Rokanna industry limited was fully established in 1982 and produce body jelly, tooth brushes, air fresheners, uzzi water and also refilling of gases. The industry employed about 40% cocu raw materials and 60% of foreign inputs. Though they value added process. What the director called value added process.
Population has increased considerably with rampant cases of products of low quality.
1.2 STATEMENT OF PROBLEM
The organizations which utilizes the functions of abobve such a federal, state and local government organizations, and armed serves and the private and public and public utilities faces the problem that raise from above functions. The material products and services were p0rovided at very high and influenced prizes which is not even computable with suitable quality and safety. However, with help of the br9ight prospects and less problems with services selected by the above function.
Store function is necessary in almost every organization from the private household to federal, state and local government as well as industries. These organizations are involved in business transaction at various levels and as such are left to decide if their potentials suppliers are the most reliable economical and trustworthy of those in the market place.
1.3 OBJECTIVE OF THE STUDY
this project is a survey of the problem –of products quality control Rokanna industries limited in Owerri. The main objective is to examine the oqresent status of the control of the quality product in this company, so that the strength and weakness and not also the factors affecting development can be determined so as to provide a sound base for a more ositive future approach.
It will help review and store some dominant materials or item, which will help item, produce products at that are satisfactory, adequate dependable and economical. Also it will help the company to realize and achieve the fullest potential of programmes in the company.
It helps in restoring of products that is ready for distribution before the distribution time the finished products.
1.4 SCOPE OF THE STUDY
The area of the study is delimited to restricted to the Rokanna industry Nekede.
This industry is chosen because it is centrally located at Nekede nearby federal Polytechnic Nekede where true study will be easy to carryout. Rokana industry is well known to me, being somebody who live at Nekede, also schooling at Nekede. That is why it is chosen as a case study and not only that, it has been functioning competitively in all its performances. Its products are everywhere in the market which also reach to the demand of people at a low rate.
The industry has been creating employment opportunities to the people as the same time doing its social responsibilities within the Nekeded where it is located.
But the scope of the study is limited to Rokana industry limited. Therefore is to check quality control of incoming materials and components to the manufacturing industries.
1.5 RELEVANCE OF THE STUDY
The stores in any organization has wide variety of function that it has performed as efficiently as possible. The way in which store overall efficiency and profitability of the organization.
At the other hand, as with other operations, store keeping is associated with the problem of facing the storekeepers on how to maintain adequate security of their stores, overstocking which lead to scarcity of money in store function.
As the case of store function, deterioration of materials due occur in a store in any organization also in some organization, unqualified personnel are employed in the stores as store keepers which leads organization to the getting losses due to bad store keeping but also due to less of efficiency in the factory.
1.6 LIMITATION OF THE STUDY
The research was carried out within limits owing to time and financial factors. It was not possible to collect the data and information necessary for this study due to excuses from the use staff in terms of inconveniences on item.
Also the research experienced come today and tomorrow syndrome as prevalent in some organization.
Finally, the volume of work and cost in involved were so much considering the areas cove7red in the organization (Rokana Industry Nekede).
1.7 DEFINITION OF TERMS
Impact: Can be defined as the effect or influence that an event situation etc has on someone or something.
Store: A store can be defined as holding materials which are awaiting dispatch to customers for further processing or final consumption.
Stock Control: Stock control is the process of maintaining a balanced stocks that are adequate to feed the current consumption rate that will ensure an uninterrupted production operations with due regard to minimum inventory investment.
Deterioration: In the course of time, most materials get deteriorated in the warehouse. This must be noted and written off the books or physical factors thus rendering such item worthless over time.
Obsolescence: Can been seen as serious source of loss with the ever increasing pace of technological advanced, products become outdated very quickly.
Even where the same product –is made for a number of years, details changes are made to its design to improve it performance or reliability, its appeal to the customer and to reduce its cost.
Pilferage: It is the extent of the loss due to pilferage depends very much on the industry concern for items having a direct appeal to the general and unter profitability tempting circumstance.
Inspection: In large organization with spectacle inspection departments, the inspection is usually undertaken by this department. Inspector have authority to accept or reject materials after inspection and endorse goods received notes accordingly unless separate inspection certificates are prepared.
Impact Of Stores Function In Profitability Of An Organization:
The stores function within an organization plays a significant role in impacting profitability. The stores function is responsible for managing the inventory and supplies necessary for the day-to-day operations of the business. Here are some ways in which the stores function can influence profitability:
Cost Control: Efficient management of inventory in the stores can lead to cost control. When inventory levels are optimized, the organization can avoid overstocking, which ties up capital, or understocking, which can lead to stockouts and lost sales. By minimizing carrying costs and storage expenses, profitability can be enhanced.
Reduction in Wastage: Proper stores management can help reduce wastage and spoilage of materials or products. This is especially important in industries with perishable goods. Minimizing wastage directly contributes to cost savings and improved profitability.
Cash Flow Management: Effective inventory management in the stores can help free up cash that would otherwise be tied up in excess inventory. This cash can be used for investments, debt reduction, or other initiatives that can generate additional profits.
Customer Satisfaction: Maintaining the right inventory levels ensures that products are readily available to meet customer demand. This leads to higher customer satisfaction and loyalty, which can result in repeat business and increased profitability.
Supplier Negotiations: The stores function often deals with suppliers and vendors. Effective negotiation with suppliers for better terms, discounts, or bulk purchase agreements can reduce the cost of goods sold (COGS) and improve profit margins.
Inventory Turnover: The stores function can influence the rate at which inventory is sold or used, known as inventory turnover. A higher turnover rate indicates efficient inventory management, which can reduce holding costs and increase profitability.
Data Analysis: With the use of modern inventory management systems and analytics, the stores function can provide valuable data and insights. This data can help in identifying trends, optimizing product offerings, and making informed decisions to enhance profitability.
Risk Mitigation: Effective stores management can mitigate risks related to inventory, such as theft, damage, or obsolescence. Minimizing these risks can protect the organization’s assets and profitability.
Lean Practices: Implementing lean inventory practices, like just-in-time (JIT) inventory management, can reduce the need for excess inventory and associated costs, leading to improved profitability.
Compliance and Regulation: Ensuring that inventory and supplies in the stores comply with industry regulations and quality standards can prevent costly fines and legal issues, thus safeguarding profitability.
In summary, the stores function can have a direct and significant impact on an organization’s profitability by controlling costs, optimizing inventory levels, improving cash flow, enhancing customer satisfaction, and making data-driven decisions. Efficient stores management is a critical component of overall business success.