Relevance Of Stock Keeping And Stock Checking In A Manufacturing Organization
Stock keeping and stock checking play a crucial role in the operational efficiency of a manufacturing organization. Effective stock keeping involves the meticulous management and storage of raw materials, components, and finished goods within the company’s inventory. This process ensures that the right quantities of essential items are available when needed, preventing production delays and disruptions. Concurrently, stock checking involves regular audits and assessments of the inventory to verify accuracy and identify discrepancies. This meticulous scrutiny aids in maintaining optimal stock levels, minimizing the risk of overstocking or stockouts. Moreover, it enables the organization to uphold cost-effectiveness by avoiding unnecessary holding costs or production halts. The seamless integration of stock keeping and stock checking is fundamental for maintaining a streamlined and responsive manufacturing process, aligning resources efficiently, and sustaining a competitive edge in the dynamic business environment.
In this project topic “the relevance of stock checking in a manufacturing organization”. A case study of P.Z industry Aba, is therefore to give an insight into ways of solving the problems of improper application of stock keeping and stock checking in the industry. The researcher made use of the stratified random sample to identify the sample among the staff of the company. The size was determined by the use of Yaro Yahmen’s sampling statistical formula. Information and all data were presented and were collected from various sources. Two hypothesis were put forward and tested. It was found that holding large stock at material increased carrying out and tied up capital which could have been used in other areas. Based on the findings above it was recommended that for efficient stock keeping and stock checking to be properly maintained daily/annual demand should be ascertained. This processes of obtaining and stocking inventory should be monitored and controlled. Finally, the total inventory investment should reflect good relationship between forecast of sales, cost of production and storage.
TITLE PAGE
APPROVAL PAGE
DEDICATION
ACKNOWLEDEMENT
ABSTRACT
TABLE OF CONTENT
CHAPTER ONE
Introduction
1.1 Background of the study
1.2 Statement of problem
1.3 Objectives of the study
1.4 Research question
1.5 Significance of the study
1.6 Limitation of the study
1.7 Definition of terms
CHAPTER TWO
2.0 Review of related literature
2.1 Historical frame work/background
2.2 Satisfaction of the organization through holding of inventory
2.3 Further review of literature
2.4 Stock valuation method
2.5 Stock keeping and stock checking throughout economic order quality (EOQ)
2.6 Stock keeping and stock checking decision
2.7 Sources of information for stock keeping and stock checking
2.8 Summary of the chapter
CHAPTER THREE
3.0 Research design and methodology
3.1 Research design
3.2 Population characteristic
3.3 The sample size/sample techniques
3.4 Data collection instrument
3.5 Validity of data collection
3.5a Primary data
3.5b Secondary data
3.6 The administration of data collection instrument
CHAPTER FOUR
4.0 Presentation and analysis of data
4.1 Presentation of Data
4.2 Analysis of data
CHAPTER FIVE
5.0 Summary, conclusion and recommendation
5.1 Summary
5.2 Recommendation
5.3 Conclusion
Bibliography
1.0 INTRODUCTION
Stock keeping and stock checking is an important area of activity which is often neglected and underrated in many organizations both public and private sectors.
Stock keeping and stock checking can be defined as a means by which materials of the correct quantity and quality are made available as an when required by taking due regard to economy in storage and the ordering cost purchasing prices, and the working capital.
Stock keeping and stock checking therefore involves the process of
1. Assessing the items to be held is stock
2. Regulating the issue of stock from the store houses.
To enable the stock keeping and stock checking to assess the items to be held in the stock, it is necessary that he consider what items that are being used and produced by the particular company, and from this, he can decide which of those items he should stock.
It is believed that the stock keeping and stock checking and management can be a factor in the success or failure of any organization.
Considering this, there is the need to hold stock to act as insurance against “longer than lead-times” to take advantage of quantity discount, seasonal and other fluctuations is prices.
Naturally, it is necessary to held stock of materials which are regularly used and also those items which may be required at short notice in the event of plant.
1.1 BACKGROUND OF THE STUDY
The study of relevance of stock keeping and stock checking in a manufacturing organization in being confined to the operations. The organization has been a participant in economic development and reconstruction since its inception and therefore has pulled a lot if experiences in market orientation.
Stock keeping and stock checking has long time been in existence without full realization by the organizations involved. Therefore, there is the need to fully understand the role of stock keeping and stock checking in providing a means of hedging against future prices and delivery uncertainties as caused by strikes, price increase and inflation affective and efficient attainment of the organizational objective.
Stock keeping and stock checking has been defined or described as a means by which materials or items of the correct quantity and quality are made available when required with due regards to economy in storage and cost of ordering, purchasing price and working capital.
Stock keeping and stock checking can also be described as the function of planning and maintaining the right quantity of item for a given production or sales programmed with the minimum of investment.
Stock keeping and stock checking has the following objectives:
i. To eliminate production or sales delay by supplying the materials items in manner and quantity need at the specified time
ii. To reduce the number of item which need to be carried etc.
1.2 STATEMENT OF PROBLEM
Certain conditions or factors can pace way for effective stocking and verification. The problem of this study intends to solve are as follows:
i. Lack of proper application of inventory control which indicates the physical balance of items in the manufacturing company.
ii. Lack of proper application of stock level and documentation of items in the company to indicate when replenishment are required.
iii. Items are strongly located in the company which exposes the items to deterioration and portage. This constitute wastes which drastically affects the company’s profit maximization.
Despite all the importance and benefits of stock taking it has from time to time recorded some drawbacks.
This study is therefore designed to identify such factors militating against effective and efficient stock keeping and stock checking for better performance
1.3 OBJECTIVES OF THE STUDY
Stock keeping and stock checking long time been in existence without full realization by the individuals. The question is that to what extent is it implied in the social in order to achieve individual or co-operate goal? Subsequently research work has been carried out based on the effective application of the stock keeping and stock checking principles techniques and practice in various organization for purpose of achieving a health economy in the organization.
The following objectives to review are:
i. To determine the degree of interference the employer or any of his sons in the course of carrying out their operation.
ii. To determine through the analysis, the degree of the application of effective stock keeping and stock checking in the manufacturing company
iii. That the space utilization is achieved.
iv. Examine how optimum safety stock level is determined and maintained.
1.4 RESEARCH QUESTION
The following question shall be asked:
1. What institutes stock requisition in P.Z industries?
2. Who is responsible for ordering raw material in P.Z industry?
3. What determines the quantity of raw material order?
4. Has P.Z industry ever experience excess stock
5. Does P.Z industry ever had a case of inadequate stock
1.5 SIGNIFICANCE OF THE STUDY
This study will be of the benefit to the following persons or group of persons.
a. The government: The government will be able to know how resources are being effectively managed and controlled in the public sector.
b. The public sector: This study will help the public sector to know the need for proper stock keeping and stock checking in an organization.
c. The store managers: This group of person will be able to identify areas to intensify inventory management and control measures.
e. The researcher: Another significance of this study is that it will help other student who may want to carry out further research on this topic or related topic.
1.6 DELIMITATIONS OF AND LIMITATIONS
This study is designed to give an insight into way of solving the research problems. The problem of improper application of stock keeping and stock checking in P.Z industry and for the research to study all of them. It will be impossible within the time given to the research. Therefore, the researcher decided to use PZ Aba as a case study so as to carry out an in depth study of the role of stock keeping and stock checking in that company.
The limitation of this study is the elements of shortcoming one often encounters when trying to get necessary information and materials for successful completion any research project. This includes, financial problems. Inadequate text books transportation problems and time constraint that was allowed for completion of this particular research works was not sufficient enough for a thorough work to be carried out on this particular topic.
THE PLAN OF THE WORK
In this laudable project, the researcher used Paterson Zonchonis Plc Aba Abia State to examine the role of stock keeping and stock checking in the attainment of organizational objective the situation that gave rise to this work was as a result of problems of inadequate and inefficient stock keeping and stock checking found among manufacturing industries in Nigeria review of different related literatures.
This work will identify drawbacks and other factors militating against effectives and efficient stock keeping and stock checking for better performance.
1.7 DEFINITION OF TERMS
1. Stock keeping and stock checking: Stock keeping and stock checking can be defined as the means by which materials of the correct quantity and quality are made available as regard to economy in storage and the ordering cost, purchasing prices and the working capital.
2. Replenishment: This could be defined as the ability of making something full again by replacing what has been used.
3. Deterioration: Can be defined as something to be worse in quality or condition.
4. Inventory: This can be defined as the total umber of goods or materials available in a storehouse at a given period of time.
5. Material control: Material control section of the store organization that is directly involved with the control of the flow of production materials (in most cases) from the supplier to production centres
6. Interference: Can be defined as to get involved in and try to influence a situation that not concern you in a way that annoys other people.
Relevance Of Stock Keeping And Stock Checking In A Manufacturing Organization:
Stock keeping and stock checking are crucial aspects of inventory management in a manufacturing organization. They play a significant role in ensuring the smooth operation of the production process and the overall financial health of the company. Here’s why stock keeping and stock checking are relevant in a manufacturing organization:
Optimizing Production: Maintaining an accurate record of stock levels helps manufacturing organizations plan production schedules more effectively. It ensures that raw materials are available when needed, reducing production delays and optimizing the use of resources.
Cost Control: Efficient stock keeping helps in controlling carrying costs associated with inventory. When stock levels are too high, a company incurs storage and holding costs. Conversely, low stock levels can lead to production stoppages and increased costs due to rush orders. Proper stock keeping helps strike the right balance.
Meeting Customer Demand: Stock checking enables organizations to meet customer demand promptly. Having the right amount of finished goods in stock ensures timely order fulfillment and customer satisfaction. This is especially critical in industries with fluctuating demand.
Reduction in Lead Times: By monitoring stock levels, a manufacturing organization can reduce lead times in the supply chain. This can lead to improved responsiveness to changes in customer demand and a competitive advantage.
Avoiding Stockouts and Overstock: Stock keeping and regular stock checking help prevent stockouts (when demand exceeds supply) and overstock situations (excessive inventory that may become obsolete or incur storage costs). Both stockouts and overstock situations can be costly and damaging to a company’s reputation.
Quality Control: Proper stock keeping includes monitoring the quality of raw materials and finished products. Regular stock checks can help identify issues such as product defects or expired materials before they negatively impact production or reach customers.
Working Capital Management: Efficient stock management can free up working capital. By reducing excess inventory, a manufacturing organization can allocate resources to other critical areas like research and development or marketing.
Forecasting and Planning: Historical stock data can be used for demand forecasting and production planning. This helps in aligning production with market trends and preventing overproduction or underproduction.
Compliance and Reporting: In many industries, there are regulatory requirements for stock record-keeping and reporting. Proper stock keeping ensures compliance with these regulations and helps in avoiding legal issues.
Cost of Goods Sold (COGS) Calculation: Accurate stock records are essential for calculating the cost of goods sold (COGS) accurately. This is crucial for financial reporting, tax purposes, and assessing the profitability of products.
Risk Management: Inventory can be susceptible to various risks, such as theft, damage, or obsolescence. Regular stock checking helps identify and mitigate these risks, reducing potential losses.
In conclusion, stock keeping and stock checking are essential functions in a manufacturing organization, as they impact production efficiency, cost control, customer satisfaction, financial management, and overall competitiveness. Properly managed inventory ensures that the right products are available at the right time, in the right quantities, and at the right cost.