Role Of Stock Control In A Manufacturing Company

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Role Of Stock Control In A Manufacturing Company


Abstract


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.

Survey research design was employed for the study and with the aid of convenience sampling method, 80 staff of Consolidated breweries plc was selected as the participant for the study. Well structure questionnaire was issued to the enrolled participants of which 77 of the instrument were retrieved and validated for the study. Data was analyzed in simple percentage using frequencies and tables. Findings from the study revealed that stock management is practical in Consolidated breweries plc as staff of the company showed core knowledge about stock control.

Findings from the study further reveals that the tools organizations use for stock management such as: Barcode data collection. The use of Tags and stacks and Cycle counting to improve accuracy. The study concluded that inventory management is essential in the operation of any business as this will enhance effective stock usage, minimize wastage and ensure business efficiency. The study therefore recommended that Organizations should train their personnel in the area of stock control practices that will empower them to be in charge of smooth running of the stock control activities or program.


Chapter One


1.0 Introduction

Stock and its control have a concept which has been as old as human race in the history of mankind. If the origin of stock control is well traced, we discover that it has some elements of recognition. In the story of the early man, we were made to understand that they lived an unsettled life having no control and kept nothing for future use, and due to this, they were faces with different problems caused by out of stock.

These days, manufacturing companies tend to put stock control into practice having known that such are expected from them, therefore as the management practice are becoming are becoming increasingly dynamic with the passage of them, numerous future planning and controlling activities that are formally performed by clerks have reading efforts in

Corporate objectives and inventory control as a vital element of materials management is of function that should be given proper attention.

According to mocker (1984), control can be defined as a systematic effort by business management to compare performance to predetermined standards plans of objective, to see where performance is in line with standards and presumably take to any remedy actions required to see that human and corporate resources are been used in the most effective and efficient manner in achieving cooperate objective. Therefore stock control according to A.M. Uzor (2006) represent the correct quantity of materials made available and as when required with due regards to economy storage and ordering cost purchase price and use of working capital, Zenz (1994:1640). Further stressed that stock control should be regarded as any item of materials used within the production process, or in the operation of the business.

From the above set of definitions, one is left in no doubt of the fact that stock control is the life wire of any industry.


1.1 Brief History of Consolidated Breweries

Consolidated breweries plc was incorporated in September 20th 1968 under the name eastern brewery was changed to continental y’s ery limited with the brewery of 33 lager beer.

In 1996, continental brewery plc gave birth to consolidated brewery plc which was originated from France. it began producing the second product (hi malt) in 1983, therefore becoming one of the largest producing malt in the country as at that time, consolidated breweries became a public quoted company in Nigeria stock exchange market. Meanwhile, the company has about 25,000 Nigerian shareholder holding 90% of the company’s equity while 105 of the company’s equity are held by foreign association and citizens.

This company has its head office at Lagos and two branches producing at Ijebu-ode and Awo-Ommama, it has about 500 employees of which junior staff has the highest of 77% of workers.


1.2 Statement of the Problem

This study titled the role of stock control in a manufacturing company, a case study of a consolidated breweries plc Awo-Amama in Imo state is aimed at examining and understanding the predicament associated with inventory or stock control system and to eventually relate these problems to stock control in a manufacturing company and they include;

  1. The problems that affect the implementation of stock control system.
  2. To know the present stock control procedure measurement using consolidated breweries plc Awo-Omama as a suitable case study.
  3. To examine the reason for holding stock
  4. To also recognize the key roles/functions of stock control

1.3 Objectives of the Study

Stock of materials firms up to 60% of the total resources of an organization and stock control management which contributes immensely to the effectively and efficient running of the organization and the objectives of the study is to;

  1. Find out the roles and benefits of stock control system and how to enhance the profit of an organization.
  2. To study and understand the factors affecting stock control system.
  3. To analyze and consider the pros and cons of stock control management.
  4. To critically examine the economic order quantity (EOQ) associated with stock control system management.

1.4 Significance of the Study

The study is vital because it will bring to the knowledge of all the manufacturing organization the numerous solutions to the problems encountered by various stock control management within any manufacturing company.

The study is also interested in assessing the ways of providing reliable costing information as regards to records of materials issues and receipts.

Finally, production operations cannot flow effectively without having stock of different materials work in progress (WIP) finished parts and supplier functions.


1.5 Research Questions

This study will centre its findings in the following questions.

  1. What is the role and place of stores department in the organization?
  2. Is stock well managed in the organization?
  3. Are professionals employed to handle is store?
  4. Is stock control important in manufacturing organizations?
  5. What system of stock control is adopted?
  6. How are scraps, waste, obsolete and reluctant materials are managed?

1.6 Hypotheses

In order to achieve the objective, of the study research hypothesis will be developed and used in analysis of data collected.

The research hypotheses are

  1. Ho: the stock control in the organization is not effective
    Ha: the stock control in the organization is effective
  2. Ho: the stock control has no significant impact in purchasing performance in consolidated breweries plc. Imo.
    Ha: the stock control has significant impact in purchasing performance in consolidated Breweries Plc. Imo.

1.7 Scope of Study

The project writer intends to adequately focus the attention of the study specifically on the role of stock control in a manufacturing company using consolidated Breweries Plc Awo-Omama. The study will also intend to control the work in progress (W.I.P.) items.

Furthermore, the study will cover the standard methods used in carrying or holding stock.

Finally, we use seek to make recommendations that will assist in improving the stock control and carry out some activities, like reviewing the past relevant literature and test of hypothesis formed in order to determine the validity.


1.8 Limitation of the Study

Stock controls like other managerial function ha its peculiar problems. It can be internal or external problems which can originate when the manager fails to understand the role of stock holding in the production process. If the work of the store manager is specified, there are unspecified roles; it then means that the job of the store keeper may be assigned to another department. It may lead to mismanagement due to inadequate knowledge in both quantity and quality.

Meanwhile, the internal problems may appear inform of customer attitude to product produced by the firms in consolidated breweries plc, quality control is based on customer’s demand for example, the quantity demanded in a week if the storekeeper will order for more materials with the hope of that more product will be demanded in the upper week and where such is not ordered as expected, it will lead to over stocking of material items which may deteriorate before they are used. it is been regarded as a limitation to stock control management.

More so, the problems faced by the research during the research work are:-

  1. Inadequate fund to make research
  2. Bad road to access the access the areas the researcher was restricted
  3. Poor manner of responding to the questionnaire
  4. Short time to amount this project research work
  5. Stress and other factors to mention but few.

1.9 Operational Definitions Of Terms:

1. Inventory:

All the tangible assets of an organization other than fixed assets.

2. Pre-Production Inventory:

This comprises parts and materials purchased from outside the organization to manufacture into products

3. Stock Checking:

This represents any other check on physical qualities which may be applied either regularly or otherwise

4. Stock Taking:

This means the complete process of varying the quantity balance of the entire range of items held in stock

5. Lead Time:

This represents a time between an orders is placed to the time it is finally delivered or accomplished.

6. Stock-Out:

A situation where one cannot boost of any stock in the store.

7. Codification:

This is the allocation of number or alphabets to store items for easy identification.

8. FIFO:

Simply means first in first out.

9. LIFO:

Last in first out.

10. Scrap:

It means materials which has lost their original value due to faulty works or other causes.

11. Obsolescence:

This can be machine or equipment which and going out of use for operational reasons but not completely phased out.


Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

The broad of this research is to examine the role Stock Control In a manufacturing company using Consolidated breweries plc in Owerri, Imo State as a case study. it stressed on the importance of stock control in an organization, thereby motivating the management to develop interest on the stock control function. it investigated the need efficient and effective stock control in the organization.

Survey research design was employed for the study and with the aid of convenience sampling method, 80 staff of Consolidated breweries plc was selected as the participant for the study. Well structure questionnaire was issued to the enrolled participants of which 77 of the instrument were retrieved and validated for the study. Data was analyzed in simple percentage using frequencies and tables.


5.2 Conclusion

Findings from the study revealed that stock management is practical in Consolidated breweries plc as staff of the company showed core knowledge about stock control. Findings from the study further reveals that the tools organizations use for stock management such as: Barcode data collection,

The use of Tags and stacks, Cycle counting to improve accuracy, ABC analysis for prioritization, Lot tracking and traceability and Integrated planning and execution viz ERP. Findings from the study also revealed that different procedures of stock management includes: Economic order quantity, Minimum order quantity, Just-in-time inventory management., Safety stock inventory, FIFO and LIFO, Reorder point formula and Batch tracking of which Consolidated breweries plc uses some of them in their inventory management and control. The study concluded that inventory management is essential in the operation of any business as this will enhance effective stock usage, minimize wastage and ensure business efficiency.


5.3 Recommendation

From the findings of the study, the following recommendations are made:

  1. Top management should emphasis on the proper stock control techniques and measuring of efficiency deviation to identify weaknesses in the process of organizational performance.
  2. Manufacturing firm develop a policy framework to facilitate faster implementation of the best stock control practices such as JIT and MRP.
  3. The firm should strength the supplier relations to the power of partnerships and not only concentrate on one supplier so that the failure of one supplier will not mar the production system.
  4. Organizations should train their personnel in the area of stock control practices that will empower them to be in charge of smooth running of the stock control activities or program.

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