Role Of Stores Security In The Profitability Of An Organization

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Role Of Stores Security In The Profitability Of An Organization

Abstract

Store security is one of the most essential areas of stores management. The aim of this study is to establish the role of stores security in the profitability of an organization or an industry for sale guarding materials in the storehouse. A case study of Unama paper mill Nigeria Limited in Ikot Osurua, Ikot Ekpene Local Government area of Akwa Ibom Imo State was carried out. A questionnaire was used to gather information. It was also gathered that, stock deterioration fraud, store pilfering and theft really influence the profit of the organization. It is my sincere belief that if these recommendations are effectively implemented, store security will lead to profitability of their companies even the most stiff competition.

Chapter One

1.0 Introduction

1.1 Background of the Study

Security, as an important fact has been discovered as the most necessary activities carried out in every organization. Because the materials of an organization or an industry determines its level of survival. Security is the duty of the management and is one of the most essential areas of stores management. It covers various areas angles including theft, fraud, stock determination, damage and specific materials for storage constitute money and have been bought to meet certain needs. To ensure those materials satisfy the need for its existence and to avoid unnecessary cash loss arising from losing of materials because of faulty security which therefore affects the profit margin of the organization. When this improvement or development has been achieved, every organization then realize how important it is for an organization or and industry to invest more on security of stores.

This is so for any oriented organization security as one of the most important and necessary aspect or area of store management.

Security of stores on a general aspect covers not only theft and fraud, but. It reaches to the aspect of stock deterioration (loss in value), damage, location and special storage requirements.

An oriented organization will decide to seek the service of professional security outfit that supply a trained team of security guards and other personnel to guard against theft. Alternatively, industry or organization might give this responsibility of store security on an individual stock keeper or manager for the stock held in their charge, as a result of this, many industries or organizations depend this responsibility of store security on stock keeper to control store security.

Store security and its softly is one of the most necessary aspect of concern in stores management as a result of the need to protect and guide the company’s huge investment in stock.

Every goods or product of any company must be valued to the company, if not valued by the company should not have been in stock.

According to Morrison (167:9) if stock is to be adequately safeguarded, it must have to be properly located and arranged in a highly secured buildings or stockyards to which unauthorized person or persons are not allowed to have access into it. Its arrangement and management must be made for the custody of store house keys and security precautions exercised during no-working hours to ensure maximum security to be achieved.

Data (1986:17) states that materials must be properly safeguarded and kept under proper security and vigilance.
However, he pointed out that the effort, time and expenditure of money should be proportionate and relative to the importance of the materials and that cost of security must be commensurate with the benefits which may occur from security measure.

The role of store security is very important which according to carter and price (1993:10) reflects both the value of stock and the roles of its operation within the organization.

They added that if stock is lost and also not recorded stock recoding becomes meaningless and useless as a means of stock control. The calculated level of stock indicated by the stock and will bear no resemblance to the actual stock hold. Operating on production will be highly hampered when stores security functions are not properly and effectively carried out. The basis store security function is that of holding stock, thus the need for proper stock control becomes imperative.

According to Morrison (1987:9) said, that stock control involves activities designed towards the effectives management and control of all inventory items held in stock. The word stock represents a major and important part of the organizational working capital money, therefore, any stock costs because of theft, fraud or damage that they encounter on the process will have to be replaced which will increase the organization costs and reduce its profits. The value of stock cost every year is impossible to calculate, hence the figure must run into billions of naira to which must be added the loss of profits and revenue arising from production hold ups and lost contracts.

To get a good store securities will therefore real definition financial reward for the organization. in occupying out this project therefore, an attempt is being made to pin point the factors that hinder them effectively on store security in UNAMA PAPER MILL NIGERIA LIMITED Ikot Ekpene, Akwa Ibom State. The reason for this is to bring the activities of stores department of this organization in line with their modern system of stores security aimed of rendering active and effective services to the user department and therefore by achieving objectives.

Unama Nigeria Limited was incorporated October, 1982 as a private Limited liability company. The company is located at Ikot Osurua, Ikot Ekpene Aba express way.

The company with indigenous and is owned by numerous shareholders including former easy central states, now made up of Anambra, Imo, Enugu and Ebonyi state. It is unique joint stock company. It has seven men as board of directors. The company is made up of six (6) departments namely;

Administration, Finance, store, production, maintenance and internal audit departments. The company is a paper conversion company engages in printing of toilet roll wrapper, waxing, sheeting of paper and production of toilet roll known as “Unama” in Akwa Ibom native language. The company has progress over the years and has now gone into a programmed of diversification and expansion as a result of research on search and finally settled on paper milling. The paper is ideal as for now; all papers will produce the types of paper available. The paper is known as “bleached Kraft” while other are sourced locally such as toilet roll core, tambourine and printing ink.

The company own numerous machines, which carries out different functions such as printing, machines, cutting machine, waxing machine, sheeting machines, toilet log machines, core machine and sheeting machines.

1.2 Statement of Problem

During this modern period numerous companies or organizations in Nigeria have reported numerous loss of materials through explosive means, fire hazard and avoidable accidents. All these dangers have contributed greatly to the effect of operating in this organization. These numerous negative effect on staffs and the management of this organization. in view of the enormous resources in terms of money and materials, cost in such incidents has been day running of industries.

Specifically, this study will focus on the following.

  1. The problem of security in store management.
  2. The problem of security as per stock yard
  3. Problems of security as per regard to personnel.
  4. How stores security affect the profit of the organization.

1.3 Purpose of the Study

The reasons for the study of security its important, its effects is to identify the stores security existing in the organization and how it concerns the store house method of stores security operation and materials handling.
Also this study will attempt to find out security lopes within the stock yard. It is also the objective of this study is to find out the security needs of the company particularly as it concern materials and personnel in stores.

Furthermore, one of the aim and reason of this study is to realize stores security requirement for finished goods in the warehouses. It will involve goods in the security needs of the company with specific reference to the materials stocked by the company such as inflammable materials, example, fuel, diesel and alcohol. The study will also cover the area of provision of equipment to safe guard materials such as stock document like ledger, stock cards etc.

1.4 Scope of the Study

In this study, the focus was to establish the role of store security in the profitability of and industry or organization for sale guarding materials in the store house. The study talked about the result of stores security towards the role of stores security in the profitability of an organization or an industry for sale-guarding materials in the store house and how stores security should be runed in order to attract profitability of an organization.

1.5 Research Questions

It is necessary to establish some research question that will serve as a guide to the study.
The research questions are:

  1. To what extent does stores security affect the administration of the organization?
  2. To what extent does stores security affect the profitability of the organization?
  3. To what extent does stores personnel activities affect the profitability of the growth of the organization.
  4. To what extent does stores personnel activities affect the growth of the organization.
  5. To what extent does stores management affects the profit making of the organization.

1.6 Significance of the Study

The result of this study may be of use to the following group of people.

  1. The result will help to enable the organization know the importance of store security and how it enhance the profit of the organization.
  2. It will contribute to the profit making of the organization.
  3. Finally, it is expected that the result obtained from this study shall be of great benefit to the government, and to the literature public who may stumble on this work and this would discover how store security enhances profit making organization.
  4. Include that other students and researchers will benefit from it.

This study will help researcher to gain practical knowledge of several problems encountered in stores department to enable then recommend proper solution to the problem and therefore contributes to effective management, supervision and functioning of stores department.

It could also be of benefits to students as a reference materials in learning and acquiring now skills and knowledge of problems and solution of stores security. For future uses. It would also serve as a guide to students in embarking on excursion to. identify strategies from stores security easily. This would help them to be more efficient if employed in stores departments

1.7 Limitation of the Study

One of the major constraints of this study was lack of finance to go around collecting data from the respondents.
Again, it was not possible to go through all the documents concerned because some document were classified as ‘secret document” and therefore were not meant for any other person’s consumptions. The researchers was disappointed to note that the very few books from which to draw references were not discovered.

Include time constraint. This study also suffers from time constraint because the scope of study is very large that if is supposed to take up to one year to conclude. But due to the short time given to us to mount up and submit our project I was constraint by time factor that I could not reach all the sources as earlier proposed for this research, though, it did not affect the proper findings and recommendations I made in this research.

1.8 Definition of Terms

1. Blind Stock Taking:

This is a system whereby the person taking stock is given no prior information about the vocabulary number, descriptions, stock record balances or location of the items he is to check.

2. Security:

Is a process of taking guard against theft burglary, fire incident etc on materials of goods stored in the store house.

3. Stock:

This is the commutation of materials, parts and components kept for future use.

4. Stock-Taking:

This refers to counting weighting or measuring stock to obtain an accurate list of it. It can be done on a periodical or continued basis.

5. Stock-Checking:

This is the physical checking of qualities of materials in regularly or intermittently.

6. Stores:

This is a general team describing goods which are held in store house and stock yard.

7. Inspection:

According to Burton (1973:18) inspection is to carry out all catalogues items of standard and specifications must immediately be available. Therefore, inspection is the examination of incoming or outgoing consignments to ensure required quality.

8. Materials Handling:

This deals with the movement of materials and storage of everything within and around an establishment, including raw materials, component and supporting goods, regardless of shapes, size form, nature or weight.

9. Inventory System:

This is a system of which items are being written down in a particular store or making a complete note of all the lists or items held on store

10. Stock-Yard:

It is usually an open storage areas used for the storing of various non-perishable goods. That is, those materials that will not deteriorate. Or perish when exposed by the elements over long periods of time.

11. Security:

This is a management responsibility and is on the most important aspects of stores management.

12. Security Services:

Is as old as any other services oriented function in organization. therefore, can be defined as a government organization that protects a country and its secrets from enemies.

13. Storekeeper:

This is a person who takes proper of items held in the store in order to maintain proper stock.

14. Specification:

It is a detailed description of how something is, or should be designed or made.

15. Negotiation:

This is legal/formal discussion between people who are trying to reach their agreement;

16. Stock Records:

They are employed to alter the balance of stock by adding stock in the case of deliveries and subtracting in the case of issues.

17. Quality:

Features of something good especially one that makes it different from something else.

18. Fencing:

According to (oxford dictionary) 7th edition. It is the sport sighting with long time sword

19. Fire Extinguisher:

Metal container with water or chemical inside for putting out small fires.

20. Apron:

A piece of clothing worn over the front of the body, from the chest or the waist down and tied around the waist.

21. Head Gear:

Anything worn on the head for protection.

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary

This study was to investigate the role of store security in the profitability of an organization for guarding materials in the storehouse.

A case study of Unama paper mill Nigeria limited in Ikot Osurua, Ikot Ekpene local government area of Akwa Ibom state. The background of the study was looked into, also the relevance of the study and research questions were include.

Questionnaire’s, interviews and observation was used to gather information. Ninety questionnaire were distributed and sixty was returned.

A questionnaire was used for data collection, the instrument was based on a close ended questionnaire and also it is based on a four point, it is like typed scale, the instrument after construction of ascertain for it validity was given to the supervisor for assessment to ensure it content validity.

The age limit of the sample ranged between 18-53 years. The data collected were coded and analysis using population t-test which was tested at 0.05 alpha level.

In chapter four the data collected was presented and analyzed the findings were discussed and in chapter five the work was summarized and concluded recommendation were made

5.2 Findings

From the data analyzed, the following findings were made;

  1. That store security is the direct and included responsibility of all the staff of a company.
  2. That store security is the life wire of every organization or company because it was discovered that is the reserviour of the raw materials used by companies in their production.
  3. The store security guarantees the existence, maintenance, consolidation and effective functioning of companies even when there are stiff oppositions or competitions, because anything that affects it affects the entire company.
  4. That security is more important to store department than any other departments and units in a company.
  5. That the existence of companies is made possible by regular and constant checks, review and conducting inventory of store departments of a company.
  6. That poor management is responsible for companies dysfunctions, insolvent or inability to withstand competition to meet up with market demand of their product.
  7. That it was discovered inadequate store security equipment, gadgets and competent security personnel encourages crime, theft and damages of company materials and thereby makes the company incapable of continues in production or achieve profitability.
  8. That it was discovered that recruitment based on maturity and experiences provide adequate security for store department than recruitment based on academic qualification without previous working experience.
  9. That motivation of staff often encourage efficiency in store security and profitability of company.
  10. That it is discovered none existence of bios and strict application and adherence to rules and regulation of the company helps to promote and sustain store security, the company’s product, personnel’s and profitability. all these findings were made after due analysis.

5.3 Conclusion

Based on the findings, it is realized that store security significantly influence the profitability of the organization. It was also gathered that the store management has an influence on the profitability of the organization.
It was concluded that, stock deterioration fraud, store pilfering and theft really influence the profitability of Unama paper mill Nigeria limited.

5.4 Recommendation

Having critically analyzed the data which I collected during the course of company out it is research project, it is expedient for me to make the following recommendations based on the findings made after the data analysis thus;

  1. That management should educate their staff in store department and other departments to know the sensitive and important nature and role of the store department for the effective functioning of their companies.
  2. The management should device motivational programmes and training that will awaken their conciouse to strive to project at all times the store department because store security prevent dyfunctioning of company and promotes productivity.
  3. That management should place more emphasis on the constant checks review and incensory of the store department to ensure that adequate store of companies in the store department are highly protected and from criminals or act likely to cause dysfunction to the company.
  4. That constant checks will help to prevent theft, negligence and inadequate raw materials for effective production to meet up with market demand.
  5. That management should make constant check compulsory and regular to enable their companies be prepared to withstand stiff opposition and adjust whenever the need arise.
  6. That management of companies should not only concentrate their checks, reviews and control in store department because of its importance to the existence of their companies but they should strive to over hand other departments and its units head to make their leadership or management effective because poor department may prevent the company from withstanding stiff competition.
  7. That adequate security equipment or gadgets necessary to make store security effective and therefore be able to prevent crime in store department.
  8. That where management fail to provide adequate security equipment, gadgets and the right caliber of store officials, such lapses many lead the company to bankruptcy or dysfunction or negligence of duties in the face of stiff competition and high market demand of its product that there is inadequate materials to produce.
  9. That management should employ or recruit officials of the store department on the basis of maturity and experiences gained.
  10. That management of companies should introduce motivational and other incentives to staff to enable them report crimes, provide information and ideas that will help to beat up store security.
  11. That motivation and incentive introduction will go a long way to make all the staff conscious of their personnel contribution to sustain the company and thereby, achieve profitability which is the good of every company in operation.
  12. That management should slum bias in all their decisions.
  13. That management should apply the rules and regulation guiding the operations of various departments and unite of the company strictly to reduce insecurity of the store department and other departments which have different but important roles to play to achieve profitability of their company.

In conclusion, it is my sincere belief that if these recommendations are effectively implemented, store security will lead to profitability of their companies even the most stiff competition.

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