The Significance Of Stock Control To Efficient Operational Activity Of Business Organization (A Case Study Of Nigerian Bottling Company Plc Ilorin)

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The Significance Of Stock Control To Efficient Operational Activity Of Business Organization (A Case Study Of Nigerian Bottling Company Plc Ilorin)


This project work will examine the significance of stock control on the smooth operational activities of manufacturing organization “a case study of Nigeria bottling company (NBC) Ilorin.”

The relevance of stock control on the smooth operational activities of manufacturing organization cannot be over emphasized. Therefore, there is the need to have in place come necessary methods to ensure that the investment of the organization on material or stock is within the reasonable unit while ensuring steady flow of necessary material to meet the needs of the operation.

In order to ensure effective analysis of the research project, the project work will be segmented into five chapters.

  • Chapter one will contain the general introduction, historical background of the case study, statement of the problems, objectives of the study, significance of the study, scope of the study, limitation and constraints of the study, hypothesis formulation, definition of terms.
  • Chapter two will focus on literature review.
  • Chapter three will contain research methodology, research approach, data collection instrument, sources of data, administration of data research population and sample size, sampling procedure employed and method of data analysis.
  • Chapter four, will highlight the presentation and analysis of data, test of hypothesis.
  • Chapter five, will consist of summary findings, conclusion, recommendations and references.

Chapter One

1.0 Introduction

1.1 Background of the Study

In recent time, stock control has been an important area in manufacturing organization. Both private and public sector make use of stock control for proper record of stock held in store.

The store as set up in any organization to assist in the production of goods and services. The primary objectives of stock is to provide services to the operating department in an organization. These function include maintenance of a balanced flow of material components tools in order to meet operational requirement to receive and issue work in progress, finished products accept stock scraps and other discarded materials.

Going by the above, there is need for strict stock control to ensure that the physical goods held in store house and stock yards for which proper records are kept.

It is important to note that stock in any organization has financial implication, because materials held in store represents money (i.e material is money). Almost large proportion that make up organization is capital went on materials. Therefore proper control is essential in an organization.

Moreover, the store manager must adopt modern stock control methods for effective operation of the store house.

1.2 Historical background of Nigerian bottling company.

The Nigeria bottling company came into existence on may 8th 1886, when the late A.G Leventis founded the company. It was the first in this country to be offered franchised by an international soft drink firm from a humble beginning as a family business, the company has grown to become a predominant bottles of non alchoholic beverages in Nigeria.

The first plant which was sited in lagos state went into operation in march 1953. Coke was the first soft drink to have its own designed shaped bottles, wjich was different from the common trade bottles. In 1972.

Some years after, the Ibadan plant was opened but later shutdown due to non availability of good water in Ibadan metropolis. Ilorin plant was mainly established to meet the needs of the people in Bida, Jebba, Ogbomosho, Okene, Oshogbo,Kontagura, Ijagbo, Offa, Lokoja and Ilorin metropolis.

The Ilorin plant has 8 managers.

The range of soft drink bottled by Nigerian bottling company plc (NBC), Ilorin plant produces the following soft drinks: Fanta orange, coke, sprite, Krest, bitter lemon, ginger Ale and Eva water. In terms of sales the company enjoys a wide acceptance of its products ranking Nigeria bottling company plc, as a whole. Its acceptance is higly appreciated.

The company presently has (13) bottling facilities and over 80 distribution warehouses located across the country. Since production started, Nigerian bottling company plc, has remained the largest bottler of non-alcoholic beverage in the bottles sold per year is 1.8 billion sales volume

1.3 Statement of the problems

There are some problems being encountered by the organization under study in the area of stock control activities. No matter how efficient an organization is, obviously, it will still be faced with one problem or the other while performing stock control function.

One of the problem is that some unit of stock are held in excess of immediate release as a result of poor stock control system.

Poor store arrangement owing to poor stock control and this can hinder free movement of personnel and material from one place to another.

Another problem is lack of adequate storage facility and material handling equipments.

Also modern stock control methods has not been adopted into the store operation of the organization.

1.4 Aims and objectives of the study

This research work was written in partial fulfillment of the requirement for the award of higher national diploma (HND) certificate in purchasing and supply awarded by department of purchasing and supply, institute of finance and management study, Kwara state polytechnic Ilorin.

In addition, the research work was conducted to enable the researcher to have a comprehensive knowledge on stock control as it affects the store operation of manufacturing organization.

1.5 The significance of the study

Apart from the specific relevance of this project work to Nigeria bottling company plc. This research work will also be relevant to other manufacturing organization.

It will enable them to understand the importance of stock control on the smooth operational activities of manufacturing organization.

The project work, will serve as a good reference point to student of purchasing and supply and students of other related discipline as well as future researcher, writing on a similar topic.

1.6 Scope of the Study

The scope of the study centers on stock control as one of the vital aspects of the store operation. It will be concerned with methods of stock control such as the stock levels, imprest control system, bin card, two bin systems and one for one etc.

The research study will be limited to Nigeria bottling company plc. Ilorin having to certain limitation.

1.7 Limitation and Constraint of the Study.

The researcher faced a lot of problems most especially the uncorporate attitude of the company’s staff.

  1. Little response from the staff and management of Nigerian bottling company. Staff and management of the company under study were unwilling to release the information required due to the nature of the information.
  2. Scanty Statistics:- The basic statistics that form the bedrock of research are often not available. Where available they are by no means reliable. In African, many key decision were known to have been made without the necessary data to supply the conclusion.
  3. Time Factor:- The time available to the researcher for writing and submission of the research study was too short for an intensive study on the subject matter.

1.8 Research Hypothesis

Hypotheses are drawn to serve as a guide in the process of writing a project work. It is also a conjunction of statement between two or more variables.

Two type of hypotheses will be adopted for the purpose of this research work. They are as follows:-

  • H0 — null hypothesis
  • H1 —- working hypothesis

These were explained below:-

  1. H0: stock control function do not have significant effect on the operational activities of manufacturing company.
    H1 stock control function has significant effect on the smooth operational activities of manufacturing company.
  2. H0:- stock control is not significant to efficient operational activities of business organization.
    H1:- stock controls field is significant to the effective operation of all activities of business organization.

1.9 Definitions of Key Terms

1. Store:

This can be define as any space reserved and equipped for holding stocks, waiting for dispatch to consumers and for further processing or for future uses.

2. Stock:

These are the physical goods held in the store house and stock yards for which proper records are kept.

3. Storage:

This is the act of holding and protecting stock in anticipation of some future requirements or for future uses.

4. Stock Records:

These are document which gives detailed information of receipts issue and balance of stock from day to day.

5. Stock Taking:

This is described as the complete process of verifying the quantity balance of the entire range of items held in store.

6. Inspection:

This refers to the total verification of all incoming materials to ensure their conformity with the specific quality and quantity required.

7. Stock Checking:

This refers to the physical check in quantity and the determination of the counting of items in the store.

8. Issue:

This refers to the act of giving out material to an authorized person or department with appropriate records.

9. Receipts:

This is the process of accepting from all sources o all material and parts which are used in the organizations.

10. Stock Level:

The basic method of controlling stock by quantity is by means of fixing for each commodity. Stock level is u7sed as a means of indicating when some action is necessary.

11. Maximum Stock Level:

This is the level above which stock should not normally be allowed to rise.

12 Minimum Stock Level:

This is the level below which stock should not normally be allowed to fall.

13. Re Order Level:

This is the point between the maximum and the minimum stock level at which time is essential to initiate purchase requisition for fresh supplies of materials.

Chapter Five

5.0 Summary of Findings, Conclusion and Recommendation

5.1 Summary of Findings

In course of the study, researcher came up with several observations among which are the followings:

  1. Through the data collected in course of investigation, store department was seen as being vital to the corporate existence of the concept.
  2. Investigation conducted further revealed that store department was the custodian of raw materials, work-in-progress and finished products.
  3. The researcher discovered that the store control function is significant to effective operational activities of business organization.
  4. It was confirmed from the study conducted that stores department is the sole department that receives blame whenever shortages of material occurs.
  5. It was also revealed in the course of study, that the company under study employed lower qualification than higher degree holder.
  6. It was also observed in the course of study that there is no cordial relationship between the store department and other departments.

5.2 Recommendations

The researcher would like to recommend the following in order to improve the stock control function of the organization under study:

  1. Effective training and development programme for all the store staff or stock control staff to be able to meet up with modern challenges demand by the job.
  2. Putting the store control system in operation the company.
  3. Should be subject to constant review in changing situation.
  4. There should be effective communication flow system between the store and other department for mutual understanding and co-operation.
  5. The organization should employ professionals into store department, so that control of stock will be effective and efficient.
  6. Storage of materials should safe and adequate to provide for frequent turnover of stock and quality maximize organization’s returns.
  7. The organization should adopt modern stock control by introducing computer system to ease stock records, and stock taking system.
  8. Inspection of every delivery at the receiving bay before taking it to store house, and also be sure that they meet up with specification.

Therefore, the researcher recommends that there should be safety of technically sound of all materials, physical storage and proper control of stocks, components, work-in-progress, maintenance, repairs and semi-finished materials.

5.3 Conclusion

The significance of stock control to efficient operational activities of business organization is the subject matter of this study had not been given proper recognition in most organization. Stock control, if proper care is taken, it contributes to success of both profit and non-profit organization. If it’s not properly taken care in any organization, that organization will experience set-back of lack of proper control of stock. The store function in making organization such organization has had to pay heavily the negligence.

The functions of stock control is more than just keeping materials in the store house, but it involved a wide range of activities and responsibility that has to be performed at various stages of the store operation which will be directed towards efficiency and profitability of the organization.

For the survival of any organization, there must be constant supplies of raw materials with adequate control in order to achieve the laid down objective of the organization. The control aspect should start from when materials are received, to the time they are issued out to authorized users. In order to ensure that proper stock control is effective, the person in-charge of stock control must have knowledge about the job and must be a professional in that field in order to implement stock control procedures adequately.

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