Stock Control; A Management Tool For Efficient Stores Operation In A Manufacturing Company (A Case Of Unilever Plc, Aba)

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Stock Control; A Management Tool For Efficient Stores Operation In A Manufacturing Company (A Case Of Unilever Plc, Aba)


Stock control had been a neglected function a manufacturing companies due to lack of professionals in the field who are capable of carrying out a good stock control system. This work titled stock control a management too for efficient stores operations in a manufacturing company shows that stock control when properly handled will contribute to the profitability of the organization.

The major aim here is to ensure a continuous and unintended flow of material a manufacturing company regarding efficiency in stores operation in order to achieve this, this work is divided into five chapters. The first chapter has the introduction followed by the background of the study, statement of problem objectives of the study, significance of the study, research questions, and statement of hypothesis, scope of the study, limitation of the study and definition of terms.

The second chapter talks about the review from contemporary literatures which encompasses the need for stock control, reasons for holding stock factors attesting the level of stock held cost associated with stock control, economic order quantity E.O.Q. ABC analysis, provision etc. The third chapter drivels on research design and methodology the fourth chapter drivels on presentation and analysis of data, test of hypothesis and interpretation of results. The fifth chapter encompasses the summary conclusion and recommendation from the work and the reference.

Table Of Contents

Preliminary Page(s)

  • Title
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content

Chapter One

1.0 Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of Problem
  • 1.3 Objectives of Study
  • 1.4 Significance of the Study
  • 1.5 Research Questions
  • 1.6 Statement of Hypothesis
  • 1.7 Scope the Study
  • 1.8 Limitation of the Study
  • 1.9 Definitions of Terms

Chapter Two

2.0 Literature Review

  • 2.1 Meaning of Stock Control
  • 2.2 Objectives of Stock Control
  • 2.3 Reasons for Holding Stock in an Organization
  • 2.4 Factors Affecting the Level of Stock Held
  • 2.5 Stocks Control by Value and Quality
  • 2.5.1 Stock control Information sources
  • 2.6 Cost Associated with stock control (Inventory)
  • 2.6.1 Effects of inefficient stock control
  • 2.7 Stock level policy and techniques
  • 2.7.1 Economic order quantity (EOQ) Policy/techniques
  • 2.7.2 ABC/Pareto’s theory or analysis
  • 2.7.3 Fixed Review period method
  • 2.7.4 Fixed re-order point method
  • 2.8 Provisioning
  • 2.8.1 Methods of provisioning
  • 2.9 Benefits of stock control

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 The Research Design
  • 3.3 Sources and Method of Data Collection
  • 3.4 Population and Sample Size
  • 3.5 Sample Techniques and Selected Respondents
  • 3.5.1 Other Techniques Used
  • 3.6 Validity and Reliability of Measuring Instruments
  • 3.7 Data Analysis Method

Chapter Four

4.0 Data Presentation, Analysis and Interpretation

  • 4.1 Introduction
  • 4.2 Data Presentation
  • 4.3 Analysis of Data
  • 4.4 Test of Hypothesis II
  • 4.5 Discussion of Findings

Chapter Five

5.0 Summary, Recommendation and Conclusion

  • 5.1 Introduction
  • 5.2 Summary
  • 5.3 Conclusion
  • 5.4 Recommendations
  • References
  • Appendix
  • Questionnaire

Chapter One

1.0 Introduction

Effective and Efficient store operation is very closely liked with production and distribution it is a much neglected area of business studies. Yet the store function is a vital part of all industrial organization, public and private utility organization Federal state and local government organization and armed services it must be designed to suit a particular need of the organization it serves.

Having defined a stocks as any space reserved and equipped for holding materials which are awaiting dispatch to customer for further processing or final consumption in most organization, store is a place where all types equipped for holding materials which are awaiting dispatch to customer for further processing or final consumption.

In most organization, store is a place where all types of equipment materials components and supplier needed for production distribute and maintenance, package etc Components distribution, maintenance, packaging etc are received stored and issued to users. A stock control system to be adopted in order to ensure effective and efficient store operation

In today’s business with competitive market, unstable economic condition, controlling cost means the difference between profit and loss. The overall business objective is to maximize profit margin and minimize cost of production and manufacturing. This has led many executives to taking steps in all aspect of their business to reduce cost of materials and stock from a major part of the total investment of an organization.

This is mainly due to the fact that no matter the type of business an organization engages into, whether merchandizing or manufacturing, there must be clearly stock of materials to keep the enterprises going. A manufacturing company form stance cannot exist without raw materials, purchased parts, intermediate parts, sub-assemblies and finished goods ready for shipment.

STOCK control concerns not only individual businesses but affect the economy of the nation holding stock waiting for a time when they would be used in production or manufacturing. As said earlier, it does not immobilize the capital resources, but could generate inventory. Inventory arising from reduction in stock due to reduction in sale could stir up a long chain of reaction affecting the while system. Effective stock control therefore does not only help the enterprises per say, it also influence the whole profitability of the manufacturing company and as well assist in nation’s economic development.

I have made some attempt in delving into books and research work done by others to get information on areas the stock controller or manager as the case may be, should be vigilant to effectively use stock control as a management tool for effective and efficient store operation.

The first chapter of this work starts with the introduction after which a brief background of the study, a brief statement of problems, objective of the study, significance of the study, research questions, a clear statement of hypothesis, scope of the study, limitation of the study and as well as the definition of terms.

The chapter two draws ideas from the works of other researchers in the same issue and this is known as literature review.

The chapter three discusses the research methodology, sources and method of data collection, population and sample size, the validity and reliability of measuring instrument and data analysis method.

Chapter four talks about the presentation and analysis of data analysis of data, analysis of data, the test of hypothesis and interpretation of result

Chapter five talks about the summary, conclusion and recommendation made to the work and finally the bibliography. All theses are intends to be carried out by the researcher in this work.

1.1 Background Of The Study

The background of the study is obtained from Unilever Nigeria plc, Aba. This company was known as lever brothers but was later changed to Unilever Nigeria plc. This company is scattered all the Africa continents and beyond. The company is located at No. 2 industrial road Aba. According to Unilever safety employee introduction handbook it was developed in 1958 from a green field site that cover 9.86 hectares of land.

The factory commences operation that same year with the production of hand soap. Consequently, the Aba none soap detergent (NSD) plan was completed with the production of first suit produced in December 1979. It was also extended to existing facilities including workshops, staff canteen and offices.

In 1980, the factory was commissioned with a pomp and pageantry by the formal vice president Dr. Flex Ekwueme and in 1982, another soap making plan was commissioned to replace the batch production that existed hitherto and since then, the company has been growing on the fast lane due to the high demand of its product in the market.

1.2 Statement Of Problem

The need for stock control in the contribution to effective and efficient store operation cannot be swept under the carpet.

As mention earlier, stock comprises of raw materials components, sub-assemblies consumable stores, general stores, maintenance materials and spares, work in progress and finished or saleable products. All these items are controlled and managed effectively through the use of stock control as a tool. This therefore, raises very big problems that this work is intended to peer into.

The problems include identifying the essential issues involved in stock control, how stock control can be made to work out in an organization, what the monetary contribution of stock control really is, how to avoid obsolete redundant and surplus stock even stock out and then how it can be used as a tool in attaining the organization objectives. These issues and many more other issues are what I intend to find solution to during the course of this study. These may be categorized thus:

Maintenance Problems

What are the things needed to make stock control work out? What and which type of stock control technique is best suited for a particular industry.

Inherent Problem

How can obsolete, redundant and surplus stock be avoided, if they can be dealt with? Other problems that are might arise from excessive stock include:

  1. Absorption of capital which would have been utilized in other ventures.
  2. Taking up the whole space in the warehouse or store.
  3. Determinations of obsolesces.
  4. Interruption in production and sales.

1.3 Objective Of The Study

The research project seeks to achieve the following objectives:

  1. To find out whether stock control could help in business survival.
  2. To find out the modalities adopted by organization in achieving its goals.
  3. To find out the solution as to what to do if the organization is not able to apply stock control method for effective and efficient store control methods for effective and efficient store operations.
  4. To find out the adverse effect of non-application of stock control techniques in an organization.
  5. To find out the information and advantages of stock control in attainment of organizational objectives.
  6. To determine the various ways by which stock control can be carried out in the attainment organizational objectives.
  7. To find out the various ways, methods and system by which stock control be used as a tool for effective and efficient stores operation

1.4 Significance Of The Study

A naira in the bank is worth two in the inventory and it usually cost more to stock too little than it does to stock too much. Stock control is an important expressive activity which often neglected and in directed in many organization both in the public and private sectors.

It is an area where modern stores management techniques could be used to advantages in reducing cost and ensuring increased profit ability for an organization.

In modern supply management, stock control is the real control function; it encompasses all the basic aims of the store operation.

The basic aims of the store control is quite simple, the basic concept of stock control is quite simple, the right material in the right quality, of the right quantity, at the right time to the right place and to the right price. The element of the cost in relation to stock control also plays a vital role.

Stock controls supply a constant flow of materials to the operation. It ensures correct quantity of stock required. Stock control ensures that the goods require for the different operation are made available at the point of consumption. It also supply information for control at production and control rotation. Stock rotation is the process of making sure that materials are used in the correct order and in accordance with shelf-life–by date;

The importance of this stock control has led the researcher to doing some work in the topic the study will enable not only those in a more organized business environment but also the small enterprise with little or no skill in the area of inventory control and management to enable them understand the contribution of inventory in achieving organizational objectives.

1.5 Research Questions

The purpose of these questions is to focus the study well and direct the researcher in what data to look for. The following questions have been recessed by the course of the study such questions are;

  1. Dose a good stock control system contribute to the profitability of the organization?
  2. Can stock control as a management tool ensure efficiency in store operation?
  3. Is stock control essential for efficient accounting system especially for material aspect of cost accounting?
  4. Does stock control eliminates duplication in ordering and encourages better utilization of availability of materials?

1.6 Statement Of Hypothesis

This is a decorative statement which gives every event a fair and equal chance of occurring. It is a conjectural proposition which needs to be tested before an influence can be drawn Ahukan and Ugorji{2008;162}.

The following hypothesis will be tested in the course of this study. The null hypothesis (hi) the null hypothesis is described as the negative assumption of the project while the attentive hypotheses denote the positive assumption of the result like.

Hypothesis 1
  • Ho: Stock control does not contribute to the profit of the organization.
  • Hi: Stock Control contributes to the profit of the organization.
Hypothesis II
  • Ho: Stock control as a management tool does not ensure efficiency in stores operation in a manufacturing company.
  • Hi: Stock control as a management tool ensures efficiency in stores operation in a manufacturing company.

1.7 Scope Of The Study

The scope of the study embraces all activities of the stock controller in an organization.
Furthermore, this research work will cover the areas on how stock control system will be used in Nigeria to help the industries and manufacturing companies achieve their objective. It will also focus on ensuring that stock control is used as a management tool for efficient stores operation in a manufacturing company.

1.8 Limitations Of The Study

So many factors militate against the researcher not being able to carry out fully the research work on the subject as it should be done. These factors include;


The time allowed for this work was considerably too short to enable him cover the necessary area.

Financial Constraint:

Additionally, the researcher encountered a financial constraint. The finance requires to carry out the research work in some areas of the state was not enough making it uneasy for the researcher to accomplish much.

There is also the reluctance of some organization to disclose some vital information concerning their firms, all these contributed to a great extent to the inability of the researcher to carryout the study on the project.

1.9 Definition Of Terms

Contain terms are associate with a good stock control system such terms include;


This refers to the building set aside for keeping material regarding its safety.


This refers to the time internal between when an order is placed and period of receipt of the order.


This refers to the semi-finished goods. It is obtainable in a situation where a balance flow of production is not possible.

Ran Materials:

This has to do with those items which are transformed into finished goods.
Stock: These are items held in the stores.


This has to do with a term which Americans used for stock that are kept or stored for use as the need arises.


This refers to the left over of stock which cannot be used immediately in the operation.


This refers to the unwanted materials that are out of use in the store


This is the act of worsening the situation of the goods items in the store.

Chapter Three

5.0 Summary, Conclusion And Recommendations

5.1 Introduction

A Naira in the bank is worth two in the inventory and it usually cost more to stock too little them it does to stock too much. Stock control is an important and expensive activity which is often neglected and under rated in many organizations, both in the public and private sectors. It is an area where modern stores management techniques could be used to advantage in reducing cost and ensuring increased profitability for an organization.

Production operations will highly be hampered if the stores functions are not properly and effectively carried out. The basic functions of stores are that of holding stock, thus, the need for proper stock control becomes imperatives.
So far, this work has been able to identify the problems associated with not applying stock control technique in a manufacturing company. It is also the intension of this work to make some recommendations to enable firm stock control efficient stores operation.

5.2 Summary

Stock control is a system of continuously arranging flows of materials so that stock balances are adequate to support the current rate of consumption, with due regard to economy. It comprises of the arrangement of raw materials and components work in progress, suppliers, parts and finished products.

It involves the means by which materials of the correct quantity and quality is made available as and when required with due regard to economy in storage and ordering cost, purchase prices and working capital.

The various techniques and method used in arriving at a good stock control system are fixed order quantity system, periodic review system, and Economic Order Quantity (E.O.Q) and ABC or praetor analysis.

Bufa stocks are those stocks that represent insurance risk of running out of stock. A good stock control system is very important to any organization that holds stock, whether in the public or private sector.

5.3 Conclusion

From the finding so far, this work recognize stock control a a management tool for efficient stores operation in a manufacturing company. This would be possible, it professional in the field are absorbed into the company.

Furthermore, having known that a good stock control system has a great effects on the profitability of the organization, it will make the manufacturing companies to put in more effort in ensuring that efficient stores operations and profit maximization is highly achieve by the help of stock control as a management tool. All these will better the economy of the company and the nation at large.

5.4 Recommendation

The researcher made some recommendation from this project work while may be useful in ensuring efficient store operation. These include:

  1. Ensuring that professional in the field are employed to handle the job, even in the case where the enterprise is a small one, and if they cannot maintain professionals, they could arrange for their existing state courses that will expose them to the entire job required.
  2. They should attend composure organized by National Institute of purchasing and supply management. This will keep them abreast with current development in the field.
  3. Adequate provision of storage facilities for efficient stores operation. There should be good materials handling equipment like cranes in the case of big organization and shelves to make for proper arrangement of stock in the stores.
  4. It is essential to introduce material request firms, bin cards for keeping record of stock taking and workers should be given incentives like better welfare services and a good pay packages. This is because stock control cannot achieve its purpose without the instrument of human. If those are applied, the workers will give in their best and this will result to efficient stores operation in a manufacturing company

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