The Effect of Damage Cargo on Market Square Inventory
CHAPTER ONE
Objectives of the Study
This research study has general and specific objectives part. The general objective part will present the overall objective of the study and the specific objective part outlines the list of detailed objectives through which the general objective will be attained.
The general Objective
The general objective of the study is to assess the inventory management practices and challenges being faced by Market Square.
The Specific Objectives
The specific objectives of the research were:
- To identify the main challenges of inventory management in the company;
- To assess the current inventory management practices;
- To identify cargo damage techniques that hinders smooth flow of operation in the company;
- To assess established company manuals, procedures and policy is appropriate for inventories management and;
- To assess whether the company has established controlling mechanisms for identified gaps in inventory management.
CHAPTER TWO
LITERATURE REVIEW
Definition of Inventory
Inventories are materials or resources of any kind having some economic value, either waiting conversion or use in future. Apart from these, there are also many indirect materials, such as maintenance materials, fuels and lubricants, etc. which are used in a manufacturing organization. (Arnold et al., 2008).
Inventories are materials and supplies that business or institutions carries for sale or provide input or supplies to the production process. All a business and institutions requires inventories, often they are substantial part of total assets.
Inventories are stock of materials of any kind stored for future use, mainly in production process. (Donald J. and David J.) Inventories are materials of any kind having some economic value, either waiting conversation or use in future. There are also many indirect materials, such as maintenance materials (spare parts),fuels and lubricants, etc,,which are used in a manufacturing organization. They are also classified as inventories of materials for future use but they differ only in their use and classification from raw and other direct materials.(A.K Datta,2003)
Inventory management
Inventory management is the process of efficiently overseeing the constant flow of units into and out of an existing inventory. This process usually involves controlling the transfer of units in order to prevent the inventory from becoming too high, or dwindling to level that could put operations of the company in to jeopardy. It is the integrated process that operationalizes the firm’s and the value chain’s inventory policy.
Inventory management is defined as a framework employed in firms in controlling its interest in inventory. It includes the recording and observing of stock level, estimating future request, and setting on when and how to arrange. (Stevenson etal., 2010 )
Every organization, big or small, depends on materials and services from other organizations to varying extents. These materials and services are obtained through exchange of money. The various materials used as inputs, such as raw materials, consumables and spares, are required to be purchased & made available to the shops /users as and when needed to ensure uninterrupted production (Donald J. and DavidJ. 2000).
Inventory management is vital for the successful operation of most organizations due to the cost inventory represents. Effective management of inventory is a major concern for firms in all industries.(Mentzer etal.,2007)
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
Research Design
There are three types of research design Exploratory, Descriptive and Causal. So, the descriptive type of research design was used in the study in order to assess the inventory management practice and challenges that affect performance of APF. A descriptive method of research approach was also used to assess whether the theoretical aspects concerning inventory management are followed or not and helps to clearly describe relevant aspects of phenomenon about individual, group or situation.
Population and sample size
The total population of the study comprises staff of planning and warehousing, finance department and procurement departments those who have relevance in the inventory
management directly or indirectly. Except few clerks the entire stuffs in the three departments are minimum BA degree holders thus it helps to get relevant data in the course of study. The total number of the staff is 85 including department managers and DGM commercial. Thus, the number of the population is manageable in executing census study, the researcher was include the whole population and considered all were fill and return back the questionnaires. As far as the employees of the enterprise are concerned, only the managers of the three departments and the DGM commercial were interviewed to collect first hand data.
CHAPTER FOUR
RESULTS AND DISCUSSION
Demographic and personal profile of respondents
A total of 85 staffs which were present in AFPIV office were participated in the survey during the study period. Thus, the overall information about the office based on the questionnaire was as in the table below.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
Summery of findings
Based on the analysis results, findings of the study is summarized as follows,
The result shows that most of the respondents were male so we can say in the office most of staffs are male. In case of the job classification, 72.9% is permanent whereas the remaining is contract. Hence the company can manage the employee idle time and reduce other employee related costs. And most of the respondents are male hence the company has to work to increase the women participation through women empowerment.
From the total respondents 38 (44.7%) of them were at first degree graduate. It shows the department has skilled man power. As the result shows the department (material planning and warehousing) is mostly employing people who graduate first degree. And also much of the respondents 42 (49.4%) were at experience of 6 up to 10 years. It shows us about 80% of the employees have more than 5years work experience. Moreover, about 44.7%of them are 1st degree holders and most of the respondents were at the position of officer which were at the percentage of 87.1 and the other were at division manager, line managers and top managers.
In cumulative the department has skilled manpower hence they can contribute better performance to the department.
In regard to functional structure, the result during the study shows Market Square has a separate materials/inventory management function. So, the office have separate department titled Material planning and warehousing department.
Regarding workable operating system of the function, the result says above half of the respondents has agree and 28.2% of them are normal on it even though 28.2% of them were not agree and2.4% of them are strongly disagree.
The results on coherent communication between the divisions under material planning and warehousing says that 57.6% of the respondents were agree on it .And except few majority of them were agreed on it.
Findings shows that, Market Square materials management function has workable organizational structure. And the department has integrated inventory and storage policy as well. So, based on the respondent’s view, we can say that the department has operating system for their practice even though there were deficiencies and challenges of operations. In addition to hard document they use mini-software to track and control stocks.
But in general, the company used different package software’s in different departments. Like in Finance they use Peachtree, in MP and WH, marketing, QA/QC, production they use different customized software. In organizational level, there is no integrated package like ERP supports. ERP (Enterprise resource planning) it is the integrated management of main business process supported by software which is installed company wise. And the whole process of the company will be integrated, and it ease the organizational operating system adds efficiency in every level of operation.
From the result of the analysis reorder- level of the function has controlled in line with each physical inventory. And it implements more than one inventory classification techniques.
Conclusion
Inventories play an important role in any type of organization and it hold significant amount of the organization’s working capital. Since Market Square is pharmaceutical manufacturing firm, it stores different types of inventory (Raw material, packing material, work-in-process, finished products, repair and maintenance parts, etc…) In its operation. Thus effective and efficient inventory management practices can aid a competitive advantage through providing optimum working capital utilization and cost efficiency.
The study can be concluded that Market Square is good at managing their inventory since they have separate function supported by two divisions and with workable organizational structure. This was predicted in their higher means of efficiency levels in inventory management and their widely application of theories of inventory management in their operations. The study revealed that this manufacturing organization has integrated inventory and storage policy and good operating system. In addition to hard document they use mini software to track and recording stocks.
But in company wise, they use different software packages in different departments. In Finance department, they use Peachtree software, in MP and WH, Marketing, QA/QC, and production they use different customized software’s. In organizational level, there is no integrated package like ERP (Enterprise Resource Planning) it is the integrated management of main business process supported by software which is installed company wise. And whole process of the company will be integrated and ease the organizational operating system and adds efficiency at company level.
Recommendations
Based on the above conclusion, the following recommendations are forwarded:
- The study revealed that Market Square is good at managing their inventory since they have separate function supported by two divisions and with workable organizational structure. This was predicted in their higher means of efficiency levels in inventory management and their widely application of theories of inventory management intheir Besides the company has integrated inventory and storage policy and good operating system. But hence different software packages are used in different departments that couldn’t gain the highest efficiency in their operation. Thus standing from the study integrated software package (ERP) is recommended so as to improve its efficiency.
- The company uses different inventory classification system to control major raw and packing materials. Besides packaging size and adopted minimum order quantity of pertinentsuppliers in its inventory But minor input materials like colorants are being out of the frame of the inventory policy. And in the long run it creates deficiency thus the researcher recommends each input materials to incorporate in the classification system and EOQ determination.
- Effective and efficient storage procedures have positive effect on inventory management. And the materials in the company are strategically coded according to the classes the material belongs would in hence inventory management at Market Square. Thus the researcher recommends that improvement on communication withconcerned bodies that can facilitate timely disposal of damage and dead materials from the warehouse.
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