Assessing the Impact of Information Technology on Inventory Control in Oil and Gas Sectors (A Case Study of Kaduna Refining and Petrochemical Company)
Chapter One
OBJECTIVES OF STUDY
The study is aimed at realizing the following objectives:
- Real-sizing the impact of information technology on inventory control in KRPC
- To know the importance of information technology organizational performance as a whole.
- To provide useful recommendations where necessary to where the study is related.
- To give other and future researchers to improve where this present research stops.
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
The American institute of accountants defines the term inventory as “the aggregate of those items of tangible properties which are held on sales in the ordinary cause of business, are in process of production for such sales or are to be currently consumed in the production of goods or services to be available for sale”.
Inventory according to B.T. Iornum(2007) can be defined as “the means by which inventory of current quantity and quality is made available as and when required, with due regard to economy in storage and ordering cost purchase price and working capital”.
- B. chase teals defines inventory as the stock of any material items or resource used in an organization inventory system is the set of policies and controls that monitor levels of inventory and determine what levels should be maintained when stock should be replenished, and how large order s should be.
Also, inventory involves the following processes.
- Assessment of item to be held in stock.
- Determine the exist of stock from the storehouse level.
- Regulating the input of stock from the storehouse.
- Regulating the issues of stock from the store house.
METHODS OF INVENTORY CONTROL.
The term “stock taking” is the complete process of verifying the quantity balance of the entire range of items held in stock, while “stock checks” as any other check, is the physical rate quantities which may be applied either regularly, intermittently or quarterly.
According to Burbridge J.L inventory represent stock and cash. Invariable they should be looked after carefully, it then follows that these inventories should be carefully protected, counted and checked in a similar or proper way. However, there are many oil and gas sectors, where the arrangement display is looseness in the system which should be tolerated in controlling inventories.
Several different approaches have been developed to handle that problem. The more common general ones will be discussed here. However, there are many variation on these, and you should keep in mind that each company sector or organization will have its own system for controlling inventory.
ABC CLASSIFICATION: – as it turns out, companies often need not keep extremely accurate track of all inventory items. For instance certain parts may have a relatively low value and be used infrequently: those items can often be monitored very loosely. On the other hand, high – value, high – usage must be tracked carefully and continuously.
To determine which inventory items should reeve the highest level of control, a scheme has bee n developed called ABC analysis. The idea behind this scheme is that if we multiply the naira value of each by its annual usage we will obtain its naira usage value. As it turns out naira usage follows the praetor principle and only 20 percent of all the items account for 80 percent of the total naira usage. While the remaining 80 percent of the items account for only 20 percent of the dollar usage. This leads to the ABC classification, based on the idea of focusing our efforts where the pay off is highest.
CHAPTER THREE
RESEARCH METHODOLOGY
This chapter deals with the methods or the producers which the researcher employed in the collection of necessary and information for the project work. A research of this kind demands that the research method be relevant and applicable to the study. This is necessary since the finding of the research depends on the quantity and quality of the information gathered.
RESEARCH DESIGN
A research design specifies the frame work on which the project is based, it makes sure that the required data is collected accurately.
RESEARCH POPULATRION
This refers to the overall coverage of the research work in terms of who to be surveyed.
The population of this research work was drawn from the workforce of Kaduna refinery and petrochemical company limited, Kaduna plant. The researcher decided to use population which comprise of all the sections under material management such as purchasing, store, production department central store, trafficking etc. the total number of staff in material department are 450 staff.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
DATA PRESENTATION
This chapter deals with presentation and analysis of data. This section is concerned with the tabulation of data collected from the management of Kaduna refining and petrochemical company limited.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
SUMMARY OF FINDING
The aim of this research is not only to burden the researcher knowledge and acquaints the student with practical aspects of the subject matter but also to highlight weakness in the present system of inventory control in the organisation and to suggest an improvement in the quality of performance.
In the cause of this work, the researcher discovered the following:
- It was observed that inventory control was established since the inception of the organization, hence the company has been doing well for years it is therefore right to say that the inventory has been fairly managed too.
- It was also observed that some staff does not have inventory control formal training. Training of staff is of vital importance to enhance efficiency in the organisation.
- Information technology enhances the use of computer for the purpose of stock taking and stock recording should be encourage in all the department
- The flow system of materials in and out of the inventory houses which could have save time, reduce doubt handling are not in existence.
- The inventory handed are not well ventilated and this had led to the deterioration of some items or materials are not well stocked and some materials are found on the bare floor which has result in deterioration of stock damage and theft.
- There are deterioration know proper stock location system for some materials even though there is a fixed location system; unevaluated materials are in some cases stocked together and this has made identification very difficult if not impossible
- All inventory book and forms are well maintained as directed in stored regulations which is consistent with the existing knowledge and views. Workers are not trained in the fire fighting some of them do not know what to do in case of fir out break
CONCLUSION
- Based on the analysis and discussion of the result obtained, it can be conducted that: the performance of inventory control in the organisation is favourable
- On the average, inventory control operation in KRPC is encouraging, poor management control is the most important factor that renders the control of inventory inefficient
RECOMMENDATIONS
- There should be adequate provision of storage equipment such as hand glove protection, over roll etc. to improve the condition on the materials store
- There system of stocking unrelated materials on items together in a particular store, should be discouraged for easy identification
- Adequate provision of funds should be made for the required materials, so as to avoid a run out of essential items
- The present quarterly stock taking should be supplemented with snap check to be carried out by the inventory officers in charge of each inventory houses. This will keep the inventory keepers at alert all the time and more committed to their jobs. In addition it helps to minimize shortage and surpluses.
- The present training of staff in the higher institution of learning should be supplemented with on the training job rotation system and attendance to seminars. This will help to enhance commitment and motivation to jobs especially by less educated staff working in the inventory house.
- Should be borne in mind that the cost to be involved in implementing these recommendations will on the long run be offset by efficiency resulting from better performance of duties.
- The above recommendation if implemented will go a long way in reducing the inventory control problem of the organization.
REFERENCES
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- Cook, R. (2002): Introduction to Management Science, 2nd edition prentice Hall international Inc. Englewood Cliffs.
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