Importance of Effective Stock Control in an Organization
CHAPTER ONE
Objective Of The Study
Stocks form up to 60% of the total resources of an organization. Since the need for proper importance of effective stock control over the years, importance of effective stock control have advance greatly and the use of the most up-to-date, time and cost savings procedure will go long way in enhancing stores service. Specifically, the researcher has the following aims:
- To determine the system/method of importance of effective stock controls in operation and its impact in the enterprises
- To find out the contribution of adequate stores control procedures to the profitability of the enterprises.
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
Our focus in this chapter is to critically examine relevant literatures that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.
CONCEPTUAL FRAMEWORK
INVENTORY
Inventory is defined as the collection of physical commodities currently owned by an individual company. Inventory management helps the persons responsible to make appropriate decisions in determining the requirements of inventory in order to make purchases in appropriate quantities to support production and distribution (Kanekiyo and Agata, 2019). Deveshwar and Modi (2013) also define inventory management as the process used by a company in organizing products, placing goods in a warehouse, and ensuring that the required goods are supplied while also minimizing costs as much as possible. According to Stevenson (2011), inventory is defined as the resources that are stored in order to enable the existing and upcoming needs of the company. Inventory can be in the form of raw materials, finished products, and works in progress that are held by a manufacturer, retailer, and supplier in any given supply chain. Raw materials are the items that are used to create finished products through the manufacturing process. However, a raw material at one firm can be considered a finished product by another firm. The next inventory type is work-in-progress (WIP), which consists of materials still under processing, including raw materials and other items that are still going through the process of being manufactured. Next are the finished goods, which entail items that have completed the processing stage and are ready to be sold to clients. Inventory could also be referred to as the stock of any item or resource used in an organization. An inventory system is the set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be, (Chase and Aquilano, 1995:546).
TYPES OF INVENTORY
Ile (2002:371), opines that inventory is classified into three types which include;
Raw Material inventory: This includes all items purchased by an organization for processing. For instance, Flour, yeast, eggs etc. are all part of raw materials inventory of a confectionary organization.
Work-in-progress inventory: This is also called goods-in-progress inventory. This is an intermediate stage of raw material inventory that is yet to be finished by the plant to enter into another stage of processing. These are materials that have been partly processed but are yet uncompleted.
Finished goods inventory: This is also called goods-in-progress inventory. This is an intermediate stage of raw material inventory that is yet to be finished by the plant to enter into another stage of processing. These are materials that have been partly processed but are yet uncompleted.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of hundred and twenty (120) questionnaires were administered to respondents of which 100 were returned. The analysis of this study is based on the number returned.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
SUMMARY
The broad of this research is to examine the importance Stock Control In a manufacturing company using Eastern shop supermarket, Enugu as a case study. It stressed on the importance of stock control in an organization, thereby motivating the management to develop interest on the stock control function. It investigated the need efficient and effective stock control in the organization.
Survey research design was employed for the study and with the aid of convenience sampling method, 120 staff of Eastern shop supermarket, Enugu was selected as the participant for the study. Well structure questionnaire was issued to the enrolled participants of which 100 of the instrument were retrieved and validated for the study. Data was analyzed in simple percentage using frequencies and tables.
CONCLUSION
Findings from the study revealed that stock management is practical in Eastern shop supermarket, Enugu as staff of the company showed core knowledge about stock control. Findings from the study further reveals that the tools organizations use for stock management such as: Barcode data collection,
The use of Tags and stacks, Cycle counting to improve accuracy, ABC analysis for prioritization, Lot tracking and traceability and Integrated planning and execution viz ERP. Findings from the study also revealed that different procedures of stock management includes: Economic order quantity, Minimum order quantity, Just-in-time inventory management., Safety stock inventory, FIFO and LIFO, Reorder point formula and Batch tracking of which Consolidated breweries plc uses some of them in their inventory management and control. The study concluded that inventory management is essential in the operation of any business as this will enhance effective stock usage, minimize wastage and ensure business efficiency.
RECOMMENDATION
From the findings of the study, the following recommendations are made:
- Top management should emphasis on the proper stock control techniques and measuring of efficiency deviation to identify weaknesses in the process of organizational performance.
- Manufacturing firm develop a policy framework to facilitate faster implementation of the best stock control practices such as JIT and MRP.
- The firm should strength the supplier relations to the power of partnerships and not only concentrate on one supplier so that the failure of one supplier will not mar the production system.
- Organizations should train their personnel in the area of stock control practices that will empower them to be in charge of smooth running of the stock control activities or program.
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