STOCK TAKING AND STOCK CONTROL AS AN AVENUE TO ORGANIZATIONAL GROWTH
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There is absolute need for adequate stocktaking and stock control in an organization. The researcher lay more emphasis on stock management for efficient stock control of an organization Many organizations in Nigeria that do not have proper stock management systems in their operations face a lot of challenges most of which include dependency on the efficiency of the supplier, missed sales in case of stock outs, high costs of obtaining materials and poor customer service. However, organizations have recently found it as having a great impact on the success of the organizations (Frazelle, 2002; Jessop, 1986). Good stock management by a firm will lower costs, improve efficiency and ensure production while at the same time meet fluctuations in customer demand. It will give the firm a competitive advantage as more efficient production can feed through to lower prices and also customers are always satisfied as products will be available on demand.
TABLE OF CONTENT
Table of content
1.1 Background of the study
1.2 Statement of problem
1.3 Objective of the study
1.4 Research Hypotheses
1.5 Significance of the study
1.6 Scope and limitation of the study
1.7 Definition of terms
1.8 Organization of the study
2.0 LITERATURE REVIEW
3.0 Research methodology
3.1 sources of data collection
3.3 Population of the study
3.4 Sampling and sampling distribution
3.5 Validation of research instrument
3.6 Method of data analysis
DATA PRESENTATION AND ANALYSIS AND INTERPRETATION
4.2 Data analysis
- Background of the study
Business management has various branches and no business enterprise ever succeed without all of these branches coming together to work effectively and efficiently as they should. If a part of human body is not functioning well, then the whole body will suffer the pain. This explains the relationship between the various functional departments of any business organization. If one department is inefficient or not functioning as it should, it will strongly undetermined the efficiency of others. This is why it is very important for all the branches in any organization to be harmonized and galvanized so that they will see themselves as one and aiming progressively to actualize a certain goal. Stock management has been defined by different scholars but all drive to the same meaning. The international dictionary of management (1995) defines stock management as the use of management techniques designed to determine and implement the holding of optimum levels of stock, whether raw materials stocks, bought out goods, work in progress, or finished goods. Stock availability is the most important aspect of customer service. The goal of stock management is therefore to increase financial returns on inventory while simultaneously increasing customer service levels (Frazelle, 2002). Stock management directly affects both the value of the assets used in a business and the quality of services given to customers. Firms should therefore focus on just a few core activities which of course include stock management in order to maintain a long term competitive advantage. Using this approach which has been refined, companies have tried to focus on their stock and have set a stage for wide spread acceptance of advantages of stock management (Baily 1997 Lewis 1970; Quinn 1992; Hamel and Prahalad 1994). Baily (1997) explains that it is widely feared that shortages of materials and certain products will be increasingly common in future. Whlie Kotler 1973 and Balachandrian (1975) argue that in times of shortages, the marketing problem shifts its location from selling to buying. Basing on this, Croell (1977) suggests that the purchasing department is expected to provide what is expected of in terms of stock taking, stores lay out and stock levels. The scenario of stock management involves determining the purchasing practice and techniques and strategy. A supply strategy is seen by Porter (1999) as an integral part of the general competitive strategy of a firm. Determining the relationship to have with suppliers is therefore crucial in stock management (Bain, 1959, Lenders, 1965). Nair (1999) explains that stock management involves stock control, purchasing, stock losses, stock cover, stock turnover and general stores operations and materials handling. An example of effective stock management system is given by W. H. Smith who sells 100,000 product lines every year and more than a million orders are placed around 2,000 different suppliers to keeping the shelves stocked at precisely the right level is an exciting task. By feeding sales information directly in the computer, it enables stock to be replenished automatically and quickly and frees staff to help customers and increase sales which in turn lead to success (Daily Monitor 10th October 2004 p 21). Firms that have not embraced the use of stock management in their operations have been reported to miss the chances of maximizing sales. So poor performing industries look to stock management to drive down costs improve performance and revolutionalise traditional systems of production. It is against this background that firms have realized the importance of stock management towards organizational success Lewis and Trevin (2000). Success is the ability of a person or machine or an organization to do something well, (Longman Dictionary, 1987). Success measures are necessary for organizations because they show whether organizations are achieving their target set at strategic and operational levels (Kermally, 1997). Success of an organization is measured basing on many variables regarding customer satisfaction, sales volume, total cost reduction and meeting industry standards. According to Host (1992), sales volume and growth rate of change in sales are used to evaluate organizational 3 success. They are determined by evaluating marketing factors that influence sales, including marketing strategies, competition, promotional programs and distribution decisions. This is why materials management expert have confirmed it that materials are the heart of any organization, and because no human being can survive without blood, the organization cannot survive without materials, this is why conscious effort has to be made at acquiring materials in a way that will save the organization cost. These materials must be efficiently utilized. Stocktaking and stock control are those activities performed which are aimed at ensuring the availability of material both in the right quantity and quality. This helps the organization not to witness a stock-out situation or capital tie down inform of heavy stock carrying. And the method that can help in avoiding these two abnormal phenomena is considered to be a good stocktaking and stock control techniques exercise in the organization like the Nigeria Breweries
1.2 STATEMENT OF THE PROBLEM
The increasing specialization of industry in recent times has progressively enhance the importance of this topic because of the tendency for firms to concentrate in the manufacturing of their own specialist line and to buy out an increasing proportion of materials either in a semi process condition or in the form of finished parts. The development of centralized industries, the over-widening range of technical materials and equipment in Nigeria Breweries and the importance to meet up with over increasing quantity of materials serve to emphasize the value of adequate stocktaking procedures.
- OBJECTIVES OF THE STUDY
The main objective of this research work is to lay emphasis on the importance for the need of accurate stocktaking and stock control method. It will also further classify the importance or benefits acquired from an efficient implementation of coding system. This is carried out with the case study of Nigeria Breweries Plc.
- To examine the impact of accurate stocktaking on the growth of the organization
- To examine the relationship between stocktaking and stock control
- To examine the role of stock management in an organizational growth
- To ascertain the effect of stock management on organizational profitability
- RESEARCH HYPOTHESES
They following hypotheses were formulated to guide the study;
H0: accurate stocktaking does not have any impact on the growth of the organization
H1: accurate stocktaking does have an impact on the growth of the organization
H0: there is no significant relationship between stocktaking and stock control in an organization
H2: there is a significant relationship between stocktaking and stock control in an organization
- IMPORTANCE OF THE STUDY
The importance of this research work is based on improving the techniques of stocktaking and stock control. It will also improve the steps involve in stocktaking. The study will also enable the reader to know much about stock discrepancies and to improve efficiency and profits through proper stocktaking and stock control. It also encourage the usefulness of automating stores function like stocktaking and stock control in Nigeria Breweries Plc
- SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers stocktaking and stock control as an avenue to organizational growth. In the course of the study, there were some factors which limited the scope of the study;
- a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
- b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
- c) Organizational privacy: Limited Access to the store manager makes it difficult to get all the necessary and required information concerning the activities.
1.7 OPERATIONAL DEFINITION OF TERMS
Stock-taking or “inventory checking” is the physical verification of the quantities and condition of items held in an inventory or warehouse. This may be done to provide an audit of existing stock. It is also the source of stock discrepancy information. Stock-taking may be performed as an intensive annual, end of fiscal year, procedure or may be done continuously by means of a cycle count.
Inventory or stock is the goods and materials that a business holds for the ultimate goal of resale. Inventory management is a discipline primarily about specifying the shape and placement of stocked goods
In one sentence inventory control is nothing but to give uninterrupted service towards the Production / Sales /Maintenance etc. with minimum stock. Inventory control is an important aspect for the growth of company.
Stock cover: length of the time present stocks will last if sales continue at the same rate as in the immediate past.
Raw materials: Basic materials which under go changes through manufacturing process in the course of being incorporated into the final goods.
Work in progress: comprises incomplete items in the course of manufacturing.
Finished goods: items out of the production ready for use. Success, this refers to achievement or attainment of desired goals or results.
Purchasing: the function responsible for obtaining by buying, lease, tenancy, franchise, or any other legal means of supplies, services or works required by an organization for use in operation or resale.
1.8 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study.
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