THE NEED FOR EFFICIENT STOCK CONTROL IN AN ORGANIZATION
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For any organization to be successful, it will take the issue of efficient stock control serious. It has been stated clearly that the need for efficient stock control in any organization is necessary. Therefore, management of any organization should know that inefficiency procurement of materials can seriously affect the financial health of the organization resulting to its closure. Purchasing as has earlier stated is the hub of any business organization. so to decentralize the function of purchasing is to deny a firm some of its potential profits. But centralization of purchasing function is essential for the attainment of both optimum operating efficiency and maximum profitability. A company’s purchase should motivate its stock control with other staff. Finally, if this procedures is followed, purchasing objective will be ensures it term of obtaining material of the right quality and right quality of the material from the right source, at the right time and place for effective stock controlling. Therefore, this research concentrates on the need for efficient stock control in an organization and suggested possible ways to improve efficient stock control in any organization.
1.1 BACKGROUND OF THE STUDY
For an organization to be successful, it depends on the efficient control of stock in that organization. Therefore, for the study of purchasing and supply management to be complete, there must be efficient control of stock. Store management is very closely liked with product and distribution and is a much neglected area of business study. Yet stock control is a vital part of all industrial organization, and it must be design to suit the particular needs of the organization it sation and it service. Stock control is set up in any organization to assist in the production of goods and services and no industrial unit or public undertaking of substantial size can be efficiently manage without it. The basic aim of every efficient manager is to reduce the time and labour involved in each operation to the absolute minimum consistent with maintaining the required quality.
According to (BIM 1952), stock control represent the clerical control of the movement of materials into an out of stores, and of the level of stocks in the stores at all times with due regard to the economy in storage as weks as on ordering cost, purchase price agreed, and the level of organizations working capital.
The stock control process focuses attention on factors related to time utility, location, quality and quality of materials used by the operations of the organization.
1.2 STATEMENT OF THE PROBLEMS
The efficient of stock control in an organization is so vital in both large and small firm, upon the efficient of stock control, the researchers, in carrying out this research work were able to identify some problems that hinder the progress or smooth control of stock in an organization. Some of these problems are identified below:-
a) The method of sources of information used in the organization in terms of checking the control of stock ie not encourageable in the sense it was done without considering if the individual has the capacity.
b) Professionals were not employed in the purchasing department and this makes the strategies involved in the efficient control of stock not achievable because the staffs employed to do the work or jobs were not well trained.
c) The efficient stock control records are not properly kept and this makes the stores manager/keeper to be very active.
d) Another problem which hinders the progress of stock control in an organization is the type of materials purchased by the procurement manager. This implies that the material might be in a bad shape, thereby stops the smooth running of the organization.
e) Finally, the material held in stock for so long can also cause a problem in controlling the stock in an organization. This means, the stocks are not supposed to be keeping in the stores for so long before that are dispatched to were they are needed.
1.3 OBJECTIVE OF THE STUDY
Obviously, every organization according to Carter (1982:31) has its one needs and requirements which have to be met by its stock control system. However, if we look at stock control in terms of the average medium size production and distribution of organization, we will obtain a complete picture of stock control and its objectives. In selecting and operating stock control methods to control the level of stock, the stock controller of the organization is seeking to achieve the following fundamental objective.
1) To stress on the importance of stock control in an organization, thereby motivating the management to develop interest on the stock control function.
2) To highlight on the need of employing young highlight on the need of employing young and energetic employees for the purpose of stock control operations.
3) To lag emphases on the importance of employing a workers of technical know how on the current advancement of technology e.g computer.
4) Employing people with business experience knowledge for the purpose of transacting effective with suppliers and other department in another objective.
5) To ensure that there is efficient and effective control of stock in the organization.
6) To control the inflow and outflow of the materials in the organization.
1.4 RESEARCH QUESTIONS
In other to make a complete investigation of subject matter, the researcher was come out with the following question; thus:
What method an organization adopts to supply requirements of materials without holding stock?
How does an organization control their stock?
What are the tools for stock and material control?
What are the process and procedures for stock control?
If total stock held in a factory average is N200,000 and issues from stock amount to N800,000 a year, what is the stock turn over?
1.5 RELEVANCE OF THE STUDY
The relevance of the stock control in an organization enhances the organization to know the various ways of controlling the stock held in there firm/organization.
Stock control is an important aspect of business management and must not be neglected by management. This is so because any management that neglects it control of stock will generally reduce its profit potential or even the level of service provided, shortage in inventory and as well as tools, for instance, will interrupt production, rendering machines and labour force idle and will further lead to losses in sales revenue. In the same manner, if there is an unintentional excess buying and over stocking of materials in inventory, the organizations fund will be tied up in stock and will represent cash that would have been used for other purpose.
1.6 SCOPE OF THE STUDY
In industries as well as in the public sector organization, the “stores” has renamed as one of the production departments, and storage, whether of raw materials, partly processed work or finished products, in part of the sequences of operations both clerical and physical which starts as soon as the customer’s order or management decision to manufacture and is completed by the dispatch of the finished product. The major aim of every efficient manager is to reduce the time and labour involved in each operation to the absolute minimum consistent with maintaining the required quality so as to achieve minimum output and reduce manufacturing cost. In treating the stock control as an operation, the manager must have similar objects in minds, his aim in this regard being to ensure that every piece of material, whether raw or worked, coming into at store, shall stay therefore, as short a time as possible before moving either out/into the factory to be processed, or in the case of such things, spares,. Tools or building materials, into use. The essential qualifying condition here is that stock must be maintained just high enough for a constant supply of materials or components to be available when required.
1.7 LIMITATION OF THE STUDY
An investigation of this kind is confronted with several limitations, it limitations; are as follows:-
a) FINANCIAL PROBLEM: Financing this project has been a trying experience, because of the prevailing economic condition in the society. So, the researcher is unable to travel and cover many places of inters in order to gather comparable data of information for the research work.
b) LIMITED TIME FACTOR: Due to the schedule of academic activities for every final year students both in ND’s and HND’s of the Polytechnic is lactic. The researcher needs to attend classes, read other courses that is related to his course of study, collect data/information from other polytechnics which he would have loved to do but due to limited time factor, the researcher was unable to do so.
c) NATURAL FACTOR: This also a hindrance to the study. These project work is disturbed form effects of riot and hot whether thereby, hinders the researchers movement in his bid to collect data/information and distribution of questionnaires to respondents.
d) TRANSPORTATION PROBLEM: The researcher was also confronted with transportation problems. He wasted so much time on the road or on the vehicles boarded and thereby making him to reach his place of choice to get information from the school libraries.
1.8 DEFINITION OF TERMS
STOCK CONTROL: The means by which material of the correct quantity and quality is made available as and when required, with due regard to economy in storage and ordering costs, purchase prices and working capital.
BUFFER STOCK: This refers to the extra stock as store holds to cover any unforeseen hold-ups in delivery or sudden changes in demands.
OBSOLESCENCE’S: This is the state/stage of material to become old and will no longer be useful.
PILFERAGE: This is a way of stealing things of little value or in small quantities, from the stores house.