The Need for Efficient Stock Control in an Organization

1.0 Introduction

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 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. Bin (1952:page)

According to (BIM 1952) stock control represents the clerical control of the movement of materials into and out of the stores, and of the level of stocks in the stores at all times with due regard to the economy in storage as well as on ordering costs, 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 Problem

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:

1. The method of sources of information used in the organization in terms of checking the control of stock is not encourage able in the sense it was done without considering if the individual has the capacity.
2. Professionals were not employed in the purchasing department and this makes the strategies involved in the efficient control of stock not to the work or job were not well trained.
3. The efficient stock control records are not properly kept and this makes the stores manager/keeper to be very active.
4. 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.
5. Finally, the stock 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 Aim and Objectives of Study

The aim of the study is to examine the Need for Efficient Stock Control in an Organization. In achieving this aim, the following specific objectives were laid out as follows:

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 and energetic employees for the purpose of stock control operations.
3. To lay 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 held in the organization.

1.4 Significance Of The Study

The relevance of the stock control in an 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.

1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

1. What method an organization adopt to supply requirements of materials without holding stock.
2. How does an organization control their stock.
3. What are the tools for stock and material control.
4. What are the process and procedures for stock control.

If total stock held in a factory average #200,000 and issues from stock amount to #800,000 a year, what is the stock turn rate.

1.6 The Scope Of The Study

In industries as well as in the public sector organization, the “stores” has remained 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 to ensure that every piece of material, whether raw or worked, coming into ant 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

During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:

1. 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 interest in order to gather comparable data or information for the research work.

2. 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 her course of study, collect data/information from other polytechnics which she would have loved to do but due to limited time factor, the researcher was unable to so.

3. Natural Factor:

   This also a hindrance to the study. These project work in disturbed from effects of regular rainfalls and hot whether wind thereby, hinders the researchers movement in her bid to collect data/information and distribution of questionnaires to respondents.

4. Transportation Problem:

   The researcher was also confronted with transportation problems. The researcher wasted so much time on the road or on the vehicles boarded, and thereby making her to reach her place of choice to get information from the school libraries.