Chapter one
1.1
Introduction
In
recent time, stock control has been an important area in manufacturing
organization. Both private and public sector make use of stock control for
proper record of stock held in store.
The
store as set up in any organization to assist in the production of goods and
services. The primary objectives of stock is to provide services to the
operating department in an organization. These function include maintenance of
a balanced flow of material components tools in order to meet operational
requirement to receive and issue work in progress, finished products accept
stock scraps and other discarded materials.
Going
by the above, there is need for strict stock control to ensure that the
physical goods held in store house and stock yards for which proper records are
kept.
It is important to note that stock in
any organization has financial implication, because materials held in store
represents money (i.e material is money). Almost large proportion that make up
organization is capital went on materials. Therefore proper control is
essential in an organization.
Moreover, the store manager must adopt
modern stock control methods for effective operation of the store house.
1.2 Historical
background of Nigerian bottling company.
The
Nigeria bottling company came into existence on may 8th 1886, when
the late A.G Leventis founded the company. It was the first in this country to
be offered franchised by an international soft drink firm from a humble
beginning as a family business, the company has grown to become a predominant
bottles of non alchoholic beverages in Nigeria.
The
first plant which was sited in lagos state went into operation in march 1953.
Coke was the first soft drink to have its own designed shaped bottles, wjich
was different from the common trade bottles. In 1972.
Some
years after, the Ibadan plant was opened but later shutdown due to non availability
of good water in Ibadan metropolis. Ilorin plant was mainly established to meet
the needs of the people in Bida, Jebba, Ogbomosho, Okene, Oshogbo,Kontagura,
Ijagbo, Offa, Lokoja and Ilorin metropolis.
The Ilorin plant has 8 managers.
The range of soft drink bottled by Nigerian
bottling company plc (NBC), Ilorin plant produces the following soft drinks:
Fanta orange, coke, sprite, Krest, bitter lemon, ginger Ale and Eva water. In
terms of sales the company enjoys a wide acceptance of its products ranking
Nigeria bottling company plc, as a whole. Its acceptance is higly appreciated.
The
company presently has (13) bottling facilities and over 80 distribution
warehouses located across the country. Since production started, Nigerian
bottling company plc, has remained the largest bottler of non-alcoholic
beverage in the bottles sold per year is 1.8 billion sales volume
1.3 Statement
of the problems
There
are some problems being encountered by the organization under study in the area
of stock control activities. No matter how efficient an organization is,
obviously, it will still be faced with one problem or the other while performing
stock control function.
One
of the problem is that some unit of stock are held in excess of immediate
release as a result of poor stock control system.
Poor store arrangement owing to poor
stock control and this can hinder free movement of personnel and material from
one place to another.
Another
problem is lack of adequate storage facility and material handling equipments.
Also
modern stock control methods has not been adopted into the store operation of
the organization.
1.4 Aims
and objectives of the study
This research work was written in
partial fulfillment of the requirement for the award of higher national diploma
(HND) certificate in purchasing and supply awarded by department of purchasing
and supply, institute of finance and management study, Kwara state polytechnic
Ilorin.
In
addtition, the research work was conducted to enable the researcher to have a
comprehensive knowledge on stock control as it affects the store operation of
manufacturing organization.
1.5 The significance of the study
Apart
from the specific relevance of this project work to Nigeria bottling company
plc. This research work will also be relevant to other manufacturing
organization.
It
will enable them to understand the importance of stock control on the smooth
operational activities of manufacturing organization.
The
project work, will serve as a good reference point to student of purchasing and
supply and students of other related discipline as well as future researcher,
writing on a similar topic.
1.6 scope of the study
The
scope of the study centers on stock control as one of the vital aspects of the
store operation. It will be concerned with methods of stock control such as the
stock levels, imprest control system, bin card, two bin systems and one for one
etc.
The
research study will be limited to Nigeria bottling company plc. Ilorin having
to certain limitation.
1.7 Limitation
and constraint of the study.
The
researcher faced a lot of problems most especially the uncorporate attitude of
the company’s staff.
–
Little response from
the staff and management of Nigerian bottling company. Staff and management of
the company under study were unwilling to release the information required due
to the nature of the information.
–
Scanty statistics:- the
basic statistics that form the bedrock of research are often not available.
Where available they are by no means reliable. In African, many key decision
were known to have been made without the necessary data to supply the
conclusion.
–
Time factor:- the time
available to the researcher for writing and submission of the research study
was too short for an intensive study on the subject matter.
1.8 Research hypothesis
Hypotheses are drawn to
serve as a guide in the process of writing a project work. It is also a conjunction
of statement between two or more variables.
Two type of hypotheses will be adopted for the purpose of
this research work. They are as follows:-
1 H0 — null
hypothesis
2 H1 —- working
hypothesis
These were explained below:-
H0: stock control
function do not have significant effect on the operational activities of
manufacturing company.
H1 stock control
function has significant effect on the smooth operational activities of
manufacturing company.
H0:- stock control is not
significant to efficient operational activities of business organization.
H1:- stock controls
field is significant to the effective operation of all activities of business
organization.
1.9 definitions of key terms
1.
store:- this can be define as any space reserved and equipped for holding
stocks, waiting for dispatch to consumers and for further processing or for
future uses.
2.
Stock: – these are the physical goods held in the store house and stock yards
for which proper records are kept.
3.
storage: – this is the act of holding and protecting stock in anticipation of
some future requirements or for future uses.
4.
stock records:- these are document which gives detailed information of receipts
issue and balance of stock from day to day.
5.
stock taking: – this is described as the complete process of verifying the
quantity balance of the entire range of items held in store.
6.
inspection: – this refers to the total verification of all incoming materials
to ensure their conformity with the specific quality and quantity required.
7.
stock checking: – this refers to the physical check in quantity and the
determination of the counting of items in the store.
8.
Issue: – this refers to the act of
giving out material to an authorized person or department with appropriate
records.
9.
Receipts: – this is the process of
accepting from all sources o all material and parts which are used in the
organizations.
10.
Stock level: – the basic method of
controlling stock by quantity is by means of fixing for each commodity. Stock
level is u7sed as a means of indicating when some action is necessary.
11.
Maximum Stock Level: – this is the
level above which stock should not normally be allowed to rise.
12
Minimum Stock Level: – this is the
level below which stock should not normally be allowed to fall.
13.
Re order level: – this is the point
between the maximum and the minimum stock level at which time is essential to
initiate purchase requisition for fresh supplies of materials.