IMPACT OF INVENTORY MANAGEMENT AND CONTROL SYSTEM IN THE PERFORMANCE OF A MANUFACTURING COMPANY IN NIGERIA
(A study of Siba Water Company, Ikot Ekpene Local Government Area.)
ABSTRACT
In any major manufacturing companies, inventory control is essential parts to check and carry out inventory adequately for proper recording. That is why in this subject topic we choose to carry out study on the impact of inventory management and control system in the performance of a manufacturing company in Nigeria. Which a case was SIBA water company no 105 Uyo Road, Ikot Ekpene Local Government Area. In order to carry out this study successfully, the work was divide into five chapters, while chapter one was on introduction and background of the study, chapter two reviewed of related literature on the subject matter, chapter three was on research design and methodology adopted in carrying out this research while chapter four was a data presentation, analysis and interpretation, while chapter five gave the summary of the work done. similarly, in SIBA water company, sample and sampling techniques were used which we have 65 and in population of the study we have five (5) department in that company which namely; Account section, purchasing officers, Transportation/Maintenance officers, Marketers, and Administration departments. Method of data analysis was chi-square method. Above all, questionnaire were administered to a few selected people in Ikot Ekpene and environment and a total number of sixty five (65) copies of the questionnaire were sent out to be completed by the people but a total of fifty five (55) copies were returned as population study. To this ends, the study revealed the following as major impact of inventory management and control, it enables the production process to flow smoothly thus enabling customer’s orders to be meet promptly and reduces the cost of carrying excessive inventories. That the inventory management techniques used by different manufacturing enterprises includes perpetual inventory review method, just in time inventory model, A.B.C analysis inventory models and a combination of modern and traditional methods that the problems inherent in holding inventories in manufacturing enterprises are in adequate warehouse facilities with the required infrastructures, risk of deterioration in the value of stocks, inadequate electricity and other amenities to keep inventory items in good form, inadequate managerial and technical know-how. It was recommended that management of manufacturing enterprises should make provision for adequate warehouse facilities, equip same with adequate infrastructure needed to keep stock in good state. Also, government should overhead the dilapidated economic and social infrastructures in order to reduce the cost of doing business in Nigeria as well as ensure full employment of factors of production which will bring about improved productivity in the country. Finally, it was recommended that manufacturing companies should train staff for/seriously development in our country.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Background of the Study
1.2 Statement of Problem -
1.3 Purpose of the study
1.4 Objective of the Study -
1.4 Research Questions
1.5 Research Hypothesis
1.6 Significance of the Study -
1.7 Scope of the study - -
1.8 Limitation of the study
1.9 Definition of Terms
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Introduction -
2.2 What is Inventory
2.2.1 The Theoretical frame Work -
2.3 What are the aims of inventory Management in
Organization -
2.4 Types of Inventory Control System
2.4.2 The fixes order quality system
2.4.3 The cyclical provisioning or the fixed order interval system
2.4.4 The Material Requirements planning (MRP)
2.5 Importance of Inventory taking control in any manufacturing company
2.6 Kinds of costs associated with inventory -
2.7 Stock checking and stock taking -
2.7.1 Purpose of stocktaking -
2.8 Objectives of inventory control -
2.9 Requirement for effective inventory management/Inventory management software
2.10 Methods of controlling issue of stock
2.11 Problems associated with control system
2.12 The main objectives of stores control system
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction -
3.2 Area of the study
3.3 Research Design
3.4 Sample and sampling techniques -
3.5 Population of the study
3.6 Procedure for Data Collection
3.7 Method of Data Analysis -
CHAPTER FOUR: PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
4.1 Introduction -
4.2 Presentation of Data
4.3 Data Analysis - - -
4.4 Testing of Hypothesis -
4.5 Discussion and summary of findings
CHAPTER FIVE:
INTRODUCTION, SUMMARY, RECOMMENDATIONS AND CONCLUSION
5.0 Introduction -
5.1 Summary -
5.2 Conclusion -
5.3 Recommendations -
REFERENCES
Appendix
Questionnaire
CHAPTER ONE
INTRODUCTION
- Background of the Study
When scholars first introduced the word “inventory”, they use the word stocks that are kept on store for use as the need arises. However, inventory includes all those goods and materials used in the production and distribution processes. Raw materials, components parts, sub-assemblies and finished products are all part of inventory as well as the various supplies required in the production and distribution process.
Inventory (or stock control) is defined by Jessop and Morrison (2010) as the operation of continuously arranging flows of materials so that stock balance are adequate to support the current rate of consumption, with due regard to economy. Inventory ties up capital, use storage space require handling, deteriorate, sometimes become obsolete, incur taxes, require insurance, can be stolen, and sometimes are lost. Furthermore, inventory frequently compensates for sloppy and inefficient management, including poor forecasting, haphazard scheduling and inadequate attention to setup and ordering process. In other words, inventory may hide inadequacies and allows management to ignore them, in such cases inventory increases cost and productivity without enhancing net income, it is a liability regardless of where it is carried on the organizations balance sheet. In addition, if an organization has the wrong items in inventory, the situation is worsened. However, the benefits of a properly managed inventory outweigh the costs of maintaining it. The absence of the appropriate inventory will halt a production process. Lack of competent parts will short down an assembly line with partially complete ones collecting dust.
An inventory can be an asset in the full sense of the word. Measures of performance and productivity may differ among organizations, but all need adequate inventory management.
Also, it includes the related process of provisioning, which is the determination of requirement in advance, stock control is a way of regulating the levels of supplies in stock to avert stock excesses or deficiencies. It also involves techniques used to ensure that stocks are kept at levels that guaranteed maximum service levels at minimum costs.
Stock control involves the following processes
- Assessing the items to be held in stock
- Deciding the extent of stock holding of items individually and collectively
- Regulating the input of stock into the store house
- Regulating the issue of stock from the store house
All business and institution require inventories, often they are substantial part of total assets. Financially, inventories are very important to manufacturing companies, on the balance sheet, they usually represent form 20% to 60% of total assets, inventory are used, their value is converted into cash which improves cash flow and return on investment.
There is a cost for carrying inventories, which increase operating costs and decreases profit. Good inventory management is essential, inventory is an idle stock of physical goods that contain economic value and held in various forms by an organization in its custody awaiting packing, processing, transformation, we or sale in future point of times.
Since the inventory or stock in the company or firm determine to a greater extent the prosperity and success of a firm. Therefore, there is need for good management and control of inventory in order for it to bring a more positive impact to the firm or company. Some scholars also defined inventory management as an effort for planning and controlling of inventory from the raw material stage to the customers for consumption or further production.
