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Inventory Management And Control In A Manufacturing Organization
CHAPTER ONE -- [Total Page(s) 4]
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CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Advancement
in all business activities has brought about the need for efficient
inventory management and control. For the past decade inventories were
handled by a clerk in a routine manner. But in recent times proper
attention has been given to it. As a matter of fact, a well planned and
effectively controlled inventory can contribute substantially to the
organization’s growth and efficiency. Inventory control is a vital
element in the management of materials.
However, before delving into this plight, it is appropriate to give the definition of inventory control.
According
to Baily [1983:73] inventory control is the means by which materials of
the correct quantity is made available as and when required, with due
regard to economy in storage and ordering cost, purchase price and use
of working capital. It involves the following processes.
[a] Accessing the items to be held in stock
[b] Deciding the extent of stock holding of items individually and collectively.
[c] Regulating the input of stock into the storehouses.
[d] Regulating the issue of stock from the storehouses.
Therefore,
through these process, it is possible to adjust continuously the
quantity and value of inventory held to confirm to circumstance at all
times.
The functionary name given to the activities in the stores is
known as inventory control or stock control. The inventory controller or
stock controller takes custody of the day to day movement of stocks.
Inventory
procedure includes receipt, storekeeping, issue and balance of stocks.
In practice, the three major functions involve the overall activities
that take place in the stores.
Some of the activities are:
communication with other department, identification of stores, receipt
and inspection, issue and dispatch, stock records, stores accounting,
stock control, stock taking and stock checking, storage of equipment and
so on.
Inventory control is the clerical control of the movement of
goods into and out of the stores, and of the level of inventories in the
stores. Different inventory records are kept to know when inventories
fell to minimum, maximum inventory level, and re-order point. The
success or failure of any organization depends largely on efficient
system of their inventory control, since inventory control is regarded
as a procedure in which appropriate system containing information are
fed to various department for recording or action.
Actually different
systems are operated in different organizations in controlling their
inventories. Some of these systems work out well while others failed in
their purposes. These systems and other relevant point will be discussed
fully in the next chapter.
The researcher could not close the
general introduction without giving a brief historical background of the
company he is researching on.
Akaraka Industries Nigeria Limited
[AINL] was incorporated as a private limited liability company in 1994
under the companies’ allied matters Act of 1990. The company is an
industrial/Agro-chemical industry located at Oboama Enyiogugu Aboh
Mbaise along Owerri Umuahia road. It has her head office at 186 wetheral
road Owerri and her factory at Mbaise in Imo State Nigeria.
It was
formed mainly to process solid minerals as industrial chemicals and
production started with a capacity of 144 tones per day using two
machines at its factory in Mbaise along Owerri – Umuahia road. Each
machine has a rated capacity of 3 tones per hour and is capable of
pulverizing solid minerals to a more scale of hardness not exceeding 7
and humidity below 6 percent.
The grain size of finished products
from the pendulum pulverize may be adjusted in the range of 0.125mm to
0.44mm [equivalent to 120 to 320 mesh per inch] according to customers
requirements or specification.
The staff strength of Akaraka
Industries Nigeria Limited is about 325 with 75 percent of the total
workforce coming from the immediate community.
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ABSRACT - [ Total Page(s): 1 ]An efficient and effective inventory control and management in any organization is very vital in the survival of such organization. Inventory is defined as “An idle resource of any kinds that possesses economic values, and is classified in many ways thus: production inventories like raw materials, parts and components which enter the firm’s product in the production process. MRO inventories that is maintenance, repair and operating supplies which are consumed in the production proce ... Continue reading---
