This project is primarily concerned with the analysis of management of stock in public utility companies with particular reference to the.
Distribution and Marketing department of the (PZ PLC). In doing this, the researcher briefly explain some of the general problems facing the stores control functions in many organizations and went on to touch on the background of the subject matter where some of the activities of the organization were highlighted. Some of the problem facing stores control systems were highlighted to include the dearth of qualified stores personnel, overstock and sometimes under stocking, pilferages, deterioration, obsolence and insufficient store materials. The research work further reviewed related literature on the subject matter to sample the opinions of various authors on the subject. The review of related literatures centred on inventory control, stock control, problems in accounting for stocks, products procurement and management, reasons for holding stock, stores control, stock taking and stock checking, cyclical provisioning, stock record system, among others. The researcher noted there was a consensus among the authors on these matters as mentioned above.
1.1 BACKGROUND INFORMATION:
P.Z Plc is a government owned business organisation set up by Decree with the main aim of maximising public welfare. Services usually provided by PZ Plc are essential. To ensure even distribution of facilities and social services, the government establishes PZ. PZ helps to control private monopoly of power and helps to combat the unhealthy rural – urban drift of the population.
Store control is an important functional branch of PZ as an organization and needs more attention that it is actually being presently given. It has been viewed in some quarters as an unnecessary activity that really costs money while in some other quarters is regarded as being vital, and a sophisticated method of control is adopted to protect the inventories. There are organizations where the buying departments do not have responsibility for the stores or even the stock control function. Despite this, the role of buying is still linked with both functions. All organisations have some stock, which must be cared for, because they represent money. In a manufacturing organisation where large unit items are produced daily for instance, large quantities of materials and component parts have to be provided daily as well.
This obviously means a lot of money and it is therefore to organize store function so that investment cost is kept to the specific standard system of stores control, which can be universally recommended or applied, but in the course of time, certain principles and practises of more or less general application have been evolved. A material as used in this write-up has the same meaning as inventory or stock. It is necessary to bring out the points at this stage because in Financial Accounting, material is often known as stock or inventory. As on accounting category, material stock is a current asset represented by goods owned by the business at a particular point in time and help for the purpose of future sale or for the manufacturing of goods for sale. Materials management is concerned basically with planning and control of materials. Control is a process by which events are made to conform to a plan. Therefore to control materials, there must be a store, where to buy, when to buy, and how much to buy. The items to be stored will be dictated by the basic functions of the firm and the customers it serves. The suppliers to be selected will be influenced by such factors as the ability of the supplier to supply the quantity of the right quality at the right time and at the right price (right from the point of view of the purchaser). Continuous stock checking is the checking by counting of physical quantities of materials in stores regularly, a few at a time, until items are checked at least once a year. The figures so obtained by continuous stock takings are compared with the corresponding figures on the bin card and stores ledger cards. The exercise is should not be aware of the balances on the bin cards or stores ledger card before the exercise. Government plays an important part with the total amount invested, with the central government, state government, local authorities and public corporations for high part. Profit is not the main determinant, but political and social factors. Although, costs-benefit analysis is used to evaluate the differing projects which a government might consider. Governments have used public work as a means to expand or restrain the economy and the commitment of full employment. For the private sector industrialist, the factor that determines investment is the profitability or rather anticipated profitability of the project. The profitability can be said to depend on the expected future returns obtained from the purchase of the equipment. The later is known before a decision is taken, while the former can be thought as nothing more than a calculated or inspires guess. However, whether it is a private or public sector, the acquisition, storage, issuance, and usage of stock in the running of the business must be involved. For effectiveness, efficiency and productivity of the business, therefore, functional machinery should be put in place for the proper control of stock or inventory of the organisation.
1.2 STATEMENT OF PROBLEM:
The problem of stores control has bee existing for too long. This problem is still with us to date and is a universal rather than a peculiar problem. Thus, it is not limited to a single organisation but all business for a. it is not only limited to the private sector with its background motive of profit maximisation’s, but also to the public sector organisation such as P.Z, even with its background principles of non-profit but social service maximisation. Many business organisations the world over have not give stock control the prominence it deserves in spite of its varied importance. However, stock control began to gain recognition as a result of the industrial revelation that swept the advance countries of America and Europe in the 1930s. The revolutions resulted into the scarcity of materials. Industrialist, therefore, had to learn how to control and manage the few available materials.
1.3 RESEARCH QUESTION
In order to facilitate data collection so as to arrive at the correct conclusion, the following hypothesis will be used to guide this study:
- Effective stores control does not create any room for effective utilization of materials in the store.
- It is not of any use of any importance to apply proper documentation of stock or inventory in any organisation.
- P.Z being a government baby, which does not operate on profit motive does not require stock control and materials management procedure.
- Personnel’s in an organisation can obtain stock from the store without using the stores requisition form. This habit does not have any effect on management of stock.
1.4 THE PURPOSE OF THE STUDY:
Every body sees a public property as a national cake, which belongs to all and which body must benefit from whether or not they have authority to use. Besides, public property does not belong to anybody. Thus, there exist the laissez-faire and lackadaisical attitude towards public property. Coupled with this there is also the problem of proper management and control of stock. These are some of the problems confronting the economies of the world. It is therefore the intension of this research work.
(1) To examine the nature and usage of stock control measures applied by P.Z;
(2) To determine the viability of such stock control measures.
(3) To determine the nature and extent of problems affecting management of stock in the public sector organizations with particular reference to P.Z; and
(4) To attempt to provide alternative strategies on effective management of stock, where necessary.
1.5 SIGNIFICANCE OF THE STUDY:
The issue of management of stock is of vital importance to the success of any organisation and is one of the serious determinants of the continuity and efficient productivity of the organisation. As the study is significant because it is hoped that on the completion, the study will provide further insights into the understanding of stock control measures. Through using P.Z as a reference point, the study will make an interesting contribution to the understanding of the general and specific effects of stores control in other public utilities. Also, the study will further justify the need to strengthen management and control of stock with anticipated benefit in view. In addition to helping the public utility sector in taking serious decisions on management of stock, it will also serve the interest of the private sector business organisations as well as the general public as a source of enlightenment since it will enlarge the existing literature on management of stock.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
The research project intends to look into the management of stock in public utilities with particular reference to the Distribution and Marketing sector of P.Z. The study will cover P.Z activities that sum up the role of effective store control, store procedure and various control mechanisms. The public sector is wide and complex, and this work is basically expository. Though relevant references maybe made to other areas, the basic area of focus remains the PZ.
A Research work is never an easy task to overcome. There are occasions when the research would encounter problems, which are basic and unavoidable. This research work is not an exception. Considering the magnitude of time and finance involved in the study and considering also the difficulties of data collection from other public utilities, the study will only be limited to P.Z. It deserves mentioning that there are several other facts that would have been included in this research work but which will not be possible since it is not a standard textbook. The lat but not the least limitation is intellectual in nature since no work can be above the intellectual ability of its writer.
1.7 RESEARCH METHODOLOGY
This research work will be basically expository and explanatory. The Research methodology will include the collection of data both from primary and secondary sources. The sources will basically include the review of literature from textbooks, other reference materials, and lecture literatures. The data so collected will be analysed using tables and percentages and based on the outcome of the analysis, conclusion will be made and recommendations given.