TABLE OF CONTENTS
CHAPTER ONE
1.0
INTRODUCTION
1.1 HISTORICAL
BACKGROUND OF THE STUDY
1.2 STATEMENT OF THE PROBLEM
1.2
SIGNIFICANCE OF THE STUDY
1.4 OBJECTIVES OF THE STUDY
1.5 SCOPE OF THE STUDY
1.6 LIMITATIONS AND CONSTRAINTS OF THE STUDY
1.7 DEFINITION OF BASIC CONCEPTS
CHAPTER TWO
2.0 LITERATURE
REVIEW
2.1
DEVELOPMENT OF AN INVENTORY MANAGEMENT SYSTEM
2.2 THE IMPACT OF INVENTORY MANAGEMENT SYSTEM
2.3 WHY KEEP INVENTORY
2.4 BEST PRACTICE IN INVENTORY MANAGEMENT
2.5 INVENTORY CONTROL SYSTEM
2.6 METHODS OF
INVENTORY CONTROL
2.7 INVENTORY MANAGEMENT SYSTEMS
2.8 IMPLEMENTING EFFECTIVE INVENTORY MANAGEMENT SYSTEMS
2.9 BENEFITS OF USING INVENTORY MANAGEMENT SYSTEMS
2.10 SUCCESSFUL INVENTORY MANAGEMENT SYSTEMS
2.11 FUTURE OF INVENTORY MANAGEMENT SYSTEMS
2.12 ANALYSING INVENTORY ADJUSTMENTS
2.13 CHALLENGES OF INVENTORY MANAGEMENT SYSTEMS
2.14 ACCURATELY
TRACKING A MOVING INVENTORY
2.14.1 Inaccurate Data
2.15 COMPUTERS AND INVENTORY
2.16 WAREHOUSE LAYOUT AND OPERATION
2.17 ADVANTAGES OF USING AN AUTOMATED INVENTORY CONTROL MANAGEMENT SYSTEM
2.18 INVENTORY MANAGEMENT SOFTWARE
CHAPTER THREE
3.0
RESEARCH METHODOLOGY AND ANALYSIS OF THE EXISTING SYSTEM
3.1 RESEARCH METHODOLOGY
3.1.1 Primary Source
3.1.2 Secondary Source
3.1.3 Observational Method
3.2 ANALYSIS OF THE EXISTING SYSTEM
3.3 OBJECTIVES OF THE EXISTING SYSTEM
3.4 PROBLEMS OF THE EXISTING SYSTEM
3.5 JUSTIFICATION FOR THE NEW SYSTEM
CHAPTER FOUR
4.0 DESIGN, IMPLEMENTATION AND TESTING OF THE EXISTING SYSTEM
4.1 DESIGN
STANDARD
4.1.1 Input Specification
4.1.2 Output Specification
4.1.3 Processing
4.1.4 Database File Design
4.2 SYSTEM
REQUIREMENTS
4.2.1
Hardware Requirement
4.2.2 Software Requirements
4.2.3 Non –Functional Requirements
4.3 SYSTEM IMPLEMENTATION
4.3.1 System Flowchart
4.3.2
Sequence Diagram for Supplier
4.4
SYSTEM TESTING
CHAPTER FIVE
5.0 SUMMARY,
CONCLUSION AND RECOMMENDATIONS
5.1 SUMMARY
5.2 CONCLUSION
5.3 RECOMMENDATIONS
REFERENCES
CHAPTER ONE
1.1
INTRODUCTION
An inventory control system
contains a list of orders to be filled and then prompts workers to pick the
necessary items, and provides them with packaging and shaping information,
inventory control may be used to automate a sales order fulfillment process and
also manage in and outward material of hardware. Automation is the replacement
of human workers by technology. For optional sales and inventory management
process, robust functionality is needed for managing logistic facilities. Ware
house management functions for inventory control cover internal ware house
movements and storage and its support helps in the recording and tracking of
materials on basis of both quantity and value.
This application takes care of
all supply orders reducing cost for warehousing, transportation while improving
customer service. It significantly improves inventory turns, optimizes flow of
goods and shortens routes within warehouse and distribution centres. it also
improves cash flow, visibility and decision making providing efficient
execution of task using this fast and reliable computerised method.
1.1 HISTORICAL
BACKGROUND OF THE STUDY
The Petroleum Equalisation Fund
Management Board is a scheduled Parastatal of the Ministry of Petroleum
Resources ,established by Decree No.9 of 1975 (as amended by Decree No. 32 of
1989 ), mainly to administer Uniform Prices of Petroleum products through out
the country . This is achieved by reimbursing a marketer’s transportation
differentials for petroleum products movement from depots to their sales
outlets (filling station), in order to ensure that products are sold at uniform
pump price throughout the country. The source of the Fund is from principally
the net surplus revenue recovered from Oil Marketing Companies.
It has an Operational Office in
Lagos, five (5) Zonal Offices as well as twenty-two (22) Depot
Offices located at the 21 NNPC Depots and Marketers’ storage
facilities at Apapa and Ibafon. It is headed by the Executive Secretary who is
the Chief Administrative Officer, responsible for the day to day operations of
the fund.
In 1979, Government, conscious of the fact that petroleum
products supply did not reach the remotest parts of the country encouraged
Major Marketers to open filling stations in those areas.
The purpose of this Charter is
to explain what we do, how we provide effective and efficient services and our
commitment to all Stakeholders and customers. It also welcomes feedback as a
means of assessing our performance and meeting expectations.
(a) Mission Statement
The Management and Staff of the
Petroleum Equalisation Fund (Management) Board are pleased to present our
Service Delivery Charter. There shall, be, for the purpose of administering the
fund in accordance with the provisions of this Act, a body to be known as the
Petroleum Equalization Fund Management Board (hereafter in this Act referred to
as the ―the fund‖).
The legislative Charter of the
Board as provided by Decree No.9 of 1975 as amended by Decree No. 32 of 1989
(now Chapter 352) of the Laws of the Federation 1990)
The Petroleum Equalisation Fund (management) Board is
committed to equalize the transportation differentials in white products
marketing and a Uniform Prices of Petroleum Products obtains in the country and
stakeholders are promptly and fairly treated in the process.
The PEF(M)B as a good corporate
organization would strive to dutifully implement all government directives,
especially in ensuring transparency, probity and accountability. It would
collaborate with all Stakeholders in ensuring prompt settlement of Marketers
claims to enhance the distribution of petroleum products to make them available
at reasonable costs nation-wide.
In addition to its primary
functions, the Board would, with its new computerization structure, strive to
build a data/information bank for accurate data on the level of lifting and
distribution of petroleum products throughout the federation
(b) Vision
To become an efficient,
technology-driven, stakeholder-oriented and pro-active partner in facilitating
the transportation and distribution of Petroleum Products nation-wide by the
year 2020
.The Petroleum Equalisation Fund (Management) Board values
and promotes high ethical standards of a responsible public service
organization, and it’s specifically committed to: Transparency,
Efficiency,
Responsiveness and Integrity.
© Service Provision and Delivery
What We Do: In broad terms, the Board performs
two (2) basic functions, namely:
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( i )
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The Administration of price equalization
scheme to ensure the
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sustenance of
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Government Policy of Uniform Pump
Prices for
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petroleum products
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nation- wide;
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( ii )
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The
administration of bridging payment scheme to complement the
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Nigeria
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National
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Petroleum Companies
pipeline distribution
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network of
petroleum
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products
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to all
the
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depot areas nation-wide, during
breakdown/maintenance of local
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refineries
and or pipeline
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breaks/vandalisation.
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(d)
The Equalisation Scheme:
I.
The consumer pays the in – build
transportation cost of N2.30kobo per litre irrespective of where the product is
purchased. The amount is not static because of
government policy.
II.
Transportation cost is related in distance traveled between
the points of lifting the
products (Depots) and the points of sale
(filling stations)
III.
The marketer serves as an agent of
the PEF (M) B in collecting the allowances build – into the price structure,
and transfers same to the Board for equalization or bridging purposes. The
allowance collected for bridging is N1.87Kobo. This also changes from time to
time.
(e)
Bridging Fund Scheme:
Bridging is the movement of
petroleum products by long distance road haulage (i.e above 450 kilometres)
from a depot/refinery to another depot experiencing scarcity. Bridging is
resorted to only when there is a pipelines break or where the refinery feeding
the depot(s) experiencing products scarcity is shut for Turn Around Maintenance
(TAM).
(f)
Penalty for Non Payment of Allowance:
(1)
The Board shall from time to time,
by notice served by registered post on the oil marketing company concerned,
specify the date on which any net surplus revenue due from that oil marketing
company shall be paid to the Board.
(2)
If any sum is not paid within
twenty-one days of the specified date, a sum equal to ten per centum of the
amount on unpaid shall be added for each month or part of a month after the date on
which payment should have been done.
(3)
The Board may, if it thinks fit,
remit in whole or in part any penalty imposed under this section.
(g)
Offences and Penalty:
(1)
Any person who fails to comply with
any requirement made by the Secretary under section 10 of this Act, shall be
guilty of an offence and liable on conviction to a fine of N50,000.
(2)
Any person who-
(a)
Knowingly or recklessly furnishes in
pursuance of any requirement made under section 10 of this Act, any return or
other information which is false in any material; or
(b)
Willfully makes a false entry in any
record required to be produced under that section with intent to deceive, or
makes use of any such entry which he knows to be false, shall be guilty of an
offence and liable on conviction to a fine of N50,000 or to
imprisonment for five years.
(3)
Where an offence under this Act by a
body corporate is proved to have been committed with the consent or connivance
of, or to be attributed to any neglect on the part of, any director, manager,
secretary or other similar officer of the body corporate (or any person
purporting to act any such capacity) he as well as the body corporate shall be
deemed to be guilty of the offence and may be proceeded against and punished
accordingly.
(h)
Those We Serve:
1.
Staff of Petroleum Equalisation Fund (management) Board
2.
Independent oil marketing companies
3.
Major oil marketing companies
4.
Stakeholders of oil industries
5.
Government organizations
6.
Third-party
7.
General public.
(i)
Our Standard and Target
Our
staff must be at the depots to sight products and stamp marketers documents at
all times during official working hours.
Collection
of NTA and issuing of receipts for same to marketers on daily basis. Collection
and acknowledgement of marketers Claims within 24hours
Claims
to be scrutinized by the depot staff and forwarded to the head office within 5
working days.
All
Claims received at the depots for processing will be ready for payment to
marketers at the depot within 37 working days.
(j) Our Expectations from those we Serve
Bridged
products must be delivered within stipulated time limit (presently set at
10days). Marketers to report any breakdown of vehicle immediately to Petroleum
Equalisation Fund (management) Board receiving depots within the stipulated
time limit (48hours).
Marketers should make all
necessary payments to Petroleum Equalisation Fund (Management) Board and depot
owners. There should therefore be evidence of such payments including National
Transportation Average (NTA) allowance.
Evidence of delivery of correct
volume of products lifted.
There must be evidence of
Petroleum Equalisation Fund (management) Board loading and receiving depot
stamps and signatures.
There must be evidence of
stamps and signatures of other agencies at the receiving depot especially
Pipeline Products Marketing Company (PPMC) and Department of Petroleum
Resources (DPR.)
Orderly presentation of Claims in
the following way:
1.
Application on original letter
headed paper indicating type of Claim with amount being Claimed and duly
signed.
2.
Each meter ticket from Pipeline Products Marketing Company
depots should have the
following
attachments (a) Receipt for product payment. (b) DO5 (c) Bridging
approval
from Pipeline Products Marketing Company (d) Bridging Note also from Company.
Out
return report on original letter headed paper duly signed by the particular
station manager confirming that products and volume were actually delivered to
that station. Submission of Daily products distribution schedule.
Evidence of payment
of National Transportation Average allowance by marketers who are in the contribution
zones.
Marketers making
Bridging /NTA or Inter-district/ NTA claims should present them in different
files but must be submitted at the same time.
Depot and Petroleum
Products Marketers Association and Major Marketer have to submit detailed and
correct addresses of destination of all lifted products.
Monitoring Targets:
(i)
Ensure payment of reimbursement to marketers within 37
working days.
(i) Quarterly
visits to depot offices by Zonal Coordinators to asses the
level of
compliance on the standard rule.
(ii)
Monthly operational meetings by unit head to evaluate
performance.
(iii)
Quarterly reports from Zonal and depots offices on
performance.
(iv)
Annual general operations meeting.
(v)
Periodic Stakeholders Forum for
assessing targets and improvements in service delivery.
(l) Standards:
(i)
Timeliness in payment of reimbursements.
ii)
Accurate record keeping and prompt up-dating mechanisms
(M) Feedback
Mechanism
The
PEF(M)B would gauge public and Stakeholders perception of its performance
through the following means:
(i)
Stakeholders consultations/meetings
with Marketers and other players in the downstream sector of the petroleum
industry.
(ii)
Responses to quarterly survey of
marketers, transporters, unions, staff and the public on the effects of the
Board’s operations.
(iii)
Reports from Staff at the 21 depots,
Major Marketers, PPPRA, NNPC, NIPCO and DAPPMA facilities on operations
perception of the Board’s performances.
(iv)
Returns through opinion/suggestion
boxes and reactions to publications in the in-house news Magazine of the Board.
(n)
Obligations
Management:
To become an efficient, technology – driven,
stakeholder – oriented and pro-active partner in
facilitating the transportation and distribution of petroleum products nation –
wide.
Also in discharging its functions, the Board shall provide a
conducive work environment. Staff and Stakeholders shall respect the right of
all Nigerians to quality service which would engender development.
Staff:
They are expected to exhibit high level of dedication to
their job, hard work, honesty and transparency.
Customers: Marketers
are expected to submit genuine claims for reimbursement and should be
within the agreed period of six months to enable the board keep to its set
objectives.
On the part of third-party, a
company must be registered with the board. Contractors should operate based on
the contractual agreement entered into with the board. They are expected to
provide quality service.
Nigerian
Public: Prompt,
reasonable, honest and transparent in making any demands on us or in benefiting from any of the service(s) we provide
1.2 STATEMENT OF THE PROBLEM
The Petroleum Equalization Fund (Management) Board PEF(m)B is to an extent manually
operated and reveals a number of problems.
- The
recording of sales and cash received are done manually on a book that appears
rough, thus the books are exposed to physical damage, information can be lost
and dust particles are accumulated.
- The
long list supply order waiting to be attended to on daily basis.
- The
control system is time consuming, less accurate and less efficient and the
environment is not user friendly.
- Inaccuracies
often ensue from human error.
The manually system is quite
tedious and can be reduced or eliminated with the introduction of the proposed
system.
1.3
SIGNIFICANCE OF THE STUDY
The study is primarily aimed at
increasing efficiency in operation, reducing maintenance and running cost,
monitoring the supply of goods and its distribution and increase profit in the
Petroleum Equilisation Fund (Management) Board PEF(M)B by introducing an
automated inventory control system.
1.4 OBJECTIVES OF THE STUDY
The main objective of the study
is to develop an automated Inventory Control System Petroleum Equalization Fund
(Management) Board. While other subsidiary objectives include:
I.
To provides total asset visibility.
II.
To ensure the
reduction inventory stocking
levels giving full inventory history
III.
To reduces lead time, shelf space,
and errors due to damage, fatigue of staff and overall cost of operations.
IV. To
facilitates ―just in time‖ deliveries
V.
To provides higher level security as
the system would be pass worded to prevent unauthorized access.
VI. To shortens
cross docking time and spends up sort/ pick up rate.
VII. To
helps the management plan, monitor, optimize resources and ascertain their
financial position at any time.
1.5 SCOPE OF THE STUDY
The
scope of this study covers the Petroleum Equalization Fund (Management) board
as whole, and its customers which include retailers, distributors and the
general public.
1.6 LIMITATIONS AND CONSTRAINTS OF THE STUDY
No authority to give bridging
approval, but reimburse marketers for bridged products Central Bank of
Nigeria’s policy/processes as it affects payment of claims and third party
payments.
Checkmating
the activities of marketers. Surveillance and control/ pricing control. Non
payment of Bridging and NTA allowance by marketers as at when due.
Delays
in remittance of Bridging allowance due to reconciliation process between the
Board and PPMC.
Lack
of up to date of reconciliation of Major Marketers lifting’s and activities as
at when due.
1.7 DEFINITION OF BASIC CONCEPTS
Automation: this is the
use technology
or computers to control and process data reducing
the need for human intervention.
Database:
this refers to a large store of related data on a computer
that user can access and modify.
Password:
this is a secret code that must be entered into a computer
to enable access to its applications. it is made up of numbers, letters,
special characters or a combination of any of the above categories.
Inventory
control system: a list of orders to be filled
prompts workers to pick the necessary items and provides them packaging
and shipping information.
Computerization:
this is the conversion of a manually operated system to a
controlled, organized and automated system.
Research:
a careful study of a subject to discover facts, establish a
theory or develop a plan of action based on the facts discovered.
System:
A set of computer components functioning together.
Technology:
the study of techniques of mobilizing resources such as
information for accomplishing objectives that benefit man and his
environment .
Software:
A computer program or set of instructions that direct a
computer to perform processing functions.
Information
System: A collection of producers, people, instructions and
equipment to produce information in a useful form.
Processing:
This is dealing with something according to an established
procedure.
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