This project work is centered on stock control as a measure
for ensuring profitability in an organisation a case study of Kaduna refinery
and Petroleum chemical. It begins with the first chapter that deals with the
background of the study which gives brief introduction about the subject matter
under study. Statement of problem which is the reason why the researcher under
take the study to exploit such problem and come up with recommendation which
will be beneficial to the organisation and entire society. Research question is
drawn up which is in line with the objective of the research work to be open up
to get veriables for questionnaires to be administered. Chapter two deals with
the review of previous work carried out by other authors on a similar topic.
Chapter three deals with the research methodology with research design
correlation studies to establish the relationship between stock control and
profitability. The study have a sample size of 50 which is 20% of the
population of 250 drawn from materials management related department and the
sample size selected randomly and questionnaire were administered to them for
their response. The findings of the study show that stock control have
relationship with the profitability of the organisation. Thus it was concluded
that stock control in KRPC is not properly carried out, because replenishment
drive is not according to actual materials requirement. Therefore recommended that
stock control unit should be established and the use of actual materials
requirement should be the principle upon which material replenishment is
carried out to ensure that materials are not hold in excess and also not.
TABLE OF CONTENTS
- - - - - - - - i
- - - - - - - ii
Declaration - - - - -- - - iii
Dedication - - - - - - - iv
Acknowledgement - - - - - v
- - - - -- - - vi
Chapter I: Introduction
1.1 Background of the study - -- - 1
1.2 Statement of the problem - - - 4
1.3 Objectives of the study - - -- - 5
1.4 Scope of the study - - - - 6
1.5 Definition of terms - - - - 6
Chapter II: Literature Review
2.1 Physical distribution - - - - 13
2.2 Distribution channel/systems - - - 15
2.3 Organising management functions - - 20
2.4 Sitting supply points - - - - - 21
2.5 Routing delivery vehicles - - - - 27
2.6 Scheduling deliveries - - - -- - 29
2.7 Containerization in distribution - -- - 30
Chapter III: Summary, Conclusion and
3.1 Summary - - - - - - - 39
3.2 Conclusion - - - - - - - 40
3.3 Recommendations - - - - - 41
- - - - - - - 43
Chapter I: Introduction
1.1 Background of the Study
Business organization must deal with distribution to
achieve a set goal. Distribution is not completed until the goods gets to the
Physical distribution comprises the tasks that is involved
in planning and implementing the physical flow of materials and good from the
manufacturing point to the distributors or the consumer for their own consumption
purpose or the aim of making profit.
Distribution of materials is one of the functions of
material management in procurement and stores. The over all objectives of
distribution is to provide a service to the procurement, marketing, stores and
the production function by holding and delivering of goods and services
(products) efficiently and economically.
Further more, it can also be related to warehousing,
delivering and planning the distribution system. Warehousing is principally a
service or production, being designed to hold products for manufacturer to
transform stock from production units to marketing (Sales) units and to
assemble loads for delivering to consumers/customers.
Distribution also makes the best used of the resources
that are available and to keep investment of a reasonable levels of products.
Planning the distribution system, it must be designed to
coordinate warehousing with delivering to advice on the location of the
factories, warehouses and depots to route delivering vehicles to schedule
deliveries and to control operations in accordance with requirements.
The supply site, must be designed and decided, (to suit
the type of business) routes are needed to develop for supplying of good to the
The different types of transportations or routes are rail,
road, sea, air and pipeline. These routes must be considered so as to select
the one that provides the best services.
Purchasing by Kenneth Lysons 4th editions
logistics management which is the same as distribution the author defined it as
“the process of strategically managing the acquisition, movement and storage of
materials, parts and finished inventory (and the related information flows)
through the organization and its marketing channels in such a way that, the
current and future profit ability is maximized, through the cost effective
fulfillment of orders (Gattona).
Supply chain management (purchasing by Mallam Hassan
Mohammed) defines distribution as a “concept that involves the integration of
all the value creating elements in the supply, manufacturing and distribution
processes of an organization, from the raw materials extraction, through the
transformation process to end users consumptions” (pp.16).
Distribution is also a system which is to provide a
service to customers who pay to receive goods as ordered.
Distribution channel is the path a product takes as it
moves from the producer to the user. The objectives generally, is to select the
most effective, efficient and profitable pathway.
The term physical distribution is part of the working
vocabulary of every business many finds it difficult to defines its meaning
because a wide range or variety of interpretation are available in the literature
of the subject.
Statement of the Problem
Most organization adopt indirect marketing strategy
because of its size. The number of products were too many and the organization
described to apply the funds to something else.
Indirect marketing is defined “as a process of marketing
that uses personal media with or the influence of sale’s man to influence and
effect sale’s product – wholesaler - retailer
The organization makes use of this strategy effectively
and efficiently because of the following reasons:
1. It has a narrow product line
2. It has unable to finance, distribution direct to retailers
or decides to apply the fund to something else
3. Retail outlet are many and widely disperse that is with a
4. The wholesaler are willing to carry the product and give
Organization who have a poor relationship
within any link of the supply chain or distribution channels can have a
disastrous consequence for all other chain. Therefore informal interaction and
information sharing should be giving priority in physical distribution to make
it more efficient and effective.
Objectives of the Study
The major rationale behind this study is to assist us to
compare how physical distribution is carried out in different business organization.
This essay will serve as a reference in case of research
purpose and also one of the prerequisite for the award of National Diploma in
Business studies in the department of Purchasing and Supply , College of
Business and Management Studies, (CBMS) Kaduna Polytechnic, Kaduna.
1.4 Scope of the Study
It covers the area of input phase which is the moving
bought-out items such as raw materials and components from supplier’s to
production and the out put phase of
moving finished goods from the factory through the appropriate channels of
distribution to the ultimate consumer.
Definition of Terms
Physical Distribution: Is the activities involved in the
flow of products as they move physical goods from the producer to the consumer
or industrial users.
Logistics: Is the total management of the key operational functions
in the supply chain-procurement, production and distribution, procurement
includes purchasing and product development.
The production function includes manufacturing and
assembling, while the distribution function involves ware-housing, inventory,
transport and delivery (Knight Wendling/Mallam Hassan)
Ware-housing: a broad range of physical distribution activities
including storage, assembling and preparing product for shipping.
Product: A set of tangible and intangible attribute that include
colour, price, packing and repetition and services of the manufacturer and the
middlemen. A product may be physical goods, a service and idea, a place, an
organization or even a person.
Storage: This involves receiving and keeping of materials and
issuing them to production department. It also inovles storage of work in
progress components and finished goods before being transferred to the ware
Packaging: This involves the methods of wrapping up of materials
packing and presenting them in good containers to retain the quality ultimately
to the consumers.
Routing: it is the systematic study of the detail of the supply
sites, customer’s location of delivery of vehicle and operating conditions
Delivery: Is a marketing services being designed for transporting products
according to orders and delivering them into the hands of customers
Schedule: is the planning of vehicles journey’s so that order are
delivered at the right time, right days, at the right place to the ultimate
consumers or users and vehicle are utilized efficiently
Stock/ Inventory Control: This involves the physical control i.e checking, counting
and racking of stocks. It also involves, clerical control i.e. keeping records
of receipts, issues and balances of all inventories.
requirement planning (DRP): This
is an inventory control and scheduling techniques that applies MRP principles
to distribution inventories, which may also be regarded as a method of handling
stock replenishment in a multi-echelon environment.
Supply Network: Is the flaw of materials and services into and within the
firm starting from extraction, right down t consumption and conversion end
products or services.
Planning: Is the preparation of materials budgets product research
and development value engineering and analysis and standardization of
Materials management: Is the total of all those tasks, functions activities and
routines which concern the transfer of external materials and services into the
organization on the administration of the same until they are consumed or used
in the process of production, operations or sale.