Attempt has been made in this project to discuss
generally and analyze the impact of stock taking as a control measure in
manufacturing company in Nigeria today, Dangote Flower Mills Ilorin is being
chosen as a case study. Stock taking is an act of verifying inventory in the store
while purchasing could be defined as the function which is responsible for the
procurement of equipment, materials, suppliers and services required in an
organization for the use of production in accordance with the standards
perforation, in the most efficient and economical manner. This project will be
divided into five chapters, the chapter one will present introduction of the
topic, statement of problems, objective of study, significant of the study,
scope of the study, limitation of study, historical background of case study
and definition of terms. Chapter two will deal with the literature review.
Chapter three will contain research design and methodology, area of the study,
sample frame/population, instrument for the data collection, and methods of data
research question. Chapter four will present presentation analysis of data,
data interpretations, and analysis of data. Chapter five show the summary of
the findings, conclusion of the findings and recommendation. References.
Statement of Problems
Objective of Study
Significant of the Study
Scope of the Study
Limitation of Study
Historical Background of Case Study
Definition of Term of Historical
CHAPTER TWO: - LITERATURE REVIEW
Classification of Stock Items
Stock Turnover, Requisition and Issues
Stock Valuation Receipt and Issues of
Stock Taking Reclamation, Procedure
Duties and Responsibilities of Stock
CHAPTER THREE: - RESEARCH METHODOLOGY
Research Design and Methodology
Area of Study
3.4 Instrument for the Data Collection
Methods of Data Collection
Methods of Data Analysis
Restatement of Research Question
Presentation Analysis of Data
Analysis of Data
Stock taking is the physical
verification of the quantities and condition of items held in an inventory, as
a basis for accurate inventory audit and valuation. Stock taking is necessary
to ensure that the stock records are accurate.
stock taking is an essential element of a loss minimization strategy. The
process helps you to compare actual stock levels with the stock levels based on
your ordering records.
company is expected to maintain adequate stock of material for a continuous
supply of raw material to the factor for an interrupted production. It is not
possible for a company to procure raw materials whenever it is needed, and more
so the finished goods manufactured by a company cannot be sold of the same
time, a time log exists between demand for material and supply
The procurement of material may be
delegated because of such factors as strike, transport , disruption, short
supply etc therefore there is a need for a firm to maintain sufficient stock of
raw material at a given time to streamline production to maintain the concept
and conservation of account. The continuity existence to adequate raw materials
for economics purpose.
The control of inventories and
management of store house in common with the other major branches of commercial
and individual work become specialist activities.
The stores should be considered as a
temporary location for materials needed for operational purpose and should be
planned, organized and operate in such a way that the period of residence of
each stock items is as short as possible consistent with economic operation.
In general, if demand is steady or
highly predictable then we should store for very short period if at all when
demand is highly unpredictable then storage for longer period may be
There is no standard system of store
keeping which and e universally recommended or applied but in the course of me
certain principle and practices of more or less general application haven been
involved large sums of money are involved and it is essential or organic to
stock management or sores function so that the investment is kept to the
minimum from the stores point of view the most important thing is to keep the
quantities of incoming goods in their appropriate and respective position and
necessary records and transaction follows immediately shortage must be avoided
or else production line will have to stop.
At the sometime for much must not be
delivered or it will clog up the ware house and perhaps also the production
area, apart from the fact that excess deliveries will be tie up more capital.
It is well known that most materials
will determined in store in the course of time and the fact that a building is
provided for storage in itself an acknowledgement that some degree of
production is required.
By and large, stores is a general term
describing goods which are hold in storehouses and stock yards.
The bulk of those goods usually
intended for this in connection which production or operation activities, but
the expression “stores” also course finished product waiting to suppliers.
The store plays an important role in
advisory on the quantity of items to be stocked, provisuring and disposal of
The objectives of store function are:
make available a balance flow of raw materials components tools equipment and
any other commodities necessary to meet operation requirements.
provide maintenance materials spares and general storage for community of
receive and issue work — in — progress and finished production. Production is
not completed until it goes to final consumers.
accept other discarded materials as it arises.
the efficient operation of the stores system and for the achievement of the stated
objectives. It is necessary for an organization to have a strong stock control
A great attention should be focused on
the operation of the stores because of general scarcity of materials vis — a —
vis the higher cost of material and equipments.
The rationale behind stock or
inventory management or stores function involves: -
What things to keepings stock
When to order those things
What quantities of them to order
Most factories stock some very
expensive items as well as some very cheap one and use some perhaps once in a
year while other may be required at a rate of hundred in a day in deciding what
to stock, unit cost, rate of usage, lead time, deterioration, obsolescence,
stock facilities and capital must be carefully considered.
It therefore follow that before a
system of storage and stock control can sensibly be desired account must b
taken of the nature and needof the organization it is intended sewer.
This study is aimed at finding out the
following problems facing manufacturing industries with particular reference to
stock taking as a control measure.
verify the accuracy of store record
compare the balance sheet records with physical verification.
disclosed the possibility of fraud (Thief /Loss)
reveal if there is any weakness in the system for the custody and control of
OF THE STUDY
This research like any other is
carried out in order to achieve some objectives such as:
identify problems associated with carry out effective inventory management or
ascertain the problem of ineffectively handling of stock (problem definition).
forestall the possibility of fraud occasional by theft/loss (Analyzed the
problem & prevented of loss).
resolve the level of stock to be added when inventory should be replenished.
quantity problem i.e. colour, brand, size etc
OF THE STUDY
study will enable the management of any organization to: -
any pay attention to their role in ensuring smooth stock management so as to
achieve the corporate goal and objective of the company.
the effectiveness and efficiently of the organization through the stock
management skills or techniques.
how organization should carefully pay attention to receiving and issuing of
materials the level at which it is necessary to place an order and with what
an overview of the experience to the management and accounting students who may
like to carry out a similar research in the future.
This will cover all aspect of stock
taking as it affect manufacturing industries the survey is a case study of
Dangote Flour Mills Industries Limited Ilorin Kwara State. The study was design
to operate within the frame work of its objective to examine the impact and
effectiveness of stock taking as employed by the company.
This study would have broader scope
but for the following factor: -
Money and time have been the major
constants on work of this nature. However the research accepts that time has
plugged the overriding factor militating against the study.
People even after proper
identification still find it difficult to part with some vital information
which will be of great help to this work as they entertain fears that such
information might be sold for industrial espionage.
BACKGROUND OF CASE STUDY
Dangote Flour Mills Plc commenced
operations in 1999 as a division of Dangote Industries Limited (DIL). One of
Nigeria largest and fastest growing conglomerates following the strategic
decision of Dangote Industries Limited to unbundled if various operations,
Dangote Flour Mills was incorporate in 2006 when Federal High Court sanctioned
a scheme of arrangement in all the asset, liabilities and undertakings of the
yeast while flour division of Dangote Industries Limited was transferred to
Dangote to Dangote Flour Mills.
From an initial installed capacity of
500 MT per day at its Apapa Mill, Dangote Flour has expanded rapidly by opening
on quick successions three other flour mills are in Kano (2000), Calabar (2001)
and Ilorin (2005).
Each of the mills started with an
installed capacity of 500 MT per day but all of them have subsequently expanded
resulting in a total installec1 capacity of 5, OQQ MT per day distributed as
1,000 MT Per day
500 MT Per day
1,500 MT Per day
1,000 MT Per
These expansions were in response to a
growing national demand for flour and based products in addition to the
company’s drive for increased market share. Thus from a modest beginning the
company has growing to become one of the industry leaders within a six years
period. The company has 3 wholly owned subsidiaries namely: -
Agro Sack Limited
In line with Dangote Industries
Limited business philosophies of establishing a dominant presence in any sector
it operate in these subsidiaries occupy leadership position in their respective
The company is in the business of
flour milling processing and marketing of branded flour. Its product port-folio
comprises the following:
Wheat is transformed into
high-quantity flour, by using state of the art plant and equipment backed by
renowned technical expertise Dangote Flour Mills across the country equipped
with the least flour milling technology available in the word.
The company import its principal raw
materials wheat (the hard Red winter wheat No. 2 variety) from united state of
America in shiploads, Wheat Silo trucks (also Dangote Industries Limited Owned)
there after convey the Wheat to the inland mills to Kano and Ilorin.
Alhaji Aliko Dangote holds the
position of chairman of the board of direction at Dangote Flour Mills Plc. In
addition he occupies the post of Dangote group’s president and chief executive
officer. He also serves on the board of National Council of Nigeria Vision,
Mohammed Bello endowment for justice and jurisprudence, Kano foundation, the
Nigeria Economic submit group African Petroleum Plc, National Investment
Promotion Council and the heart of African (a management group on Nigeria Image
Project) etc Alhaji Aliko Dangote Graduated in Business from Al – Azahar
University Caire, Egypt.
Aliko Dangote Chairman of the
There are some terms that are common
in the economic and marketing circles and the definition of such term are
THE MIDDLE PERSON
Can be defined as any individual or a
group of individuals or an organization that serve as a link between the
companies and its market.
The middle person to any firm
includes, the firms market, the firms suppliers and of course the firm
A good company will always look
forward to serving or servicing market efficiently, profitably and in a
socially acceptable manner. The market is of a paramount importance in any
The role of a supplier in a marketing
system cannot be over emphasized in our economy to they we have a buyer’s
market, unlike few years ago the customers now have choice and they are being
constantly waved by the sellers.
problem area therefore is selling
The importance of supplier comes to
light when shortage occurs then the supplier rather than the buyer gets waved.
Hence the problem area is buying supplier price (cost to the organization).
Is a major factor considered in
setting the final price or any product.
THE MARKET INTERMEDIARIES
The market intermediaries from the
link between the produce and the consumer. They include the reseller,
wholesaler, retailer, hawker generally referred to as middle person, and others
organization that facilitates the follow of goods and services such as banking,
ware house, insurance, transportation, financing etc. they is some case, the
services of these intermediaries by the company dealing directly with it
supplier and selling directly to its consumers.