BENEFITS AND CHALLENGES OF STORE MANAGEMENT IN ORGANIZATION
ABSTRACT
The study examines benefits and challenges of store management in Alibert Product Nigeria limited, Lagos.
Data used in this study were obtained from primary sources. A structured questionnaire was the instrument used to
collect primary data for the study. The questionnaire was sectionalized into four parts.
The Taro Yamane formula was applied to determine the appropriate sample size for the study based on the
population at 90% confidence interval and 10% error of tolerance. The simple random sampling technique was used
to select 63 staff of the organization across all departments.
The descriptive statistics technique was employed to analyze the data collected from the respondents and the chisquare technique was used to test the two operational hypotheses developed in the study.
The research revealed that; The appropriate store management techniques that fit the operations of Alibert Product
Nigeria Limited are follow; material requirement planning, first-in; first out (FIFO), economic order quantity, forecasting
approach and strategic supplier partnership method; The benefits and challenges of store management significantly
impact on the operational performance of Alibert Product Nigeria Limited.
The study concluded that store management is very instrumental to the operations of any manufacturing firms.
The study suggested that; Alibert Product Nigeria Limited should adopt scientific techniques of store management; All
staff of the organization should be trained to have thorough knowledge of store management as this will enable them
to work towards stock protection and cost minimization; The organization should strengthen the supplier relation to
the level of partnership and also stop the habit of transacting business with only one supplier in order for the failure of
one supplier to slow down production process; The management should prioritize on the proper inventory techniques
and measuring of efficiency deviations to expose the weaknesses in the process of managing stocks.
CHAPTER ONE
INTRODUCTION
Onuoha (1991) defines management as the process of combining, utilizing and allocating organization’s input such
as men, money and materials by planning, organizing, directing and controlling for the purpose of producing goods
and services desired by customers so that organizational goals are accomplished.
In furtherance, stock refers to pile of goods a firm is producing for sale and the components that make up the goods
(Ama, 2001). Stock is an itemized list of goods and valuables with their estimated worth, specifically, the annual
accounted goods taken in any business (Ogbu, 2014). From the above mentioned definitions, stock is the totality of
goods, which include raw materials, work in progress and finished goods that enable an organization to produce. It
also refers to the amount of goods and materials contained in a store or factory at any given time. There are ways of
handling these stocks for the purpose of achieving the best from them. These stocks must be managed and
controlled in order to achieve their usefulness. To do this, the production manager, purchasing manager and sales
manager of the organization always put their heads together to plan appropriate ways of managing the level of stock
purchases, production stock requirement and sales using some feedbacks to exercise controls in order to achieve standardized results.
1.2 Background to the Study
According to Lucey (2007), stock management is the system used in a firm to control the firms’ investment in the
production of goods and services. The system involves recording and monitoring of stock levels, forecasting future
demands and deciding when and how to order with the overall objective of minimizing the cost associated with stock.
Store management or stock management refers to the ability of an organization to use all techniques at its disposal to
hold the quantity of stock that will be sufficient to produce the required number of goods needed by customers at the
appropriate time and at least cost to the organization with the view to maximize profit.
Managing stock is a crucial issue to every organization. Without effective stock management, there is great likelihood
for such organization to dissolve. Stock represents the largest single investment in assets for most organizations.
Employees in virtually every organization have become conversant with high level of commodity availability resulting
in higher stock level holdings. The basic reason why stock is held is to avoid stock out and its resultant problems. The
extent of stock is influenced by the operational needs of the organization, time required to obtain the delivery of stock,
availability of capital, cost of storage and the need for detailed records in the form of stock issues which should be
kept through the use of store records (Osei, 2015). Other factors that need to be considered are funds available,
availability of storage facilities, rate of consumption of materials, lead time, margin of safety and the stock level can
then be set for each material.
The unpredictability and volatility of timing and content of information flow on usage of stocks lead to uncertainty in
planning, increased stocks, stock out and delays. Therefore, it is pertinent to take appropriate steps especially on
stock to deal with the volatility and dynamics on the operational level of the business. In order for this to be effective,
there is need to apply strategies that will stimulate the supply chain strategy to achieve competitive advantage and
excellence.
Many organizations in developing economies usually leave stock decisions as well as store management to
departments concerned. Due to this, some problems are inherent and they include high cost of stock, selection of
suppliers, problem of delivery, stock out, stock obsolescence. To mitigate these challenges, the Federal Ministry of
Trade and Investment promulgated the store regulation act. This act governs the acquisition / receipt, custody,
control, issue and disposal of every registered organization. Government stores are to be procured from the Value
Added registered persons except where there is an exemption based on the request of waiver. Intermittent and
emergent purchases are common procurement practices in most organizations which negate public procurement
laws as proper procurement not well followed.
Organizational resources are always limited in supply and resources must be well used to avoid wastage. It is
therefore important to explore how manufacturing firms using a case study of Alibert Product Nigeria Limited have
been avoiding wastage by using efficient store management techniques among others to render efficient services to
their customers, maximize profitability, avoid stock out and reduce the cost of doing business.
1.3 Statement of Problem
The smooth running of any organization needs an organized flow of materials to service its activities. This can work
out when the organization manages its stock materials effectively. Many manufacturing outfits in Nigeria often
encounter some challenges managing their stores. Some of the problems are the cost of obtaining and holding stock
is always high and this affects the price of the finished goods thereby making it relatively unaffordable for customers
to buy them. Poor transportation system and unreliable delivery services in Nigeria have made it difficult for them to forecast the
workable lead time and stock levels that can enable them place order at the right time and get replenishment. Also
players in the manufacturing industry have been finding it difficult to determine the quantity of stock to order which is
economical due to variations in environmental factors such as price changes, exchange rate volatility et al that affect
other aspects of their production.
The concern is to investigate how Alibert Product Nigeria Limited has been managing their stores inspite of the above
listed challenges, the effectiveness of their store management techniques and how this has affected their performance.
1.4 Objectives of the Study
The main objective of this study is to investigate the benefits and challenges of store management in Alibert Product
Nigeria Limited, Lagos.
The specific objectives are to:
- examine the store management techniques that effectively suits the operations of Alibert Product Nigeria
Limited, Lagos. - ascertain the extent to which the benefits inherent in store management have impacted on the operational
performance of Alibert Product Nigeria Limited, Lagos. - determine the extent to which the challenges inherent in store management have impacted on the operational
performance of Alibert Product Nigeria Limited, Lagos. - 1.5 Research Questions
- The questions of interest in the study are:
i. What are the benefits of store management to Alibert Product Nigeria Limited, Lagos?
ii. What are the challenges of store management experienced by Alibert Product Nigeria Limited, Lagos?
iii. What are the store management techniques that effectively suit the operations of Alibert Product Nigeria Limited, Lagos?
iv. Have the benefits of store management impacted on the operational performance of Alibert Product Nigeria Limited, Lagos?
v. Have the challenges of store management impacted on the operational performance of Alibert Product Nigeria Limited, Lagos?
BENEFITS AND CHALLENGES OF STORE MANAGEMENT IN ORGANIZATION