CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY
Advancement in all business activities has brought about store management. For the past decade, stores were handled by clerks in a routine manner. But in recent times, proper attention has been given to it. As a matter of fact, a well planned and effectively managed stores can contribute substantially to the organization’s growth and efficiency. Stores management is a vital element in the management of materials.
However, before delving into this plight, it is appropriate to give the definition of stores in the public section because it means a different thing from what we learned under financial accounting and cost accounting.
According to federal Government financial regulation number 2101 “Stores include all moveable property purchased from public funds or otherwise acquired by Government. It is divided into allocated and unallocated stores.
According to Monday Osirim (2012 p. 151) “The term stores in Government Accounting means stock or inventory of materials and equipment purchased with public funds for official use”.
International Public Sector Accounting Standard (IPSAS) number 12 known stores as inventories. So, this topic can also be seen as “Inventory management in the public sector of the economy”.
According to Okey, G.O (2011 p. 181)”Inventory management is the act of ensuring proper stock control”.
It is very necessary that organization must try to asses the items to be held in stock, decide the extent of stock holding of Items, individually and collectively, and finally regulating the input and issue of stock into and from the stores house. Therefore, through this process, it is possible to adjust continuously the quantity and value of store held to conform to circumstance at all time.
Store management is the clerical control of the movement of goods into and out of the stores, and of the level of stock in stores. Different store records cards are keep to known when stores fell to minimum stock level, maximum stock level, re-order quantity and re-order point. The success or failure of any organization depends largely on efficient systems of their store management, since store management is regarded as a procedure in which appropriate system containing information are fed to various departments for recording or action.
Actually, different systems are operated in different organization in managing their stores. Some of these systems work out well while others fails in their purpose.
1.2 STATEMENT OF THE PROBLEM
From the past decades, most organization did not realize the essence of maintaining an effective and efficient store management system. As regards to this, store management has long been known as a major factor in the quest from growth and efficiency, so organizations face a lot of store management problem.
Due to lack of proper record of store, organization don’t know when their stock level reached maximum stock level, minimum stock level, re-order quantities controlled which has resulted to excess obsolescence and determination. At the same time shortage of material have risen at the time when they are urgently needed and operating delayed most alarming problem which as prompted the study is the one concerning the Rivers State Polytechnic, Bori.
These amongst other factors have necessitated the study, to explore into ways and areas to find solution to the problems.
1.1.2 RESEARCH QUESTIONS
This research will be guided by the following questions,
Is there any effective and efficient store management in Rivers State Polytechnic, Bori?
Is there any acquisition policies guiding the stores management?
What are the likely problems encountered in maintaining an effective and efficient store management in Rivers State Polytechnic Bori?
Do the policies have any effect on overall performance of store management?
What is the interface between the stores department and other department?
Is there any store procedures in place and is the performance of its activities contributing to the achievement of the department objectives/goals?
Why it is necessary for a company and institutions to carryout stores for raw materials, component parts and finished goods?
Can there be solution to the problem of the store management in the public sector (RivPoly)
1.3 PURPOSE/OBJECTIVES OF THE STUDY
In attempt to achieve these objectives, the following strategies will be considered:
To highlight the importance of inter-relationship of store department functions
To establish the link between store department and other department in the school (institution)
To identify the most appropriate method of store management
To determine the scope of stores department
To identify the proper model of cost effectiveness.
1.4 STATEMENT OF HYPOTHESIS
On the above research question, this study will examine the following hypothesis.
Ho: There is no significant effect of store management in the public sector.
Hi: There is a significant effect of store management in the public sector.
1.5 SIGNIFICANT OF THE STUDY
This study becomes very important because the acquisition of store (materials) and management is an indispensable function in any organization. No one organization can do without stores (material); be is manufacturing, industry, sole business, institutions, etc. all other department in the organization are dependent on store department for achieving their activities.
Considering the foregoing duties of the store manager, this research therefore will be useful to any level of management in the manufacturing, as well as Construction Company, most especially those who have strategic positions.
The line staff who is not in such high position of policy making but working as a team to achieve the co-operate, will also find this as a guide.
To academicians, this work will lay foundation with which they will build on, as this study will widen their scope of understanding of what the store management is all about
1.6 LIMITATION/SCOPE OF THE STUDY
My major limitations were that of finance and time. The researcher could not attain the desired scope and depth as a result of financial handicap, time and resource constraints.
The researcher is delimited to Rivers State Polytechnic Bori. It was not easy to get most heads of department and director of school on seat, while some of those seen were reluctant to open up. Nevertheless, the researcher was grateful to the very few especially the staff in Central Store, Bursary Department, Internal Audit Unit, Works Sports and Student Affair Department who not only made data available to me but also provide some useful guideline and critics
1.7 DEFINITION OF TERMS
Requisition: the researcher sees this as the act of requiring or demanding. It usually a written demand
Minimum Stock Level: According to Braide, J.J.M (2000 p. 88) “It indicates the smallest quantity of a particular inventory item that should be maintained at any point in time
Maximum Stock Level: According to Braide J.J.M, it indicates the largest quantity of a particular inventory item that should be maintained at any point in time
Re-Order Level: According to Braide, J.J.M, it indicate the stock quantity, when attained, necessitates the replenishment of stock.
Re-Order Quantity: This is sometimes known as the economic order quantity. According to Braide, J.J.M. (2000 p. 88) is the quantity of item ordered whenever there is the need for the fresh supplies of an item. This is the quantity that is ordered whenever the re-order level is reached.
Lead Time: According to Adeniyi, A. Adeniye (2009 p. 62) “Is the time between the time an order is made and the time the item is received.
Obsolesce Stock: According to Braide, J.J.M (2000 p. 114) “These are store items which are no longer demanded by the factory.
Allocated Stores: According to Monday Osirim (2012 p. 151) “In a simple language, allocated store are quantity of items held in stock that have already been allocated to an end use.
Unallocated Stores: According to Financial Regulation number 2104 “Unallocated stores are those purchased for general stock rather than for a particular work or service for which the final vote of change cannot be stated at the time of purchase.
Bin Card: Is a store card used to record the receipt, issues and balance of each items of stock in units.
Stock (Materials) Control: This is a system use in a firm and institution to control the firm’s investment in stock.
Buffer or Safety Stock: This refers to reserve stock held to guard against stock out and to usage to lead time exceeding the average.
This chapter give the ever view of the research work. It tried to point out the importance of store management in public sector of the economy. Also in this chapter, the importance of this study was highlighted under significance of study and
Questions were raised whether there is effective store management in the Public Sector. Again, whether there is acquisition policies guiding store management.