STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of

ADIC

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

DEDIDCATION

TO MY PARENTS

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

ACKNOWLEDGEMENTS

In order to carry out our work , we have benefited from a multifaced

assistance. A few people took a notable part and we would like to express our thanks to them .
We particularly think of :

- The president and CEO of ADIC , Mr NOUCTI TCHOKWAGO, for offering us a

position as a trainee in his structure.
- The general manager of ADIC Mr TCHOLA.
- Mr NGUIMEZAP for setting up IUC as the pole of academic excellence.
- Mr SEHOU JULES our professional supervisor for his availability and good
collaboration.
- Mr LENJO MARTIN, our academic supervisor for his patience and rich contribution.
-
-

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

ABSRACT

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

RESUME

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

PREFACE

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

INDENTIFICATION FORM

NAME OF THE COMPANY AFRICAN DISTILIING COMPANY

Abbreviation ADIC
Legal form Limited liability company
Share capital 250,000,000
Social objective Production (sprint ,drink,alcohol)
The head office Douala bonabérie
Date of creation 1990
Address Bp 2199 Douala Cameroon
Phone 33391584/ 33911586
Fax 33391585
E mail Adic2yahoo .fr
CEO NOUCTI THCOKWAGO
DG THCOLA
Rc n 7136
TAXpayer number M108900001783A
Main activities Distillation of alcohol
Tax system Real

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

LIST OF ABBREVIATIONS

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

LIST OF TABLES

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

TABLE OF CONTENT

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

GENERAL INTRODUCTION

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
ADIC

CHAPTER 1 : GENERAL PRESENTATION OF THE COMPANY AND

INTERNSHIP ACTIVITIES

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ADIC is an industrial company which deals in the production,commercialization

and distribution of liquors.In this chapter we are called to present the company ADIC with its
internal and external environment on one hand and on the other hand to describe the course of
our internship while highlighting the difficulties that led to the choice of our topic.

SECTION I: PRESENTATION OF ADIC

In this section , we are going to discuss on the history and evolution of ADIC
from its creation to date. Also , we will equally throw light on the structural organization of
the company and the product it offers.

I - INDENTIFICATION, HISTORY AND EVOLUTION

I.1- IDENTIFICATION

ADIC is a company with a capital of 250000000 FCFA held by its CEO, with
more than 200 employees in various highly skilled categories , all working to ensure the
smooth running of the company. ADIC in Cameroon is located in the city of Douala more
precisely in Bonaberi.

I.12 – HISTORY AND EVOLUTION

BATOULA, created in 1976 , has expanded its field of activity from BATOULA
to GROUPE BATOULA, and is made up of :

 COMPANY BATOULA
 LITTOCOL
 ADIC
 VOLCANIC

ADIC was created in 1990 under the initiative of its CEO, Mr. NOUCTI
TCHOKWANGO, a very ambitious economic operator. As part of the observation made of
suger cane residue called MELASSE, during one of his journey in china , he realizes the
importance of transforming melasses to make raw alcohol on one hand , and on the other hand
the production of spirit drinks for consumption. The idea thus created will lead to the creation
of ADIC.

II – BUSINESS ACTIVITIES AND PRODUCTS OFFERED

II.11 Business activities

ADIC has as primary mission to valorize a local material ; molasse, inorder to

meet the needs of Cameroon and central Africa in alcohol. It is also responsible for the ;

- Production of alcohol for the cosmetics and brewering industries.

- Production of various types of spirit drinks.

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II.12 Products offered;

 Range of sachets
- MEGORE 5CL
- SAMBUCA 5CL
- JOHNY WALKER 5CL
- MINAYOU 3CL
- PASTIS 5CL
- VISA 3CL
- NIKITA 5CL

 Range of bottles
- BLEN GARNER 60cl
- STINGEHS 75cl
- OLD MEGORE 75cl
- COLEMAN 75cl

 Canister range
- NOFIA 500cl
- BEST DRY GIN 500cl

III – THE RESOURCES OF ADIC

Resource is the set of elements enabling the company to function.

III.11 The material resources

ADIC has a large stock of equipment namely ; two swimming pools of about
25000 litres each, a water tower, a mixer, filter plates, bagging machines, (ILAPAK),
water.

III.12 Financial resources

It has the financial resources namely : operating income, bank overdrafts,

borrowing.

III.13 Human resources

It main mission is to offer employment to Cameroonians with the aim of

developing their creative genius of employment , it has more than 200 qualified , dynamic
and motivated employees in agencies and factories.

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IV - ORGANISATIONAL STRUCTURE AND VARIOUS BODIES OF THE

UNDERTAKING

The administrative section consist of ;

- The CEO: who represents the company everywhere when need is felt,
- The general manager: he develops the company’s policy and makes the necessary
choice in the long, medium and short term.It commands coordinates and controls
all the department under its responsibility.
- Production manager
- The sales manager
- Human resource manager
- The head of administrative and financial affairs
- The secretary general
- Executing agents

V - THE ENTERPRISES EXTERNAL ENVIRONMENT

ADIC has a good number of relationships with various partners who share a
common affinity with the company the latter carries out operations with third
parties to be able to face very serious competition for marketing in order to
perform well in its field of activity ADIC must not only master its market, its
partners but also its competitors.

 The Main Partners

These main partners are;
 Customers
The operation of a business depends on the demand, in short the
consumers who are the customers. These customers are :hospitals, brewing
industries, households, and establishments marketing of spirit drinks.
 Suppliers
- SOSUCAM
- ILAPAK
 The state
 Competitors

- FERMENCAM

- IMPORTED PRODUCTS

 Financial institutions
- BICEC
- ECOBANK

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SECTION II : INTERNSHIP ACTIVITY

I.1 SUMMARY PRESENTATION OF THE RECEPTION SERVICE

Upon our arrival at ADIC during our internship we were assigned to the human
resources management from where we were introduced to the company from there we spent a
few days at the production plant to have a knowledge of the different materials and products
involved in production then we were assigned to the financial and accounting department
where we carried out the work with the mission of identifying the difficulties faced by the
latter in other words our work consisted of a set of activities that we will share with you
following the presentation of the financial and accounting department and the expectations of
our internship

ACTIVITY OF THE INTERNSHIP

During the course of our internship we did not just content ourselves with our topic
because we had to know the various departments in order to know the size of the company
and soak up the realities but first of all we undertook to make an acquaintance on the
functioning of the department in which we had evolved afterwards , several tasks were
entrusted to use like (the recording of certain invoices verification of the effectives times of
work on pay slips before payroll etc

TIMING AND RUNDOWN OF ACCTIVITIES

PERIOD ACTIVITIES OBSERVATION

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From 16th to the Contact and reading of Nothing to report

20th of august company manuals

From the 23th to Visit of the production Mastery of the different

the 27th of august plant and knowledge product of the company
of the various tasks as well as their
carried out and packaging
participation

From the 30th of Awareness of the From there we have

rd
august to the 3 of accounting department learned and discovered
September and the effectiveness many things like the
of the certain posting stamp some
accounting tasks on accounting entries
invoices using an
allocation

From the 6th to the Same activities Discovery of

15th of september mismanagement of
stock within the
company and many
other problems

Table made by us

THE ACQUISITIONS OF INTERNSHIP

During the course of oue internship we learned a lot of things both

professionally and socially the most captivating of which are:

- The discovery of an Imputation form.

- Learn how to punch and file accounting documents in order in a chrono
- Learning to do ; photocopies, binding
-

DIFFICULTIES ENCOUNTERED AND CHOICE OF THEME

A-The difficulties encountered are

-stress during the registering of operations from the first days

-problem of accounting of operation during the first week of the business account numbers

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 STOCK MANAGEMENT IN AN INDUSTRIAL COMPANY : case of
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-problem of determination of their different costs

B-JUSTIFICATION OF THE TOPIC

The ESTABLISHMENT of the CMA in this company was chosen as the topic because
during our internship we found that there was a lack of organization and practice of the petty
cash.

Following this the realization of this topic will be for us a great contribution that we bring
to this company in the MANAGEMENT OF THE PETTY CASH that it is saved from losses
when disbursing cash for sundary expenses.

Given all of the above we will then take a conceptual approach to the
topic(MANAGEMENT OF THE PETTY CASH IN AN INDUSTRIAL COMPANY)

CHAPTER II : CONCEPTUAL APPROACH TO STOCK

MANAGEMENT

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Stock management is an important function for both a commercial enterprise and an

industrial enterprise. Inventory management consists of planning, organizing, directing and
controlling the activities relating to all merchandise stocks held in the company. However,
inventory management is an entire process from the purchase of the goods, their entry into
stock, their release in stock and their accounting. We will insist here on the definition and the
categories of stocks, the analysis of the purchasing process, the selection of the suppliers, the
optimal material organization of the stocks and finally the inventory organization.

SECTION I : THEORETICAL CONCEPT OF INVENTORY MANAGEMENT

I DEFINITION AND CATEGORIES OF STOCK

I.11 Definition
According to the Uniform Act relating to OHADA accounting law, inventories include the set
of goods or services that intervene in the business's operating cycle either to be sold in the
same state or as production to come or going or to be consumed generally at first use. In the
context of a commercial enterprise, stocks are defined as goods made for resale and
characterized by their variety. For industrial companies, stocks consist of raw materials, semi-
finished products, goods in progress, finished products.
From these definitions we can highlight the categories of stocks that will be the subject
of the following paragraph.

I.12 Categories of stocks

There are two main categories of stocks:
 The stock of manufactured products
They consist of raw materials, consumable materials and supplies, commercial packaging.
 The stock of finished and outstanding products
They include finished products, intermediate or semi-finished products, work in progress, by-
products, residual products and manufactured commercial packaging.

The buying process can be summarized in three steps:

• The arise of the need
• The placing of the order
• The delivery

 The arise of need

This is the first step of the buying process. The activity of the company brings out needs of all
kinds in the services, so the process consists of defining and describing the product (s)
capable of satisfying the needs of the customers.

 Order placing
The order is a legal act that commits the buyer to the supplier and that includes all the needs
for products expressed in quality, on a document called purchase order. It is carried out when
the stock reaches a certain level and this according to the objectives of the company and
taking into account delivery times.

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 Delivery
This is the act by which the supplier makes the ordered products available to the company. It
is materialized by a document called delivery note. The delivery is done within the deadlines
and conditions stipulated in the contract signed by the parties (company and its supplier).
When stocks arrive at the store, the inspection service must check whether the stocks received
comply with the substantive and formal conditions laid down in the contract.

II SELECTION OF SUPPLIERS
The supplier selection process is very important where the manager must choose the one that
will enable him to achieve his goal of minimizing costs, achieving a potential profit and
satisfying the market. The process must be done according to several criteria namely:
• The quality
• The price
• Conditions

II.11 QUALITY
The quality of the product is decisive in that it satisfies the customers and enhances the image
of the company in terms of supplies of good quality products. Thus the choice of suppliers by
the company must take into account the "product quality" factor.

II.12 THE PRICE

As one of the manager's objectives is to minimize the costs associated with the management
of the stock, he must therefore source from the supplier offering the products at affordable
prices depending on the means available to the company. Also the choice of suppliers by the
company must take into account the "price" factor.

II.13 CONDITIONS
The choice of suppliers must also take into account the conditions offered by the supplier,
namely:
- The quality of the product
- The delivery time: it must be as short as possible in order to avoid stockouts and to meet the
needs of customers at any time.
- Payment conditions
- Delivery conditions

III MATERIAL ORGANIZATION

The material organization of the stock is based on the evaluation of the stocks received.
Knowing that it is not always easy to manage all product stocks with the same attention. The
analysis of the various goods stored shows that they consist of a small number of items having
a large share of the value of the stock. Two methods of analysis are generally retained: the
ABC method and the 20/80 method.

III.11 THE ABC METHOD

ABC analysis is a more refined version of the 20/80 analysis. Here, three categories of stocks
are highlighted:
- 10 to 20% of the stock items (category A) represent 70 to 80% of the total value of the
stock; their good management is imperative.

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- 20 to 30% of articles (category B) represent 10 to 20% of the total value of the stock; their
management is more or less important.
- 50 to 60% of articles (category C) represent 5 to 10% of the value of the total stock; their
management is not a priority.
Its purpose is to identify the priority elements. Above all, it is important to define what is the
purpose of the analysis. Once the goal is clearly identified, the data on which to base the
analysis is easily identifiable. For example :

  * identify the items generating the most (class A) or least (class C) rotation in a warehouse
  * identify the families that represent most of the stock (class A)
  * weight the causes generating product returns in warehouse
  * classify suppliers according to the volume of purchase
  * classify product families according to sales volume.

III.12 THE 20/80 METHOD

This method shows that
- 20% of the products in number represent 80% of the total value of the stocks.
- 80% of the products in number represent 20% of the total value of the stocks.
Its purpose is to select the articles for which stock management should be prioritized. When
we notice that about 20% of the referenced products represent about 80% of the value of the
stock, we apply to these products a complex and rigorous management (the 80% in quantity
which represents only 20% in value are applied a management a lot). more flexible).

Note: These inventory management methods are theoretical. Their actual application can vary
a lot from one company to another.

IV OPTIMUM MANAGEMENT AND MONITORING OF STOCKS

IV.11 OPTIMAL MANAGEMENT OF STOCKS
The optimal inventory management is the set of ways and means implemented by the
manager so that the company bears the lowest overall cost of storage possible. Generally,
mathematical models accepted in the framework of operations research are used to satisfy
stock management rationalization requirements, the most used of which is the method of the
economic quantity to be ordered (WILSON model) that we will analyze in the after. But first
we will analyze the different stock levels and the costs of inventory management.

S
There are different stock levels in the stock management process:
- The average stock: it is the one that for a given article and a given period is in store. It is
calculated from the relation: SM = (INITIAL STOCK + FINAL STOCK) / 2 if the company
has an initial stock and a final stock; otherwise we will have: SM = CONSUMPTION / 2

.NUMBER OF CONTROL.
- The security stock: this is the level of stock to be provided by any company to deal with
unforeseen events.
- The stock of alert or security: it is the level of stock which triggers the order, in other words,
it is the level of stock which makes it possible to satisfy the demand during the delivery
periods and to maintain the stock of security if it exists.
- The minimum or critical stock: it is the stock from which the company wants to never find
itself, it makes it possible to avoid any break, even if an exceptional event occurs

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(delay of delivery, sudden acceleration of order ... etc.).

- The maximum stock: it is the level of stock that the company avoids to go to the Delas for
reasons of insufficient storage area which could cause the risks of slump or overall costs of
storage too high.

V COSTS GENERATED BY STOCKS

The OHADA Uniform Act defines cost as charges incurred to achieve a specific objective to
carry out an activity, various costs are related to the stock namely:
- The overall cost of ordering or launching costs
- The overall cost of storage or possession of stock
- The cost of shortage or cost of breaking stocks

V.11 THE ORDERING COST

The start-up cost or the cost of placing orders represents all the costs related to the placing of
orders, among which we quote: telephone costs, fax, air ticket, photocopying fees, telex ... etc.
.
V.12 THE COST OF POSSESSION OF STOCK OR COST OF STORAGE
The inventory holding stock is made up of physical storage costs but also of the non-
regularization of capital assets in the stock (see the cost of capital borrowed to finance the
stock).
The annual possession rate t% is the cost of ownership reduced to the monetary unit of stored
material. It is obtained by dividing the total cost of possession charges by the average stock.
These costs cover: the costs of shopping (rent and maintenance of the premises, insurance,
personnel and handling costs, guarding, electricity ... etc.), the interest of the immobilized
capital, the deteriorations of the material and the risks of obsolescence.

V.13 THE COST OF SHORTAGE OR LOSS OF STOCKS

It is a cost that aims to avoid all stock outs, because the purpose of the company is to ensure
the availability of products that make up the stock.
 The economic order quantity
Inventory management involves answering the following questions:
• How to minimize stocks?
• What should I order?
The principle of the economic quantity to order or model of WILSON tries to answer it. The
principle is based on the following assumptions: during the period considered (the year in
general), the demand is certain to be known. This demand is uniformly distributed over time
(there is no seasonal variation). Delivery times are known and strictly respected. The purchase
price is constant (independent of the quantity ordered). In such a context, there can be no
stock-outs. We will talk here of :
• The cost of holding inventory
• The cost of placing orders

Terminology:
Let Q = the economic order quantity, D = the consumption, N = the number of orders placed
during the exercise, p= the proportional unit purchase price, Co = the cost of placing an
order, C = holding cost of one unit, t = the possession rate for 1 F of the average stock, P the
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unit price, OC = the ordering cost, HC = the holding cost and T=s the total cost of inventory
management.The economic quantity to be ordered is that which makes it possible to minimize
the overall cost of management; therefore it will be necessary to determine Q * and N *:

Q * =√DCo
p*t

N * =D/Q

The model based on the economic order quantity seems attractive but the assumptions on
which it rests are often very far from the reality because it considers that the future is certain
and that the demand is known, which is not often the case in the practice where consumption
is not constant and no shortage is allowed, which is not verified because, there are on the one
hand hazards that affect deliveries and on the other hand a relationship between replenishment
cost and the ordered quantity which are random variables.
In the end, despite the limitations that make the WILSON model a theoretical model, we can
notice that these hypotheses have had the merit of simplifying the mathematical models of
inventory management.

VI MONITORING OF STOCKS AND ACCOUNTING RECORD

Stock movements experience certain critical moments which spontaneously provoke adequate
follow-up provisions in order to avoid either counting errors (inventory, receipt of deliveries,
customer visits, stock conservation, delivery preparation, risk cover flight or fire). For this
purpose, the stock is tracked and checked on a daily basis using the stock cards or an
inventory account and for the manual stock management cases by simple recording and
recording of the output movement as well as case of computerized management of stock. In
either case, a physical inventory is performed at the end of each exercise.

a. CHECKING FROM INVENTORY SHEETS

The stock sheet is a document that shows the different stocks that are found in the company
(in quantity and value) and these different movements of entry and exit. There is no standard
layout because each company presents its sheet according to the categories of stock it has.

b. FOLLOWING PHYSICAL STOCK INVENTORY

The accounting law OHADA in its article 17 paragraph 6 defines the physical inventory as
being the operation which consists in recording all the elements of the patrimony of the
company by mentioning the nature, the quantity and the value of each one of them to the
inventory date.
It's an extra accounting inventory. It is realized in two stages namely:
- The organization of the inventory teams and the refinement of the inventory documents:
before the start date of the inventory operations, the head of the accounting organization
establishes teams of 3 and 4 people to carry out inventory and to establish a complete list of
the various elements of the stock.
- Inventory reports: the enumeration of assets; the inventory can give rise to 3 types of report:
• The existing stock equals the theoretical balance from accounting: this is the case generally
desired that does not pose any particular problem.

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• The existing inventory is higher or lower than the theoretical balance: it is advisable to carry
out research both in the bookkeeping and in the keeping of the store so as to find the origin of
the discrepancy and to proceed with the regularization of the anomaly.
• The existing inventory no longer has market value: this is the case of deteriorated stocks and
in this case, special procedures must be implemented to ensure sincere financial
communication in the search for the delivery of a faithful image of heritage.

c. ACCOUNTING RECORD

Registration of Goods Receipts and Outflows in Permanent Inventory

The permanent inventory system advocates the day-to-day recording of entries and exits from
stock stores.
Inventory entry of goods
311 Goods Purchase cost

6031 stock variation of goods Purchase cost

(stock entry)

Inventory exit of goods

6031 stock variation of goods Purchase cost

311 Goods Purchase cost

(stock exit)

Companies that cannot afford to keep the inventory can use intermittent inventory.
Accounting records of goods in intermittent inventory.
The intermittent inventory is a stock organization in which only those quantities and values
are quantified periodically at least once a year. So when a company practices it only accounts
for purchase and sale invoices. Inventory movements are managed by commercial
management software (SAARI). At the end of the fiscal year, thanks to an extra accounting
inventory, the physical stock or initial stock of the next fiscal year is determined and
recalculated from the weighted average unit cost of the storage period. This makes it possible
to pass either the inventory change posting or the write-off posting and the final stock
recognition that will become the initial stock for the new year.

Accounting entries

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6031 stock variation of goods Marchandises Initial stock

311 (Goods) Initial stock

311 Goods Final stock

6031 stock variation of goods Final stock

There is also a method that consists of passing a single entry to record the variation of the two
stocks. The change in stock thus calculated can be a storage if the initial stock is lower than
the final stock or a destocking if the initial stock is greater than the stock. final.

311 goods Value of stock

6031 stock variation of goods Value of stock

(Cas de stockage)

SECTION II : PRACTICE OF STOCK MANAGEMENT IN ADIC

The particularity of inventory management at ADIC is located at the level of

supplies and sales. Thus, the purchase transactions are carried out both on the international
and national markets, hence the search for suppliers remains a permanent quest and it is the
same for its customers located in Cameroon and in the United States. sub-region of Central
Africa. Notwithstanding the difficulties related to the relations of trust and insurance on both
sides between ADIC, its suppliers and its customers. The study of these relations will form the
backbone of this chapter.

I- ANALYSIS OF PROCESS OF PURCHASE AND CHOICE OF SUPPLIERS

I.1 Analysis of the process of purchase

At the international level, orders are placed quarterly during the year at ADIC, to
make up for any stock outs, orders are also made at the national level to satisfy its customers.

i. Birth of need
To return to what we have just said above ADIC takes into account the general rules of
purchase, that is to say the respect of a certain supply rhythm stopped and breaks that cause
the need to purchase .

ii. Order placing

The offers being made at international and national level, they are attractive if the prices are
competitive in the market, given the quality and diversity of the products.

iii. Delivery

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After the conclusion of the contract of sale between the parties (ADIC and its suppliers), with
regard to international purchases, the financial institutions take care of the insurance of the
goods which pass directly to the embarkation. These goods remain the property of the supplier
until the port of Douala for a possible landing; when the boat berths at the port of Douala, the
Cameroonian customs takes care of the declaration of importation of these goods. Their check
is necessary to check if the quantity and the quality of the goods mentioned on the invoice
correspond to the purchase order while respecting the ISO standards in order to confirm to the
supplier the good reception of the goods ordered. The company rents the carriers who
transport the goods to the company's main warehouse or depot.
In addition, for locally procured goods, it is the local suppliers who transport the goods
to the company store. Upon arrival these goods are controlled by the storekeeper who takes
care of storage while checking if the quantities delivered are those mentioned on the order
form.

I.2 Criteria for the choice of suppliers

The choice of a supplier is not always easy, the search for suppliers remains a major concern
for companies. In order to satisfy and retain its customers, ADIC opted for a policy of the best
products at prices accessible to all these customers. When ADIC faces a multitude of offers,
the main concern of the management controller is whether the products offered are of good
quality, if they will be sold on the market as quickly as possible to avoid storage costs too
much. high and at what price. This concern refers to whether customers will appreciate the
products in order to achieve a result, not to mention the terms of settlement favorable to the
company. Once when all these conditions are met, we actually place the order.

II MATERIAL ORGANIZATION AND STOCK MANAGEMENT INDICATOR

II.1 MATERIAL ORGANIZATION OF STOCKS

II.11 IDENTIFICATION OF STOCKS AND CLASSIFICATION

identification is the act of sorting the products in the stores on top of one another so as to
easily recognize them. In ADIC stores, goods are sorted by reference items, and colours. It is
therefore with great care that the received products are assigned a product family code, a
reference (article bar code) and an entry value.

II.12 INVENTORY MANAGEMENT INDICATOR

These are elements that constitute the warning sign for the birth of the need and the placing of
the order or the guarantee of the stock level par excellence according to its objectives.

a) The different stock levels

The theoretical management of the stock makes it necessary to be cautious different stock
levels which each have a specific meaning, in practical terms, ADIC has established its own
method of inventory management. Supplies are conditioned by the availability of products
nationally and internationally. This is how there is a minimum amount of stock without alert
purpose to trigger the order.

(b) Costs generated by stocks

It is :

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 Ordering cost; It consists of telephone charges, travel expenses of the person in

charge of the supplies, photocopies, incidental expenses globally ... etc.
 Holding cost ; It is composed of all the expenses incurred in the acquisition of the
stocks, among which one can quote: handling charges, security costs, insurance costs
of the goods ... etc.

(c) Inventory control and monitoring

Inventory control and monitoring imply the implementation of the practical monitoring
and verification provisions to prevent theft, breakage or delivery errors from the agents
responsible for the distribution. It is a matter here to demonstrate how inventory control and
monitoring mechanisms are developed. This is the stock inventory and stock inventory and
tracking instruments

(d) Physical inventory inventory

Within ADIC, inventory control and monitoring is done from a physical inventory. ADIC
uses consulting firms to determine the actual quantities in stock at the end of the financial
year and compare them to the stock that is in the machine according to the SAGE SQL
software (commercial management). With regard to permanent inventories, they are non-
existent because of the multiplicity of product ranges, the time but also the volume of annual
supplies. The appendix shows the families of articles and some articles according to their
reference.
(e) Inventory and inventory tracking instruments
Inventory tracking within the company at the base by the stock department including
the storekeeper. The latter notifies all the information concerning the movements of exits of
entries of goods and transmits his data to the service stock to verify the accuracy of the data
with the help of the documents which he received all throughout the day, in order to compare
to have an estimate of the actual in stock. It is the SAGE SQL COMMERCIAL
MANAGEMENT software that are the different movements of articles in stock.

CHAPTER III : CRITICAL ANALYSIS AND RECOMMENDATION

Having reached this stage, we will be highlighting the inadequacies identified in ADIC
inventory management and propose some recommendations to overcome these deficiencies.

SECTION I - PROBLEMS RELATED TO STOCK MANAGEMENT

Managing a stock means implementing techniques that will minimize storage costs while
protecting against stockouts.

I.1 ADIC STOCK BREAKS

ADIC has a stock of high turnover items that should not have any cases of breakages that is ;
office supplies (reams of paper, manifolds, notepads, registers, office binder ...) and computer
equipment (key USB, ink cartridges for printer, computer mouse ...), this lack of stock item
can generate huge costs to the company. The question here is how do stock-outs occur that are
their consequences within IMPEXTEAM?

I.11 THE CAUSES OF STOCK BREAK

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Despite its supply policy, ADIC often experiences stock-outs of certain products.
This break can occur due to the delay of deliveries, the approximate choice of suppliers, the
lack of control of the security stock and also the abundance of customer requests; Since the
orders of these customers are not regularly stable, the quantity of merchandise in stock does
not meet the needs expressed by its customers. At this level it is necessary to trigger the
process of direct replenishment to achieve it, it would be necessary to contact either always
ready to satisfy the demand because any delay at this moment will have adverse consequences
on the company.

I.12 THE CONSEQUENCES OF THE STOCK BREAK

Frequent stock-outs lead to a delay in the execution of tasks and therefore a delay
in the delivery of the work, which creates a bad image of the company. Thus the company,
with the primary concern of being profitable and preserving its image, will see some of its
expenses increased like additional supply costs. In addition, the extended period of execution
can lead to the departure of certain customers who are experiencing a crisis of confidence in
the company compared to their expectations.

I.2 OVERSTOCKING
Since the general store space at ADIC is not very large to meet the storage
requirements, the structure should be optimized for space. This is how certain items such as
large perforators, D50 ESSELTE chronographs, mini staplers ... should not be ordered in
large quantities because they are the least consumed items. However it would be wise to note
the causes of overstocking and their consequences.

I.21 CAUSE OF OVERSTANDING

The overstocking would find its origin in the unwise orders whose motivations are far
from being related and in managerial rigor. We can cite :
v No control of the existing stock
v No control of storage

I.22 CONSEQUENCES OF OVERSTOCKING

The stock being immobilized money, this overstocking can cause huge losses in the
company (risk of depreciation, theft, destruction ...) Therefore, if this money had been
deposited in the bank, it would have produced interest necessary to enable the company to
cover some of its expenses; moreover, overstocking reduces the space in the store. The more
you stock, the higher the cost of storage because of the costs incurred for the safety and
maintenance of the items, which can lead to the reduction of the profit of the company.
After presenting the problems of inventory management at ADIC, their causes and their
consequences. It is necessary for us to make suggestions for improvement inherent to the
various problems raised. This is the focus of our concern for the next section.

SECTION II: TOWARDS AN IMPEXTEAM STOCK MANAGEMENT

IMPROVEMENT

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In this section, we will be talking about making our modest contribution to any improvement.
For this, we will make proposals for storage.

I - PROPOSALS RELATING TO STOCK BREAKS

For goods with a high turnover, the most acute problem is that of random supplies. It
would be a question of better reorganizing the supplies of these articles.
Orders from customers are generally unpredictable which sometimes lead to a lack of goods
that can satisfy customers. This is when the order is launched.
Where the need is expressed, it is imperative to select suppliers capable of delivering on
time, as any delay in delivery in the case will stagger the working time. This will not allow
the company to satisfy its customers in time and will erode the trust of customers who will
turn away in favor of the main competitor at the next opportunity, thus leading to the loss of
opportunity, the destruction of the image of IMPEXTEAM brand and by ricochet its
competitive, hence the need for efficient and effective selection of suppliers. In other words, it
is important to know which suppliers offer the right quality of the product at a reasonable cost
in reasonable time with the quantities corresponding to the purchase order.

It is of obvious interest for a company to consolidate as quickly as possible on the same order
form, all items that must be ordered from the same supplier. This leads to maximum
discounts, lower shipping costs while reducing the number of orders, receipts, deliveries and
invoices. These reductions lead to a reduction in the cost of acquisition or cost, thus
respecting the objective of minimizing stock management costs by reducing the cost of
procurement and shortage.
With regard to the stock of specific merchandise , it is necessary to set up a point-of-
command management system; it consists in determining the economic quantity when one
reaches the security stock.
The goal here is to determine the stock alert that the stock level that triggers the order. This
level of inventory must be able to allow the company to cope with random requests during
delivery times and maintain the security stock. This level of stock is determined according to
one of the methods proposed by Wilson.

In this context, the analysis focuses on the cost of security stock management. Indeed, a large
safety margin which leads to management costs that are too high, whereas a lower level of
this stock generates the costs of shortage. This is to determine the safety stock that minimizes
storage and breakage costs.
This system requires a permanent monitoring of the stock that is made using a record of
inventory or supply planning. However, these cards should be analyzed with the aim of:
 Update the stock without a location
 Clean up and redistribute locations

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 Eliminate duplicates
 Determine the number of moving items in the store (incoming and outgoing
movement in quantity and value)

II - PROPOSALS RELATING TO OVERSTANDING

The ADIC store is reduced to meet the storage expectations of its items, it would be
necessary to master the level of inventory in store to be more rigorous in the acquisition of
products.
Similarly , the warehouse keeper should please remove the defective or outdated goods
which reduce the storage space, he must also avoid that the same article is found on both sides
in different departments where the importance Warehousing in the store, because when the
same item is placed in several shelves it causes misunderstanding about its presence in stock
generating new orders. This leads to unnecessary replenishment, resulting in overstocking.
The immobilization of the store requires a big investment for stocks. The keeping of the stock
cards must be checked at any moment of the movement of an article at the store. It will be
necessary to note the quantities released, the quantities entered by article; in short, establish
rigor in the keeping of these cards.
In addition, it should be noted that overstocking is not always a disadvantage. Indeed,
the company following a fall in prices on the market can stock goods in large quantities to sell
at high prices which will increase its turnover.
At the end of our contribution to the improvement of inventory management within ADIC, we
do not claim to have brought a miraculous solution to the problems encountered. However,
we hope that the proposals made could anticipate, prevent and control anomalies for better
profitability.
Despite all the measures taken by the companies, most of them are experiencing stock
outs and overstocking of goods or products. The latter is due to the consequences of random
supplies with multiple causes, but the main one is the absence of a reliable supply program; to
this is added the demands that are far from meeting the precepts and principles of
management.
Ultimately we propose the "just-in-time" supply management model for a specific hardware
and the "point-of-command" management model for standard hardware. In short it is
appropriate for the head of the service to control and control the various existing flows in the
store. This raises the issue of retraining and continuing education for managers.

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GENERAL CONCLUSION
At the end of our analysis, we realize that our study has allowed us to better understand the
concept of inventory management and to appreciate the notion of minimizing management
costs.
In the first part we presented ADIC, we tried to describe the concept of holding cost which is
integrated into a broader issue of stock management. Thus, we noted that the difficulties of
stock management are for the most part related to problems of random supply, the lack of
control of storage and also the lack of control over the quantity of products in stock. . To cope
with frequent breaks the company must:

 Select the suppliers able to deliver the good quality goods, on time, to
respect the quantities of the purchase order and especially to forecast the
security stock
 Have a fixed location for each item to avoid overstocking, which will result
in real quantity control of stored items,
 The good performance of the inventory sheets which ensures the control of
the articles entered and released in stock.
These problems listed above can slow down growth, longevity and destroy the company's
image . The balance is difficult to achieve, however, we must reduce the additional costs
incurred to not reduce the profitability of the company. Thus we hope that our work will
contribute to an improvement of the management and especially the minimization of the
storage costs with ADIC.
We do not claim that the given solutions are a ; therefore, we will remain open to any
constructive suggestions to improve this work.

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