CHAPTER ONE
1.0 Introduction
It
is quite obvious that every organization keeps materials which form one of the
pivotal elements in the organization. Any establishment that is set up to produce
one thing or another; any organization could either be goods producer or
services delivery or both, and they must make use of materials in all their
operations, and these materials must be properly managed to achieve the desired
objectives.
Materials
management is one of the most technological choices in any organization. Thus,
it must be decided as to when, how and by who materials should be handled. It
covers the processes of moving, packing and storing materials. Note that in the
past, there was no any distinct method in use.
However,
today the methods employed are numerous such as: The Automated Guided Vehicle
(AGV), the Automated Storage and Retrieval System (ASRS).
1.1 Background
of the Study
What dominates organizational operations
and there seeks to transform management practices is no other than material
management.
It
is obvious that in all kinds of organizations, management effort is often times
committed to the effective and efficient management of materials. Furthermore,
the management practices have gained the understanding that the success of any
can only be guaranteed in today’s circumstances by a practical and holistic
commitment to materials management.
Materials
management is not a mere technique, but a philosophy anchored on a belief that
long run success depends on the uniform commitment to materials management in
7Up Plc, Kaduna Plant which can be achieved via the interplay of both the
analytical and holistic facilities of the personalities concerned.
1.2 Statement
of the General Problem
Materials
management as we all know is considered “life blood” of every organization.
Unfortunately enough, most companies have entrusted the materials management
functions into the hands of mediocre.
Therefore,
the basic problem with which the study is concerned about is the unethical
practices in the 7Up Plc Kaduna plant which includes: the placement of
unqualified personnel on the functional, they do not have professional
knowledge about, over invoicing and local inaccessibility of raw materials.
Also, therefore is the problem of wastage and pilferage of materials in 7Up
Plc, Kaduna plant.
1.3 Objectives
of the Study
The
main objective of this study is to find out the effect of material management
on the profitability of the manufacturing company in Nigeria, specifically the
study intends to:
1. Find
out the effect of material management on the product output of a manufacturing
company
2. Analyze
the effect of material management on the profitability of a manufacturing
company
3. Investigate
the challenges of managing materials in manufacturing companies
1.4 Research
Question
1. What
is the effect of material management on
the product output of a manufacturing company
2. Is
there any effect of material management on the profitability of a manufacturing
company
3. What
are the challenges of managing materials in manufacturing companies
1.5 Significance
of the Study
This
study would add to the knowledge of the subject matter, “materials management”
and equally help managers in 7Up Plc Kaduna plant in tackling the effects of
stock taking, stock checking and stock recording in the organization, as one of
the salient components of materials management.
It would enable managers to boost
productivity and minimize or eradicate problems related to materials for
students and businesses that will be embarking upon materials management
operations.
It
will generally help management in reducing wastage and pilferage of materials
and equally enhance proper utilization of materials.
1.6 Scope
of the Study
The study is concerned with materials
management as an effective tool for productivity in Seven Up (7-Up) Nigeria Plc
Kaduna plant. The study would cover the practical activities performed by Seven
Up (7Up) Nigeria Plc Kaduna plant from the identification of new order up to
the issue of ordered materials to the user department from 2008 – 2012).
1.7 Limitations
of the Study
In
every research work, the researcher is bound to face hitches. One of the
problems anticipated during this research study include lack of cooperation
from subjects or objects leading to use of smaller than anticipated numbers,
low return of questionnaire and inability to use correct data gathering
instruments due to ignorance about their availability. Another limitation was
the attitude of the staff during visits to the organization. At the end,
despite all the constraints, I was able to conduct the research successfully.
1.8 Definition
of Terms
Stocks: These
are raw materials of varying qualities held in store house.
Stores:
This is a house or a structure prepared for safe keeping of materials.
Logistics:
This is the process of averaging the movement and storage of goods and
materials from their source to the point of ultimate consumption.
Bulk Issues:
These are materials that are made in set agreed quantities in designated
departments.
Obsolescence:
These are items held in stock which becomes out of date and no further use to
the organization.
Distribution Requirement Planning
(DRP): This is a requirement placed by customers at the
points of use or demand.
Stock Yard:
This is an open air place in which materials may be kept for reasonable time
without serious deterioration.
Work in Progress (WIP): These
are inventories of materials in a part finished or partially assembled state.
Scrap:
These are wastes, used or surplus materials or part arising out of
manufacturing processes or other activities.
Stock Checking:
This involves the inspection of materials for quality and quantity.
Stock Taking:
This is the physical counting of materials in the store.
Materials Requisition Planning
(MRP): This is a set of logically related procedures
decision, rules and records designed to translate or master production schedule
into net requirement and planned coverage of such requirements for each
component inventory item needed to implement a schedule.
Inventory Status File:
This is a document used in keeping records of what is in stock and allows the
gross requirements to be adjusted to net requirement by taking into account the
current position.
Automated Guided Vehicles: These
are trucks used in the store house with no driver but guided automatically.
Materials:
These are items used for production of goods and services.
Replenishment:
This is the process of supplying back materials in order to replace what has
been used up.