Assessment Of The Role Of Efficient Materials Handling In A Manufacturing Firm
Assessment Of The Role Of Efficient Materials Handling In A Manufacturing Firm
Abstract
The effective movement of materials is being seen as business in its own right materials heading is a feature of almost all the companies, although it has for many years been an unexplored area in recent time; this area has been many changes and which continues to change new equipment and machines are appearing in the market and most firm now operate complex system of efficient movement of materials.
This research project is designed to open up some of the basic elements and aspects of the subject. It is also an attempt to relate materials handling methods employed to the operation of rest of the organization. In an endeavor to remedy this situation, this project has been written to pull together in one thought as many facts on materials handling and its management as possible managers, technicians, driver and aspiring ones to those tasks in this firm (unclear Nigeria plc Aba) will thereby have a foundation job and function of this expensive business.
Chapter One
Introduction
1.1 Background Of The Study
Material handling is an important part of factory and industrial process. It covers the entire spectrum of function such as waste handling, assembly line management, storage and material transport. Material handling system includes several smaller components that work side by side, to make the every day business more efficient and cost effective. Material handling is a costly operation and therefore the methods and equipment employed should be efficient at all times. As in many other aspect of store keeping the approach depends on nature of the business concerned, the type of materials flocked and the size of the store house. Efficient materials handling is very important in the storehouse and also throughout the production process.
According to Khyomesh and Chetna, (2011) materials account for 60 to 70 percent of direct cost of a project or a facility, the remaining 30 to 40 percent being the labour cost. Therefore, efficient procurement and handling of material represent a key role in the successful completion of the work. It is important for the project manager to consider that there may be significant difference in the date that the material was requested or date when the purchase order was made, and the time at which the material will be delivered. These delays can occur if the contractor needs a large quantity of material that the supplier is not able to produce at that time or by any other factors beyond his control. Chan (2002) noted that the project manager should always consider that procurement of materials is a potential cause for delay. The management of Manufacturing processes to reduce, reuse, recycle and effectively dispose of wastes has a serious bearing on the final cost, quality, time and impact of the project on the environment. (Dania, 2007)
The goal of materials management is to ensure that manufacturing materials are available at their point of use when needed. The materials management system attempts to ensure that the right quality and quantity of materials are appropriately selected, purchased, delivered and handled on site in a timely manner and at a reasonable cost, (khyomesh and chetna 2011). The scope of materials waste is vast, and this waste occurs in the industry irrespective of the size of the firm, instructions about handling, storage and stacking are not provided with the goods or sent in advance to the site (Abdulazeez, 2000).
Materials management in manufacturing is also regarded as the efficient use of goods and equipment before, during and upon completion of a process. Petra (2013) observed that Successful materials management requires the participation of all persons involved in a manufacturing process. For Materials may deteriorate during storage or get stolen unless special care is taken. Delays and extras expenses may be incurred if materials required for particular activities are unavailable. Ensuring a timely flow of materials is an important concern of efficient material handling (Shah, 1993).
Thus, Materials management is an important element in project management. Materials represent a major expense in manufacturing, so minimizing procurement costs improves opportunities for reducing the overall project costs. Poor materials management can result in increased costs during manufacturing. On the other hand, efficient management of materials can result in substantial savings in project costs. If materials are purchased too early, capital may be held up and interest charges incurred on the excess inventory of materials (Wendy, 2006).
Johnston (2001) opined that Efficient material handling is divided between head office and site in major manufacturing companies. The selection, pricing, ordering, preparation of schedules and payment accounts are dealt with at head office, learning the receipt storage, protection and use of materials to management on site. Due to the high cost of materials, if not properly managed during the period of execution of contract can lead to abandonment of project.
In his submission, lan (2008), opined that the rate at which materials are been squandered on site due to poor management is getting too rampant in our society and if not curbed, it can jeopardize the future of our manufacturing industry. This is particularly true in view of the fact that mismanagement of manufacturing resources (i.e materials, plants and labour) affects the continuity and profit margin of such project and if not checked can lead to technical insolvency or bankruptcy.
Therefore, attention must be paid to how materials are been procured, stored and managed in order to achieve perfect work, effective handling of materials, right usage of materials and control of manufacturing resources.
This, explain the reason why Johnston (2001), noted that Materials management begins with planning and estimation, these can be achieved through proper site co-ordination measure of reducing wastes, the location and security of materials on sites, procurement of quality materials as being specified and effective administration of site together with quality control.
Lee and Donald (2001), observed that the problem associated with the absence of proper materials management on manufacturing firm could be wastage of resources making contract cost more than budget sum, reduction of profit margin of the contractor ineffectiveness of project handlings reduction of output etc. and if these are not properly taken care of it might be disastrous to the firm.
No manufacturing project can commence and proved effective without an adequate supply of raw materials, apart from the careful planning of materials required by the builder, it is to his advantage to foster a good relationship with the suppliers, many of whom will have been selected due to their fulfillment of orders to the standard required and meeting of delivery times over a number of years (Pheng and Chuan, 2001).
Besides the builder’s own suppliers, the architect may specify that a certain supplier must be used and these are termed “nominated supplier” whatever the type of suppliers to be used, the information passed to them and receive from them is the same and in all but in the smallest firms this information and document will pass through the buyer. (Yang, et al., 2003).The buyer must also ensure that the architect receives any samples from the suppliers in the very early stage of contract procedure to satisfy him of the relative merits of the material. It may, for example, not be possible to obtain the specified material in time in conjunction with the programme, but by obtaining samples of similar products the architect may decide on a new form of manufacturing or design to prevent hold ups.
In most cases, a buyer will send enquiries to two or three suppliers or in some cases, direct to manufacturers for such items as sand, gravel, brick, block, cement etc., regarding prices, delivery dates and such, for use at the estimating stage of the project. This will enable the estimator to use the figures obtained in the preparation of the tender figure.
To enable quick checks to be made on delivery or non-delivery of materials a card index system is generally adopted, this enables the purchasing or procurement department to keep a constant eye on the supplies. These cards contain all necessary information and are best filed in date offer for case of reference. Even when bulk delivers have been placed according to programme, by taking the extra time and trouble to write out a card for each delivery the chance of losing sight of the delivery date is very much reduced, as regular checks will be on the file. As materials are received, the information will be recorded on the card.
Material handling functions include planning and taking off materials, vendor evaluation and selection, purchasing, expenditure, shipping, material receiving, warehousing and inventory, and material distribution. (Narimah 2011), Almost 60% of the total working capital of any industrial organization consists of materials costs (Dey, 2001). Material handling can only produce what it should with the right quantities of the right material at the right time (Arnold and Chapman 2004). Thus, any improper handling and managing of materials will cause a huge effect on the total project cost, time and quality. There is a need to explore on the area of material handling, the issues relating to material handling problems
1.2 Statement Of Problems
The firms are fast springing up in a high rate in Nigerian and the difference in distance and location due to the vast nature of the country. The teething problem of material handling in Unilever Nigeria plc Aba is as follows:
1. Lack of Finance:
Handling of materials in any organization is very expensive in terms of material handling equipment, plant and labour. Therefore it was noticed that in the firm Unilever Nigeria plc Aba. That due to lack of finance the organization cannot handle their material efficiently.
2. Lack of Material Handling Equipment:
The size of wrong materials handling equipment which resulted to double handling of material is a problem in the company due to the lack of a material handling equipment.
3. Lack of Skill and Experience Operator:
It was noticed in Unilever that the operators of the various materials handling equipment that are used in the firm are not well trained and they lack the required skill to operate the machines which result to high damage of materials handling equipment.
4. Poor Surface and Road Network:
In the Unilever Company, the floor surface and the road network were not properly constructed thereby resulting to water logging in the whole area in the stockyard in the firm. On the other hand, the road network to the storehouse were not properly constructed which cause the double handling of materials from the storehouse to the production center.
5. Poor Maintenance Culture:
There are a lot of machines and equipment breakdown in the firm due to the poor maintenance culture in the firm. This is cause by the lack of skill operators that can maintain the equipment and machines.
1.3 Research Objectives
The aim of the research is to evaluate factors affecting efficient material handling in Unilever Nigeria plc in Aba, Abia state in Nigeria with a view to proffering solutions to the identified problems.
1.4 Research Questions
The following are the research questions as related to this study.
- What are the principle and procedures of good material handling?
- What is the current practice of material handling in Unilever Nigeria plc Aba, Abia state?
- What are the factors militating against material handling on Unilever Nigeria plc in Aba, Abia state?
- What are the measures to be put in place to ensure effective material handling in Unilever Nigeria plc Aba, Abia state?
1.5 Significance of Study
A major part of professional builder’s responsibility in production management entails the selection, purchase, testing, storing and use of manufacturing materials. As noted earlier, materials are a major expense in manufacturing, thus the ability of contractor to manage his team and the flow of supplies are absolutely necessary for the successful project delivery and profit maximization. This requires the architects and engineers to specify exact supplies during pre-manufacturing to avoid overstock. The manufacturing management team is required to buy the correct amount of material at the right time to avoid cash flow, storage and deterioration problems. Subcontractors need to keep track of inventories, while suppliers are required to deliver as ordered and on time. The post-manufacturing team has to evaluate remaining materials for reuse and recycling purposes.
However, this is not easy; First, if materials are purchased early, capital may be tied up and interest charges incurred on the excess inventory of materials. Even worse, materials may deteriorate during storage or be stolen unless special care is taken. For example, electrical equipment often must be stored in waterproof locations. Second, delays and extra expenses may be incurred if materials required for particular activities are not available. Accordingly, ensuring a timely flow of material is an important concern of project managers. (Harris and MacCaffer, 2001)
Thus, to determine the misery behind proper material handling in Unilever Nigeria plc in Nigeria, so as to guide against project delay and abandonment, also to create a standard method based on size of manufacturing firm to control cost of contract and materials wastage. It is not only desirable but necessary to undertake careful study of efficient material handling. Additionally, since Proper efficient material handling will benefit the firm in terms of increase profit margin, quick execution and reduce cost of the project. This brings the need for an evaluation of material handling in Nigeria manufacturing industry.
1.6 Scope and Limitation
This work focused on material handling practices in Unilever Nigeria plc. The study covered factors militating against material handling, measures for effective material handling on manufacturing firms. The study was limited to only Unilever Nigeria plc in Aba, Abia state; therefore not all the country was covered.
1.7 Operational Definition of Terms
Box pallet:
Is a size box used for storage and shipping of bulky quantities.
Deterioration:
Is the process of gradual decline as in quality, serviceability.
Material handling:
It’s the movement, protection, storage and control of materials and products throughout manufacturing, warehousing, distribution, consumption and disposal.
Profitability:
This is the ability of a company to use its resources to generate revenues in excess of the expenses
Storage:
Is the action or method of storing something for future use,
Warehouse
Is a large where raw materials or manufactured goods may be stored before they are used.
Chapter Five
Conclusion and Recommendations
5.1 Conclusion
The research has examined the role of efficient materials handling in a manufacturing firm. Findings shows that procurement of materials with requisition from site is more common with the contractors and its best practice of materials procurements for Unilever Nigeria plc for effective material handling. The study also establish that the following: damage by mishandling and re-work due to poor workmanship, inadequate storage facilities on site, delay in material supply, inadequate supervision, poor site security, weather and other natural occurrence, alteration of designs, over ordering of manufacturing materials, theft and vandalism are the causes of material wastage on Unilever Nigeria plc and the factors affecting effective efficient material handling on Unilever Nigeria plc are as follows: design changes, lack of proper work planning and scheduling, inefficient workforce, fraudulent practices /negligence and corrupt practices, lack of security personnel, waste on manufacturing firm and lack of or inadequate storage facility.Furthermore, the research identifies the following as measures for effective efficient material handling on Unilever Nigeria plc: employment of skilled craftsmen and operators, training of both management and other staff, employment of store keeper and security personnel; procurement requisition to specify quality, quantity and delivery time; ensuring proper planning and scheduling of works, introducing efficient material handling at the design stage and consideration of weather conditions.
5.2 Recommendation
The study recommends that Contractor should make provisions for training and retraining of management and site personnel in order to improve their efficiency for effective efficient material handling and contractors should ensure the use of skilled craftsmen for their works and provide efficient supervision with professionals to ensure effective efficient material handling on Unilever Nigeria plc in Aba, Abia state.
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