The Effect Of Material Management Technique On Production Planning Processes
The aims and objectives of this work is to examine “The Effect of Materials Management Techniques on Production Planning Process with reference to United Nigeria Textile Plc (UNT Plc), Kaduna… Materials management is open to so many problems in industrial sector in Nigeria, especially when theory and practice are compared. Among the problems facing materials management in Nigeria, which is also peculiar to the company which the project is based on are: Multiplication of materials management principles, unprofessional/unskilled personnel, given the task of material manager. The writer looked at the opinions of different notable authors and academic writers on the topic that are related to the subject matter. It was deduced that those academic writers are of the same view as far as materials management is concerned. In this research study, I will attempt to look at the following points:
- The purpose of the study, historical background, statement of the problem, limitation and scope of the study, rational for the study.
- Literature review on materials management, production planning, materials control, purchasing, stock ordering and types of stock taking, benefit of stock taking.
- Methodology, research methods and approach used, justification for approach used.
- Presentation and analysis of data, and also test of hypothesis.
- Summary of finding, conclusion and recommendations.
Material management is an integrated management approach to the planning, purchasing, ware housing, stock keeping allocation and movement of needed material from point of source to user department. It can also be defined as the process of management of material which involves purchasing, storage control and transportation.
Material management is a relatively new discipline. The 20th century’s rapid growth and the significant industrial development has played a major role in the relationship and effective management of the traditional 5Ms which are: Machine, material, men, money and management.
The famous industrial revolution made material(s) the largest elements cost in any organization.
At the wake of the 20th century many firms had recognized the importance of material, and several material activities like purchasing, ware housing, stock control and distribution carried out by the organization.
By the 1950 firms have identified the need for effective coordination or integration of such material activities and material organization tools concept like those of physical distribution movement, logistic movement and material management as a means to check, co-ordinate and control the firm’s material activities.
Globally, there is no clear definition on the area of material management. According to M.A. Tokunbo (1987) defines it in the context of store and material control as compensation for the effective co-ordination of the principle element.
- Identifying, classifying and coordination of stocks
- Provision, inventory control and stress accounting
- Store house layout and organization
- In house storage handling and distribution
- Presentation of materials in store.
To these, material management has the duty to apply the most suitable technique in the most effective way to ensure the minimum total cost consistent with providing the service required.
The American production and inventory control; society (APICS) defines material management technique and production as the grouping of management function related to the complete cycle of material flow from the purchase and internal control of work in the latter term, traditionally is limited to internal control of production materials.
In examining the whole definition one could easily notice that they are not quite different from one another only the way of approach and little difference in terminology. In this respect (material and resource) or material management is not only limited to buying and storing as many view it but involves also purchasing, transport and distribution planning and continuous monitoring.
1.1 Background of the Study
The subject matter of this study is the effect of material management technique on production planning process in United Nigeria Textile Plc (UNT Plc), Kaduna. The research is meant to be of great importance to various enterprise and organization wishing to conduct a detailed study into stores and purchasing material hence, the research aims at identifying the problems associated with efficient operation in an organization, the research is interested in knowing the effect of material management technique on production planning process as practicable in an organization. Due to sophistication in technology coupled with socio-economic and political instability, production processes face complex problems that needs to be addressed by management ensuring that materials are allocated and used in the most efficient and effective manner.
The material management technique on production is also to identify problems by guiding against supb-optimization of the material management techniques in production planning processes, for this the researcher suggests that which will achieve optimal result quickly, cheaper and acceptable.
Today materials are the live-wire of every organization be it public or private hence no organization can survive without material, its availability, distribution and transportation and delivery at the right amount and quality is paramount.
1.2 Statement of the Problems
United Nigeria Textile Plc (UNT Plc), Kaduna. is faced with problems in relation to utilization of the effect of material management being the utmost thing that are needed to be utilized effectively. The problem facing material management especially United Nigeria Textile Plc (UNT Plc), Kaduna. are mainly under stocking or over stoking of material, stock obsolescence breakage and the economic order quantity.`
Due to the fact that the impact is to be felt positively in the society by making themselves’ productive in every area of inputs.
But despite the effect observed there have been general apathy, ignorance and lack of interest by many people and the government.
1.3 Objectives of the Study
Specifically, the aims and objectives of this study are:
- To assess the impact of material management on organizational performance.
- To appraise and further appreciate the significance of material management in a manufacturing industry.
- To identify and ascertain some of the problems poised by materials management in Nigerian United Nigeria Textile Plc (UNT Plc), Kaduna.
- It is also the researcher’s desire that this compilation will be of great help and interest to whosoever uses it to gain knowledge on issues discussed.
1.4 Statement of Hypothesis
The following hypothesis was formulated for this study:
H0: Material management does not have any significant impact on organizational performance.
H1: Material Management does have significant impact on organizational performance.
1.5 Significance of the Study
A research of this nature will be incomplete without highlighting the importance of this study.
Firstly, the researcher as a student aspiring to be a material executive in the future sees this study as an opportunity to fully investigate into the field of materials management to see the challenges therein.
Secondly, the study is needed as a pre-requisite for the award of the Higher National Diploma in Production and Operation Management (POM).
Furthermore, the researcher has also undertaken the study in order to gather necessary information and suggest solution to the problem facing materials management in United Nigeria Textile Plc (UNT Plc), Kaduna.
1.6 Scope of the Study
The subject matter “Materials Management” has an area of coverage within its concept, i.e. theory and practice in the private sector. This would also include purchasing, stocktaking and stock checking of materials.
1.7 Limitation of the Study
In carrying out this research, certain problems were encountered which in fact hindered the area of coverage.
- The researcher faced the problem of sourcing for materials for the project.
- Time constraint was a factor the researcher encountered. This resulted in the backlog of the researcher’s class work.
- Lack of textbooks related to the subject matter also contributed to backlog in writing the project.
- Unco-operative and bureaucratic attitude of United Nigeria Textile Plc (UNT Plc), officials who were reluctant in providing necessary information in writing.
- Despite all these constraints, the researcher was lucky to gather vital information that made the investigation a success.
1.8 Historical Background of United Nigeria Textile Plc (UNT Plc), Kaduna.
The United Nigeria Textiles PLC, formally called the United Nigeria Textiles Limited (UNTL) is located in Kakuri Industrial Area of Kaduna South Local Government area of Kaduna State.
Mr. Cha-Chi-Ming, a Chinese founded it on May 7th, 1964, with some Nigerians and commenced operations in early 1965. The company started operating as a finishing plant, importing policy on backward integration in June 1976, the company immediately acquired and installed its first spinning and weaving facilities to produce its own Grey Baft from locally grown cotton.
For its determination to expand its operation the company acquired controlling interest in Zamfara Textiles Industry Limited (ZTIL) in 1976, by this, there is a steady supply of Grey Baft for its highly efficient finishing plant in Kaduna. UNT. PLC is the only factory capable of producing highly sophisticated wax prints in the country and indeed the whole of West Africa.
In 1976, fresh idea of another factor was conceived, so in 1977 its incorporated Funtua Textiles Limited (FTL) to produce materials different from the conventional products of Kidnap factory and Gusau factory, the Funtua Textiles United produces high quality bedspreads, pillow cases and cotton/polyester fabrics in various designs and colours.
In 1980, the company bought Norspin in Kaduna from its former owners UAC. The name Norspin was changed and its is now a subsidiary company registered as unitex Limited and an associate company named Supertex limited. Unitex Limited is a spinning plant producing yam for the sole consumption of UNT Plc, while Supertex limited is a finishing plant producing wax prints for export to ECOWAS countries and USA with the support and encouragement from business-like partners such as Northern Nigeria Development Company (NNDC), Nigeria Industrial Development Bank (NIDB), New Nigeria Investment Limited (NNIL), Kaduna State Government and the Federal Ministry of Industry. In view of technological advancement UNT. Plc have embarked on basic technological review of its machines and equipment through computerization, restructuring and modernization of its various components units, improved transportation system. It was scientific approaches to solving environmental problems. It is the first mill in Nigeria to acquire and install its own effluent treatment plant for minimizing health hazard and preventing land water pollution.
UNT plc is the largest employers of labour among textiles industries in the country and the largest in terms of production capacity. It has a total workforce of 15,000. The total install capacity is for ninety six million meters (96m) finished materials. Currently the company is expanding its factory building to accommodate additional processing machines for its blocked real wax prints and finishing department. The expansion of the finishing department will enable the company to engage in bleaching, dying and finishing of synthetic cotton blend textiles.
The aims and objectives of the company are to undertake the production and marketing of textiles commodity. Thus, it is involved by weaving, dying and printing of textile materials which has helped Nigeria in providing employment as well as having locally made textiles materials without difficulties and at cheaper prices compared to imported ones.
Ownership Structure Of Unt. Plc
At inception the paid-up of capital of UNTL (now UNT.Plc) was N1.4million. The shareholders of the company are made up of the followings:
- Private individuals from china 49.5%
- UNT. Plc staff 21.17%
- Other Nigerians 15.6%
- International finance corporation (IFC) 7.8%
- New Nigerian Investment Limited 5.6%
Organizational Structure Of Unt. Plc
At the apex of UNT.plc organization is the board of directors. The shareholders elect the members and they hold the office for terms, which are renewable at the expiration of each term. Following by the managing Director (MD) who implements the board’s policies and decisions taken at the board meeting on the running of the organization. The company secretary stands between the board of directors and the managing director. However, the managing director is accountable to the board, the board are in turn accountable to the shareholders.
The managing director is charged with the day-to-day running of the organization and assisted by experienced managers who from the nucleus of the management. There are departments most of which have sections; a senior manager referred to as assistant general manager (AGM) mans each of the department. The department comprises of human resources/personnel, sales finance, production and administration departments.
Conclusion and Recommendation
This research paper found out that there is a significant relationship between materials management problems and the frequent breakdown of the plant. This can be expected since the existence of materials management problems result in the breakdown of the plant. Out-of stock and lack of spare parts interrupts production and hinder profitability.
This research has shown how profitability can be achieved via effective management of materials with particular attention to sourcing, receiving, storing and issuing materials.
Prudent management of materials reduces depreciation, pilferage and wastages and ensures availability of materials.
We would like to re-emphasize that for a firm to achieve profitability the goal of materials management should be properly planned.
It is clearly significant to manage all materials from the creation stage to the construction stage. The waste of materials should also be minimized throughout the construction stage in order to avoid loss of profit. Failure in managing site material and inventory will result in cost overrun, postponements in project completion and reduce overall project performance. Better management among purchase and finance department will help in attaining greater efficiency in Inventory management. Firm, employing proper and efficient material management system can have increased their overall efficiency by 35%.
Based on the findings from the study is on the effect of materials management on the productivity of an organization and in light of data collected by personal observation and though the questionnaire conducted in the organization; it is necessary to offer the following recommendations.
- Material supply should be optimum to avoid “stock out” while work in process.
- Organizations should always take into knowledge the cost of production or price of raw materials before arriving at selling price
- There should be good and effective record system of materials for the operations of the organization especially as it affects production.
- Rate of spoilage and wastages should be minimized as much as possible and ensure that products pass quality control.
- There is the need to train staff in the area of material management to further enhance the knowledge of the job.
- Organizations should computerize their material management system in line with the global changes in order to be able to track the movement of materials in the store.
- It is also recommended that further studies be carried out in the area of material management considering the importance to profitability of an organization.
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