Effect Of Materials Management On Resource Utilization In Organization

Project and Seminar Material for Human Resource Management (HRM)

Effect Of Materials Management On Resource Utilization In Organization


Abstract


This project (research) work is titled “Effect of Materials Management on resource utilization in Organization”. The researcher carried on investigation to determine the impact of effect of materials management on resource utilization in organization as it affect organization’s productivity and output in the field of resource control and management.

The researcher went further to talk about the side effect of lack of adequate materials and resources used in industrial or manufacturing situation and the consequences it has placed the country at large. The researcher drew up questionnaire and administered them on forty six (46) staff of the company (Senior and junior staff). Only closed –ended questions were used in designing the questionnaire. Thus the questionnaire method was used in gathering the relevant data and information needed for the study.

The researcher formulated hypothesis which comprises of Null hypothesis (HO) and hypothesis (Hi). The data used for the study were gathered and presented in tabular form using simple percentage method. Means while, the hypothesis formulated for the study were tested using chi-square (X2) distribution method. Finally, the researcher summaries the study, drew conclusion with respect to what has been discussed in the previous chapters and proffered recommendations among which state that, “management of an organization should be committed to their role and carry its people along.


Table Of Contents


Preliminary Page(s)

  • Title Page
  • Declaration
  • Approval
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Content

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the General Problem
  • 1.3 Objectives of the Study
  • 1.4 Significance of the Study
  • 1.5 Research Questions
  • 1.6 Scope of the Study
  • 1.7 Limitations of the Study
  • 1.8 Definition of Terms

Chapter Two:

Literature Review

  • 2.0 Introduction
  • 2.1 Definition of Materials Management
  • 2.2 Types and Classification of Materials
  • 2.3 Methods of Material Management
  • 2.4 The Importance of Materials Management
  • 2.5 Materials Requisition Planning
  • 2.6 Positioning of Store within the Organization
  • 2.7 A Typical Store Organizational Chart

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • A research design specifics the frame work on which the project is based, it makes sure that the required data is collected accurately.
  • 3.2 Research Population
  • 3.3 Sample Size and Sampling Technique
  • 3.4 Method of Gathering Data
  • 3.5 Justification of the Method Used
  • 3.6 Method of Data Analysis
  • 3.7 Justification of the Instrument Used

Chapter Four:

Data Presentation, Analysis and Interpretation

  • 4.1 Results
  • 4.2 Discussion

Chapter Five:

Conclusion and Recommendation

  • 5.1 Conclusion
  • 5.2 Recommendation
  • References

Chapter One


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

This research work is titled the Effect of Materials Management on resource Utilization in Organization. A case study of 7up Bottling Company PLc Kaduna.

Arnold (1998) said that the wealth of any country is measured by its Gross National Product i.e the output of goods and services produced by the nation in a given time. He further defined materials as those physical objects i.e something we can touch, feel or see. Services are the performance of some useful function such as banking, medical care restaurants, clothing stores, or social services. But that the source of wealth of any country is measured by the amount of goods and services produced. A production process is needed to transform our resources into useful goods. Production takes place in all forms of transformation such as the transformation of resources to manufacture useful products.

There are many stages between the extraction of resource materials and the final consumer product. At each stage in the development of the final product, value is added. Thus, creating more wealth. Japan is a prime example of this, it has very few national resources and buys most of the raw materials it needs. However, the Japanese have developed one of the wealthiest economy in the world by transforming the raw materials they purchased and add value to them through manufacturing. To get value out of our resources, we must design production process that will make products most efficiently. Once the process exist, we need to manage their operation so they produce goods more economically. Managing the operation means planning for and controlling the resources used in the process such as labour, capital, equipment and materials. They are all important but the management plans through effective flow of materials. The flow of materials controls the performance of the process. if the right materials in the right quantity are not available at the right time, the profitability and even existence of a company, will be threatened.

Stevenson (1993) defined materials as all physical items used during production process. they includes not only the parts and raw materials that becomes the finished goods, but also the physical items needed to support the production process such as fuel, lubricants, tools, machinery, forms and anything else that is purchased, moved, stored or shipped.

Follet (2001) defined management as the act of getting things done through people by planning, organizing, directing, coordinating and controlling.

Stevenson (1993) defined materials management as the activity that is concerned with purchasing, storing, and movement of materials during production and with the distribution of finished goods.

George (1993) said that, materials management is an aspect of industrial management which is concerned with all activities that may include production control, inventory, purchasing, expenditure, traffic, materials handling, welfare, receiving, shopping, scrap and surplus, disposition and customer services.

Billington (1995) defined materials management as the process by which goods and services that an organization needs to achieve its objectives of buying, storage and movement of materials are required.

Lyson (1996) defined materials management as the management process which integrates the flow of supplies into, through and out of an organization to achieve a level of services that ensures that the right materials are available at the right place at the right time, at the right quantity, right quality and at the right cost.

Arnold (1998) said materials management is a coordinating function responsible for planning and controlling materials flow, in order to maximize the use of the formed resources and also provide the required level of customer services.

Iornum (2007) defined materials management as an integrated management approach to the planning, purchasing ware housing, storekeeping, allocation and movement of needed materials from one place to another. He further said that its also, the management of goods and materials that involves purchasing, storage, control and transportation.

Knod (2008) defined materials management to incorporate a broad set of activities related to acquiring, moving or handling, storage and control or monitoring of materials, thus, purchasing, distribution and other supply-chain management duties could be included.


1.2 Statement of the Problems

This research work focuses on the Effect of Materials Management on Resource Utilization in organization. Using seven up bottling company Plc Kaduna as a case study.

Most organizations lays little emphasis on the need to adopt effective materials management techniques in their firms. This has resulted to high level of store insecurity, high cost of production and high level of customers dissatisfaction. Hence, it is because of this phenomenon that this study tries to examine the effect of material management on resource utilization in organization.

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 the study is to determine the impact of materials management on resource utilization in organization of Seven-Up Bottling Company. Other specific objectives include to:

  1. Identify ways in which materials can be controlled to increase productivity in 7Up Plc, Kaduna plant.
  2. Identify and evaluate how buying, stock taking, stock checking and stock recording in the organization ensure continuity of operation in 7Up Plc Kaduna plant
  3. To outline the accompanying benefits that will accrue to the management of the organization if materials are properly managed.
  4. Identify how shortage of quality personnel deter the effective management of materials in the organization.
  5. To recommend procedures, processes and techniques for effective and efficient management of materials in the organization.

1.4 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.


1.5 Research Questions

  1. Can materials management increase productivity in organization?
  2. Can proper buying, stock taking, stock checking and stock recording ensure continuity of operations in 7Up Plc Kaduna plant?
  3. What are the benefit that will accrue to the management of the organization if materials are properly managed?
  4. Does shortage of qualified personnel deter the effective management of materials in 7Up Plc Kaduna plant?
  5. Can formidable procedures, processes and techniques bring about effective and efficient management of materials in an organization?

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.


Chapter Five


Conclusion and Recommendation

5.1 Conclusion

The objectives of the study was to

  1. Identify ways in which materials can be controlled to increase productivity in 7Up Plc. Kaduna plant.
  2. Identify and evaluate how buying, stock taking, stock checking and stock recording in the organization ensure continuity of operation in 7Up Plc. Kaduna plant
  3. To outline the accompanying benefits that will accrue to the management of the organization if materials are properly managed.
  4. Identify how shortages of quality personnel deter the effective management of materials in the organization.
  5. To recommend procedures, processes and techniques for effective and efficient management of materials in the organization.

Findings from the survey revealed the following:

  1. That the application of material management techniques increases the profitability of an organization.
  2. That the profitability of an organization depends on how well they manage their materials.
  3. That the application of material management helps to identify the strengths and weaknesses of materials.
  4. That the application of material management would help to increase material utilization.
  5. That a material management department should be created in organizations to help in educating workers on how to manage materials to increase productivity.

5.2 Recommendation

As a result of the findings from the survey, the following recommendations are made:

  1. That material management department should be created in organizations to enhance production.
  2. The type or technique of material management used in an organization determines the level of profit made.
  3. Adequate and holistic techniques should be adopted by organizations in other to increase productivity.

Effect Of Materials Management On Resource Utilization In Organization


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