Impact Of Material Management On Project Delivery And Productivity Of An Organization
Impact Of Material Management On Project Delivery And Productivity Of An Organization
Abstract
Recent researches have indicated that formal material management programs have the potential to yield significant organizational cost savings, yet small‐ and medium‐sized organizations may not feel that an integrated material management program is cost effective. The objective of this study is to assess the impact of material management on project delivery and productivity of an organization. Data collected as part of organization’s productivity study is used to analyze and compare the effects of material management practices on the productivity of the organization. The study made use of descriptive data analysis, while the data collected were analyzed using the chi-square tool from the SPSS. The study found that there is a positive relationship between material management and organization’s effectiveness, efficiency and productivity. The study recommends the application of the recent trends in material management through retraining of staffs and the adoption of material management softwares.
Chapter One
Introduction
1.1 Background of the Study
To manage materials is to manage the life of an organization. No organization can survive without adequate management of materials. The bottom line and effective flow of input material either purchased from outside manufacturing or made in house. Stocking of materials of minimum cost is a total management function of planning, organizing and controlling all the activities that contributes to materials cost materials management thus, encompasses the total process from a need for material/or services or works arising, right through to the supply of works to the user and in many causes, the product thereby being made available to the final consumer or customer from the above, it vital to carry out an effective control over materials by designing a separate function/department to be in charge of materials and this will be termed materials management department. This department should have streamlined duties of total cost control, elimination of materials waste and profit optimization. Material management problems can be functionally traced to quality, quantity and cost and an appropriate fashion of these functions that contribute to materials cost into an integrated system will largely determine its efficiency and profitability and improved productivity. Management interest is necessarily confined to attain total control but have been extended into the arena of achieving a total breakthrough in the practice of effective materials management system. Most management activity concerns itself with the design and operation at cost. There are many management with the scientific methods and techniques, which have been developed and perfected, but it must be achieved at once that such functions and economic characteristics can be effectively operated within the scope of materials management concepts.
Materials management is now thought to be the last frontier for cost control and profit improvement, contributing to higher production and productivity and thus largely designed for cost-effectiveness in any individual enterprise management echelon must recognize that it is not the materials manager’s main prerogative, but in fact this laurels. Whatever and whenever achieved, depends primarily on top management support and without its blessing all his efforts are exercise in futility.
In management or business management we understand that for a company to achieve their goal there must be efficient and effective use of planning, organizing, controlling and coordinating therefore for the effect of the materials to come out positively the company should plan how to carry out their production purchase and supply schedules materials receive and handling transportation, warehousing etc with proper planning of those mentioned above. The organization must ensure timely and positive availability of materials be able to meet agree and projected demand and also meet their target goals.
Thus good organizing helps the management coordinate and integrate the efforts of others so as to attain their goals. Through organizing the goals of the organization are given a structure, the structure aids in the planning process and success. In addition to this, control gauges the success of other areas in their attempt to accomplish a given project. The performance of every workers is measured against the specification put in place by the management. For instance scheduling make product control possible because report and monitor or workers absenteeism, time availability of material and machines available etc could make product control possible, poor production lead to poor purchasing management inadequate maintenance which affect the company’s productivity (Smith et al, 2001).
Because of the fragmented control of material problems of coordinating are severe. In organization and company you may have a purchasing management who is responsible for purchasing and supply of materials, a traffic manager who is responsible for decision relating to the transportation need of decision to the company and a store manager man not be under one department each manager who controls the inventory of goods in warehouse all these managers may not be under one department. Each manager may make decisions that are supposedly the best from a limited perspective but which may be bad for the company as whole.
Therefore good and proper coordination is dearly apparent if this managers mentality or sub optimization is to be avoided concussively proper material coordination that is purchasing and supply unit of the organization handling of the various production function such as planning scheduling, store end warehousing receiving and handling of material inventory control and traffic and transportation will yield a production increase to the organizational.
1.2 Statement of Problem
As a thermal cessation from improper material management and utilization where organizational productivity are based, the life wire and the total margin output of any organization is based on how effective the materials are managed and utilized. But the reverse has been the case, as the materials procured by many organizations are not judiciously managed in order to achieve the designed objectives of an organization.
Thus, it is questionable whether an organizations make use of effective planning, organizing, controlling and coordinating of the different material at their disposal before adequately implementing them in order to achieve desired results and the different banners experienced in the process of importing and transporting material purchased by the purchasing managers and the negative impacts of ineffective management of materials in an organization.
This research therefore was motivated by these hydra-headed problems with respect to assessing the impact of materials management on project delivery and productivity of an organization.
1.3 Purpose of Study
The following purposes are formulated to guide the researcher in collecting data for the study.
- To ascertain the relationship between the effective management of materials and the level of productivity in an organization.
- To examine if the positive impact of these materials management has helped improving the company productivity.
- To examine if the organization make use of effective planning, organizing, controlling and coordinating of these materials management before implementing them
- To examine whether the material and in improving the company’s productivity
- To identify and proffer solutions to the barriers experienced by the company in importing and transporting materials purchased by the purchasing managers.
1.4 Research Questions
- What is the relationship between effective management of material and level of productivity in an organization
- Has material management help in improving the company’s productivity?
- Does the organization make use of effective planning organizing controlling and coordinating, of these material management before implementing them?
- Does the material management help in improving the company’s productivity?
1.5 Research Hypotheses
The study formulated and developed for testing the following hypotheses:
Hypothesis one
- Ho: There is no relationship between the effective management of materials and the level of productivity in an organization.
- Hi: There is a relationship between the effective management of materials and the level of productivity in an organization.
Hypothesis two
- Ho: Organization does not make effective use of planning, organizing, controlling and coordinating material management before implementing them.
- Hi: Organization make effective use of planning organizing controlling and coordinating material management before implementing them.
1.6 Significance of the Study
It is evident that not much been carried out on this concept hence the researcher work will contribute to the existing literatures on material management and productivity in general and how this impacts the organization. It will serve as information medium to reactive measures by prospective researchers, and to also give the organization the guideline on effective use of planning, organizing, controlling and coordinating concept of material management in order to avoid waste.
1.7 Scope and Limitation of the Study
This study encapsulates various empirical literatures on material management in order to present a comprehensive idea of the impact of material management. The study is limited to a particular organization but has room for further researches. The study was however limited by the delay responses from the respondents to the questionnaire and their unavailability and unwillingness to part with information.
1.8 Definition of Terms
Materials:
A type of physical thing, such as wood, stone, or plastic, having qualities that allow it to be used to make other things
Management:
The control and organization of something
Project:
A piece of planned work or an activity that is finished over a period of time and intended to achieve a particular purpose
Productivity:
The rate at which a company or country makes goods, usually judged in connection with the number of people and the amount of materials necessary to produce the goods
Organization:
A group of people who work together in an organized way for a shared purpose.
Chapter Five
Summary, Conclusion and Recommendation
5.1 Introduction
It is important to reiterate that the objective of this study was to examine the impact of material management on project delivery and productivity of an organization.
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in examining the impact of material management on project delivery and productivity of an organization.
5.2 Summary
This study was undertaken to examine the impact of material management on project delivery and productivity of an organization. The study opened with chapter one where the statement of the problem was clearly defined. The study objectives and research hypotheses were defined and formulated respectively. The study reviewed related and relevant literatures. The chapter two gave the conceptual framework, empirical and theoretical studies. The third chapter described the methodology employed by the researcher in collecting both the primary and the secondary data. The research method employed here is the descriptive survey method. The study analyzed and presented the data collected in tables and tested the hypotheses using the chi-square statistical tool. While the fifth chapter gives the study summary and conclusion.
5.3 Conclusions
This study found out that there is a positive and significant relationship between materials management project delivery which in extension improves the productivity of the organization. Furthermore, on the contrary there is also a positive and 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 immediate raw materials interrupts production and hinder profitability. This study has shown how profitability can be achieved through 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.
5.4 Recommendations
From the findings made in this study, the following recommendations are put forward:
- Material supply should be optimum to avoid “stock outs” while work in process.
- Organizations should always take into cognizance the cost of production or price of raw materials before arriving at selling price.
- There should be good record system of materials for the operations of the organization particularly 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.
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