The Impact Of Materials Management On Organization Productivity

Project and Seminar Material for Business Administration and Management BAM

The Impact Of Materials Management On Organization Productivity


The proposal is based on the impact of materials management in organization productivity. these project need to be studied in order to bring about awareness at least on the side of the research user and to adopt to the laws given by the manager or management to the workers. Material management can be defined as a science based art which deals with the planning, organization, controlling and directing of the supply and processing actives of materials in an organization. The chapter one of this research work will be basically on the introduction of the case study, statement of the problem, objective of the study, significance of the study, scope and limitations of the study and defined of the terms. The chapter two shall look at the literature review, historical background of the study, source of raw materials, factors affecting the size of raw materials field in store, the male or buying decision, cost associated with raw materials, the inventory management system and the function include in material management. Chapter three of the project shall be looking on the research methodology and review of the case study, research design, population size, research methodology used and method of data collection and analysis. Chapter four of the project will focus on the data analysis through single method and testing of hypothesis. Finally, the chapter five of the project will look into the summary of the findings, conclusion and recommendation of the data.

Chapter One

1.1 General Introduction

Material management in an organization is all embracing than any other form of management because of the diverse activities involved such as:

  1. Purchasing
  2. Stores
  3. Inventory control
  4. Production control
  5. Quality control
  6. Packaging
  7. Warehousing
  8. Inward and out ward inspection
  9. Marketing or sales.

Therefore, material management is the act of planning, organizing, controlling and directing of the supply and processing activities of material in an organization.

The impact of material management on organization productivity is unavoidable either positively or negatively, this. In production, material must be managed properly on order to avoid any the seventy five parent (759) of the entire operation and the money spent on material alone range between 60-65% of the company total arrestment.

Therefore, the importance of material in an organization is very obvious and should be given proper attention.

1.2 Statement of the Problem

For the purpose of this research work, there are lots of limitation of problem of that lingered the project to be carried all effectively.

Therefore, because we were approaching the end of the National Diploma (ND) there is time constraint and there was not enough time to carry out the project work as necessary.

Also, the research of this project is limited to coca-cola plant at Ilorin; although the company has various plants all over the countries and even the work at large. Therefore, the information supplied in this project milled to business strictly to the economic environment.

1.3 Objective of the Study

These are the objective of the study that shows the impact of material management on organization productivity. It shows how a manufacturing organization can survive through the effective management of materials.

Among the crucial objective of the study are:

  1. To examine how raw materials can be made available directly or indirectly form abroad or within the country.
  2. To look at ways and sub- strategies that can be adopted in order to develop alternative means of getting raw materials so as to guarantee availability when it is needed.
  3. To identify the role of material control in effective management of raw materials such that material can be procured and stored at an economic quality that guarantee a fair price and right quality.
  4. To take note adequately of the role of machine utilization in the management of raw materials an order to reduce scrap rate.

1.4 Significance of the Study

The study lies on how alternative means of getting raw materials can be embarked upon to make possible its availability when need and also to find the solution to the problem of absolve dependence on foreign sources.

The storage of raw materials and economically producers can plan adequately against higher than maximum stock lever and lower than minimum stock level which can bring about some negative implosion on the business capital.

The study also aim at suggesting and deciding strategies that can be used and the serried of the manufacturing industry through efficient materials which will lead to economic boost.

1.5 Scope and Limitations of the Study

The project will focus on the relevant aspect of materials management in production and it limitation to its relationship with the current situation of our economy. It will cover areas like sources availability and utilization of raw materials.

In the course of study, the research is limited to Nigeria bottling company Ilorin and in searching for the collection of data, only workers in department that have relationship with the project topic will be adequately unrolled such as production department, store department, purchasing department quality control and the account or administer department.

1.6 Definition of the Terms

1. Management

Management can be defined as a process of planning contorting, directing, motivating organizing and budgeting in order to active a particular goal.

Management can also be defined as the process entailing Responsibility for effective and economic planning and regularizing responsibility of the operation of an enterprise in fulfillment of a given purpose or task.

2. Raw Material

Raw material can be defined as a good that has not been committed to production on a manufacturing firm. Raw material can also be defined as the inputs of an organization production process aimed at conversion from raw materials stage to finished goods.

3. An Organization

Organizations are group of people with ideas and researches to achieve organization goal.

Broadly, an organization can be defined as a process of identifying and grouping the work to be performed, defined and developing responsibility and authority and establishing relationship for the purpose of enabling to work together an accomplishing the objectives of an organization effectively.

4. Productivity

Productivity can be defined as the amount of output per unit of input (labour, equipment and capital); there are many ways of measuring productivity. For example, productivity in a factory might be measured based on the number of hours. It takes to produce good while in service sector, productivity might be measured based on the avenue generated by an employed decided by his/ her salary.

5. Production

Production can be defined as the creation of utility. Also production can be defined as the process of manufacturing or transforming raw materials into finished goods for the use of consumers.

6. Purchasing

Purchasing can be defined as the process of buying goods and services of the right quality in the right quantity at the right price and the right time from the right supplier or source to be delivered at where and when needed.

7. Price

Price may be seen as the point at which exchange takes place- the point at which the amount for which the seller is writing to sell his product or service coincides with the amount that the buyer is willing to pay for the benefits offered by the product or service.

8. Inspection

Inspection is the process of ascertaining whether or not the goods delivered are of the specified quality.

9. Stock Control

Stock control represents the clerical control of the movement of materials into and out of the stores, and of the level of the stock in the stores at all times with due regard to the economic in storage.

10. Material Management

Material management is the act of planning, organization, controlling and directing of the supply and processing activities of materials in an organization.

11. Materials Handling

Materials handling is the overall means, method, approach and techniques used to effect the transfer and storage of terms.

12. Right Quality

Right quality means meeting an acceptable standard of performance by the material in order to meet the specification set out.

13. Right Quantity

Right quantity refers to the value or amount of material that can be most economically of supply with minimum investment in stock.

14. Right Price

Right price means buying at the best price that commensurate with quality and service required and the subsequent costs that may likely be incurred and above all, buying competitively and wisely.

15. Right Time

Right time means that supplies should be received not too early as to increase cost of stock holding neither unnecessarily nor too late as to cause avoidable delays and stoppages in production operation.

16. Right Source

Right source is the selection of the right source or supplier based on his willingness and the ability to fulfill the specified requirements of the purchase contract.

Chapter Five

5.0 Summary of the Findings, Conclusion and Recommendation

5.1 Summary of the Findings

The basic responsibilities of material management place it in a position of importance in a typical manufacturing organization.

The present economic procession is an issue which materials management are not exceptions, there is decline which is as a result of the current economy recession, it is an external variable which is uncontrollable in nature.

On procurement activities, the centralized structure with its advantages is virtually the best and this is seen in operation of the organization under study. With this procurement, structure, individual and departments know who to meet to place order for the needed materials.

The order arrives early when needed and the organization keeps safety stock as revealed by the study. This is to avoid shortage which is common in production which could consequently lead to loss of customers to other competitors in the industry.

Moreover, the effect of quality in production cannot be over emphasized. The quality of raw material used in production process is a variable which can lead to an increase in the rate of wasted product and possibly lead to a poor quality output. It was revealed in the study that the qualities of raw materials from abroad are better than those obtain locally.

However, in order to enhance the effectiveness of the organization, materials management effort have to be effectively private sector in the manufacturing business through its polices.

Also, a lot lies in the hand of the organization as regards their materials management. A sound inventory management system with capable Hanes need to be butt and maintained so that management in this areas will be fruitful.

5.2 Conclusion

The finding of the research which has already been summarized, materials management is an organization effort aimed at effective management of material resources. This depend on the policy of the organization which cover area like procurement and souring, price control, storage, utilization and quality control, the following can be deduced form the result of the findings.

Sourcing locally does not pose as much problem as sourcing form abroad. But to ensure availability and take advantage of better quality materials from abroad, a plan for the combination of the source will help a typical manufacturing business.

The economy as an external variable, influence organization sometime negatively, there could be inflation which could to the increase in price level. The central bank of Nigeria annual report and statement of account 1991 report that the cost of raw material has been a substantial increase due to the deprecated value of naira.

The aim of keeping safety stock is to avoid situation where company run out of good if order fail to arrive early. In cases where the supplier are reliable such that order arrive early, management can either decide to keep stock or decide not to keep stock.

5.3 Recommendations

There is definitely no substitute and effective and efficient material management strategy in a battered economy. Manufacturing organizations will need to take note of the following.

The objectives of the form and the materials management effort must be at variance of effectiveness and should be enhanced despite the fact that there would be some element of autonomy, goods must be kept.

Raw materials in store must be properly taken care of with adequate storage facilitates put in place to suit the type of materials in the store.

Effective stock keeping must be put in the building and efficient inventory control system that will provide all information needed concerning the economic order (EOQ), safety stock, lead time, stock level, etc. Stock keeping is to comply with periodic stock taking.

Organizations need to employ suitable qualified staff expert in the field of material management. Apart from employing qualified staff, training programmes need to be organized for workers already on the job to have career obsolescence which reduces productivity.

Each company must establish a quality control department to ensure that the quality of raw materials and manufacturing goods are kept stable. In a situation where an organization has already established the department, there is need for the department to be well equipped and managed by experts.

Manufacturing and production effort should be supported by research effort to enhance effectiveness. Professional bodies and research institutes should be properly made use of in order to get acquainted with the latest development within the environment.

To avoid wastage or shortage, the organization needs to build an effective and efficient system for returning of sub-standard products during production.

Also, the government as the regulator of the economy has some roles to play. The government through their fiscal should encourage the production and consumption of locally made raw materials and finished goods.

Finally, manufacturing organization should adopt a system of control in which they set standard for their material management function. They should conduct periodic review of their activities in order to measure results, evaluate performance and use of collective mechanism when a situation calls for such.

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